Exhibit 10.1 

 

EXECUTION VERSION

 

 

CREDIT AGREEMENT

 

dated as of June 15, 2020

 

among

 

MFRESIDENTIAL ASSETS HOLDING CORP.,

 

as Borrower,

 

MFA FINANCIAL, INC.,

 

as Parent,

 

THE LENDERS PARTY HERETO

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

 

as Administrative Agent and Collateral Agent

 

 

 

 

 

TABLE OF CONTENTS

 

  Page     ARTICLE 1      Definitions 1 Section 1.01 Defined Terms 1 Section
1.02 Terms Generally 27 Section 1.03  Designated Senior Indebtedness 28      
ARTICLE 2      THE CREDITS 28 Section 2.01 Commitments 28 Section 2.02  Several
Obligations 29 Section 2.03  Borrowing Mechanics 29 Section 2.04  Evidence of
Debt; Repayment of Loans 29 Section 2.05  Fees 30 Section 2.06  Interest on
Loans 31 Section 2.07 Default Interest 31 Section 2.08 Election of PIK Interest
31 Section 2.09  Repayment of Term Borrowings 31 Section 2.10  Voluntary
Prepayment 32 Section 2.11  Mandatory Prepayments 33 Section 2.12 Offer to
Repurchase Upon Change of Control 34 Section 2.13 Reserve Requirements; Change
in Circumstances 35 Section 2.14 Pro Rata Treatment 36 Section 2.15 Sharing of
Setoffs 36 Section 2.16 Payments 37 Section 2.17 Taxes 37 Section 2.18 Duty to
Mitigate; Assignment of Commitments Under Certain Circumstances 41 Section 2.19
Defaulting Lenders 42 Section 2.20 Protective Advances 42       ARTICLE
3      REPRESENTATIONS AND WARRANTIES 43 Section 3.01 Company Status 43 Section
3.02 Power and Authority 43 Section 3.03 No Violation 43 Section 3.04  Approvals
44 Section 3.05 Financial Statements; Financial Condition 44 Section 3.06 
Litigation 45 Section 3.07 True and Complete Disclosure 45 Section 3.08  Use of
Proceeds; Margin Regulations 45 Section 3.09 Tax Matters 46 Section 3.10
Compliance with ERISA 46 Section 3.11 Security Documents 46 Section 3.12
[Reserved] 46 Section 3.13 Capitalization 46

 

i

 

 

Section 3.14  Subsidiaries 47 Section 3.15 Compliance with Statutes, Etc. 47
Section 3.16 Investment Company Act 47 Section 3.17 Insurance 47 Section 3.18 
Environmental Matters 47 Section 3.19 Employment and Labor Relations 48 Section
3.20 Intellectual Property, Etc. 48 Section 3.21 [Reserved] 49 Section 3.22
Anti-Terrorism Law 49 Section 3.23 Foreign Corrupt Practices Act 49 Section 3.24
Third Forbearance Agreement 50       ARTICLE 4      CONDITIONS OF LENDING 50
Section 4.01 Conditions Precedent to the Effectiveness of this Agreement 50
Section 4.02 Conditions to the Funding of the Loan 52       ARTICLE
5      AFFIRMATIVE COVENANTS 55 Section 5.01 Information Covenants 55 Section
5.02 Books, Records and Inspections 57 Section 5.03 Maintenance of Property;
Insurance 58 Section 5.04 Existence; Franchises 58 Section 5.05 Compliance with
Statutes, Etc. 59 Section 5.06 Compliance with Environmental Laws 59 Section
5.07 ERISA 59 Section 5.08 End of Fiscal Years; Fiscal Quarters 60 Section 5.09
Conference Calls 60 Section 5.10 Tax Matters 60 Section 5.11 Use of Proceeds 61
Section 5.12 Additional Security; Further Assurances; Etc. 61 Section 5.13
Sanctions; Anti-Corruption Laws 62 Section 5.14 Closing of the Transactions 62
Section 5.15 Post-Closing 62       ARTICLE 6      NEGATIVE COVENANTS 62 Section
6.01 Liens 62 Section 6.02 Consolidation, Merger, Sale of Assets, Etc. 64
Section 6.03 Restricted Payments 67 Section 6.04 Indebtedness 68 Section 6.05
Advances, Investments and Loans 70 Section 6.06 Transactions with Affiliates 72
Section 6.07 Modifications of Certain Agreements 72 Section 6.08 Limitation on
Certain Restrictions on Subsidiaries 72 Section 6.09 Limitation on Issuance of
Equity Interests 73 Section 6.10 Business; Etc. 73 Section 6.11 Limitation on
Creation of Subsidiaries 73 Section 6.12 Prepayments of Other Indebtedness 73
Section 6.13 Anti-Layering 74

 

ii

 

 

Section 6.14 Permitted Activities of Parent and the Borrower 74 Section 6.15
Minimum Liquidity 74       ARTICLE 7      EVENTS OF DEFAULT 75 Section 7.01
Events of Default 75 Section 7.02 Application of Payment 78       ARTICLE
8      THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT 79     ARTICLE
9      MISCELLANEOUS 83 Section 9.01 Notices; Electronic Communications 83
Section 9.02 Survival of Agreement 87 Section 9.03 Binding Effect 88 Section
9.04 Successors and Assigns 88 Section 9.05 Expenses; Indemnity 93 Section 9.06
Right of Setoff 95 Section 9.07 Applicable Law 96 Section 9.08 Waivers;
Amendment 96 Section 9.09 Interest Rate Limitation 97 Section 9.10 Entire
Agreement 97 Section 9.11 WAIVER OF JURY TRIAL 97 Section 9.12 Severability 98
Section 9.13 Counterparts 98 Section 9.14 Headings 98 Section 9.15 Jurisdiction;
Consent to Service of Process 98 Section 9.16 Confidentiality 99 Section 9.17
Lender Action 100 Section 9.18 USA PATRIOT Act Notice 100 Section 9.19
Acknowledgement and Consent to Bail-In of Affected Financial Institutions 100
Section 9.20 WAIVER 101 Section 9.21 Specific Performance 101

 

SCHEDULE 1.01 Subsidiary Guarantors SCHEDULE 2.01 Commitments SCHEDULE 3.05
Financial Statements; Financial Condition SCHEDULE 3.06 Litigation SCHEDULE 3.09
Certain Tax Matters SCHEDULE 3.14 Subsidiaries SCHEDULE 3.17 Insurance SCHEDULE
6.01 Liens SCHEDULE 6.05 Investments     EXHIBIT A Form of Administrative
Questionnaire EXHIBIT B Form of Assignment and Acceptance

 

iii

 

 

EXHIBIT C Form of Borrowing Request EXHIBIT D Form of Compliance Certificate
EXHIBIT E Form of Guaranty EXHIBIT F [Reserved] EXHIBIT G Form of Intercompany
Subordination Agreement EXHIBIT H [Reserved] EXHIBIT I Form of Payment Election
Notice EXHIBIT J Form of Pledge Agreement EXHIBIT K Form of Solvency Certificate
EXHIBIT L Form of Waiver EXHIBIT M Repo Indebtedness Purchase Letter

 

iv

 

 

 

CREDIT AGREEMENT dated as of June 15, 2020 (the “Effective Date”), among
MFRESIDENTIAL ASSETS HOLDING CORP. (the “Borrower”), MFA FINANCIAL, INC.
(“Parent”), the Lenders (such term and each other capitalized terms used but not
defined in this introductory statement and the Recitals having the meaning given
it in Article 1), and WILMINGTON TRUST, NATIONAL ASSOCIATION, as administrative
agent (in such capacity, including any successor thereto, the “Administrative
Agent”) and as collateral agent (in such capacity, including any successor
thereto, the “Collateral Agent”) for the Lenders.

 

RECITALS

 

WHEREAS, the Borrower has requested that the Lenders establish a senior secured
term loan credit facility in an aggregate initial stated principal amount of
$500,000,000.

 

The Lenders are willing to extend such credit to the Borrower on the terms and
subject to the conditions set forth herein. Accordingly, the parties hereto
agree as follows:

 

ARTICLE 1
Definitions

 

Section 1.01        Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:

 

“2042 Notes” shall mean Parent’s 8.00% Senior Notes due 2042 issued pursuant to
a base indenture as supplemented by a first supplemental indenture thereto, each
dated as of April 11, 2012, between Parent and Wilmington Trust, National
Association, as trustee.

 

“Additional Pledge Documents” shall have the meaning assigned to such term in
Section 5.12.

 

“Administrative Agent” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

 

“Administrative Questionnaire” shall mean an Administrative Questionnaire
substantially in the form of Exhibit A, or such other form as may be supplied
from time to time by the Administrative Agent.

 

“Affected Financial Institution” shall mean (a) any EEA Financial Institution or
(b) any UK Financial Institution.

 

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling (including all directors and officers of such Person),
controlled by, or under direct or indirect common control with, such Person. A
Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power (i) to vote 20% or more of the securities
having ordinary voting power for the election of directors (or equivalent
governing body) of such Person or (ii) to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise. No Agent, Lender or other Secured
Creditors shall be deemed an “Affiliate” of the Credit Parties or their
Subsidiaries for purposes of Section 6.06.

 

 

 

 

“Agent Fee Letter” means the agent fee letter dated as of the Effective Date
between the Borrower and Wilmington Trust, National Association.

 

“Agents” shall have the meaning assigned to such term in Article 8.

 

“Agreement” shall mean this Credit Agreement.

 

“Anti-Corruption Laws” shall have the meaning assigned to such term in
Section 3.23(a).

 

“Anti-Money Laundering Laws” means the applicable anti-money laundering statutes
or jurisdictions where any of the Credit Parties conducts business and the rules
and regulations thereunder, issued, administered or enforced by any Governmental
Authority, including without limitation the USA PATRIOT Act and the Bank Secrecy
Act.

 

“Applicable Rate” shall mean, as of any time, a rate per annum equal to:

 

(a)               at all times on and after the Closing Date and prior to the
third anniversary of the Closing Date, 11.00%,

 

(b)               at any time on and after the third anniversary of the Closing
Date and prior to the fourth anniversary of the Closing Date, 12.00%,

 

(c)               at any time on or after the fourth anniversary of the Closing
Date and prior to the fifth anniversary of the Closing Date, 13.00% and

 

(d)               for any time on or after the fifth anniversary of the Closing
Date, 14.00%.

 

“Asset Level Borrower” means, collectively, the borrower or borrowers under the
Asset Level Term Loan, each of which must (a) be a direct Wholly Owned
Subsidiary of the Borrower or a Subsidiary Guarantor (unless any such Asset
Level Borrower (x) is Wholly Owned by another Asset Level Borrower, (y) is a REO
Subsidiary and the equity of such REO Subsidiary is required to be pledged to
secure the Asset Level Term Loan, or (z) is a Repo Subsidiary) and (b) have 100%
of its Equity Interests pledged as Pledged Collateral under the Pledge Agreement
(unless any such Asset Level Borrower is (x) Wholly Owned by another Asset Level
Borrower and 100% of such owning Asset Level Borrower’s Equity Interests are
pledged as Pledged Collateral under the Pledge Agreement, (y) is a REO
Subsidiary and the equity of such REO Subsidiary is required to be pledged to
secure the Asset Level Term Loan or (z) is a Repo Subsidiary).

 

“Asset Level Term Loan” shall mean the term loan financing facility to the Asset
Level Borrower in an initial aggregate principal amount of up to $1.65 billion
in the aggregate on the terms, and subject solely to the conditions, set forth
in the Asset Level Term Loan Commitment Letter and otherwise on terms reasonably
acceptable to the Administrative Agent (or the Required Lenders).

 

“Asset Level Term Loan Commitment Letter” shall mean the commitment letter
agreement, dated June 15, 2020, from Barclays Bank PLC and AUSA in favor of
Parent, as in effect on the Effective Date.

 

2

 

 

“Assignment and Acceptance” shall mean an assignment and acceptance entered into
by a Lender and an Eligible Assignee, and accepted by the Administrative Agent,
substantially in the form of Exhibit B or such other form as shall be approved
by the Administrative Agent.

 

“AUSA” shall mean Athene USA Corporation.

 

“Authorized Officer” shall mean the chief executive officer, president, any
vice-president, chairman, vice chairman, secretary, any assistant secretary,
treasurer, any assistant treasurer, chief operating officer or chief financial
officer of the Borrower.

 

“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers
by the applicable Resolution Authority in respect of any liability of an
Affected Financial Institution.

 

“Bail-In Legislation” shall mean, (a) with respect to any EEA Member Country
implementing Article 55 of Directive 2014/59/EU of the European Parliament and
of the Council of the European Union, the implementing law, regulation rule or
requirement for such EEA Member Country from time to time which is described in
the EU Bail-In Legislation Schedule. and (b) with respect to the United Kingdom,
Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and
any other law, regulation or rule applicable in the United Kingdom relating to
the resolution of unsound or failing banks, investment firms or other financial
institutions or their affiliates (other than through liquidation, administration
or other insolvency proceedings).

 

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled
“Bankruptcy,” as now or hereafter in effect, or any successor thereto.

 

“Borrower” shall have the meaning assigned to such term in the introductory
statement to this Agreement.

 

“Borrower Materials” shall have the meaning assigned to such term in
Section 9.01.

 

“Borrowing Request” shall mean a request by the Borrower for the advance of the
Loans pursuant to Section 2.01 in accordance with Section 2.03.

 

“Business Day” shall mean any day other than a Saturday, Sunday, any other day
on which banks in New York City are authorized or required by law to close or
any other day on which either the New York Stock Exchange or the Federal Reserve
Bank of New York is closed.

 

“Capital Expenditures” shall mean, subject to Section 1.02, with respect to any
Person, all expenditures (without duplication) by such Person which should be
capitalized in accordance with GAAP and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.

 

“Capitalized Lease Obligations” shall mean, subject to Section 1.02, with
respect to any Person, all rental obligations of such Person which, under GAAP,
are required to be capitalized on the books of such Person, in each case taken
at the amount thereof accounted for as indebtedness in accordance with such
principles.

 

3

 

 

“Cash Equivalents” shall mean, as to any Person, (a) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one (1)
year from the date of acquisition, (b) marketable direct obligations issued by
any state of the United States or any political subdivision of any such state or
any public instrumentality thereof maturing within one (1) year from the date of
acquisition thereof and, at the time of acquisition, having one (1) of the two
(2) highest ratings obtainable from either S&P or Moody’s, (c) Dollar
denominated time deposits, certificates of deposit and bankers acceptances of
any Lender or any commercial bank having, or which is the principal banking
subsidiary of a bank holding company having, a combined capital and surplus of
at least $1,000,000,000 with maturities of not more than one (1) year from the
date of acquisition by such Person, (d) repurchase obligations with a term of
not more than thirty (30) days for underlying securities of the types described
in clause (a) above entered into with any bank meeting the qualifications
specified in clause (c) above, (e) commercial paper issued by any Person
incorporated in the United States, and at the time of acquisition, rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody’s and in each case maturing not more than one (1) year after
the date of acquisition by such Person, and (f) investments in money market
funds substantially all of whose assets are comprised of securities of the types
described in clauses (a) through (e) above. To the extent that, upon the
maturity of any instrument referred to in this definition, such instrument would
no longer constitute a “Cash Equivalent” due to a change in ratings of the
issuer of such instrument, such instrument shall no longer constitute a Cash
Equivalent except to the extent reinvested in an instrument that would otherwise
qualify as a Cash Equivalent at such time.

 

“Cash Interest” shall have the meaning assigned to such term in Section 2.06.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as the same has been amended and may hereafter be amended
from time to time, 42 U.S.C. § 9601 et seq.

 

“Certificated Securities” shall have the meaning assigned to such term in the
Pledge Agreement.

 

“Change in Law” shall mean (a) the adoption of any law, rule or regulation after
the Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority or the NAIC
after the Closing Date or (c) compliance by any Lender (or, for purposes of
Section 2.13, by any lending office of such Lender or by such Lender’s holding
company, if any) with any request, guideline or directive (whether or not having
the force of law) of any Governmental Authority made or issued after the Closing
Date; provided that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,
rules, guidelines or directives thereunder or issued in connection therewith and
(y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any
successor or similar authority) or United States or foreign regulatory
authorities, in each case pursuant to Basel III, shall in each case be deemed to
be a “Change in Law”, regardless of the date enacted, adopted or issued, except
to the extent any items in clauses (x) or (y) are in effect as of the Closing
Date.

 

4

 

 

“Change of Control” shall mean the occurrence of any of the following or the
entering into of any agreement to consummate any of the following: (a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act as in effect on the Closing Date) shall have obtained the power
(whether or not exercised) to elect a majority of the board of directors (or
equivalent governing body) of Parent, (b) any “person” or “group” (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the
Closing Date) is or shall become the “beneficial owner” (as defined in Rules
13(d)-3 and 13(d)-5 under the Exchange Act as in effect on the Closing Date),
directly or indirectly, of 40% or more on a fully diluted basis of the voting
interests or economic interests in Parent’s Equity Interests, (c) within any
twelve (12) month period, the board of directors (or equivalent governing body)
of Parent shall cease to consist of a majority of Continuing Directors, (d) a
“change of control” or similar event howsoever defined shall occur as provided
in the Existing Preferred Stock (or any refinancing, renewal or replacement
thereof) or any Indebtedness of Parent or any Subsidiary with an aggregate
principal amount of at least $50,000,000 (or the documentation governing the
same) and such “change of control” or similar event shall not be waived in
writing by the holders of such Existing Preferred Stock or Indebtedness, (e)
Parent shall cease to directly own Equity Interests representing 100% the issued
and outstanding Equity Interests of the Borrower, (f) Parent, Borrower, any
Subsidiary or any direct or indirect parent of the foregoing shall enter into an
agreement for the management of any assets (other than customary maintenance,
administration and servicing, rental and similar contracts with respect to REO
Assets and Residential Mortgage Loans) of Parent or any of its Subsidiaries
other than any agreement entered with Parent, the Borrower or any Wholly Owned
Subsidiary of the Borrower, or (g) Parent and its Subsidiaries shall sell, lease
or otherwise dispose of all or substantially all of the assets of Parent,
Borrower and the Subsidiaries, taken as a whole (including the issuance of
Equity Interests of any Subsidiary of Parent (other than an issuance to the
Borrower or any Wholly Owned Subsidiary of the Borrower)).

 

“Change of Control Offer” shall have the meaning assigned to such term in
Section 2.12(a).

 

“Change of Control Payment” shall have the meaning assigned to such term in
Section 2.12(a).

 

“Change of Control Payment Date” shall have the meaning assigned to such term in
Section 2.12(a)(ii).

 

“Charges” shall have the meaning assigned to such term in Section 9.09.

 

“Charter” shall mean the Amended and Restated Articles of Incorporation (except
as otherwise expressly provided herein as it may be amended, amended and
restated or otherwise modified from time to time) of Parent.

 

“Claims” shall have the meaning assigned to such term in the definition of
“Environmental Claims”.

 

“Closing Date” shall mean the date on which the conditions specified in
Section 4.01 and 4.02 are satisfied (or waived in accordance with Section 9.08)
and the funding of the Loans to be made pursuant to Section 2.01 hereunder has
occurred.

 

“Closing Date Subsidiary Guarantors” shall have the meaning assigned to such
term in the definition of “Subsidiary Guarantors”.

 

“Closing Date Warrants” shall mean those certain warrants for up to 7.5% of the
outstanding Common Stock of Parent issued by Parent pursuant to and as defined
in the Investment Agreement.

 

5

 

 

“Code” shall mean the Internal Revenue Code of 1986.

 

“Collateral” shall mean all property (whether real or personal) with respect to
which any security interests or liens have been granted (or purported to be
granted) pursuant to any Security Document, including all Pledge Agreement
Collateral.

 

“Collateral Agent” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

 

“Commitment” means, with respect to each Lender, the commitment of such Lender
to make Loans pursuant to Section 2.01 on the Closing Date, as such commitment
may be (a) reduced or terminated from time to time and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Lender’s Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance or other documentation
contemplated hereby pursuant to which such Lender shall have assumed its
Commitment, as applicable.

 

“Commitment Termination Date” shall have the meaning assigned to Section 4.02.

 

“Communications” shall have the meaning assigned to such term in Section 9.01.

 

“Company” shall mean any corporation, limited liability company, partnership or
other business entity (or the adjectival form thereof, where appropriate).

 

“Connection Taxes” shall mean, with respect to the Administrative Agent, the
Collateral Agent or any Lender, Taxes imposed as a result of a present or former
connection between such Administrative Agent, Collateral Agent or Lender and the
jurisdiction imposing such Tax (other than connections arising from such
Administrative Agent, Collateral Agent or Lender having executed, delivered,
become a party to, performed its obligations under, received payments under,
received or perfected a security interest under, engaged in any other
transaction pursuant to, or enforced, any Credit Document, or sold or assigned
an interest in any Loan or Credit Document).

 

6

 

 

“Contingent Obligation” shall mean, as to any Person, any obligation of such
Person as a result of such Person being a general partner of any other Person,
unless the underlying obligation is expressly made non-recourse as to such
general partner, and any obligation of such Person guaranteeing, having the
economic effect of guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations (“primary obligations”) of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or any property constituting direct or
indirect security therefor or (y) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth, solvency or other
financial statement condition of the primary obligor, (c) to purchase or lease
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the holder of such primary obligation against loss in respect thereof; provided
that the term Contingent Obligation shall not include (i) endorsements of
instruments for deposit or collection in the ordinary course of business, (ii)
Repurchase Obligations or (iii) any customary carve-out or “bad-boy” matters for
which such Person acts as a guarantor or indemnitor, such as fraud,
misappropriation, breach of representation and warranty and misapplication,
unless and until, in the case of the foregoing subclauses (ii) and (iii), a
claim for payment or performance has been made in respect thereof (which has not
been satisfied). The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary obligation
in respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.

 

“Continuing Directors” shall mean, with respect to any Person, the directors (or
equivalent governing body) of such Person on the Closing Date and each other
director (or equivalent Person) if such director’s (or equivalent Person’s)
nomination for election to the board of directors (or equivalent governing body)
of such Person is recommended or approved, or such director was nominated or
otherwise approved, by a majority of the then Continuing Directors.

 

“Convertible Debt Security” means debt securities of the Parent (including the
Convertible Senior Notes) (i) issued pursuant to a transaction registered with
the SEC, or exempt therefrom in reliance on Rule 144A, the terms of which
provide for conversion into, or exchange for, common stock (other than
Disqualified Equity Interests) of the Parent and cash in lieu of fractional
shares of such common stock and (ii) any Permitted Refinancing of a Convertible
Debt Security described in the immediately preceding clause (i).

 

“Convertible Senior Notes” shall mean Parent’s 6.25% Convertible Senior Notes
due 2024 issued pursuant to a base indenture as supplemented by a supplemental
indenture thereto, each dated as of June 3, 2019, between Parent and Wilmington
Trust, National Association, as trustee.

 

“Credit Documents” shall mean this Agreement, the Guaranty, the Pledge
Agreement, the Intercompany Subordination Agreement, the Agent Fee Letter and,
after the execution and delivery thereof pursuant to the terms of this
Agreement, each Note and each other Security Document.

 

“Credit Party” shall mean each of Parent, the Borrower and each Subsidiary
Guarantor.

 

“Debt to Value Ratio” shall mean, as of any date of determination, the ratio of
Total Indebtedness of the Borrower and the Subsidiaries to the Total Assets of
the Borrower and the Subsidiaries.

 

7

 

 

“Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief laws of the United States or other applicable jurisdictions from
time to time in effect.

 

“Default” shall mean any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.

 

“Defaulting Lender” shall mean, subject to Section 2.19(b), any Lender that (a)
has failed to (i) fund all or any portion of its Loans within two (2) Business
Days of the date such Loans were required to be funded hereunder or (ii) pay to
the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within two (2) Business Days of the date when due, (b) has
notified the Borrower or the Administrative Agent in writing that it does not
intend to comply with its funding obligations hereunder, or has made a public
statement to that effect, (c) has failed, within three (3) Business Days after
written request by the Administrative Agent or the Borrower, to confirm in
writing to the Administrative Agent and the Borrower that it will comply with
its prospective funding obligations hereunder (provided that such Lender shall
cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such
written confirmation by the Administrative Agent and the Borrower), or (d) has,
or has a direct or indirect the parent company that has, (i) become the subject
of a proceeding under any Debtor Relief Law or, (ii) had appointed for it a
receiver, custodian, conservator, trustee, administrator, assignee for the
benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets, including the Federal Deposit Insurance
Corporation or any other state or federal regulatory authority acting in such a
capacity, or (iii) become the subject of a Bail-In Action; provided that a
Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any equity interest in that Lender or any direct or indirect the
parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts
or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above
shall be conclusive and binding absent manifest error, and such Lender shall be
deemed to be a Defaulting Lender (subject to Section 2.19(b)) upon delivery of
written notice of such determination to the Borrower and each Lender.

 

“Disqualified Equity Interests” shall mean any Equity Interests (other than any
Existing Preferred Stock) of any Person so long as the terms of any such Equity
Interests (or the terms of any security into which it is convertible or for
which it is exchangeable) (a) contains any maturity, mandatory put, redemption,
repayment, sinking fund or other similar provision (except as a result of a
change of control or asset sale or casualty or condemnation event) so long as
any rights of the holders thereof upon the occurrence of a change of control or
asset sale shall be subject to the prior repayment in full of the Loans and all
other Obligations (other than contingent indemnification obligations and other
contingent obligations that are not then due and payable) that are accrued and
payable and the termination or expiration of the Commitments, (b) requires the
payment of cash dividends or distributions that would otherwise be prohibited by
the terms of this Agreement or (c) provides that such Equity Interests are or
will become convertible into or exchangeable for Indebtedness or any other
Equity Interests (other than Qualified Equity Interests), in each case of (a),
(b) and (c) before the date that is ninety-one (91) days after the Maturity
Date.

 

8

 

 

“Disqualified Lender” shall mean any competitor of Parent or its Subsidiaries
that is a U.S. residential mortgage REIT with shares traded on a national
securities exchange (other than Parent or any successor entity thereof) and any
Affiliate of such Person that is clearly identifiable solely on the basis of
similarity of their names or that has been specified in writing to the
Administrative Agent by the Borrower from time to time.

 

“Dividend” shall have the meaning assigned to such term in the definition of
“Restricted Payment”.

 

“Dollars” and the sign “$” shall each mean freely transferable lawful money of
the United States.

 

“Domestic Subsidiary” of any Person shall mean any Subsidiary of such Person
incorporated or organized in the United States or any State thereof or the
District of Columbia.

 

“Economic Book Value” shall mean, as publicly reported by Parent in its
financial results for each fiscal quarter, the consolidated total stockholders’
equity of Parent as determined in accordance with GAAP less the aggregate
liquidation preference of any outstanding Preferred Equity of Parent less the
difference (which may be a positive or negative number) between the (i) the
aggregate value of Residential Mortgage Loans recorded at carrying value on the
consolidated balance sheet of Parent (the “Carrying Value Mortgage Loans”) and
(ii) the aggregate fair value of the Carrying Value Mortgage Loans.

 

“EEA Financial Institution” shall mean (a) any credit institution or investment
firm established in any EEA Member Country which is subject to the supervision
of an EEA Resolution Authority, (b) any entity established in an EEA Member
Country which is a parent of an institution described in clause (a) of this
definition, or (c) any financial institution established in an EEA Member
Country which is a subsidiary of an institution described in clauses (a) or (b)
of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country” shall mean any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” shall mean any public administrative authority or any
Person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

 

“Effective Date” shall have the meaning assigned to such term in the
introductory statement to this Agreement.

 

9

 

 

“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender, (c) a
Related Fund of a Lender and (d) any other Person (other than a natural person)
approved by the Administrative Agent; and, unless an Event of Default has
occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed and, in the case of the Borrower, any such
approval shall be deemed to have been given at the time the Borrower’s consent
is deemed to be given pursuant to Section 9.04(b)); provided that
notwithstanding the foregoing, “Eligible Assignee” shall not include (x) Parent
or any of Parent’s Subsidiaries or Affiliates, (y) any Defaulting Lender or any
of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would
constitute any of the foregoing Persons described in this clause (y) or (z) any
Disqualified Lender.

 

“Environmental Claims” shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, orders, claims, liens, notices
of actual or potential noncompliance, violation or liability, investigations or
proceedings arising under any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereafter, “Claims”),
including (a) any and all Claims by Governmental Authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of, or exposure to,
Hazardous Materials.

 

“Environmental Law” shall mean any federal, state, foreign or local statute,
law, rule, regulation, ordinance, code and rule of common law now or hereafter
in effect and in each case as amended, including any judicial or administrative
order, consent decree or judgment, relating to the environment, natural
resources, human health and safety (as such matters relate to exposure to
Hazardous Materials) or Hazardous Materials, including CERCLA; the Resource
Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Toxic Substances Control
Act, 15 U.S.C. § 2601 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. § 300f et seq.; the Oil Pollution Act of
1990, 33 U.S.C. § 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. § 11001 et seq.; the Hazardous Material
Transportation Act, 49 U.S.C. § 5101 et seq.; the Occupational Safety and Health
Act, 29 U.S.C. § 651 et seq.; and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.

 

“Equity Interests” of any Person shall mean any and all shares, interests,
rights to purchase, warrants, options, participation or other equivalents of or
interest in (however designated) equity of such Person, including any common
stock, preferred stock, any limited or general partnership interest and any
limited liability company membership interest; provided that, other than for
purposes of clause (b) of the definition of “Change of Control”, “Equity
Interests” shall not include any Convertible Debt Securities unless and until
any of the foregoing is converted into, or is exchanged or exercised for, any
Equity Interest.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
that, together with any Credit Party or any other Subsidiary of the Borrower, is
treated as a “single employer” within the meaning of Section 414(b), (c), (m) or
(o) of the Code.

 

10

 

 

“ERISA Event” shall mean (a) any Reportable Event, (b) with respect to any Plan
or Multiemployer Plan, the failure to satisfy the minimum funding standard (as
defined in Section 412 or 430 of the Code or Section 302 of ERISA), whether or
not waived, (c) the filing pursuant to Section 412(c) of the Code or
Section 302(c) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan or Multiemployer Plan, (d) the filing of a
notice to terminate any Plan, (e) a determination that any Plan is in “at-risk
status” or any Multiemployer Plan is in “endangered status” or “critical status”
(as each is defined in Section 303 and 305 of ERISA, respectively), (f) the
incurrence by any Credit Party, any other Subsidiary of the Borrower or any
ERISA Affiliate of any liability (x) under Title IV of ERISA with respect to the
termination of any Plan or (y) in connection with the withdrawal or partial
withdrawal from any Multiemployer Plan, (g) proceedings have been instituted to
terminate or appoint a trustee to administer any Plan, (h) the receipt by any
Credit Party, any other Subsidiary of the Borrower or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from any Credit Party, any
other Subsidiary of the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent within the meaning of
Title IV of ERISA or (i) the occurrence of a non-exempt “prohibited transaction”
with respect to which any Credit Party or any other Subsidiary of the Borrower
is a “disqualified person” (each within the meaning of Section 4975 of the Code.

 

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

 

“Event of Default” shall have the meaning assigned to such term in Section 7.01.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

 

“Excluded Pledges” shall mean any pledge of Equity Interests (a) for which the
pledge of such Equity Interests is prohibited by applicable law or any
contractual obligations not otherwise prohibited hereunder or that would require
the consent, approval, license or authorization of any Governmental Authority or
third party (unless such consent, approval, license or authorization has been
received; provided that no Credit Party shall be required to seek such consent),
(b) any Specified Subsidiary, (c) of a captive insurance entity, (d) any REO
Subsidiary (i) if the Equity Interests of such REO Subsidiary are required to be
pledged to secure the Asset Level Term Loan or the related Permitted Funding
Indebtedness or (ii) in the case of Diplomat Property Manager, LLC and Spartan
Property Manager, LLC, during the first 180 days after the Closing Date and (e)
any Repo Subsidiary. The pledge of the Equity Interests of the Asset Level
Borrower shall not be an Excluded Pledge unless such Asset Level Borrower is
also (a) a REO Subsidiary (i) whose Equity Interests are required to be pledged
to secure the Asset Level Term Loan or the related Permitted Funding
Indebtedness or (ii) in the case of Diplomat Property Manager, LLC and Spartan
Property Manager, LLC, during the first 180 days after the Closing Date or (b) a
Wholly Owned Subsidiary of another Asset Level Borrower that is not a REO
Subsidiary whose Equity Interests are required to be pledged to secure the Asset
Level Term Loan or the related Permitted Funding Indebtedness.

 

11

 

 

“Excluded Subsidiary” shall mean each (a) Securitization Entity, (b) Repo Debt
Entity, (c) Immaterial Subsidiary, (d) captive insurance Subsidiary, (e)
Subsidiary that is prohibited by applicable law from guaranteeing the
Obligations or that would require the consent, approval, license or
authorization of any Governmental Authority or third party to guarantee the
Obligations (unless such consent, approval, license or authorization has been
received; provided that no Credit Party shall be required to seek such consent),
(f) non-wholly owned Subsidiary,  (g) any REO Subsidiary (i) if the Equity
Interests of such REO Subsidiary are required to be pledged to secure the Asset
Level Term Loan or the related Permitted Funding Indebtedness or (ii) if such
REO Subsidiary is Diplomat Property Manager, LLC or Spartan Property Manager,
LLC, during the first 180 days after the Closing Date and (h) any Repo
Subsidiary; provided that a Securitization Entity or Repo Debt Entity shall not
be an Excluded Subsidiary if the Permitted Funding Indebtedness incurred by such
Securitization Entity or such Repo Debt Entity is guaranteed, by any Credit
Party (excluding any guaranty that is solely any of the following (i) a
“carve-out” or “bad-boy” guaranty and the related Securitization Issuer or Repo
Debt Entity is intended to be bankruptcy remote from the Credit Parties or (ii)
any guarantee that is limited to a guarantee of the performance of obligations
incurred in connection with the related Permitted Funding Indebtedness, such as
the performance of Repurchase Obligations and is not a guaranty of the related
Permitted Funding Indebtedness).

 

“Excluded Taxes” shall mean, with respect to any Recipient of any payment to be
made by or on account of any obligation of the Borrower or any other Credit
Party hereunder, (a) Taxes imposed on (or measured by) net income (however
denominated), franchise Taxes and branch profits Taxes, in each case (i) imposed
as a result of such recipient being organized under the laws of, or having its
principal office located in or, in the case of any Lender its applicable lending
office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof), or (ii) that are Connection Taxes, (b) in the case of a
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.18), any U.S. federal withholding Tax that is imposed on amounts
payable to or for the account of such Lender under applicable law in effect at
the time such Lender acquires any interest in a Loan or a Commitment or
designates a new lending office, except to the extent that such Lender (or its
assignor, if any) was entitled, at the time of acquisition of such interest in a
Loan or Commitment, designation of a new lending office or assignment, to
receive additional amounts with respect to such withholding Tax pursuant to
Section 2.17(b), (c) any Tax attributable to such Recipient’s failure to comply
with Section 2.17(f) and (d) any U.S. federal withholding Taxes imposed pursuant
to FATCA.

 

“Executive Order” shall have the meaning assigned to such term in
Section 3.22(a).

 

“Existing Preferred Stock” shall mean Parent’s outstanding 7.50% Series B
Cumulative Redeemable Preferred Stock and 6.50% Series C Fixed-to-Floating Rate
Cumulative Redeemable Preferred Stock as classified and designated by the
articles supplementary to Parent’s Charter in effect as of the Effective Date.

 

“Fair Market Value” shall mean, with respect to any asset (including any Equity
Interests of any Person), the price at which a willing buyer that is not an
Affiliate of the seller, and a willing seller, would reasonably be expected to
agree to purchase and sell such asset, as determined in good faith by the
Borrower or the Subsidiary selling such asset, whose determination will be
conclusive for all purposes under the Credit Documents, absent manifest error.

 

12

 

 

“FATCA” shall mean Sections 1471 through 1474 of the Code, as of the Closing
Date (or any amended or successor version that is substantively comparable and
not materially more onerous to comply with), any current or future regulations
or official interpretations thereof and any agreements entered into pursuant to
Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules
or practices adopted pursuant to any intergovernmental agreement, treaty or
convention among Governmental Authorities implementing such Sections of the
Code.

 

“Federal Funds Effective Rate” shall mean, for any day, the rate per annum
calculated by the Federal Reserve Bank of New York based on such day’s federal
funds transactions by depository institutions (as determined in such manner as
the Federal Reserve Bank of New York shall set forth on its public website from
time to time), as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day; provided that if such day is not a
Business Day, the Federal Funds Effective Rate for such day shall be such rate
on such transactions on the next preceding Business Day as so published on the
next succeeding Business Day.

 

“Forbearance Security and Collateral Agency Agreement” means that certain
Security and Collateral Agency Agreement, dated as of April 10, 2020, by and
among Parent and certain of its affiliates, jointly and severally, Wilmington
Trust, National Association, as agent for the repurchase agreement financing
counterparties named therein (the “Participating Counterparties”), and the
Participating Counterparties.

 

“Foreign Lender” shall mean any Lender that is not a “United States person”
within the meaning of Section 7701(a)(30) of the Code.

 

“Foreign Subsidiary” of any Person shall mean any Subsidiary of such Person that
is not a Domestic Subsidiary.

 

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

 

“Governmental Authority” shall mean the government of the United States of
America, any other nation or any political subdivision thereof, whether state,
provincial or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

 

“Government Official” shall have the meaning assigned to such term in Section
3.23(a).

 

“Granting Lender” shall have the meaning assigned to such term in
Section 9.04(i).

 

“Guarantors” shall mean Parent and each Subsidiary Guarantor.

 

“Guaranty” shall mean the Guaranty dated as of the Closing Date made by
Guarantors from time to time party thereto in favor of the Administrative Agent
for the benefit of the Secured Creditors, substantially in the form of Exhibit
E.

 

“Hazardous Materials” shall mean (a) any petroleum or petroleum products,
radioactive materials, asbestos, asbestos-containing material, lead, mold, urea
formaldehyde foam insulation, polychlorinated biphenyls, and radon gas; (b) any
chemicals, materials or substances defined as or included in the definition of
“hazardous substances,” “hazardous waste,” “hazardous materials,” “extremely
hazardous substances,” “restricted hazardous waste,” “toxic substances,” “toxic
pollutants,” “contaminants,” or “pollutants,” or words of similar import, under
any applicable Environmental Law; and (c) any other chemical, material or
substance, the exposure to, or Release of which is prohibited, limited or
regulated by any Governmental Authority, or may give rise to liability under any
Environmental Law.

 

13

 

 

“Immaterial Subsidiary” shall mean at any time, any Subsidiary of Parent (i)
having aggregate total assets (as determined in accordance with GAAP) in an
amount of less than 5.0% of consolidated total assets of Parent and its
Subsidiaries as of the last day of the immediately preceding fiscal quarter for
which financial statements are available and (ii) contributing in the aggregate
less than 5.0% to consolidated revenue for the most recent period of four (4)
consecutive fiscal quarters for which financial statements are available.

 

“Indebtedness” shall mean, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money and all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, including
any Securitization Indebtedness, (b) the maximum amount available to be drawn or
paid under all letters of credit, bankers’ acceptances, bank guaranties, surety
and appeal bonds and similar obligations issued for the account of such Person
and all unpaid drawings and unreimbursed payments in respect of such letters of
credit, bankers’ acceptances, bank guaranties, surety and appeal bonds and
similar obligations, (c) all Capitalized Lease Obligations of such Person, (d)
all Contingent Obligations of such Person in respect of indebtedness and other
obligations described in another clause of this definition, (e) (i) the net
mark-to-market exposure under any Interest Rate Protection Agreement or any
Other Hedging Agreement and, (ii) all obligations of such Person under
conditional sale or other title retention agreements relating to property or
assets purchased by such Person, (f) any obligation owed for all or any part of
the deferred purchase price of property or services, including any liquidated
earn-out obligations (excluding any such obligations incurred under ERISA),
which purchase price is due more than six (6) months from the date of incurrence
of the obligation in respect thereof and (g) Disqualified Equity Interests. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is directly liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is not liable
therefor. Notwithstanding the foregoing, Indebtedness shall not include trade
payables, accrued expenses and deferred Tax and other credits incurred by any
Person in accordance with customary practices and in the ordinary course of
business of such Person.

 

“Indemnified Taxes” shall mean (a) Taxes imposed on or with respect to any
payment made by any or on account of any obligation of any Credit Party under
any Credit Document, other than Excluded Taxes, and (b) to the extent not
otherwise described in (a), Other Taxes.

 

“Indemnitee” shall have the meaning assigned to such term in Section 9.05(b).

 

“Information” shall have the meaning assigned to such term in Section 9.16.

 

“Initial Lenders” shall mean Omaha Debt Aggregator, L.P., a Delaware limited
partnership, and AUSA.

 

14

 

 

“Intangible Assets” shall mean assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.

 

“Intercompany Debt” shall mean any Indebtedness, payables or other obligations,
whether now existing or hereafter incurred, owed by the Borrower or any
Subsidiary to the Borrower or any other Subsidiary.

 

“Intercompany Loans” shall have the meaning assigned to such term in
Section 6.05(f).

 

“Intercompany Subordination Agreement” shall mean the Intercompany Subordination
Agreement dated as of the Closing Date among the Borrower and certain
subsidiaries of the Borrower and the Collateral Agent, substantially in the form
of Exhibit G.

 

“Interest Rate Protection Agreement” shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or any other agreement or arrangement similar to any of the
foregoing.

 

“Investments” shall have the meaning assigned to such term in Section 6.05.

 

“Investment Agreement” shall mean that certain Investment Agreement, dated as of
June 15, 2020, by and among Parent, Omaha Equity Aggregator, L.P. and AUSA.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Lenders” shall mean (a) the Persons listed on Schedule 2.01 and (b) any Person
that has become a party hereto as a Lender pursuant to an Assignment and
Acceptance, other than any such Person that has ceased to be a party hereto as a
Lender pursuant to an Assignment and Acceptance.

 

“Lien” shall mean (a) any lien (statutory or other), mortgage, deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest,
charge, preference, priority or other security agreement or encumbrance of any
kind or nature whatsoever (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement, and any lease or
license in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (b) in the
case of Securities, any purchase option, call or similar right of a third party
with respect to such Securities.

 

“Liquidity” shall mean, as of any date of determination, the sum of (i)
Unrestricted cash and Unrestricted Cash Equivalents of the Parent, the Borrower
and the Subsidiaries plus (ii) the aggregate amount of unused committed
availability as of such date under facilities for Permitted Repo Indebtedness
(which shall be deemed to include any committed unused capacity attributable to
under-borrowing (or under payment of “purchase price” to the applicable Repo
Debt Entity) or the equivalent thereof under such facilities).

 

“Liquidity Threshold” shall mean, at any time, the sum of (a) $50,000,000 plus
(b) the product of (i) 10.0% and (ii) the aggregate outstanding obligations in
respect of Permitted Repo Indebtedness that is subject to mark-to-market
valuation thereunder at such time.

 

15

 

 

 

“Loans” shall mean collectively, (a) the term loans made by the Lenders to the
Borrower pursuant to Section 2.01 and (b) the Protective Advances made by the
Lenders pursuant to Section 2.20.

 

“Make Whole Premium” shall mean, with respect to any prepayment of Loans
pursuant to Section 2.10(a) pursuant to which the Make Whole Premium applies, or
with respect to Loans the principal of which has become or has been declared to
be immediately due and payable pursuant to Article 7, an amount equal to the net
present value (computed using a discount rate equal to the Treasury Rate as of
such prepayment date plus 50 basis points), as determined by the Administrative
Agent (or its designee, which may be a Lender) in accordance with accepted
financial practice at the date of such prepayment or acceleration, of all
required interest payable on the aggregate principal amount of the Loans subject
to such prepayment or acceleration from the date of such prepayment or
acceleration through and including the Maturity Date (assuming all interest is
paid in cash during such period).

 

“Margin Stock” shall have the meaning assigned to such term in Regulation U.

 

“Market Value” means (a) in respect of any asset subject to a mark-to-market
arrangement in connection with any Indebtedness to finance such asset, the most
recently determined mark-to-market value determined for such Indebtedness, (b)
in respect of any Permitted Funding Asset not subject to a mark-to-market
arrangement in connection with any Indebtedness to finance any such asset or any
other asset for which Parent or any Subsidiary in the Ordinary Course of
Business obtains third party valuations, the lesser of (i) the most recent third
party valuation thereof received by Parent, the Borrower or any Subsidiary and
(ii) the book-value of such asset as determined in in accordance with GAAP and
(c) in respect of any other asset, the book-value of such asset as determined in
in accordance with GAAP.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, property, assets or financial condition of Parent, the
Borrower and its Subsidiaries taken as a whole, (b) the rights or remedies of or
benefits available to the Lenders, the Administrative Agent or the Collateral
Agent hereunder or under any other material Credit Document, taken as a whole or
(c) the ability of Parent, the Borrower or the other Credit Parties, taken as a
whole, to perform its or their payment obligations to the Lenders, the
Administrative Agent or the Collateral Agent hereunder or under any other
material Credit Document; provided that changes in the business, assets,
operations or financial condition of Parent, the Borrower or any of its
Subsidiaries that have been disclosed in writing to the Lenders or in Parent’s
public filing with the SEC, in each case prior to the Effective Date, shall not
constitute a “Material Adverse Effect”.

 

“Material Subsidiary” shall mean any Subsidiary of the Borrower other than an
Immaterial Subsidiary.

 

“Maturity Date” shall mean the 6th anniversary of the Closing Date.

 

“Maximum Rate” shall have the meaning assigned to such term in Section 9.09.

 

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor thereto.

 

16

 

 

“MSR Related Assets” shall mean loans and other debt instruments secured by (or
otherwise paid out of payments on or arising from) the servicing of residential
mortgage loans and related activities.

 

“Multiemployer Plan” shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which any Credit Party, any other Subsidiary of
the Borrower or any ERISA Affiliate (a) currently makes or is obligated to make
contributions, (b) has made or was obligated, within the preceding six (6)
years, to make contributions, or (c) otherwise has any outstanding liability.

 

“NAIC” shall mean the National Association of Insurance Commissioners.

 

“Net Cash Proceeds” shall mean, for any event requiring a repayment of Loans
pursuant to Section 2.11(a) or (b), as the case may be, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a promissory
note, receivable or otherwise, but only as and when received) received from such
event, net of out-of-pocket transaction costs (including, as applicable, any
underwriting, brokerage or other customary commissions and out-of-pocket legal,
advisory and other fees and expenses associated therewith) received from any
such event and, in the case of a Recovery Event, net of the amount of such gross
cash proceeds required to be used to permanently repay any Indebtedness which is
secured by the respective property or assets destroyed, damaged, taken or
otherwise underlying such Recovery Event.

 

“Non-Defaulting Lender” shall mean, at any time, each Lender that is not a
Defaulting Lender at such time.

 

“Non-Wholly Owned Subsidiary” shall mean, as to any Person, each Subsidiary of
such Person which is not a Wholly Owned Subsidiary of such Person.

 

“Notes” shall mean any promissory notes issued from time to time pursuant to
Section 2.04(e).

 

“Obligations” shall mean all amounts owing to the Administrative Agent, the
Collateral Agent or any Lender pursuant to the terms of this Agreement or any
other Credit Document, including all amounts in respect of any principal,
premium, interest (including any interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding (or which would
accrue but for the operation of applicable bankruptcy or insolvency laws) at the
rate provided for herein, whether or not such interest is an allowed or
allowable claim in any such proceeding), penalties, fees, expenses,
indemnifications, reimbursements, damages and other liabilities, and guarantees
of the foregoing amounts.

 

“Ordinary Course of Business” shall mean the ordinary course of business (i) as
conducted by similarly situated residential loan and mortgage finance businesses
in good faith in a manner consistent with customary market practice for the
industries in which the Borrower and its Subsidiaries operate or (ii) as
conducted by the Borrower and its Subsidiaries in good faith and consistent with
past practice with respect to the scope of its normal business operations. A
non-qualified mortgage loan securitization of Permitted Funding Assets or
Permitted Funding Indebtedness with respect to any Permitted Funding Assets, in
each case, that is not otherwise prohibited hereunder shall be deemed to be in
the Ordinary Course of Business.

 

17

 

 

“Other Hedging Agreements” shall mean any foreign exchange contracts, currency
swap agreements, commodity agreements, credit default swap agreements or other
similar arrangements, or arrangements designed to protect against fluctuations
in currency values, commodity prices or credit exposures.

 

“Other Taxes” shall mean any and all present or future stamp, court or
documentary Taxes, intangible, recording or filing Taxes or any other similar
Taxes, charges or levies arising from any payment made under any Credit Document
or from the execution, delivery, performance, registration or enforcement of,
from the receipt or perfection of a security interest under, or otherwise with
respect to, any Credit Document, except any such Taxes that are Connection Taxes
imposed with respect to any assignment (other than an assignment made pursuant
to Section 2.18).

 

“Parent” shall have the meaning assigned to such term in the introductory
statement to this Agreement.

 

“Participant Register” shall have the meaning assigned to such term in
Section 9.04(f).

 

“Payment Election Notice” shall mean, with respect to any Quarterly Payment Date
a notice, duly completed and signed by an Authorized Officer of the Borrower,
substantially in the form of Exhibit I specifying (i) pursuant to Section 2.06
and Section 2.08, the amount of interest that shall be paid as PIK Interest and
Cash Interest on such Quarterly Payment Date (expressed as a percent per annum,
e.g. up to 3% per annum may be elected to be accrued as PIK Interest), and (ii)
pursuant to Section 2.09, the amount of amortization that the Borrower may elect
to defer on such Quarterly Payment Date, if any together with, solely in the
event such deferral is elected, reasonably detailed calculations demonstrating
the amount of such deferred payment, if any, and the calculation of the test
under Section 6.15 after giving effect to the application of funds on such
Quarterly Payment Date (it being understood that such test shall use the average
Liquidity for the five (5) Business Days immediately preceding the date the
relevant Payment Election Notice is delivered by the Borrower).

 

“Permitted Credit Default Swap” shall mean any credit default swap with respect
to one or more counterparties to which the Parent or any of its Subsidiaries has
exposure, which credit default swap is designed to protect against actual credit
risk to which such Person has exposure, is for bona fide hedging activities in
the Ordinary Course of Business and which is not for speculative purposes and
which has been approved by the board of directors of Parent.

 

“Permitted Funding Assets” shall mean (a) Residential Mortgage Loans, REO
Assets, MSR Related Assets, credit risk transfer or similar securities, and
residential mortgage backed securities (including those backed by re-performing
and/or non-performing loans), (b) any reserve accounts, collection accounts and
similar other accounts (including any trust accounts) established in connection
with the incurrence of Permitted Funding Indebtedness to finance the assets
described in clause (a), and any amounts on deposit in (or credited to) such
accounts, (c) rights and interests under any of the transaction documents
(including any transfer agreements) related to any such Permitted Funding
Indebtedness, (d) in each case, with respect to assets of the type described in
clause (a), (b) or (c), any related rights or other assets ancillary or
incidental to the acquisition or ownership of such assets and (e) Equity
Interests in any Subsidiary of the Borrower whose sole assets are assets of the
type described in clauses (a), (b), (c) and (d).

 

18

 

 

“Permitted Funding Indebtedness” shall mean (a) any Permitted Repo Indebtedness
and (b) any Permitted Securitization Indebtedness (including, in each case, any
obligations incidental to the incurrence of such Permitted Repo Indebtedness or
Permitted Securitization Indebtedness, such as Repurchase Obligations).

 

“Permitted Liens” shall have the meaning assigned to such term in Section 6.01.

 

“Permitted Refinancing” shall mean any Indebtedness (the “refinancing
Indebtedness”) issued in exchange for, or the net proceeds of which are used to
refinance, renew, replace, defease, discharge or refund, other Indebtedness (the
“refinanced Indebtedness”); provided that:

 

(a)               the principal amount of such refinancing Indebtedness does not
exceed the principal amount of the refinanced Indebtedness (plus all accrued
interest thereon and the amount of all out-of-pocket fees, expenses and premiums
incurred in connection with such exchange, refinancing, renewal, replacement,
defeasance, discharge or refunding);

 

(b)               such refinancing Indebtedness has a final maturity date later
than the final maturity date of, and, in the case of non-revolving credit
Indebtedness, has a weighted average life to maturity equal to or greater than
the weighted average life to maturity of, the refinanced Indebtedness
(determined without giving effect to prior payments that reduced amortization of
the refinanced Indebtedness.

 

(c)               no Person, other than the obligors of the refinanced
Indebtedness, shall be an obligor in respect of such refinancing Indebtedness;

 

(d)               if the refinanced Indebtedness is subordinated in right of
payment or in lien priority to the Obligations, the refinancing Indebtedness
shall be subordinated in right of payment or in lien priority, as applicable, to
the Obligations on terms at least as favorable to the Lenders as those contained
in the documentation governing the refinanced Indebtedness;

 

(e)               if such refinanced Indebtedness is secured, the refinancing
Indebtedness with respect thereto may only be secured if and to the extent
secured by the same assets (and improvements affixed thereto) that secured such
refinanced Indebtedness; and

 

(f)                in the case of a refinancing of any Convertible Debt
Security, such refinanced debt shall consist of debt securities, the terms of
which provide for the conversion into, or exchange for, common stock of Parent
and cash in lieu of fractional shares thereof.

 

“Permitted Repo Indebtedness” shall mean Repo Indebtedness, so long as (a) such
Repo Indebtedness is the sole obligation of (i) the related Repo Debt Entity,
(ii) any related REO Subsidiary, (iii) any related Repo Subsidiary, (iv) Parent
(pursuant to an unsecured guaranty by Parent or an arrangement pursuant to which
Parent is a co-seller or a co-borrower but does not grant any collateral
security to secure such Repo Indebtedness), and (v) at any time prior to the
funding of the Loans to be made pursuant to Section 2.01 and the settlement of
the proceeds thereof (but not at any time thereafter), each of the “Debtor”
parties to the Forbearance Security and Collateral Agency Agreement, and (b) the
Borrower and the applicable Repo Debt Entity use commercially reasonable efforts
to cause the related financing sources to deliver a Repo Indebtedness Purchase
Letter.

 

19

 

 

“Permitted Securitization Indebtedness” shall mean Securitization Indebtedness,
so long as (a) such Securitization Indebtedness is the sole obligation of the
related Securitization Entity and any related REO Subsidiary (other than
Repurchase Obligations, which may be obligations of other parties) and (b) in
connection with any Securitization, any Repo Indebtedness used to finance the
purchase or origination of any Permitted Funding Assets subject to such
Securitization is repaid in connection with such Securitization to the extent of
the net proceeds received by the Borrower and its Subsidiaries from the
applicable Securitization Entity.

 

“Permitted Subordinated Debt” shall mean unsecured Indebtedness of Parent that
is expressly subordinated to the Obligations in right of payment on terms
approved by the Required Lenders, such approval not to be unreasonably withheld,
delayed or conditioned.

 

“Person” shall mean any individual, partnership, joint venture, firm,
corporation, association, limited liability company, trust or other enterprise
or any Governmental Authority.

 

“PIK Election” shall have the meaning assigned to such term in Section 2.06(b).

 

“PIK Interest” shall have the meaning assigned to such term in Section 2.06(b).

 

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which any Credit Party, any other
Subsidiary of the Borrower or any ERISA Affiliate (i) is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA or (ii) otherwise has any outstanding
liability.

 

“Platform” shall have the meaning assigned to such term in Section 9.01.

 

“Pledge Agreement” shall mean the Pledge Agreement dated as of the Closing Date
among each of the pledgors from time to time party thereto and the Collateral
Agent, substantially in the form of Exhibit J.

 

“Pledge Agreement Collateral” shall mean all “Collateral” as defined in the
Pledge Agreement; provided that such Pledge Agreement Collateral shall not
include Excluded Pledges.

 

“Preferred Equity”, as applied to the Equity Interests of any Person, shall mean
Equity Interests of such Person (other than common Equity Interests of such
Person) of any class or classes (however designated) that ranks prior, as to the
payment of dividends or as to the distribution of assets upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person, to shares of
Equity Interests of any other class of such Person.

 

“Preferred Stock Accumulated Dividends” shall mean such dividends on the
Existing Preferred Stock which have accumulated but have not been paid to the
record holders thereof or such other Persons as to which such dividends are to
be paid in accordance with the terms governing the Existing Preferred Stock.

 

“Protective Advance” shall have the meaning assigned to Section 2.20.

 

20

 

 

“Public Lender” shall have the meaning assigned to such term in Section 9.01.

 

“Qualified Equity Interests” shall mean any Equity Interests of the Borrower so
long as the terms of any such Equity Interests (or the terms of any security
into which it is convertible or for which it is exchangeable) (a) do not contain
any maturity, mandatory put, redemption, repayment, sinking fund or other
similar provision (whether as a result of an asset sale, change of control or
otherwise), (b) do not require the payment of cash dividends or distributions
that would otherwise be prohibited by the terms of this Agreement and (c) do not
provide that such Equity Interests are or will become convertible into or
exchangeable for Indebtedness or any other Equity Interests (other than
Qualified Equity Interests), in each case of (a), (b) and (c) before the date
that is ninety-one (91) days after the Maturity Date.

 

“Qualified REIT Subsidiary” has the meaning set forth in Section 856(i)(2) of
the Code.

 

“Quarterly Payment Date” shall mean the last Business Day of each calendar
quarter, commencing on September 30, 2020.

 

“Real Property” of any Person shall mean all the right, title and interest of
such Person in and to land, improvements and fixtures.

 

“Recipient” means (a) the Administrative Agent or (b) any Lender.

 

“Recovery Event” shall mean the receipt by the Borrower or any Subsidiary of any
cash insurance proceeds or condemnation awards payable (a) by reason of theft,
loss, physical destruction, damage, taking or any other similar event with
respect to any property or assets of the Borrower or any Subsidiary or (b) under
any policy of insurance required to be maintained under Section 5.03 (excluding,
in each case, business interruption insurance and hazard and flood insurance
maintained with respect to REO Assets).

 

“Register” shall have the meaning assigned to such term in Section 9.04(d).

 

“Regulation U” shall mean Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“Regulation X” shall mean Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor to all or a
portion thereof.

 

“REIT” shall mean a real estate investment trust within the meaning of and under
the provisions of Sections 856 et seq. of the Code.

 

“Related Fund” shall mean, with respect to any Lender that is an insurance
company, fund or commingled investment vehicle (or an affiliate of any of the
foregoing) that invests in bank loans, (a) one or more of such Lender’s
Affiliate or one or more cedants that have entered into a reinsurance
relationship with such Lender or any Affiliate thereof, (b) any fund, insurance
company or other entity managed or advised by the investment advisor (or one or
more Affiliates thereof) to any Lender, or (c) any beneficiary under a trust
agreement in which the investment advisor (or an Affiliate thereof) to any
Lender is also the investment advisor or asset manager of the grantor under such
trust agreement.

 

21

 

 

“Related Parties” shall mean, with respect to any specified Person, such
Person’s Affiliates and the respective directors, trustees, officers, employees,
agents, representatives and advisors of such Person and such Person’s
Affiliates.

 

“Release” shall mean actively or passively disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring, seeping, migrating or the like, into or upon any land or water or air,
or otherwise entering into the environment.

 

“REO Assets” of a Person shall mean any real property owned by such Person and
acquired as a result of the foreclosure or other enforcement of a lien on such
asset securing a loan.

 

“REO Subsidiary” means a Subsidiary of the Borrower whose sole business purposes
are (a) holding REO Assets directly or indirectly pledged in connection with the
Asset Level Term Loan or any Permitted Funding Indebtedness, and (b) activities
incidental or related thereto.

 

“Repo Debt Entity” shall mean any Wholly Owned Subsidiary of the Borrower that
is exclusively or primarily engaged in the origination or acquisition of
Permitted Funding Assets and the incurrence of Permitted Repo Indebtedness in
connection therewith and activities relating thereto.

 

“Repo Facility” shall mean any financing arrangement of any kind, including
financing arrangements in the form of repurchase facilities, loan agreements,
note issuance facilities and commercial paper facilities (excluding, in all
cases, Securitizations), with a financial institution or other lender or
purchaser (such financial institution or other lender or purchaser, a “Repo
Provider”) exclusively to finance or refinance the purchase or origination by a
Repo Debt Entity of, or provide funding to a Repo Debt Entity through the
transfer of, Permitted Funding Assets purchased or originated by a Repo Debt
Entity in the Ordinary Course of Business.

 

“Repo Indebtedness” shall mean Indebtedness in connection with a Repo Facility;
provided that the amount of any particular Repo Indebtedness as of any date of
determination shall be calculated in accordance with GAAP.

 

“Repo Indebtedness Purchase Letter” means a letter agreement substantially in
the form of Exhibit M hereto or such other letter agreement related to the
matters described in Exhibit M and acceptable to the Required Lenders in their
commercially reasonable discretion.

 

“Repo Subsidiary” means a Subsidiary of a Repo Debt Entity or an Asset Level
Borrower (a) whose sole assets are Permitted Funding Assets and (b) whose Equity
Interests are required to be pledged to secure the Asset Level Term Loan or the
related Permitted Repo Indebtedness, as applicable.

 

“Repo Provider” shall have the definition given to it in “Repo Facility”.

 

“Reportable Event” shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan other than those events as to which the 30-day notice
period is waived.

 

22

 

 

“Repurchase Obligation” shall mean any obligation of a seller of Permitted
Funding Assets in connection with the incurrence of Permitted Funding
Indebtedness to repurchase the related Permitted Funding Assets from the related
buyer, or to make a payment in respect thereof, arising as a result of a breach
of a representation, warranty or covenant or otherwise, including, without
limitation, as a result of a receivable or portion thereof becoming subject to
any asserted defense, dispute, offset or counterclaim of any kind as a result of
any action taken by, any failure to take action by or any other event relating
to the seller.

 

“Required Lenders” shall mean, at any time, Lenders having Loans and unused
Commitments representing more than 50% of the sum of all Loans outstanding and
unused Commitments at such time. The Loans and unused Commitments of any
Defaulting Lender shall be disregarded in the determination of the Required
Lenders at any time.

 

“Residential Mortgage Loan” shall mean any residential mortgage loan,
manufactured housing installment sale contract and loan agreement, home equity
loan, home improvement loan, fix and flip loans, single family rentals loans,
multi-family loans, consumer installment sale contract or similar loan evidenced
by a Residential Mortgage Note, and any installment sale contract, loan contract
or chattel paper.

 

“Residential Mortgage Note” shall mean a promissory note, bond or similar
instrument evidencing indebtedness of an obligor under a Residential Mortgage
Loan, including, without limitation, all related security interests and any and
all rights to receive payments due thereunder.

 

“Resolution Authority” shall mean an EEA Resolution Authority or, with respect
to any UK Financial Institution, a UK Resolution Authority.

 

“Response Date” shall have the meaning assigned to such term in Section
2.12(a)(iii).

 

“Restricted” shall mean, when referring to cash or Cash Equivalents of Parent or
any Subsidiary, that such cash or Cash Equivalents (i) appears (or would be
required to appear) as “restricted” on a consolidated balance sheet of Parent or
of any such Subsidiary (unless such appearance is related to Liens on the
Collateral securing Indebtedness permitted hereunder to be secured by Liens on
the Collateral), or (ii) are subject to any Lien in favor of any Person other
than the Collateral Agent for the benefit of the Secured Creditors (other than
Liens of the type permitted by Section 6.01(l)).

 

“Restricted Payment” shall mean (a) any dividend or other distribution or return
of capital, direct or indirect (whether in cash, Securities or other property),
on account of any shares of any class of Equity Interests (each a “Dividend”) of
Parent, the Borrower or any of their respective Subsidiaries now or hereafter
existing and (b) any payment, direct or indirect (whether in cash, Securities or
other property), including any sinking fund, setting aside of funds or similar
deposit, on account of the purchase, redemption, retirement, surrender,
acquisition, cancellation or termination of any shares of any class of Equity
Interests of Parent, the Borrower or any of their respective Subsidiaries now or
hereafter existing.

 

“S&P” shall mean S&P Global Ratings, an S&P Global business, or any successor
thereto.

 

“Sanctioned Person” means at any time any Person: (a) listed on any
Sanctions-related list of designated or blocked persons; (b) resident in or
organized under the laws of a country or territory that is the subject of
comprehensive restrictive Sanctions from time to time (as of the date of this
Agreement, Cuba, Iran, North Korea, Syria, and the Crimea region); or (c)
majority-owned or controlled by any of the foregoing.

 

23

 

 

“Sanctions” means all economic or financial sanctions or trade embargoes
imposed, administered or enforced from time to time by (a) the United States
(including without limitation the Office of Foreign Assets Control of the U.S.
Department of the Treasury or the U.S. Department of State), (b) the European
Union and enforced by its member states, (c) the United Nations, or (d) Her
Majesty’s Treasury.

 

“SEC” shall have the meaning assigned to such term in Section 5.01(f).

 

“Secured Creditors” shall mean the Administrative Agent and the Lenders.

 

“Securities” shall mean any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as “securities” or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

 

“Securitization” shall mean a public or private term note or term certificate
financing of Permitted Funding Assets by which the Parent or a Subsidiary of the
Parent directly or indirectly (whether as a sponsor, distributor or otherwise)
securitizes a pool of specified Permitted Funding Assets.

 

“Securitization Entity” shall mean (a) any Person (whether or not a Subsidiary
of the Borrower but which shall not be a direct Subsidiary of Parent)
established for the purpose of issuing asset-backed or mortgaged-backed or
mortgage pass-through securities of any kind, and (b) any special purpose
Subsidiary established solely for the purpose of selling, depositing or
contributing Permitted Funding Assets into a Person described in clause (a) or
holding securities in any related Securitization Entity, regardless of whether
such person is an issuer of securities.

 

“Securitization Indebtedness” shall mean, for any Securitization, Indebtedness
of the Securitization Entity incurred in connection with such Securitization.

 

“Security Document” shall mean and include the Pledge Agreement and, after the
execution and delivery thereof, each Additional Pledge Document.

 

“Special Redemption Premium” shall have the meaning assigned to such term in
Section 2.05(b).

 

“Specified Subsidiaries” shall mean Crimson Residential Assets Corp. and
Cardinal Residential Asset Corp.

 

“SPV” shall have the meaning assigned to such term in Section 9.04(i).

 

24

 

 

“Subsidiary” shall mean, as to any Person, (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person and/or one (1) or more
Subsidiaries of such Person and (b) any partnership, limited liability company,
association or other entity in which such Person and/or one (1) or more
Subsidiaries of such Person has more than a 50% equity interest at the time.
Unless otherwise qualified, all references to a “Subsidiary” or to
“Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of
Parent.

 

“Subsidiary Guarantor” shall mean each Subsidiary (other than the Excluded
Subsidiaries) (in each case, whether existing on the Closing Date or
established, created or acquired after the Closing Date), unless and until such
time as the respective Subsidiary is released from all of its obligations under
the Guaranty in accordance with the terms and provisions thereof. As of the
Closing Date, Subsidiary Guarantors are listed on Schedule 1.01 (the
Subsidiaries listed on Schedule 1.01, the “Closing Date Subsidiary Guarantors”).

 

“Swap Termination Value” means, in respect of any one or more Interest Rate
Protection Agreement or Permitted Credit Default Swap, (a) for any date on or
after the date such Interest Rate Protection Agreements or Permitted Credit
Default Swaps have been closed out and termination value(s) determined in
accordance therewith, such termination value(s) and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Interest Rate Protection Agreements or
Permitted Credit Default Swaps, as determined by the Borrower based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such agreements (which may include any Lender).

 

“Tax Return” means any return, report or similar statement required to be filed
or sent with respect to any Tax (including any attached schedules), including
any information return, claim for refund, amended return or declaration of
estimated Tax.

 

“Taxes” shall mean any and all present or future taxes, levies, imposts, duties,
deductions, withholdings (including backup withholding), assessments, fees or
other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto.

 

“Termination Date” shall have the meaning assigned to such term in Article 5.

 

“Third Forbearance Agreement” shall mean the Third Forbearance Agreement, dated
as of June 1, 2020, among Parent, certain Subsidiaries of the Borrower and
certain Repo Providers.

 

“Total Assets” shall mean, for any Person and as of any date of determination,
an amount equal to the aggregate Market Value of all assets owned by such Person
and its Subsidiaries on a consolidated basis and the proportionate share of
assets owned by non-consolidated Subsidiaries of such Person, less Intangible
Assets as determined in accordance with GAAP.

 

25

 

 

“Total Indebtedness” shall mean, for any Person and its Subsidiaries on a
consolidated basis, as of any date of determination, the sum of (i) the
aggregate Indebtedness (and guarantees thereof) referred to in clauses (a), (b),
(c) and (g) of the definition of “Indebtedness” (other than contingent
liabilities not reflected on such Person’s consolidated balance sheet) of such
Person, (ii) all Contingent Obligations of such Person in respect of
Indebtedness of the type described in clause (i), (iii) letters of credit to the
extent non-contingent and actually drawn and (iv) the proportionate share of all
Indebtedness (other than contingent liabilities not reflected on such Person’s
consolidated balance sheet) of all non-consolidated Subsidiaries of such Person
as of such date, all on or as of such date and determined in accordance with
GAAP.

 

“Transactions” shall mean, collectively, (a) the execution, delivery and
performance by the Credit Parties of the Credit Documents to which they are a
party and the making of the Loans hereunder, (b) the use of the proceeds of the
Loans as required by Section 5.11, (c) the closing and funding of the Asset
Level Term Loan, (d) the closing of the Investments Agreement and the
consummation of the transactions contemplated therein and (e) the payment of
related fees and expenses.

 

“Treasury Rate” means the yield to maturity at the time of computation of U.S.
Treasury securities with a constant maturity (as compiled and published in the
most recent Federal Reserve Statistical Release H.15 (519) that has become
publicly available at least two (2) Business Days prior to the applicable
prepayment date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data)) most nearly equal to the
period from such prepayment date to the Maturity Date; provided, however, that
if the period from such prepayment date to the Maturity Date is not equal to the
constant maturity of a U.S. Treasury security for which a weekly average yield
is given, the Treasury Rate shall be obtained by linear interpolation
(calculated to the nearest one-twelfth of a year) from the weekly average yields
of U.S. Treasury securities for which such yields are given, except that if the
period from such prepayment date to the Maturity Date is less than one (1) year,
the weekly average yield on actually traded U.S. Treasury securities adjusted to
a constant maturity of one (1) year shall be used.

 

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in
the relevant jurisdiction.

 

“UK Financial Institution” shall mean any BRRD Undertaking (as such term is
defined under the PRA Rulebook (as amended form time to time) promulgated by the
United Kingdom Prudential Regulation Authority) or any person falling within
IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the
United Kingdom Financial Conduct Authority, which includes certain credit
institutions and investment firms, and certain affiliates of such credit
institutions or investment firms.

 

“UK Resolution Authority” shall mean the Bank of England or any other public
administrative authority having responsibility for the resolution of any UK
Financial Institution.

 

“United States” and “U.S.” shall each mean the United States of America.

 

“Unrestricted” shall mean, when referring to cash or Cash Equivalents of Parent
or any Subsidiary, that such cash or Cash Equivalents are not Restricted.

 

“USA PATRIOT Act” shall mean The Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001
(Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

 

26

 

 

“Wholly Owned Domestic Subsidiary” shall mean, as to any Person, any Wholly
Owned Subsidiary of such Person which is a Domestic Subsidiary.

 

“Wholly Owned Subsidiary” shall mean, as to any Person, (a) any corporation 100%
of whose capital stock is at the time owned by such Person and/or one (1) or
more Wholly Owned Subsidiaries of such Person, and (b) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one (1) or more Wholly Owned Subsidiaries of such Person has a
100% equity interest at such time (other than, in the case of a Foreign
Subsidiary of the Borrower with respect to the preceding clauses  (a) and (b),
director’s qualifying shares and/or other nominal amount of shares required to
be held by Persons other than the Borrower and its Subsidiaries under applicable
law).

 

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal by any Credit Party, any other Subsidiary of
the Borrower or an ERISA Affiliate from such Multiemployer Plan, as such terms
are defined in Part 1 of Subtitle E of Title IV of ERISA.

 

“Write-Down and Conversion Powers” shall mean, (a) with respect to any EEA
Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the
applicable EEA Member Country, which write-down and conversion powers are
described in the EU Bail-In Legislation Schedule and (b) with respect to the
United Kingdom, any powers of the applicable Resolution Authority under the
Bail-In Legislation to cancel, reduce, modify or change the form of a liability
of any UK Financial Institution or any contract or instrument under which that
liability arises, to convert all or part of that liability into shares,
securities or obligations of that Person or any other Person, to provide that
any such contract or instrument is to have effect as if a right had been
exercised under it or to suspend any obligation in respect of that liability or
any of the powers under that Bail-In Legislation that are related to or
ancillary to any of those powers.

 

Section 1.02        Terms Generally.

 

(a)               The definitions in Section 1.01 shall apply equally to both
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”. The word “will” shall be
construed to have the same meaning and effect as the word “shall”; and the words
“asset” and “property” shall be construed as having the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights. All references herein
to Articles, Sections, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Except as otherwise expressly provided
herein, (a) any reference in this Agreement to any Credit Document shall mean
such document as amended, restated, supplemented or otherwise modified from time
to time, in each case, in accordance with the express terms of this Agreement,
(b) any reference to any law shall include all statutory and regulatory
provisions consolidating, amending, replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified, refer to
such law or regulation as amended, modified or supplemented from time to time
and (c) all terms of an accounting or financial nature shall be construed in
accordance with GAAP as in effect from time to time; provided that if the
Borrower notifies the Administrative Agent that the Borrower wishes to amend any
covenant in Article 6 or any related definition to eliminate the effect of any
change in GAAP occurring after the Closing Date on the operation of such
covenant (or if the Administrative Agent notifies the Borrower that the Required
Lenders wish to amend Article 6 or any related definition for such purpose),
then the Borrower’s compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrower and the Required Lenders. Notwithstanding
anything to the contrary contained herein, all financial covenants contained
herein or in any other Credit Document shall be calculated without giving effect
to (x) any election under Accounting Standards Codification 825-7-25 or 470-20
(or any similar accounting principle) permitting a Person to value its financial
liabilities at the fair value thereof or at any amount other than the
outstanding principal amount thereof or (y) the adoption of Accounting Standards
Codification 842, also referred to as Accounting Standards Update No. 2016-02 by
the Financial Accounting Standards Board in February 2016 (“ASU 2016-02”) (or
any similar accounting principal) such that “Capital Lease Obligations” shall
specifically exclude liabilities that were considered operating lease
liabilities under GAAP prior to the adoption of ASU 2016-02, notwithstanding any
modifications or interpretive changes thereto that may occur thereafter.

 

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(b)               The words “execution,” “signed,” “signature,” and words of
like import in any Credit Document or any agreement entered into in connection
therewith, including any Assignment and Assumption, or any notice, certificate
or other instrument delivered in connection therewith shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system, as
the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar
state laws based on the Uniform Electronic Transactions Act.

 

Section 1.03        Designated Senior Indebtedness. The Obligations hereunder
are hereby designated by the Borrower as “Designated Senior Indebtedness” (or
similar term) for all purposes of any subordinated indebtedness of the Borrower
or any Subsidiary (if any).

 

ARTICLE 2
THE CREDITS

 

Section 2.01        Commitments. Subject to the terms and conditions set forth
herein (a) each Initial Lender agrees to make a Loan to the Borrower in Dollars
on the Closing Date (so long as the Closing Date occurs on or prior to the
Commitment Termination Date) and (b) the Borrower agrees to borrow the Loan in
an amount not less than the full Commitment (it being understood that, if a
Lender does not fund its portion of the Loan, the Borrower shall not be in
breach of this clause (b) in respect of its obligation to borrow the portion of
the Loan being provided by such Lender). Amounts paid or prepaid in respect of
the Loans may not be reborrowed. The Commitment shall terminate immediately and
without further action on the Closing Date, after giving effect to the funding
of the Loan on such date, or, if the Closing Date has not occurred on or prior
to the Commitment Termination Date, the Commitment shall terminate immediately
and without further action.

 

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Section 2.02        Several Obligations. The Loans made pursuant to Section 2.01
shall be made by the applicable Initial Lenders ratably in accordance with their
respective Commitments. The failure of any Initial Lender to make any Loan
required to be made by it shall not relieve any other Initial Lender of its
obligations hereunder; provided that the Commitments are several and no Initial
Lender shall be responsible for any other Initial Lender’s failure to make Loans
as required.

 

Section 2.03        Borrowing Mechanics. Unless otherwise approved by the
Initial Lenders, to request the borrowing of Loans pursuant to Section 2.01 on
the Closing Date, the Borrower shall notify the Administrative Agent and the
Initial Lenders of such request by delivering a duly completed written Borrowing
Request in substantially the form of Exhibit C signed by an Authorized Officer,
not later than 12:00 p.m., New York time, one (1) Business Day prior to the
Closing Date. Such Borrowing Request shall be irrevocable (provided that such
notice may be conditioned upon other transactions that constitute conditions
under Section 4.02, in which case, such notice may be revoked or extended if
such transactions are not consummated or are delayed) and shall specify the
location and number of the Borrower’s account to which funds are to be
disbursed.

 

Each Initial Lender shall make its share of the Loan available upon satisfaction
or waiver of the conditions precedent specified herein, to the Borrower on the
Closing Date in same day funds in Dollars, such funds to be credited to the
account of the Borrower or to such other account or accounts as may be
designated in writing to the Lenders by the Borrower, in compliance with this
Agreement.

 

Section 2.04        Evidence of Debt; Repayment of Loans.

 

(a)               The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the principal amount of each
Loan of such Lender as provided in Section 2.09 and Section 2.11. The Borrower
hereby further agrees to pay the amounts of interest payable on the Loans made
to the Borrower from time to time outstanding from the Closing Date until
payment in full thereof at the rates per annum, and on the dates, set forth in
Section 2.06 and Section 2.07.

 

(b)               Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender from time to time,
including the amounts of principal and interest payable and paid to such Lender
from time to time under this Agreement.

 

(c)               The Administrative Agent shall maintain accounts in which it
will record (i) the amount of each Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower or any Guarantor and each
Lender’s share thereof.

 

29

 

 

(d)               The entries made in the accounts maintained pursuant to
clauses (b) and (c) above shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrower to repay
the Loans in accordance with their terms.

 

(e)               Any Lender may request that Loans made by it hereunder be
evidenced by a promissory note. In such event, the Borrower shall execute and
deliver to such Lender a promissory note payable to such Lender and its
registered assigns and in a form and substance reasonably acceptable to such
Lender and the Borrower.

 

Section 2.05        Fees.

 

(a)               The Borrower agrees to pay to the Initial Lenders, an upfront
fee equal to 1.00% of the stated principal amount of the Loans made on the
Closing Date pursuant to Section 2.01, with such payment to be earned by, and
payable to, the Initial Lenders on the Closing Date. The Loans may be net funded
on the Closing Date to account for the fees under this Section 2.05(a) and the
Borrower and Lenders agree that such fee is intended to be “original issue
discount” for U.S. federal income tax purposes, consistent with Section 5.10(b)
of this Agreement.

 

(b)               Upon the occurrence of a Change of Control, the Borrower
agrees to pay to the Administrative Agent, for the ratable benefit of each
Lender, a redemption premium (the “Special Redemption Premium”) equal to (i)
1.00% of the aggregate principal amount of Loans immediately outstanding prior
to the occurrence of such Change of Control plus (ii) an additional amount
necessary to ensure that each Lender (assuming that each Lender has held its
Loans from the Closing Date through and including the date of such Change of
Control) has received a minimum return on its investment in the Loans in an
amount equal to the product of (A) 0.12 multiplied by (B) the remainder of (x)
the initial aggregate stated principal amount of such Loans (not giving effect
to any amortization payments or other prepayments or increases in the principal
amount of the Loans due to PIK Interest) less (y) 1.0% to account for the fee
paid pursuant to Section 2.05(a) above (which calculation shall take into
account all interest paid in respect of such Loans since the Closing Date (other
than PIK Interest or interest accruing in respect of PIK Interest) or that will
be paid on the date such redemption premium is paid), which Special Redemption
Premium shall be payable (x) in accordance with the Change of Control Offer
provisions of Section 2.12 or (y) if the Borrower has failed to comply with
Section 2.12 with respect to such Change of Control, immediately upon such
failure. The Special Redemption Premium shall be calculated by the
Administrative Agent (or its designee, which may be a Lender).

 

(c)               The Borrower agrees to pay to the Administrative Agent and the
Collateral Agent, for their own account, the administrative fees set forth in
the Agent Fee Letter at the times and in the amounts specified therein.

 

(d)               All fees referenced in clauses   (b) and (c) above shall be in
immediately available funds and, once paid, shall not be refundable under any
circumstances.

 

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Section 2.06        Interest on Loans.

 

(a)               Subject to Section 2.07, the Loans shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, at all times and calculated from and including
the date of such borrowing to but excluding the date of repayment thereof) at a
rate per annum equal to the Applicable Rate. All calculations of interest under
this Agreement shall be performed by the Administrative Agent or its designee
(which may be a Lender) and such calculations shall be conclusive evidence,
absent manifest error, of the correctness of such amount.

 

(b)               Interest on each Loan shall be payable in arrears in cash on
each Quarterly Payment Date; provided that, at the election of the Borrower (a
“PIK Election”) pursuant to Section 2.08 for any Quarterly Payment Date
occurring on or prior to the third anniversary of the Closing Date, a portion of
the accrued interest on the Loans payable on each such Quarterly Payment Date in
an amount up to, but not exceeding, 3.00% per annum shall be capitalized,
compounded and added to the unpaid principal amount of the Loans of each Lender
on the applicable Quarterly Payment Date (the “PIK Interest”), in which case,
the remaining portion of interest then due on the Loans shall be payable in cash
(the “Cash Interest”). Except for the purposes of calculating the Special
Redemption Premium, amounts representing PIK Interest shall be treated as Loans
for all purposes of this Agreement and shall bear interest at the Applicable
Rate in accordance with this Section 2.06. All interest shall accrue to, not
including, the date of repayment or prepayment.

 

Section 2.07        Default Interest. If there shall have occurred and be
continuing an Event of Default hereunder or if any Lender shall have made a
Protective Advance hereunder, to the extent permitted by law (x) all Loans and
(y) other overdue amounts outstanding under this Agreement, in each case, shall
bear interest (after as well as before judgment), (a) in the case of principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, at all times) equal to the rate that would be applicable to a
Loan plus 2.00% per annum. All interest accrued under this Section 2.07 shall be
payable upon demand in cash.

 

Section 2.08        Election of PIK Interest. With respect to any accrued
interest payable on any Quarterly Payment Date occurring on or prior to the
third anniversary of the Closing Date, the Borrower shall have the right to make
a PIK Election upon prior irrevocable written notice to the Administrative Agent
not later than 4:00 p.m., New York City time, three (3) Business Day prior to
such Quarterly Payment Date by delivering a Payment Election Notice. If the
Borrower does not deliver a Payment Election Notice to the Administrative Agent
in a timely manner with respect to any Quarterly Payment Date or such Payment
Election Notice does not indicate the portion of Interest to be paid as PIK
Interest, the Borrower shall be deemed to have elected to pay all interest due
on such Quarterly Payment Date in cash.

 

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Section 2.09        Repayment of Term Borrowings.

 

(a)               Subject to Section 2.09(c), the Borrower shall pay to the
Administrative Agent, for the account of the Lenders, on each Quarterly Payment
Date, quarterly installments in cash equal to the amounts listed below (which
installments shall be reduced as a result of the application of prepayments as
specified in Section 2.11 or increased by the amount of any deferred payment as
provided in Section 2.09(c)) as follows:

 

Quarterly Payment Date  Principal Amount  September 2020  $18,750,000.00 
December 2020  $18,750,000.00  March 2021  $18,750,000.00  June 2021 
$18,750,000.00  September 2021  $18,750,000.00  December 2021  $18,750,000.00 
March 2022  $18,750,000.00  June 2022  $18,750,000.00  September 2022 
$18,750,000.00  December 2022  $18,750,000.00  March 2023  $18,750,000.00  June
2023  $18,750,000.00  each March, June, September and December thereafter 
$22,500,000.00 

 

(b)               Each payment pursuant to this Section 2.09 shall be made
together with accrued and unpaid interest on the principal amount to be paid to
but excluding the date of such payment.

 

(c)               At the election of the Borrower, if after making the payment
required by Section 2.09(a) on any Quarterly Payment Date the Borrower would not
be compliance with Section 6.15, the Borrower may defer the payment required
pursuant to Section 2.09(a) in the amount necessary (and only such amount
necessary) to ensure compliance with Section 6.15 in which case such deferred
amount shall be payable on the next Quarterly Payment Date. In connection with
any deferral election made under this Section 2.09(c), the Borrower shall have
delivered to the Administrative Agent a Payment Election Notice not later than
12:00 (noon), New York City time, five (5) Business Days prior to the applicable
Quarterly Payment Date. If the Borrower does not deliver a Payment Election
Notice to the Administrative Agent in a timely manner with respect to any
Quarterly Payment Date or such Payment Election Notice does not indicate the
portion of the payment pursuant to this Section 2.09(a) that is to be deferred
or does not include the calculation of the covenant set forth in Section 6.15,
the Borrower shall be deemed to have not deferred any amount of the payment
otherwise due under this Section 2.09 on such Quarterly Payment Date.

 

(d)               To the extent not previously paid, all Loans shall be due and
payable on the Maturity Date in cash, together with accrued and unpaid interest
on the principal amount to be paid to but excluding the date of payment.

 

(e)               All repayments pursuant to this Section 2.09 shall be without
premium or penalty.

 

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Section 2.10        Voluntary Prepayment.

 

(a)               The Borrower shall have the right to prepay the Loans in its
discretion at any time or from time to time upon at least one (1) Business Day
prior written notice to the Administrative Agent before 1:00 p.m., New York
time, which prepayment shall be made at par, without the payment of any penalty
or premium, for any prepayment (x) in whole (whether the full initial amount of
the Loan or the remaining outstanding portion after giving effect to other
payments and other adjustments), (y) in part on one (1) occasion prior to the
Maturity Date in an amount that is not less than $250,000,000 or (z) in
connection with the incurrence of Indebtedness by the Borrower under
Section 6.04(d), made to the extent necessary (and only to the extent necessary)
to ensure compliance with such Section 6.04(d) (in which case, the Borrower
shall have delivered to the Administrative Agent a certificate executed by an
Authorized Officer demonstrating the foregoing, including a calculation of
compliance with such Section 6.04(d) before and after giving effect to the
incurrence of such Indebtedness); provided that any prepayment in circumstances
not described in this Section 2.10(a) shall be subject to the Make Whole
Premium.

 

(b)               Voluntary prepayments of Loans shall be applied against the
remaining scheduled installments of principal due in respect of the Loans under
Section 2.09(a) in the direct order of maturity.

 

(c)               Each notice of prepayment shall specify the prepayment date
and the principal amount of the Loans (or portion thereof) and the accrued and
unpaid interest on such principal amount of the Loans to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay the Loans in the amount
stated therein on the date stated therein; provided that the Borrower may
provide that such notice is conditioned upon the occurrence of one (1) or more
other transactions, in which case, such notice may be revoked or extended if
such transactions are not consummated or are delayed.

 

(d)               All prepayments under this Section 2.10 shall be accompanied
by accrued and unpaid interest on the principal amount to be prepaid to but
excluding the date of payment, payable in cash.

 

Section 2.11        Mandatory Prepayments.

 

(a)               In addition to any other mandatory repayments pursuant to this
Section 2.11, on each date on or after the Closing Date upon which the Credit
Parties or any of their Subsidiaries receives any Net Cash Proceeds from any
issuance or incurrence by the Borrower or any Subsidiary of Indebtedness (other
than Indebtedness permitted to be incurred pursuant to Section 6.04), an amount
equal to 100% of such Net Cash Proceeds shall be applied on such date as a
mandatory repayment in accordance with the requirements of Section 2.11(c).

 

(b)               In addition to any other mandatory repayments pursuant to this
Section 2.11, after giving effect to and subject to any mandatory prepayments
required under any Permitted Funding Indebtedness and the Asset Level Term Loan,
within five (5) Business Days following each date on or after the Closing Date
upon which the Credit Parties or any of their Subsidiaries receives any Net Cash
Proceeds from any Recovery Event (other than individual Recovery Events where
the Net Cash Proceeds therefrom do not exceed $10,000,000), an amount equal to
100% of such Net Cash Proceeds shall be applied on such date as a mandatory
repayment in accordance with the requirements of Section 2.11(c); provided that
no such prepayment shall be required pursuant to this Section 2.11(b) with
respect to such portion of such Net Cash Proceeds that Parent or any Subsidiary
intends to reinvest or that has been reinvested, in each case, in accordance
with Section 2.11(e); provided further, that such proceeds shall not constitute
Net Cash Proceeds except to the extent not so used at the end of such period, at
which time such proceeds shall be deemed to be Net Cash Proceeds.

 

33

 

 

(c)               Each amount required to be applied pursuant to Section 2.11(a)
or Section 2.11(b) in accordance with this Section 2.11(c) shall be applied pro
rata according to the respective outstanding principal amounts of the Loans then
held by the Lenders. Each such prepayment of the Loans shall be applied in
inverse order of maturity against the remaining scheduled installments of
principal due in respect of the Loans under Section 2.09(a).

 

(d)               The Borrower shall deliver to the Administrative Agent, if
practicable, at least three (3) Business Days prior to each prepayment required
under this Section 2.11 but in any event not later than the date and time of
each prepayment required under this Section 2.11, a certificate signed by an
Authorized Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment. Each notice of prepayment shall
specify the prepayment date, and the principal amount of the Loans (or portion
thereof) to be prepaid. All prepayments of Loans pursuant to Section 2.11(a) and
Section 2.11(b) shall be without premium or penalty and shall be accompanied by
accrued and unpaid interest on the principal amount to be prepaid to but
excluding, the date of payment; provided that any prepayment that is made
pursuant to Section 2.11(a) in circumstances not described under Section 2.10(a)
shall be subject to the Make Whole Premium.

 

(e)               With respect to any Net Cash Proceeds received with respect to
any Recovery Event, the Borrower or any Subsidiary may reinvest all or any
portion of such Net Cash Proceeds in its business (including in Investments not
prohibited hereby) prior to the date that is the later of (i) 180 days following
receipt of such Net Cash Proceeds or (ii) if the Borrower or any Subsidiary
enters into a legally binding commitment to reinvest such Net Cash Proceeds
within 180 days following receipt thereof, 360 days following receipt thereof;
provided that if any Net Cash Proceeds are not reinvested by the deadline
specified this Section 2.11(e), an amount equal to such Net Cash Proceeds shall
be applied to the prepayment of the Loans as set forth in Section 2.11(b);
provided further, that such proceeds shall not constitute Net Cash Proceeds
except to the extent not so used at the end of such period, at which time such
proceeds shall be deemed to be Net Cash Proceeds.

 

(f)                 On each quarterly Payment Date ending on or after the fifth
anniversary of the Closing Date, the Borrower shall make a mandatory prepayment
for cash of a portion of such Loan outstanding at such time at par plus any
accrued interest thereon as shall be necessary to ensure that the Loan shall not
be considered an applicable high yield discount obligation within the meaning of
Section 163(i) of the Code.

 

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Section 2.12        Offer to Repurchase Upon Change of Control.

 

(a)               Upon the occurrence of a Change of Control following the
Closing Date, the Borrower will make an offer (a “Change of Control Offer”) to
each Lender to repay 100% of such Lender’s outstanding Loans at par, plus the
Special Redemption Premium that is due and payable in accordance with
Section 2.05(b), plus accrued and unpaid interest, if any, on such outstanding
Loans (the “Change of Control Payment”) within five (5) Business Days following
the occurrence of such Change of Control by delivering a notice signed by an
Authorized Officer of the Borrower to the Administrative Agent describing the
transaction or transactions that constitute such Change of Control and stating:

 

(i)                 that the Change of Control Offer is being made pursuant to
this Section 2.12;

 

(ii)              the amount of the Change of Control Payment (including
reasonably detailed calculations thereof) and the proposed date of payment,
which shall be no later than five (5) Business Days after the date of delivering
such notice (the “Change of Control Payment Date”); and

 

(iii)            that each Lender may, at its option, accept such offer for
repayment in whole or in part by notifying the Administrative Agent, which shall
in turn notify the Borrower, no later than one (1) Business Day prior to the
Change of Control Payment Date (such date, the “Response Date”) (it being
understood and agreed that any Lender that does not accept such Change of
Control Offer prior to 4:00 p.m., New York time, on the Response Date will be
deemed to have declined such Change of Control Offer.

 

(b)               On the Change of Control Payment Date, the Borrower will pay
in immediately available funds to the Administrative Agent, for the account of
each Lender having accepted such offer, an amount equal to the Change of Control
Payment payable in respect of all Loans for which such offer has been accepted. 
The Borrower will deliver a notice to the Administrative Agent, for distribution
to the Lenders, disclosing the results of the Change of Control Offer on or as
soon as practicable after the Change of Control Payment Date.

 

(c)               Notwithstanding anything to the contrary in this Section 2.12,
the Borrower will not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and which otherwise complies with the requirements set
forth in this Section 2.12.

 

Section 2.13        Reserve Requirements; Change in Circumstances.

 

(a)               Notwithstanding any other provision of this Agreement, if any
Change in Law shall impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender, shall subject a Lender to any Taxes
(other than Indemnified Taxes and Excluded Taxes) on its loans, loan principal,
commitments or other obligations, or on its deposits, reserves, other
liabilities or capital attributable thereto, and the result of any of the
foregoing shall be to increase the cost to such Lender of making or maintaining
any Loan or to reduce the amount of any sum received or receivable by such
Lender hereunder (whether of principal, interest or otherwise) by an amount
deemed by such Lender to be material, then the Borrower will pay to such Lender
upon demand such additional amount or amounts as will compensate such Lender for
such additional costs incurred or reduction suffered.

 

(b)               If any Lender shall have determined that any Change in Law
regarding capital adequacy has or would have the effect of reducing the rate of
return on such Lender’s capital or on the capital of such Lender’s holding
company, if any, as a consequence of this Agreement or the Loans made to a level
below that which such Lender or such Lender’s holding company could have
achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such Lender’s holding company for any
such reduction suffered.

 

35

 

 

 

(c)               A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as applicable, as
specified in clause (a) above shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same.

 

(d)               Failure or delay on the part of any Lender to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender’s right to demand such compensation. The protection of this
Section 2.13(d) shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of the Change in Law that shall
have occurred or been imposed.

 

Section 2.14        Pro Rata Treatment. Subject to the express provisions of
this Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders, and the provisions of
Section 2.12 and Section 2.20, each Loan, each payment or prepayment of
principal of any Loan, each payment of interest on the Loans, and each other
payment received by any Lender by exercising any right of setoff, counterclaim
or otherwise shall be allocated pro rata among the Lenders in accordance with
their respective principal amounts of their outstanding Loans. Each Lender
agrees that in computing such Lender’s portion of the Loans to be made
hereunder, the Administrative Agent may, in its discretion, round each Lender’s
percentage of the Loans to the next higher or lower whole Dollar amount.

 

Section 2.15        Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker’s lien, setoff or counterclaim against
the Borrower or any other Credit Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan as a result of which the unpaid principal portion of its Loans shall be
proportionately less than the unpaid principal portion of the Loans of any other
Lender, it shall be deemed simultaneously to have purchased from such other
Lender at face value, and shall promptly pay to such other Lender the purchase
price for, a participation in the Loans of such other Lender, so that the
aggregate unpaid principal amount of the Loans and participations in Loans held
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans then outstanding as the principal amount of its Loans prior
to such exercise of banker’s lien, setoff or counterclaim or other event was to
the principal amount of all Loans outstanding prior to such exercise of banker’s
lien, setoff or counterclaim or other event; provided that (i) if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.15
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest, and
(ii) the provisions of this Section 2.15 shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement (including any application of funds arising from the
existence of a Defaulting Lender) or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any of its
Affiliates (it being understood that the provisions of this Section 2.15 shall
apply). The Borrower expressly consents to the foregoing arrangements and agrees
that any Lender holding a participation in a Loan deemed to have been so
purchased may exercise any and all rights of banker’s lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender by reason thereof as fully as if such Lender had made a Loan directly to
the Borrower in the amount of such participation.

 

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Section 2.16        Payments. The Borrower shall make each payment (including
principal of or interest on the Loans or any Fees or other amounts) hereunder
and under any other Credit Document not later than 2:00 p.m., New York time, on
the date when due in immediately available Dollars (other than any payment of
PIK Interest), without setoff, defense or counterclaim. Any amounts received
after such time on any date may, in the discretion of the Administrative Agent,
be deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. Each such payment shall be made to the
Administrative Agent at the account specified in writing by the Administrative
Agent to the Borrower. The Administrative Agent shall promptly distribute to
each Lender any payments received by the Administrative Agent on behalf of such
Lender.

 

Section 2.17        Taxes.

 

(a)                For purposes of this Section 2.17, the term “applicable law”
includes FATCA.

 

(b)               Any and all payments by or on account of any obligation of the
Borrower or any other Credit Party hereunder or under any other Credit Document
shall be made without deduction or withholding for any Indemnified Taxes except
as required by applicable law; provided that, if any applicable law (as
determined in the good faith discretion of the Borrower or the Administrative
Agent) requires the deduction or withholding of any Taxes from any such payment
by a Credit Party or the Administrative Agent, then (i) the applicable Credit
Party or Administrative Agent (as the case may be) shall be entitled to make
such deduction or withholding and shall timely pay the full amount deducted or
withheld to the relevant Governmental Authority in accordance with applicable
law and, (ii) if such Tax is an Indemnified Tax, then the sum payable by the
applicable Credit Party shall be increased as necessary so that after making all
required deductions or withholdings (including deductions and withholdings
applicable to additional sums payable under this Section) the Administrative
Agent and each Lender (as the case may be) receives an amount equal to the sum
it would have received had no such deductions or withholdings been made.

 

(c)                In addition, the Credit Parties shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law,
or at the option of the Administrative Agent, timely reimburse it for the
payment of any Other Taxes.

 

(d)               (i) Indemnification by the Borrower. The Credit Parties shall
jointly and severally indemnify the Administrative Agent and each Lender within
10 days after written demand therefor, for the full amount of any Indemnified
Taxes payable or paid by the Administrative Agent or such Lender, as the case
may be, or required to be withheld or deducted from a payment to the
Administrative Agent or such Lender, as the case may be, on or with respect to
any payment by or on account of any obligation of the Borrower or any other
Credit Party hereunder or under any other Credit Document (including Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this
Section) and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or by the
Administrative Agent on behalf of itself or a Lender, shall be conclusive absent
manifest error.

 

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(ii) Indemnification by Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 10 days after demand therefor, for (x) any
Indemnified Taxes attributable to such Lender (but only to the extent that the
Credit Parties have not already indemnified the Administrative Agent for such
Indemnified Taxes and without limiting the obligation of the Credit Parties to
do so) (y) any Taxes attributable to such Lender’s failure to comply with the
provisions of Section 9.04(f) relating to the maintenance of the Participant
Register and (z) any Excluded Taxes attributable to such Lender, in each case,
that are payable or paid by the Administrative Agent in connection with any
Credit Document, and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to any Lender by the Administrative Agent shall
be conclusive absent manifest error. Each Lender hereby authorizes the
Administrative Agent to set off and apply any and all amounts at any time owing
to such Lender under any Credit Document or otherwise payable by the
Administrative Agent to the Lender from any other source against any amount due
to the Administrative Agent under this clause (d)(ii).

 

(e)                As soon as practicable after any payment of Taxes by the
Borrower or any other Credit Party to a Governmental Authority pursuant to this
Section 2.17, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(f)                (i) Any Lender that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under this Agreement
or any other Credit Document shall deliver to the Borrower or other Credit Party
(with a copy to the Administrative Agent), at the time or times reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation reasonably requested by the Borrower or the
Administrative Agent as will permit such payments to be made without withholding
or at a reduced rate of withholding. In addition, any Lender, if reasonably
requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the Administrative Agent as will enable the Borrower or the
Administrative Agent to determine whether or not such Lender is subject to any
withholding (including backup withholding) or information reporting
requirements. Upon the reasonable request of the Borrower or the Administrative
Agent, any Lender shall update any form or certification previously delivered
pursuant to this Section 2.17(f). If any form or certification previously
delivered pursuant to this Section expires or becomes obsolete or inaccurate in
any respect with respect to a Lender, such Lender shall update the form or
certification or reasonably promptly notify the Borrower and the Administrative
Agent in writing of its legal inability to do so. Notwithstanding anything to
the contrary in the preceding four (4) sentences, the completion, execution and
submission of such documentation (other than such documentation set forth in
Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Lender’s reasonable judgment such completion, execution or submission would
subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.

 

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(ii) Without limiting the generality of the foregoing, if the Borrower is a
“United States person” within the meaning of Section 7701(a)(30) of the Code,
any Lender with respect to such Borrower shall, if it is legally eligible to do
so, deliver to such Borrower and the Administrative Agent (in such number of
copies reasonably requested by such Borrower and the Administrative Agent) on or
prior to the date on which such Lender becomes a party hereto, duly completed
and executed copies of whichever of the following is applicable:

 

(A)             in the case of a Lender that is a “United States person” within
the meaning of Section 7701(a)(30) of the Code, IRS Form W-9 certifying that
such Lender is exempt from U.S. federal backup withholding Tax;

 

(B)              in the case of a Foreign Lender claiming the benefits of an
income Tax treaty to which the United States is a party (1) with respect to
payments of interest under any Credit Document, IRS Form W-8BEN or W-8BEN-E
establishing an exemption from, or reduction of, U.S. federal withholding Tax
pursuant to the “interest” article of such Tax treaty and (2) with respect to
any other applicable payments under any Credit Document, IRS Form W-8BEN or
W-8BEN-E establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article of
such Tax treaty;

 

(C)              in the case of a Foreign Lender for which payments under any
Credit Document constitute income that is effectively connected with such
Lender’s conduct of a trade or business in the United States, IRS Form W-8ECI;

 

(D)             in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under Section 881(c) of the Code both (1) IRS
Form W-8BEN or W-8BEN-E and (2) a certificate to the effect that such Lender is
not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a
“10 percent shareholder” of the Borrower within the meaning of
Section 881(c)(3)(B) of the Code or (c) a “controlled foreign corporation”
described in Section 881(c)(3)(C) of the Code;

 

(E)              in the case of a Foreign Lender that is not the beneficial
owner of payments made under any Credit Document (including a partnership or a
participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the
relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this
subclause (f)(ii) that would be required of each such beneficial owner or
partner of such partnership if such beneficial owner or partner were a Lender;
provided however, that if the Lender is a partnership and one (1) or more of its
partners are claiming the exemption for portfolio interest under Section 881(c)
of the Code, such Lender may provide the certificate described in (D)(2) above
on behalf of such partners; or

 

39

 

 

(F)              any other form prescribed by law as a basis for claiming
exemption from, or a reduction of, U.S. federal withholding Tax together with
such supplementary documentation necessary to enable the Borrower or the
Administrative Agent to determine the amount of Tax (if any) required by law to
be withheld.

 

(G)             If a payment made to a Lender under any Credit Document would be
subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such
Lender shall deliver to the applicable withholding agent, at the time or times
prescribed by law and at such time or times reasonably requested by such
withholding agent, such documentation prescribed by applicable law (including as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the withholding agent as may be necessary
for the withholding agent to comply with its obligations under FATCA, to
determine that such Lender has or has not complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from
such payment. Solely for purposes of this Section 2.17(f)(ii), “FATCA” shall
include any amendments made to FATCA after the date of this Agreement.

 

(g)               If any party determines, in its sole discretion exercised in
good faith, that it has received a refund of any Taxes as to which it has been
indemnified pursuant to this Section 2.17 (including by the payment of
additional amounts pursuant to this Section 2.17), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund), net of all out-of-pocket expenses (including Taxes) of such
indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund). Such indemnifying
party, upon the request of such indemnified party, shall repay to such
indemnified party the amount paid over pursuant to this clause (g) (plus any
penalties, interest or other charges imposed by the relevant Governmental
Authority) in the event that such indemnified party is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary
in this clause (g), in no event will the indemnified party be required to pay
any amount to an indemnifying party pursuant to this clause (g) the payment of
which would place the indemnified party in a less favorable net after-Tax
position than the indemnified party would have been in if the Tax subject to
indemnification and giving rise to such refund had not been deducted, withheld
or otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax had never been paid. This paragraph shall not be construed
to require any indemnified party to make available its Tax Returns (or any other
information relating to its Taxes that it deems confidential) to the
indemnifying party or any other Person.

 

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(h)               Without limiting the provisions of Section 9.02, each party’s
obligations under this Section 2.17 shall survive the resignation or replacement
of the Administrative Agent or any assignment of rights by, or the replacement
of, a Lender, the termination of the Commitments and the repayment, satisfaction
or discharge of all obligations under any Credit Document.

 

Section 2.18        Duty to Mitigate; Assignment of Commitments Under Certain
Circumstances.

 

(a)               Designation of a Different Lending Office. In the event (i)
any Lender requests compensation under Section 2.13, or (ii) requires the
Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall (at the request of the Borrower) use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or Section 2.17, as the case may be, in the future, and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.

 

(b)               Replacement of Lenders. In the event (i) any Lender delivers a
certificate requesting compensation pursuant to Section 2.13, (ii) any Credit
Party is required to pay any Indemnified Taxes or additional amounts to any
Lender or any Governmental Authority on account of any Lender pursuant to
Section 2.17 and, in each case, such Lender has declined or is unable to
designate a different lending office in accordance with clause (a) of this
Section 2.18, (iii) any Lender refuses to consent to any amendment, waiver or
other modification of any Credit Document requested by the Borrower that
requires the consent of a greater percentage of the Lenders than the Required
Lenders and such amendment, waiver or other modification is consented to by the
Required Lenders, or (iv) any Lender becomes a Defaulting Lender, then, in each
case, the Borrower may, at its sole expense and effort (including with respect
to the processing and recordation fee referred to in Section 9.04(b)), upon
notice to such Lender, as the case may be, and the Administrative Agent, require
such Lender to transfer and assign, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all of its interests,
rights and obligations under this Agreement and related Credit Documents (or, in
the case of clause (iii) above, all of its interests, rights and obligation with
respect to the Loans or Commitments that is the subject of the related consent,
amendment, waiver or other modification) to an Eligible Assignee that shall
assume such assigned obligations and, with respect to clause (iii) above, shall
consent to such requested amendment, waiver or other modification of any Credit
Documents (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (x) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority having
jurisdiction, (y) in the case of any such assignment resulting from a claim of
compensation under Section 2.13 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or
payments thereafter and (z) the Borrower or such assignee shall have paid to the
affected Lender in immediately available funds an amount equal to the sum of the
principal of and interest accrued to the date of such payment on the outstanding
Loans of such Lender, respectively, plus all Fees and other amounts accrued for
the account of such Lender hereunder with respect thereto (including any amounts
under Section 2.13); provided further that, if prior to any such transfer and
assignment the circumstances or the amounts paid pursuant to Section 2.17, as
the case may be, cease to result in amounts being payable under Section 2.17, as
the case may be, or shall waive its right to further payments under Section 2.17
in respect of such circumstances or event or shall consent to the proposed
amendment, waiver, consent or other modification, as the case may be, then such
Lender shall not thereafter be required to make any such transfer and assignment
hereunder. Each Lender hereby grants to the Administrative Agent an irrevocable
power of attorney (which power is coupled with an interest) to execute and
deliver, on behalf of such Lender, as assignor, any Assignment and Acceptance
necessary to effectuate any assignment of such Lender’s interests hereunder in
the circumstances contemplated by this Section 2.18.

 

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Section 2.19        Defaulting Lenders.

 

(a)               Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
such Lender is no longer a Defaulting Lender, to the extent permitted by
applicable law:

 

(i)               Such Defaulting Lender’s right to approve or disapprove any
amendment, waiver or consent with respect to this Agreement shall be restricted
as set forth in the definition of Required Lenders.

 

(ii)              Any payment of principal, interest, fees or other amounts
received by the Administrative Agent for the account of such Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to Article 8 or
otherwise) or received by the Administrative Agent from a Defaulting Lender
pursuant to Section 9.06 shall be applied at such time or times as may be
determined by the Administrative Agent as follows: first, to the payment of any
amounts owing by such Defaulting Lender to the Administrative Agent and the
Collateral Agent hereunder; second, to the payment of any amounts owing to the
Lenders as a result of any judgment of a court of competent jurisdiction
obtained by any Lender against such Defaulting Lender as a result of such
Defaulting Lender’s breach of its obligations under this Agreement; third, to
the payment of any amounts owing to the Borrower as a result of any judgment of
a court of competent jurisdiction obtained by the Borrower against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; and fourth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction.

 

(b)               If the Borrower and the Administrative Agent agree in writing
that a Lender is no longer a Defaulting Lender, the Administrative Agent will so
notify the parties hereto, whereupon as of the effective date specified in such
notice, such Lender will cease to be a Defaulting Lender; provided that except
to the extent otherwise expressly agreed by the affected parties in writing, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

 

Section 2.20        Protective Advances. Each Lender is authorized by Borrower
and the other Lenders, from time to time in any such Lender’s sole and absolute
discretion (but the Lenders have absolutely no obligation), to make advances
that any such Lender elects to fund to satisfy, in whole or in part, any “margin
call”, “margin deficit”, “borrowing base deficiency” or the equivalent of any of
the foregoing in respect of any Indebtedness of Parent or any Subsidiary that
any such Lender determines in its commercially reasonable discretion in
consultation with the Borrower that the applicable obligor or obligors thereof
will likely not satisfy in accordance with the requirements for such
Indebtedness or when required thereby giving effect to any grace or cure periods
in respect of such Indebtedness (any of such advances are herein referred to as
“Protective Advances”). Any Protective Advances are payable by the Borrower on
written demand to the Borrower by the Lender that made any such Protective
Advance.

 

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ARTICLE 3
REPRESENTATIONS AND WARRANTIES

 

In order to induce the Lenders to enter into this Agreement and to make the
Loans, each Credit Party makes the following representations and warranties, in
each case on the Closing Date, all of which shall survive the execution and
delivery of this Agreement and the Notes and the making of the Loans.

 

Section 3.01        Company Status. Each Credit Party and its Subsidiaries (a)
is a duly organized and validly existing Company in good standing under the laws
of the jurisdiction of its organization, (b) has the Company power and authority
to own its property and assets and to transact the business in which it is
engaged and (c) is duly qualified and is authorized to do business and, to the
extent applicable, is in good standing in each jurisdiction where the ownership,
leasing or operation of its property or the conduct of its business requires
such qualifications, except to the extent all failures with respect to the
foregoing clauses (a) and (b) (other than, in the case of clauses (a) and (b),
with respect to the Borrower) and clause (c) could not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 3.02        Power and Authority. Each Credit Party has the Company power
and authority to execute, deliver and perform its obligations under each of the
Credit Documents to which it is party and, in the case of the Borrower, to
borrow hereunder, and has taken all necessary Company action to authorize the
execution, delivery and performance by it of each of such Credit Documents. Each
Credit Party has duly executed and delivered each of the Credit Documents to
which it is party, and each of such Credit Documents constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except as
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors’ rights
generally and by general equitable principles relating to enforceability
(regardless of whether enforcement is sought by proceedings in equity or at
law).

 

Section 3.03        No Violation. The execution, delivery and performance of
this Agreement and the other Credit Documents, the borrowings hereunder and the
use of the proceeds thereof do not or will not (a) contravene any provision of
any law, statute, ordinance, code, rule or regulation or any order, writ,
injunction or decree of any court or Governmental Authority applicable to any
Credit Party, (b)(i) conflict with or result in any breach of, or constitute a
default under, or give rise to any right to accelerate or to require the
prepayment, repurchase of redemption of any obligation under, or (ii) result in
the creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the property or assets
any of Credit Party or any Subsidiary, in each case pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other agreement, contract or instrument, in each case to which any Credit Party
or any Subsidiary is a party or by which it or any its property or assets is
bound or to which it may be subject or (c) violate any provision of the
certificate or articles of incorporation, certificate of formation, limited
liability company agreement or by-laws (or equivalent organizational documents),
as applicable, of any Credit Party or any Subsidiary, except to the extent all
violations or contraventions with respect to the foregoing clauses (a) and
(b)(i) could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.

 

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Section 3.04        Approvals. Except as the failure to so obtain, make and/or
authorize, as applicable, could not reasonably be expected to have a Material
Adverse Effect, no order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (x) those
that have otherwise been obtained or made on or prior to the Closing Date and
which remain in full force and effect on the Closing Date and (y) filings which
are necessary to perfect the security interests or liens created under the
Security Documents), or exemption or other action by, any Governmental Authority
is required to be obtained or made by, or on behalf of, any Credit Party to
authorize, or is required to be obtained or made by, or on behalf of, any Credit
Party in connection with, the execution, delivery and performance of any Credit
Document or the legality, validity, binding effect or enforceability of any such
Credit Document.

 

Section 3.05        Financial Statements; Financial Condition.

 

(a)               (i) The audited consolidated balance sheets of Parent and its
Subsidiaries at December 31, 2019 and December 31, 2018 and the related
consolidated statements of income and cash flows and changes in stockholder’s
equity of Parent for the two (2) fiscal years of Parent ended on such dates, in
each case furnished to the Administrative Agent for delivery to the Lenders
prior to the Effective Date, present fairly in all material respects the
consolidated financial position of Parent and its Subsidiaries at the dates of
said financial statements and the results of operations for the respective
periods covered thereby except as set forth on Schedule 3.05 and (ii) the
unaudited consolidated balance sheet of Parent as at March 31, 2020 and the
related consolidated statements of income and cash flows and changes in
stockholders’ equity of Parent for the three-month period ended on such date, in
each case furnished to the Lenders prior to the Closing Date, present fairly in
all material respects the consolidated financial condition of Parent and its
Subsidiaries at the date of said financial statements and the results of
operations for the respective periods covered thereby, subject to normal
year-end adjustments and the absence of footnotes. All such financial statements
have been prepared in accordance with GAAP consistently applied and subject, in
the case of the unaudited financial statements, to normal year-end audit
adjustments and the absence of footnotes.

 

(b)               On the Closing Date, and after giving effect to the
Transactions and to all Indebtedness (including the Loans) being incurred or
assumed and Liens created by the Credit Parties in connection therewith, (i) the
sum of the fair value of the assets, of Parent and its Subsidiaries (taken as a
whole) will exceed the sum of their debts, (ii) Parent and its Subsidiaries
(taken as a whole) as of the Closing Date do not have debts outstanding, and do
not intend to incur further debts, beyond their ability to pay such debts as
such debts mature in the ordinary course of business and (iii) the capital of
Parent and its Subsidiaries (taken as a whole) is not unreasonably small in
relation to the business of Parent or its Subsidiaries (taken as a whole)
contemplated as of the Closing Date. For purposes of this Section 3.05(b),
“debt” means any liability on a claim, and “claim” means (a) right to payment,
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (b) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.

 

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(c)               (i) Since December 31, 2019, and (ii) since the date hereof,
after giving effect to the Transactions, there has been no event or circumstance
or any change in the business, operations, property, assets or financial
condition of Parent or any of its Subsidiaries that either, individually or in
the aggregate, has had, or could reasonably be expected to have, a Material
Adverse Effect.

 

Section 3.06        Litigation. Except as set forth on Schedule 3.06, there are
no actions, suits or proceedings before any arbitrator or Governmental Authority
at law or in equity pending or, to the knowledge of each Credit Party,
threatened in writing against the Credit Parties or any of their Subsidiaries
(a) with respect to any Credit Document or (b) that has had, or could reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.

 

Section 3.07        True and Complete Disclosure. All written information (taken
as a whole) (including all information contained in the Credit Documents) for
purposes of or in connection with this Agreement, the other Credit Documents or
any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of the
Borrower in writing to the Administrative Agent or any Lender will be, complete
and correct on the date as of which such information is dated or certified and
does not or will not contain any untrue statement of a material fact or omit a
material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided (giving effect to all supplements and updates provided
thereto prior to the date hereof); provided that no representation is made with
respect to information of a general economic or general industry nature. Any
projections and pro forma financial information provided to the Administrative
Agent or any Lender are based upon good faith estimates and assumptions believed
by each Credit Party to be reasonable at the time made (it being understood that
projections are not to be viewed as fact and are subject to uncertainties and
contingencies and actual results may differ materially from the projections and
no assurance can be given that any projections will be realized).

 

Section 3.08        Use of Proceeds; Margin Regulations.

 

(a)               All proceeds of the Loans will be used by the Borrower only
for the purposes specified in Section 5.11.

 

(b)               No part of any Loan (or the proceeds thereof) will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof will, whether directly or indirectly, and whether
immediately, incidentally or ultimately, violate Regulation U or X.

 

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Section 3.09        Tax Matters.

 

(a)               Except as set forth on Schedule 3.09, (i) Parent, the Borrower
and each of its Subsidiaries, as applicable, has timely filed or caused to be
timely filed with the appropriate taxing authority all Tax Returns required to
be filed by, or with respect to the income, properties or operations of, Parent,
the Borrower and/or each Subsidiary, as applicable, and all such Tax Returns are
true, correct and complete in all respects, and (ii) Parent, the Borrower and
each Subsidiary, as applicable, has paid all Taxes levied or imposed upon it or
its property, income, profits and assets payable by it which have become due,
except, in each case, (A) Taxes that are being contested in good faith by
appropriate proceedings diligently conducted and for which adequate reserves are
being maintained on the financial statements of the Parent and the Borrower in
accordance with GAAP or (B) to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

(b)               Parent has qualified to be taxed as a REIT for U.S. federal
income tax purposes for its taxable years ended December 3, 2014 through
December 31, 2019. Parent has been organized and has operated, and intends to
continue to operate, in a manner so as to continue to qualify as a REIT for U.S.
federal income tax purposes for its taxable year ending on December 31, 2020,
and the Borrower is properly classified as a Qualified REIT Subsidiary of
Parent. Parent has not taken or omitted to take any action that could reasonably
be expected to result in a challenge by the IRS or any other Governmental
Authority to its status or qualification as a REIT for U.S. federal income tax
purposes, and no such challenge to its status or qualification as a REIT for
U.S. federal income tax purposes is pending, being threatened in writing or, to
the knowledge of Parent or Borrower, otherwise threatened or asserted.

 

Section 3.10        Compliance with ERISA. Each Plan is in compliance in all
material respects with its terms and the applicable provisions of ERISA and the
Code, and each Credit Party, other Subsidiary of the Borrower and ERISA
Affiliate has complied with their respective obligations with respect to each
Plan and Multiemployer Plan, except for non-compliance which, in the aggregate,
would not have a Material Adverse Effect. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other ERISA
Events that have occurred or are reasonably likely to occur, could reasonably be
expected to have a Material Adverse Effect.

 

Section 3.11        Security Documents. The provisions of the Pledge Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all right,
title and interest of the Credit Parties in the Pledge Agreement Collateral
described therein, and the Collateral Agent, for the benefit of the Secured
Creditors, has a fully perfected security interest in all right, title and
interest in all of the Pledge Agreement Collateral described therein to the
extent required thereunder, subject to no other Liens other than Permitted Liens
created by operation of law.

 

Section 3.12        [Reserved].

 

Section 3.13        Capitalization. All outstanding Equity Interests of Borrower
are owned by Parent and have been duly and validly issued, are fully paid
(except as such rights may arise under mandatory provisions of applicable
statutory law that may not be waived or otherwise agreed) and non-assessable and
have been issued free of preemptive rights.

 

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Section 3.14        Subsidiaries. As of the Closing Date, (a) Parent has no
direct Subsidiaries other than the Borrower and (b) Schedule 3.14 sets forth the
percentage ownership (direct and indirect) of Parent in each class of Equity
Interests of each of its Subsidiaries and also identifies the direct owner
thereof. All outstanding Equity Interests of each Subsidiary of Parent and the
Borrower have been duly and validly issued and are fully paid (except as such
rights may arise under mandatory provisions of applicable statutory law that may
not be waived or otherwise agreed) and have been issued free of preemptive
rights, and no Subsidiary of Parent or the Borrower has outstanding any
securities that are convertible into or exchangeable for its Equity Interests or
outstanding any right to subscribe for or to purchase, or any options or
warrants for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its Equity Interests or any stock appreciation or similar
rights except as set forth on Schedule 3.14.

 

Section 3.15        Compliance with Statutes, Etc. Each Credit Party and each
Subsidiary is in compliance with all statutes, regulations and orders of, and
all restrictions imposed by, all Governmental Authorities in respect of the
conduct of its business and the ownership of its property (including applicable
Environmental Laws), except such non-compliances as could not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Neither any Credit Party nor any Subsidiary is subject to or in
default with respect to any final judgments, writs, injunctions, decrees, rules
or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.

 

Section 3.16        Investment Company Act. Neither any Credit Party nor any
Subsidiary is required to register as an “investment company”, or is subject to
regulation, under the Investment Company Act of 1940, as amended.

 

Section 3.17        Insurance. Schedule 3.17 sets forth a listing of all
material insurance maintained by each Credit Party and each Subsidiary as of the
Closing Date, with the amounts insured (and any deductibles) set forth therein.
Each Credit Party and each Subsidiary have insurance (including self-insurance)
in such amounts and covering such risks and liabilities as are consistent with
normal industry practice and such insurance is in full force and effect.

 

Section 3.18        Environmental Matters.

 

(a)               Each Credit Party and each Subsidiary, is and all times has
been, in compliance with all applicable Environmental Laws and the requirements
of any permits issued under such Environmental Laws. There are no pending or, to
the knowledge of each Credit Party, threatened Environmental Claims against any
Credit Party or any Subsidiary or relating to any Real Property owned, leased or
operated by any Credit Party or any Subsidiary (including any such claim arising
out of the ownership, lease or operation by any Credit Party or any Subsidiary
of any Real Property formerly owned, leased or operated by any Credit Party or
any Subsidiary). To the knowledge of each Credit Party there are no facts,
circumstances, conditions or occurrences with respect to any Credit Party or any
Subsidiary, or any Real Property currently or formerly owned, leased or operated
by any Credit Party or any Subsidiary or any other property that could be
reasonably expected (i) to form the basis of any liability under Environmental
Law of, or an Environmental Claim against, any Credit Party or any Subsidiary,
or any Environmental Claim relating to any such Real Property, or (ii) to cause
any Real Property owned, leased or operated by any Credit Party or any
Subsidiary to be subject to any restrictions on the ownership, lease, occupancy,
use or transferability of such Real Property by any Credit Party or any
Subsidiary under any applicable Environmental Law.

 

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(b)               Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, or Released on, to, or from,
any Real Property currently or, to the knowledge of each Credit Party, formerly
owned, leased or operated by any Credit Party or any Subsidiary, or any other
property where such generation, use, treatment, storage, transportation or
Release has violated or could be reasonably expected to violate any applicable
Environmental Law or give rise to an Environmental Claim or any liability under
Environmental Law.

 

(c)               Notwithstanding anything to the contrary in this Section 3.18,
the representations and warranties made in this Section 3.18 shall be untrue
only if the effect of any or all facts, circumstances, occurrences, conditions,
violations, claims, restrictions, failures, liabilities or noncompliance could,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

Section 3.19        Employment and Labor Relations. Neither any Credit Party nor
or any Subsidiary is engaged in any unfair labor practice that could reasonably
be expected, either individually or in the aggregate, to have a Material Adverse
Effect. There is (a) no unfair labor practice complaint pending against any
Credit Party or any Subsidiary or, to the knowledge of each Credit Party,
threatened against any of them, before the National Labor Relations Board, and
no grievance or arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against any Credit Party or any Subsidiary
or, to the knowledge of each Credit Party, threatened against any of them, (b)
no strike, labor dispute, slowdown or stoppage pending against any Credit Party
or any Subsidiary or, to the knowledge of each Credit Party, threatened against
any Credit Party or any Subsidiary, (c) no union representation question exists
with respect to the employees of any Credit Party or any Subsidiary, (d) no
equal employment opportunity charges or other claims of employment
discrimination are pending or, to the knowledge of each Credit Party, threatened
against any Credit Party or any Subsidiary and (e) no wage and hour department
investigation has been made of any Credit Party or any Subsidiary, except (with
respect to any matter specified in clauses (a) through (e) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a Material Adverse Effect.

 

Section 3.20        Intellectual Property, Etc. Each Credit Party and each
Subsidiary, as applicable, owns or has the right to use all the patents,
trademarks, domain names, service marks, trade names, copyrights, inventions,
trade secrets, proprietary information and know-how of any type, whether or not
written (including rights in computer programs and databases), or rights with
respect to the foregoing, necessary for the present conduct of its business,
without any known infringement or other violation of the rights of others which,
or the failure to own or have the rights which, as the case may be, could
reasonably be expected, either individually or in the aggregate, to have a
Material Adverse Effect.

 

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Section 3.21        [Reserved].

 

Section 3.22        Anti-Terrorism Law.

 

(a)               Neither any Credit Party nor any Subsidiary is in violation of
any applicable Sanctions or Executive Order No. 13224 on Terrorist Financing
effective September 24, 2001 (the “Executive Order”). Neither any Credit Party
nor any Subsidiary and, to the knowledge of such Credit Party, no agent of any
Credit Party or any Subsidiary acting on behalf of any Credit Party or any
Subsidiary or any director, officer, employee or Affiliate of any Credit Party
or any Subsidiary, as the case may be, is or has been any of the following:

 

(i)               a Sanctioned Person; or

 

(ii)              a Person that commits, threatens or conspires to commit or
supports “terrorism” as defined in the Executive Order.

 

(b)               Neither any Credit Party nor any Subsidiary and, to the
knowledge of such Credit Party, no agent of any Credit Party or any Subsidiary
when acting on behalf of any Credit Party or any Subsidiary, as the case may be,
(i) conducts any business or engages in making or receiving any contribution of
funds, goods or services to or for the benefit of a Person described in Section
3.22(a), (ii) deals in, or otherwise engages in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or
applicable Sanctions, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any Sanctions.

 

(c)               Neither any Credit Party nor any Subsidiary will directly or
knowingly indirectly use the proceeds of the Loans or otherwise make available
such proceeds to any Person, for the purpose of financing the activities of any
Sanctioned Person in violation of applicable Sanctions.

 

(d)               For the five (5) years prior to the date of this Agreement,
the operations of the Credit Parties are and have been conducted at all times in
compliance with applicable know-your-customer, financial record-keeping, and
reporting requirements of applicable Anti-Money Laundering Laws in all
jurisdictions in which the Credit Parties conduct business.

 

Section 3.23        Foreign Corrupt Practices Act.

 

(a)               For the five (5) years prior to the date of this Agreement,
each Credit Party, each Subsidiary and each of their directors, officers, and
the knowledge of each Credit Party their respective agents, employees, and any
person acting for or on behalf of any Credit Party or any Subsidiary has
complied in all material respects with, and will comply with, the U.S. Foreign
Corrupt Practices Act, as amended from time to time, or any other applicable
anti-bribery or anti-corruption law (“Anti-Corruption Laws”), and have not made,
offered, promised, or authorized, and will not make, offer, promise, or
authorize, whether directly or indirectly, any payment, of anything of value to:
(i) an executive, official, employee or agent of a governmental department,
agency or instrumentality, (ii) a director, officer, employee or agent of a
wholly or partially government-owned or -controlled company or business, (iii) a
political party or official thereof, or candidate for political office, or (iv)
an executive, official, employee or agent of a public international organization
(e.g., the International Monetary Fund or the World Bank) (“Government
Official”); while knowing or having a reasonable belief that all or some portion
will be used for the purpose of unlawfully: (a) influencing any act, decision or
failure to act by a Government Official in his or her official capacity, (b)
inducing a Government Official to use his or her influence with a government or
instrumentality to affect any act or decision of such government or entity, or
(c) securing an improper advantage; in order to obtain, retain, or direct
business.

 

49

 

 

(b)               Parent represents that it maintains on behalf of itself and
its Subsidiaries (or such Subsidiaries maintain) systems of internal accounting
controls as required by and reasonably designed to promote compliance with
applicable Anti-Corruption Laws.

 

Section 3.24        Third Forbearance Agreement.

 

(a)               As of the Effective Date, the Third Forbearance Agreement has
been duly executed and delivered by the parties thereto and is in full force and
effect (with respect to parties other than Parent and its Subsidiaries party
thereto, to the knowledge of Parent), pursuant to which the holders of
Indebtedness of the Borrower and its Subsidiaries that are party thereto have
agreed to forbear from exercising remedies with respect to such Indebtedness
until and through the termination date of the Third Forbearance Agreement as
such date may be extended pursuant to the terms thereof (the “Forbearance
Termination Date”).

 

(b)               As of the Closing Date, all events of default under
Indebtedness subject to the Third Forbearance Agreement shall either (i) have
been waived in accordance with the terms of the related Indebtedness and the
Borrower shall have provided written evidence of such waivers in form and
substance satisfactory to the Administrative Agent or (ii) not be in effect
after the funding of the Loans and the Asset Level Term Loans and the
application of the proceeds thereof because the proceeds of the Loans and the
Asset Level Term Loans are applied to repay the related Indebtedness.

 

ARTICLE 4
CONDITIONS OF LENDING

 

Section 4.01        Conditions Precedent to the Effectiveness of this Agreement.
The effectiveness of this Agreement is subject to the satisfaction (or waiver in
accordance with the terms hereof) of the following conditions (and, in the case
of each document specified in this Section to be received by the Administrative
Agent and the Lenders, such document shall be in form and substance satisfactory
to the Administrative Agent and each Lender):

 

(a)               Parent and the Borrower shall have duly authorized, executed
and delivered this Agreement, and each other party to this Agreement shall have
executed and delivered this Agreement, and this Agreement shall be in full force
and effect;

 

(b)               The Administrative Agent and the Lenders shall have received
certified copies of requests for information or copies (Form UCC-11), or
equivalent reports as of a recent date, listing all effective financing
statements that name the Parent, the Borrower or any Subsidiary as debtor and
that are filed in their respective jurisdictions of incorporation or other
organization as of the date of such report, together with copies of such other
financing statements that name Parent, the Borrower or any Subsidiary as debtor
(none of which shall cover any of the Collateral except (x) to the extent
evidencing Permitted Liens or (y) those in respect of which the Collateral Agent
and the Lenders shall have received termination statements (Form UCC-3) or such
other termination statements as shall be required by local law or such other
arrangements reasonably satisfactory to the Collateral Agent and the Lenders
shall have been made);

 

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(c)               [Reserved];

 

(d)               As of the Effective Date, no Default or Event of Default shall
have occurred and be continuing, in each case, under Section 5.14;

 

(e)               The Administrative Agent and the Lenders shall have received a
certificate, dated the Effective Date and signed by an Authorized Officer of the
Borrower, confirming compliance with the conditions precedent set forth in
clause (d) of this Section 4.01;

 

(f)                The Administrative Agent and the Lenders shall have received
(a) a copy of the certificate or articles of incorporation or equivalent
formation document, including all amendments thereto, of Parent and the
Borrower, certified as of a recent date by the Secretary of State (or other
similar official) of the state of its organization, and a certificate as to the
good standing of Parent and the Borrower as of a recent date, from such
Secretary of State; (b) a certificate of the Secretary or Assistant Secretary of
Parent and the Borrower dated the Effective Date and certifying (i) that
attached thereto is a true and complete copy of the by-laws of Parent and the
Borrower as in effect on the Effective Date and at all times since a date prior
to the date of the resolutions described in the following clause (ii), (ii) that
attached thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors (or equivalent governing body) of Parent and the Borrower
authorizing the execution, delivery and performance of the Credit Documents to
which Parent and the Borrower is a party and, in the case of the Borrower, the
borrowings hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect on the Effective Date,
(iii) that the certificate or articles of incorporation or other equivalent
formation document of Parent and the Borrower has not been amended since the
date of the last amendment thereto furnished pursuant to clause (a) above, and
(iv) as to the incumbency and specimen signature of each officer executing any
Credit Document or any other document delivered in connection herewith on behalf
of Parent and the Borrower; and (c) the certificate referred to in the foregoing
clause (b) shall contain a certification by an Authorized Officer of Parent and
the Borrower as to the incumbency and specimen signature of the Secretary or
Assistant Secretary executing such certificate pursuant to clause (b) above;

 

(g)               The Administrative Agent and the Lenders shall have received a
copy of the Asset Level Term Loan Commitment Letter and such Asset Level Term
Loan Commitment Letter shall be in form and substance acceptable to the Required
Lenders; provided that the draft of the Asset Level Term Loan Commitment Letter
via electronic mail at 6:33 p.m., New York time on June 15, 2020 shall be deemed
acceptable for the purposes of this Section 4.01(g); and

 

(h)               The Administrative Agent and the Lenders shall have received a
copy of the Investment Agreement and such Investment Agreement shall be in form
and substance acceptable to the Required Lenders.

 

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Section 4.02        Conditions to the Funding of the Loan. The obligation of
each Lender to make the Loan pursuant to Section 2.01 is additionally subject to
the satisfaction (or waiver in accordance with the terms hereof) of the
following conditions:

 

(a)               The Administrative Agent, the Collateral Agent and each Lender
shall have received all Fees and other amounts due and payable on or prior to
the Closing Date, including reimbursement or payment of all out of pocket
expenses required to be reimbursed or paid by the Borrower hereunder, under any
other Credit Document or under the Agent Fee Letter referred to therein
(including reasonable fees and expenses of counsel to the extent invoiced at
least one (1) Business Day prior to the Closing Date);

 

(b)                the Administrative Agent shall have received a written (which
may be delivered via electronic mail) Borrowing Request in accordance with the
requirements hereof;

 

(c)               all events of default under Indebtedness subject to the Third
Forbearance Agreement shall have been waived or otherwise remedied in accordance
with the terms of the related Indebtedness, and the Borrower shall have provided
written evidenced of such waivers or other remedies in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders or such
Indebtedness has been or will be permanently repaid prior to or substantially
concurrently with the Closing Date; (ii) immediately after the funding of the
Loans and the Asset Level Term Loans and the application of the proceeds thereof
(including repayment of any Indebtedness subject to the Third Forbearance
Agreement), the aggregate outstanding principal (whether as “repurchase price”
or otherwise) obligations under Permitted Repo Indebtedness shall not (A) be
less than $1.75 billion (exclusive of the Asset Level Term Loan), (B) have
weighted average maturity dates (or repurchase dates) earlier than the date that
is six (6) months following the Closing Date or (C) accrue interest (or
price-differential) at a weighted-average margin above the applicable index of
greater than 4.0%;

 

(d)               on and as of the Closing Date after giving effect to the
Transactions, the representations and warranties set forth in Article 3 and in
each other Credit Document shall be true and correct in all material respects,
except to the extent such representations and warranties expressly relate to an
earlier date;

 

(e)               as of the Closing Date after giving effect to the
Transactions, no Default or Event of Default shall have occurred and be
continuing or would result therefrom;

 

(f)                the Administrative Agent and the Lenders shall have received
a certificate, dated the Closing Date and signed by an Authorized Officer of the
Borrower, confirming compliance with the conditions precedent set forth in
clauses (c), (d), (e), (g) and (i)(A) of this Section 4.02;

 

(g)               the Asset Level Term Loan shall have been funded
contemporaneously with the funding of the Loans in an aggregate principal amount
of not less than $1.5 billion;

 

(h)               the conditions to the obligation of the purchasers to close
the transactions contemplated by the Investment Agreement shall have occurred
and such transactions shall have been consummated in accordance with the terms
of the Investment Agreement;

 

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(i)                 (A) Parent shall have contributed 100% of the Equity
Interests of MFA Securitization Holdings LLC to the capital of the Borrower or a
Subsidiary Guarantor such that, after giving effect to such contribution, (x)
MFA Securitization Holdings LLC is a direct Wholly Owned Subsidiary of the
Borrower or a Subsidiary Guarantor, (y) Borrower is the sole direct Subsidiary
of Parent and (z) all Equity Interests of MFA Securitization Holdings LLC are
pledged as Equity Interests pledged as Pledged Collateral under the Pledged
Agreement and (B) the Administrative Agent and the Lenders shall have received
evidence reasonably satisfactory to them of such contribution;

 

(j)                 the Administrative Agent and the Lenders shall have
received:

 

(i)               evidence reasonably satisfactory to it as to the proper filing
of financing statements (Form UCC-1 or the equivalent) in each jurisdiction as
may be necessary or, in the reasonable opinion of the Collateral Agent and the
Lenders, desirable, to perfect the security interests purported to be created by
the Pledge Agreement; and

 

(ii)              evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent and the Lenders, desirable to perfect
and protect the security interests purported to be created by the Pledge
Agreement have been taken (other than to the extent such actions are required or
permitted to be performed after the Closing Date), including the delivery to the
Collateral Agent (or its designee) of certificates in respect of the
Certificated Securities or any intercompany notes, if any, pledged pursuant to
the Pledge Agreement and required to be delivered to the Collateral Agent,
accompanied by signed and undated stock powers in respect of such certificates
and the Pledge Agreement shall be in full force and effect (provided that,
notwithstanding anything to the contrary contained herein or in the Pledge
Agreement, if the Borrower has used commercially reasonable efforts to do so,
but it cannot or it is impracticable to, the delivery of such Certificated
Securities, intercompany notes and stock powers shall be provided in accordance
with Section 5.15 of this Agreement);

 

(k)                the Administrative Agent and the Lenders shall have received
a certificate from the chief financial officer of the Borrower substantially in
the form attached hereto as Exhibit K certifying that the Borrower and its
subsidiaries, on a consolidated basis after giving effect to the Transactions to
occur on the Closing Date, are solvent;

 

(l)                 the Administrative Agent and the Lenders shall have
received, on behalf of itself and the Lenders, the Closing Date Warrants and a
waiver by the board of directors of Parent, substantially in the form of Exhibit
L, waiving the limitations on stock ownership contained in Article NINTH of the
Charter;

 

(m)              the Administrative Agent and the Lenders shall have received
evidence reasonably satisfactory to the Administrative Agent and the Lenders
that the Liens arising under the Forbearance Security and Collateral Agency
Agreement will be released substantially concurrently with the funding of the
Loans and the Asset Level Term Loans and the application of the proceeds
thereof;

 

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(n)               the Administrative Agent and the Lenders shall have received,
at least five (5) Business Days prior to the Closing Date, to the extent
requested, all documentation and other information required by regulatory
authorities under applicable “know your customer” and anti-money laundering
rules and regulations, including the USA PATRIOT Act;

 

(o)               the Administrative Agent and the Lenders shall have received,
at least one (1) Business Day prior to the Closing Date, Schedule 6.01 (in each
case, which shall be acceptable to the Required Lenders in its sole discretion);
and

 

(p)               the Asset Level Term Loan lenders shall have entered into a
written agreement, in form and substance reasonably satisfactory to the Lenders,
with the Lenders to the effect that (i) the Lenders may purchase the obligations
in respect of the Asset Level Term Loan from the holders thereof during the
continuation of certain events of default under the Asset Level Term Loan, (ii)
may participate in any auction of any collateral for the Asset Level Term Loan
in connection with the enforcement of remedies in respect of the Asset Level
Term Loan, and (iii) the owner of the Equity Interests of MFA Omaha Borrower,
LLC will be permitted to pledge the Equity Interests of MFA Omaha Borrower, LLC
to secure the Obligations so long as the Lenders agree to a customary
non-petition provision with respect to MFA Omaha Borrower, LLC and agree not to
exercise remedies to foreclose on the pledge of the Equity Interests of MFA
Omaha Borrower, LLC unless the Asset Level Term Loan has been paid in full and
the commitments to lend thereunder have terminated;

 

(q)               The Administrative Agent and the Lenders shall have received
(a) a copy of the certificate or articles of incorporation or other equivalent
formation document, including all amendments thereto, of each Credit Party,
certified as of a recent date by the Secretary of State (or other similar
official) of the state of its organization, and a certificate as to the good
standing of each Credit Party as of a recent date, from such Secretary of State;
(b) a certificate of the Secretary or Assistant Secretary of each Credit Party
dated the Closing Date and certifying (i) that attached thereto is a true and
complete copy of the by-laws, partnership agreement, limited liability company
agreement, memorandum and articles of association or other equivalent governing
document of such Credit Party as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (ii)
below, (ii) that attached thereto is a true and complete copy of resolutions
duly adopted by the Board of Directors (or equivalent governing body) of such
Credit Party authorizing the execution, delivery and performance of the Credit
Documents to which such Credit Party is a party and that such resolutions have
not been modified, rescinded or amended and are in full force and effect on the
Closing Date, (iii) that the certificate or articles of incorporation or other
equivalent formation document of such Credit Party has not been amended since
the date of the last amendment thereto furnished pursuant to clause (a) above,
and (iv) as to the incumbency and specimen signature of each officer executing
any Credit Document or any other document delivered in connection herewith on
behalf of such Credit Party; and (c) the certificate referred to in the
foregoing clause (b) shall contain a certification by an Authorized Officer of
such Credit Party as to the incumbency and specimen signature of the Secretary
or Assistant Secretary executing such certificate pursuant to clause (b) above;
provided that, in the case of Parent and the Borrower, such certifications
pursuant to clause (b) and clause (c) above may affirm there have been no
changes since the date of, or to the contents of, such Effective Date
certifications;

 

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(r)                The Administrative Agent and the Lenders shall have received,
on behalf of itself and the Lenders, a favorable written opinion of (i) Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Borrower, and (ii) Venable LLP,
Maryland counsel to Parent, each such opinion to be in form and substance
reasonably satisfactory to the Administrative Agent and the Lenders, in each
case (A) dated the Closing Date, (B) addressed to the Administrative Agent and
the Lenders, and (C) covering such matters relating to the Credit Documents and
the Transactions as the Administrative Agent or the Lenders shall reasonably
request, and the Borrower hereby requests such counsel to deliver such opinions;
and

 

(s)                the Administrative Agent and the Lenders (or their respective
counsel) shall have received from each Credit Party either (i) a counterpart of
each of the Pledge Agreement, the Guaranty and Intercompany Subordination
Agreement, in each case, signed on behalf of such Person party thereto or (ii)
written evidence satisfactory to the Administrative Agent and the Lenders (which
may include facsimile or other electronic transmission of a signed counterpart
of the Pledge Agreement, the Guaranty and Intercompany Subordination Agreement)
that such party has signed a counterpart of the Pledge Agreement and the
Guaranty.

 

The Closing Date shall occur no later than the date that is five (5) Business
Days after the Forbearance Termination Date but in any event not later than July
1, 2020 (the “Commitment Termination Date”), and if the Closing Date shall not
have occurred on or prior to such date, the Commitments hereunder shall
automatically terminate and be of no further force and effect.

 

The Borrower’s acceptance of the proceeds of the Loans shall be deemed to
constitute a representation and warranty by the Borrower on and as of the date
of the borrowing are made as to the matters specified above in this Section
(other than as to any matters required to be satisfactory to, approved by or
otherwise acceptable to the Administrative Agent or any Lender or any items
(including signature pages) to be delivered by the Administrative Agent or any
Lender).

 

ARTICLE 5
AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that (x) in the case of Section 5.14,
from and after the Effective Date and (y) in the case of the other provisions of
this Article 5, from and after the Closing Date and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees, all
indemnities and all expenses or other amounts payable under any Credit Document
shall have been paid in full in cash (other than contingent indemnification
obligations and expense reimbursement for which no claim has been made) (the
date on which all such conditions are satisfied, the “Termination Date”), unless
the Required Lenders shall otherwise consent in writing:

 

Section 5.01        Information Covenants. The Borrower will furnish to the
Administrative Agent which will promptly furnish to each Lender:

 

(a)               Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the end of the first three (3) fiscal quarters of
each fiscal year of Parent or such later date as may be permitted by the SEC,
its consolidated balance sheet and related statements of comprehensive income as
of the end of and for such fiscal quarter and the then elapsed portion of the
fiscal year and related statements of stockholders’ equity and cash flows as of
the then elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding prior period or periods (or
in the case of the balance sheet, as of the end of the previous fiscal year,
and, in the case of the statement of shareholders’ equity, no comparative
disclosure), all of which shall be certified by an Authorized Officer of the
Borrower that they fairly present in all material respects in accordance with
GAAP the financial condition of Parent and its Subsidiaries as of the dates
indicated and the results of their operations for the periods indicated, subject
to normal year-end audit adjustments and the absence of footnotes.

 

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(b)               Annual Financial Statements. As soon as available, and in any
event within 90 days after the end of each fiscal year of Parent or such later
date as may be permitted by the SEC, the consolidated balance sheet of Parent
and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and stockholders’ equity and statement of cash
flows for such fiscal year setting forth comparative figures where applicable
for the preceding fiscal year and reported on by KPMG LLP or other independent
certified public accountants of recognized national standing (which report shall
be without a “going concern” or like qualification or exception and without any
qualification or exception as to scope of audit) (other than a going concern
qualification resulting from (i) an upcoming maturity date under this Agreement
occurring within one (1) year from the time such opinion is delivered or (ii)
any potential inability to satisfy the financial covenants under Section 6.15 on
a future date or for a future period within one (1) year from the time such
opinion is delivered)).

 

(c)               Officer’s Certificates. At the time of the delivery of the
financial statements provided for in Section 5.01(a) and Section 5.01(b), a
compliance certificate from an Authorized Officer of the Borrower substantially
in the form of Exhibit D certifying on behalf of the Borrower that, to such
officer’s knowledge after due inquiry, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has occurred
and is continuing, specifying the nature and extent thereof, which certificate
shall (i) set forth in reasonable detail (A) the calculations required to
demonstrate the Debt to Value Ratio at the end of such fiscal quarter or year,
as the case may be, and (B) a summary of all outstanding Permitted Funding
Indebtedness and the Asset Level Term Loan of each Credit Party, including the
outstanding principal amount, maturity date, maintenance covenants, and any
other material information.

 

(d)               Liquidity Report. No later than 15 days after the end of each
fiscal quarter, commencing with the fiscal quarter ended June 30, 2020, a
liquidity certificate from an Authorized Officer of the Borrower in the form
previously agreed among the Borrower and the Lenders or a form reasonably
satisfactory to the Required Lenders certifying on behalf of the Borrower as to
the Liquidity as of the close of business on the last day of such fiscal
quarter; provided that the Borrower shall deliver the calculation of Liquidity
more frequently than quarterly upon the written request of any Lender (but not
more frequently than once per day) during the existence of a volatile market (as
reasonably determined by such Lender), which delivery of such calculation shall
be made via email to the addresses set forth in Section 9.01.

 

(e)               Notice of Default, Litigation and Material Adverse Effect.
Promptly, and in any event within five (5) Business Days after any Authorized
Officer obtains knowledge thereof, notice of (i) the occurrence of any Default
or Event of Default, specifying the nature and extent thereof and the corrective
action (if any) taken or proposed to be taken with respect thereto, (ii) any
litigation or governmental investigation or proceeding pending, or any written
threat or notice of intention of any Person to file or commence any litigation
or governmental investigation or proceeding, against any Credit Party or any
Subsidiary (x) which, either individually or in the aggregate, has had, or could
reasonably be expected to have, a Material Adverse Effect or (y) with respect to
any Credit Document and (iii) any other event or change that has had, or could
reasonably be expected to have, a Material Adverse Effect.

 

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(f)                Other Reports and Filings. Promptly after the filing or
delivery thereof, copies of all financial information, proxy materials and
reports, if any, which any Credit Party shall publicly file with the Securities
and Exchange Commission or any successor thereto (the “SEC”), or any of its
other material Indebtedness pursuant to the terms of the documentation governing
the same or deliver to holders (or any trustee, agent or other representative
therefor) of any Equity Interests of the Borrower.

 

(g)               Certain Notices Related to Other Indebtedness. As soon as
practicable, and in any event no later than twenty-four (24) hours after its
receipt by any Credit Party or any Subsidiary thereof, (i) written notice from
any holder of any Permitted Funding Indebtedness or the Indebtedness under the
Asset Level Term Loan of any “event of default” or equivalent thereunder that is
not waived or otherwise remedied and (ii) any “margin call”, “borrowing base
deficiency” or the equivalent under any Indebtedness of the Parent or any
Subsidiary that remains unsatisfied after a Credit Party or any Subsidiary has
received prior notice thereof or demand for payment thereof.

 

(h)               USA PATRIOT Act Information. Promptly following the
Administrative Agent’s or any Lender’s request therefor, all documentation and
other information that the Administrative Agent or any Lender reasonably
requests in order to comply with its on-going obligations under applicable “know
your customer” and anti-money laundering rules and regulations, including the
USA PATRIOT Act.

 

(i)                 Other Information. From time to time, such other information
or documents (financial or otherwise) with respect to any Credit Parties or any
of their Subsidiaries as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request; provided that no Loan Party will
be required to disclose, permit the inspection, examination or making copies of
or abstracts from, or discussion of, any document, information or other matter
(a) in respect of which disclosure to the Administrative Agent or any Lender (or
their respective representatives or contractors) is prohibited by Requirements
of Law or any contractual obligation or (b) is subject to attorney-client or
similar privilege or constitutes attorney work product.

 

Any requirement to deliver documentation, information, materials or reports or
other information pursuant to this Section 5.01 shall be deemed satisfied by the
posting of such documentation, information, materials or reports on EDGAR or any
successor website maintained by the SEC or Parent’s website or a subsite
thereof).

 

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Section 5.02        Books, Records and Inspections. Each Credit Party will, and
will cause each Subsidiary to, keep proper books of record and accounts in which
full, true and correct entries in conformity in all material respects with GAAP
shall be made in relation to its business and activities. Each Credit Party will
permit officers and designated representatives of the Administrative Agent or
the Required Lenders to visit and inspect, under guidance of officers of such
Credit Party, any of the properties of such Credit Party and to examine, copy
and take extracts from the books of account of such Credit Party and discuss the
affairs, finances and accounts of such Credit Party with, and be advised as to
the same by, its and their officers and independent accountants, all upon
reasonable prior notice and at such reasonable times during normal business
hours and to such reasonable extent as the Administrative Agent or the Required
Lenders may reasonably request; provided that (i) the Credit Parties shall be
given a reasonable opportunity to participate in any discussions with
accountants, (ii) such actions shall be at the Borrower’s sole cost and expense,
and (iii) no Credit Party will be required to disclose, permit the inspection,
examination or making copies of or abstracts from, or discussion of, any
document, information or other matter (x) in respect of which disclosure to the
Administrative Agent or any Lender (or their respective representatives or
contractors) is prohibited by Requirements of Law or any contractual obligation
or (y) is subject to attorney-client or similar privilege or constitutes
attorney work product.; provided further that (a) only the Administrative Agent
on behalf of the Lenders may exercise the visitation and inspection rights of
the Administrative Agent and the Lenders under this sentence and (b) except for
any such visits during the continuation of an Event of Default, the
Administrative Agent shall not exercise such rights more often than one (1) time
during any calendar year.

 

Section 5.03        Maintenance of Property; Insurance.

 

(a)               Each Credit Party will, and will cause each Subsidiary to, (i)
keep all material property necessary to the business of each Credit Parties and
each Subsidiary in good working order and condition, ordinary wear and tear
excepted and subject to the occurrence of casualty events, and force majeure and
(ii) maintain or cause to be maintained with financially sound and reputable
insurance companies (determined at the time obtained and giving effect to such
insurance), as is consistent and in accordance with industry practice for
companies similarly situated owning similar properties and engaged in similar
businesses as the Credit Parties and the Subsidiaries, and (iii) furnish to the
Administrative Agent, upon its request therefor, full information as to such
insurance carried. Such insurance to the extent consistent with the foregoing
shall include physical damage insurance on all real and personal property
(whether now owned or hereafter acquired) on a comprehensive basis and business
interruption insurance.

 

(b)               If any Credit Party or any Subsidiary shall fail to maintain
or cause to be maintained insurance in accordance with this Section 5.03, the
Administrative Agent shall have the right (but shall be under no obligation) to
procure such insurance and the Borrower agrees to reimburse the Administrative
Agent for all costs and expenses of procuring such insurance, provided that the
Administrative Agent shall furnish written notice to the Borrower of its intent
to procure such insurance.

 

Section 5.04        Existence; Franchises. Each Credit Party will, and will
cause each Subsidiary (other than any Immaterial Subsidiary) to, at all times
preserve and keep in full force and effect its existence and all rights,
privileges, franchises, licenses and permits necessary or material to its
business except (other with respect to the existence of the Credit Parties) to
the extent the failure to do so could not reasonably be expected to result in a
Material Adverse Effect; provided that nothing in this Section 5.04 shall
prevent sales of assets and other transactions by any Credit Party or any
Subsidiary permitted by Section 6.02.

 

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Section 5.05       Compliance with Statutes, Etc. Each Credit Party will, and
will cause each Subsidiary to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all Governmental
Authorities in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such non-compliances
as could not, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

Section 5.06        Compliance with Environmental Laws.

 

(a)               Each Credit Party will, and will cause each Subsidiary to,
comply with all Environmental Laws and permits applicable to, or required by,
its operations or the ownership, lease, occupancy, or use of its Real Property
now or hereafter owned, leased or operated by each Credit Party and each
Subsidiary, except such noncompliance that could not, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect, and
will promptly pay or cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental Laws
except, in each case, for Permitted Liens related thereto. Neither any Credit
Party will, nor will any Credit Party permit any Subsidiary to, generate, use,
treat, store, Release or dispose of Hazardous Materials on any Real Property now
or hereafter owned, leased or operated by any Credit Party or any Subsidiary, or
transport Hazardous Materials to or from any such Real Property, except for
Hazardous Materials generated, used, treated, stored, Released or disposed of at
or transported from, any such Real Properties except such activities as could
not, either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

(b)               (i) At any time that any Credit Party or any Subsidiary are
not in compliance with Section 5.06(a), or (ii) in the event that the
Administrative Agent or the Lenders have exercised any of the remedies pursuant
to the last clause of Section 7.01, each Credit Party will (in each case)
provide, at the sole expense of the Borrower and at the request of the
Administrative Agent, a non-invasive environmental site assessment report
concerning the Real Property owned, leased or operated by any Credit Party or
any Subsidiary that is in question, prepared by an environmental consulting firm
reasonably approved by the Administrative Agent, indicating the presence or
absence of Hazardous Materials or noncompliance and the potential cost of any
removal or remedial action required by a Governmental Authority in connection
with such Hazardous Materials or noncompliance on such Real Property. If any
Credit Party or any Subsidiary fails to provide the same within 60 days after
such request was made, the Administrative Agent may order the same, the cost of
which shall be borne by the Borrower, and the Borrower and each other Credit
Party will, and will cause each Subsidiary to, grant and hereby grants to the
Administrative Agent and the Lenders and their respective agents access to such
Real Property and specifically grants the Administrative Agent and the Lenders
an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment at any reasonable time upon reasonable notice to
the Borrower, all at the sole expense of the Borrower.

 

Section 5.07        ERISA.

 

(a)               Each Credit Party shall furnish written notice to the
Administrative Agent promptly, and in any event within three (3) Business Days
after any responsible officer of any Credit Party knows, or has reason to know,
that any ERISA Event has occurred or is reasonably likely to occur that, alone
or together with any other ERISA Event could reasonably be expected to result in
liability of any Credit Party or any Subsidiary in an aggregate amount that
would reasonably be expected to have a Material Adverse Effect.

 

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(b)               Each Credit Party shall, and shall cause each Subsidiary and
each ERISA Affiliate to, maintain and operate each Plan in compliance in all
material respects with its terms and the applicable provisions of ERISA and the
Code, and each Credit Party shall, and shall cause each Subsidiary and ERISA
Affiliate to comply with their respective obligations with respect to each
Multiemployer Plan, except, in each case, for non-compliance which could not
reasonably be expected to result in liability of any Credit Party or any
Subsidiary in an aggregate amount that would reasonably be expected to have a
Material Adverse Effect.

 

Section 5.08        End of Fiscal Years; Fiscal Quarters. The Borrower will
cause (i) its and each of its Domestic Subsidiaries’ fiscal years to end on
December 31 of each calendar year and (ii) its and each of its Domestic
Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and
December 31 of each calendar year.

 

Section 5.09        Conference Calls. Upon the request of the Administrative
Agent or the Required Lenders, the Borrower shall (and shall cause appropriate
members of senior management of the Borrower and Parent to) participate in a
conference call with the Administrative Agent and the Lenders up to two (2)
times during each fiscal year, at such time and on such date as may be
reasonably agreed to by the Borrower and the Administrative Agent and upon
reasonable prior notice.

 

Section 5.10        Tax Matters.

 

(a)               The Parent, the Borrower and each Subsidiary will timely pay
and discharge all Taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits or upon any properties belonging to it,
unless (i) the same are being contested in good faith by appropriate proceedings
diligently conducted and adequate reserves in accordance with GAAP are being
maintained by the Credit Parties and each Subsidiary and shown in their
financial statements, except to the extent that the failure to do so could not
be reasonably expected to have a Material Adverse Effect, and (ii) in the case
of a Tax or claim which has or may become a Lien against any of the Collateral,
such contest proceedings conclusively operate to stay the sale of any portion of
the Collateral to satisfy such Tax or claim.

 

(b)               For federal income tax purposes, pursuant to Treasury
Regulations §1.1273-2(h), the Borrower, the Administrative Agent and the Lenders
acknowledge that the “issue price” of the Loans is 99% of the stated principal
amount of the Loans minus the purchase price of the Closing Date Warrants (as
determined pursuant to the Investment Agreement). Each of the Borrower and the
Lenders accordingly shall treat the issue price of the Loans for federal income
tax purposes as 99% of the stated principal amount of the Loans minus the
purchase price of the Closing Date Warrants. In accruing “original issue
discount” on the Loans for U.S. federal income tax purposes, in accordance with
Treasury Regulation 1.1272-1(c)(5), the Borrower will be assumed to repay the
Loans in such a manner as to minimize the yield on the Loans.

 

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(c)               From and after the Closing Date, Parent will continue to be
organized and operated in conformity with the requirements for qualification and
taxation as a REIT under the Code, and the Borrower will continue at all times
to be a Qualified REIT Subsidiary of Parent, unless otherwise consented to by
the Administrative Agent.

 

Section 5.11        Use of Proceeds. The Borrower and each other Credit Party
will use the proceeds of the Loans, together with the proceeds of the Closing
Date Warrants, only for (a) the permanent repayment of a portion of certain Repo
Indebtedness of the Borrower and its Subsidiaries, (b) the payment of the
Preferred Stock Accumulated Dividends in respect of the Existing Preferred
Stock, (c) the payment of fees and expenses incurred in connection with the
Transactions, and (d) for general company purposes and working capital for
Parent and its Subsidiaries, including making Investments and taking any action
not otherwise prohibited by this Agreement.

 

Section 5.12        Additional Security; Further Assurances; Etc. The Borrower
and each other Credit Party shall promptly following the creation, formation, or
acquisition of any Subsidiary (and, in any event, within sixty (60) days, as
such time period may be extended by the Administrative Agent in its sole
discretion) cause such Subsidiary now existing or created, formed or acquired to
(a) to the extent such Subsidiary is party to any Intercompany Loan that is
evidenced by a note, cause such Subsidiary to deliver such note to the
Administrative Agent, (b) to the extent such Subsidiary is not a Subsidiary
Guarantor, notify the Administrative Agent and the Lenders of the creation,
formation, or acquisition of such Subsidiary and, upon the reasonable request of
the Administrative Agent or the Required Lenders, cause such Subsidiary (other
than an Excluded Subsidiary) to become a party to the Guaranty and grant a
security interest in the Equity Interests owned by such Subsidiary (other than
any Excluded Pledges) by delivering to the Administrative Agent a duly executed
supplement to the Pledge Agreement or such other document as the Administrative
Agent shall deem appropriate for such purpose, (c) upon the request of the
Administrative Agent or the Required Lenders, deliver to the Administrative
Agent any Certificated Securities issued by such Subsidiary (other than any
Excluded Pledges), if any, and assignments related thereto, (d) deliver to the
Administrative Agent such updated schedules to the Credit Documents as requested
by the Administrative Agent with respect to such Subsidiary, (e) except in the
case of any Excluded Subsidiary, deliver to the Administrative Agent
counterparts, joinders or similar documents with respect to the Guaranty, the
Pledge Agreement and the Intercompany Subordination Agreement and (f) except in
the case of any Excluded Subsidiary, deliver to the Administrative Agent such
other documents as may reasonably requested by the Administrative Agent, all in
form, content and scope reasonably satisfactory to the Administrative Agent
(collectively, the “Additional Pledge Documents”). All such security interests
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Collateral Agent and shall constitute valid and enforceable
perfected security interests, superior to and prior to the rights of all third
Persons and enforceable against third parties and subject to no other Liens,
other than involuntary Liens permitted under Section 6.01. The Additional Pledge
Documents or instruments, filings or documents related thereto shall be duly
recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Pledge Documents and all
Taxes, fees and other charges payable in connection therewith shall be paid in
full.

 

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Section 5.13        Sanctions; Anti-Corruption Laws. Each Credit Party and each
Subsidiary will materially comply with all applicable Anti-Corruption Laws,
Anti-Money Laundering Laws, and Sanctions. Parent shall maintain in effect (or
shall cause its Subsidiaries to maintain in effect) policies reasonably designed
to promote compliance by Parent, its Subsidiaries, and their respective
directors, officers, employees, and agents with applicable Sanctions, Anti-Money
Laundering Laws, and Anti-Corruption Laws.

 

Section 5.14        Closing of the Transactions. The Credit Parties shall (a)
use commercially reasonable efforts, in good faith, to (i) close the
Transactions prior to the Forbearance Termination Date but in any event not
later than July 1, 2020 and (ii) satisfy each of the conditions precedent to the
funding of the Loans set forth in Section 4.02 (and, solely to the extent that
such Credit Party cannot satisfy the conditions after the use of its
commercially reasonable efforts in good faith, request the waiver of such
conditions in accordance with this Agreement) and (b) in the case of the
Borrower, deliver a Borrowing Request in accordance with Section 2.03 for the
Loan in an amount not less than the full Commitment.

 

Section 5.15        Post-Closing. To the extent certificates in respect of the
Certificated Securities or any intercompany notes, if any, pledged pursuant to
the Pledge Agreement and required to be delivered to the Collateral Agent are
not delivered to the Collateral Agent or its designee on or prior to the Closing
Date, accompanied by signed and undated stock powers or other appropriate
instruments of transfer, after using commercially reasonable efforts, the Credit
Parties shall deliver the same to the Collateral Agent as soon as practical
thereafter but in any event no later than sixty (60) days following the Closing
Date; provided further that if such Certificated Securities or intercompany
notes have not been delivered on or prior to the date that is sixty (60) days
following the Closing Date after using commercially reasonable efforts, the
Credit Parties shall not be in beach of this Section 5.15 so long as the Credit
Parties deliver a certificate to the Administrative Agent, which shall certify
that such Certificated Securities or intercompany notes are not held by any
third party and continue to use commercially reasonable efforts to deliver such
Certificated Securities or intercompany notes.

 

ARTICLE 6
NEGATIVE COVENANTS

 

The Credit Parties covenants and agrees with each Lender that from and after the
Closing Date and until the Termination Date, unless the Required Lenders shall
otherwise consent in writing:

 

Section 6.01        Liens. The Credit Parties will not, and will not permit any
of the Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist any Lien upon or with respect to any property or assets of any Credit
Party or any Subsidiary of the Credit Parties, whether now owned or hereafter
acquired, or on any income or revenues or rights in respect of any thereof
except (Liens described below are herein referred to as “Permitted Liens”):

 

(a)               Liens for Taxes not yet due and payable or that are diligently
being contested in good faith by appropriate proceedings and adequately
disclosed and fully provided for on the financial statements of the Company in
accordance with GAAP;

 

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(b)               Liens in respect of property or assets of any Credit Party or
any Subsidiary imposed by law (other than Liens imposed under ERISA), which were
incurred in the Ordinary Course of Business and do not secure Indebtedness for
borrowed money, such as carriers’, warehousemen’s, materialmen’s and mechanics’
liens, statutory and common law landlord’s liens and other similar Liens arising
in the Ordinary Course of Business, and in each case (i) which are for amounts
that are not past-due for a period of more than sixty (60) days or (ii) which
are being contested in good faith by appropriate proceedings, diligently
conducted, if adequate reserves with respect thereto are maintained on the books
of the applicable Person to the extent required in accordance with GAAP;

 

(c)               Liens in existence on the Closing Date which are listed, and
the property subject thereto described, in Schedule 6.01 (it being understood
and agreed that such schedule may be updated following the Effective Date and
prior to the Closing Date with the consent of the Required Lenders in their sole
discretion);

 

(d)               Liens created by or pursuant to this Agreement and the other
Credit Documents;

 

(e)               (i) non-exclusive licenses, non-exclusive sublicenses, leases
or subleases granted by the Borrower or any Subsidiary of the Borrower to other
Persons in the Ordinary Course of Business and not materially interfering with
the conduct of the business of the Borrower or any Subsidiary and (ii) any
interest or title of a lessor, sublessor or licensor under any operating lease
or license agreement entered into by the Borrower or any Subsidiary in the
Ordinary Course of Business and covering only the assets so leased or licensed;

 

(f)                Liens upon assets of the Borrower or any Subsidiary of the
Borrower subject to Capitalized Lease Obligations to the extent such Capitalized
Lease Obligations are permitted by Section 6.04(f), provided that (i) such Liens
only serve to secure the payment of Indebtedness arising under such Capitalized
Lease Obligation and (i) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of the Borrower
or such Subsidiary (other than property financed by such Indebtedness and
proceeds thereof and improvements affixed thereto);

 

(g)               Liens placed upon fixed or capital assets used in the Ordinary
Course of Business of the Borrower or any Subsidiary of the Borrower and placed
at the time of the acquisition thereof by the Borrower or such Subsidiary or
within 90 days thereafter to secure Indebtedness incurred to pay all or a
portion of the purchase price thereof or to secure Indebtedness incurred solely
for the purpose of financing the acquisition of any such assets, or extensions,
renewals or replacements of any of the foregoing for the same or a lesser
amount, provided that (i) the Indebtedness secured by such Liens is permitted by
Section 6.04(f) and (i) in all events, the Lien encumbering the assets so
acquired does not encumber any other asset of the Borrower or such Subsidiary
(other than property financed by such Indebtedness and proceeds thereof or
improvements thereon);

 

(h)               easements, right-of-way, restrictions, encroachments and other
similar charges or encumbrances, not securing Indebtedness and not materially
interfering with the conduct of the business of the Borrower or any Subsidiary;

 

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(i)                 Liens arising from precautionary UCC financing statement
filings regarding operating leases, consignment arrangements or bailee
arrangements entered into, or dispositions of assets by the Borrower or any
Subsidiary otherwise permitted under Section 6.02 consummated in the Ordinary
Course of Business;

 

(j)                 Liens arising out of the existence of judgments or awards
not constituting an Event of Default under Section 7.01(j);

 

(k)               (i) Liens (other than Liens imposed under ERISA) incurred in
the Ordinary Course of Business in connection with workers compensation claims,
unemployment insurance and other social security legislation and (ii) Liens
securing the performance of bids, trade contracts, performance and completion
guarantees, tenders, leases and contracts in the Ordinary Course of Business,
statutory obligations, surety bonds, performance bonds and other obligations of
a like nature incurred in the Ordinary Course of Business;

 

(l)                 (i) bankers’ Liens, rights of setoff and other similar Liens
existing solely with respect to cash and Cash Equivalents on deposit in one (1)
or more accounts maintained by Parent or any Subsidiary, in each case granted in
the Ordinary Course of Business and which are customary in the banking industry
in favor of the bank or banks with which such accounts are maintained, securing
amounts owing to such bank or banks with respect to cash management and
operating account arrangements and (ii) Liens of a collection bank arising under
Section 4-210 of the UCC on items in the course of collection;

 

(m)             Liens (i) securing Permitted Funding Indebtedness so long as any
such Liens shall encumber only the Permitted Funding Assets (a) originated,
acquired or funded with the proceeds of such Permitted Funding Indebtedness, or
(b) otherwise established, created or in existence because of or in connection
with such Permitted Funding Indebtedness or (ii) arising in connection with
transfers permitted by Section 6.02(n);

 

(n)               Liens on Permitted Funding Assets to secure the Indebtedness
permitted by Section 6.04(d) or in connection with transfers permitted by
Section 6.02(n);

 

(o)               Liens on cash, Cash Equivalents and restricted accounts
containing cash and Cash Equivalents in connection with the defeasance,
discharge or redemption of Indebtedness; provided that such defeasance,
discharge or redemption is permitted hereunder;

 

(p)               [reserved];

 

(q)               Liens securing obligations under Interest Rate Protection
Agreements or Permitted Credit Default Swaps, in each case, not entered into for
speculative purposes so long as such Liens are limited to cash, cash equivalents
and, in the case of the Borrower or any Subsidiary of the Borrower, the
Permitted Funding Assets hedged thereby; and

 

(r)                other Liens securing obligations in an outstanding amount not
to exceed $15,000,000.

 

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Section 6.02        Consolidation, Merger, Sale of Assets, Etc. The Credit
Parties will not, and will not permit any of the Subsidiaries to, wind up,
liquidate or dissolve its affairs or consummate any merger or consolidation, or
convey, sell, lease or otherwise dispose of all or any part of its property or
assets (other than sales of inventory in the Ordinary Course of Business, but
including the issuance of Equity Interests of any Subsidiary of Parent (other
than an issuance by the Borrower to Parent to any Wholly Owned Subsidiary of the
Borrower), or consummate any sale-leaseback transactions with any Person, except
the following:

 

(a)               disposition of cash and Cash Equivalents shall be permitted;

 

(b)               the Subsidiaries (other than the Borrower) may liquidate or
otherwise dispose of obsolete or worn-out property or property no longer useful
in their respective businesses in the Ordinary Course of Business;

 

(c)               Investments may be made to the extent permitted by
Section 6.05 and Restricted Payments to the extent permitted by Section 6.03;

 

(d)               the Borrower and any Subsidiary of the Borrower may sell
assets (provided that any sale of less than all the capital stock or other
Equity Interests of any Subsidiary in accordance with this clause (d) shall be
deemed to be an Investment by the Borrower or the applicable Subsidiary in the
capital stock or other Equity Interests not so sold in an amount equal to the
Fair Market Value of such capital stock or other Equity Interests), so long as
(i) no Default or Event of Default then exists or would result therefrom
(including as a result of any such deemed investment), (ii) the Borrower or the
respective Subsidiary receives at least Fair Market Value and (iii) after giving
effect to such disposition, the Debt to Value Ratio (as determined on a pro
forma basis) either (A) is no greater than 0.80 to 1.00 or (B) will decrease
after giving effect to such transaction (and the application of funds related
thereto);

 

(e)               the Borrower and the Subsidiaries of the Borrower may enter
into Sales, leases, conveyances and other dispositions of assets, so long as (i)
no Default or Event of Default then exists or would result therefrom (including
as a result of any such Sale, lease, conveyance and other disposition of
assets), (ii) the Borrower or the respective Subsidiary receives at least Fair
Market Value and (iii) after giving effect to such Sale, lease, conveyance and
other disposition of assets, the Debt to Value Ratio (as determined on a pro
forma basis) either (A) is no greater than 0.80 to 1.00 or (B) will decrease
after giving effect to such transaction (and the application of funds related
thereto) (provided that any sale of less than all the capital stock or other
Equity Interests of any such Subsidiary in accordance with this clause (e) shall
be deemed to be an Investment by the Borrower or the applicable Subsidiary in
the capital stock or other Equity Interests not so sold in an amount equal to
the Fair Market Value of such capital stock or other Equity Interests);

 

(f)                the Borrower and any Subsidiary of the Borrower may lease (as
lessee) or license (as licensee) real or personal property in the Ordinary
Course of Business (so long as any such lease or license does not create a
Capitalized Lease Obligation except to the extent permitted by Section 6.04(d));

 

(g)               the Borrower and any Subsidiary of the Borrower may sell or
discount, in each case without recourse and in the Ordinary Course of Business,
accounts receivable arising in the Ordinary Course of Business, but only in
connection with the compromise or collection of delinquent accounts receivable
and not as part of any financing transaction;

 

65

 

 

(h)               the Borrower and each Subsidiary of the Borrower may grant
licenses, sublicenses, leases or subleases (or other grants of rights to use) to
other Persons (x) in the Ordinary Course of Business, (y) existing on the
Closing Date, or (z) between or among the Credit Parties;

 

(i)                 any Subsidiary of the Borrower may convey, sell or otherwise
transfer all or any part of its business, properties and assets to the Borrower
or to any Wholly Owned Domestic Subsidiary of the Borrower;

 

(j)                 any Subsidiary of the Borrower may merge or consolidate with
and into, or be dissolved or liquidated into, the Borrower or any Wholly Owned
Domestic Subsidiary, so long as (i) in the case of any such merger,
consolidation, dissolution or liquidation involving the Borrower, the Borrower
is the surviving or continuing entity of any such merger, consolidation,
dissolution or liquidation, (ii) in the case of a merger of any non-Wholly Owned
Subsidiary with any Wholly Owned Subsidiary, the Wholly Owned Subsidiary shall
be the survivor or such transaction shall be deemed an Investment by such
Borrower (directly or indirectly) in such non-Wholly Owned Subsidiary and (iii)
in the case of a Subsidiary Guarantor, a Subsidiary Guarantor is the surviving
or continuing entity of any such merger, consolidation, dissolution or
liquidation;

 

(k)               any Subsidiary of the Borrower that is not a Subsidiary
Guarantor (other than a Securitization Entity, a Repo Debt Entity, a REO
Subsidiary or a Repo Subsidiary) may convey, sell, lease or otherwise dispose of
all or any part of its property or assets to, or merge or consolidate with and
into, or be dissolved or liquidated into, the Borrower or any other Subsidiary,
in each case so long as (i) no Event of Default shall result therefrom, (ii) in
the case of any such merger, consolidation, dissolution or liquidation involving
the Borrower, the Borrower is the surviving or continuing entity of any such
merger, consolidation, dissolution or liquidation, (iii) in the case of any such
merger, consolidation, dissolution or liquidation involving a Subsidiary
Guarantor (but not involving the Borrower), such Subsidiary Guarantor is the
surviving or continuing entity of any such merger, consolidation, dissolution or
liquidation and (iv) after giving effect to such disposition, the Debt to Value
Ratio (as determined on a pro forma basis) either (A) is no greater than 0.80 to
1.00 or (B) will decrease immediately after giving effect to such transaction
(and the application of funds related thereto);

 

(l)                 the Credit Parties and their Subsidiaries may liquidate or
otherwise dispose of Cash Equivalents in the Ordinary Course of Business for
cash or Cash Equivalents;

 

(m)             [reserved];

 

(n)               the Subsidiaries of the Borrower may make sales,
contributions, assignments or other transfers of Permitted Funding Assets
(including any intermediate sales, contributions, assignments or other
transfers) to Securitization Entities, Repo Debt Entities, REO Subsidiaries and
Repo Subsidiaries in connection with Permitted Funding Indebtedness;

 

(o)               the modification of any Permitted Funding Assets owned by the
Borrower or any of the Subsidiaries in the Ordinary Course of Business shall be
permitted.

 

(p)               the settlement, unwinding, cancellation or termination of any
Interest Rate Protection Agreements and/or any Permitted Credit Default Swap;

 

66

 

 

(q)               (i) the issuance of any Convertible Debt Securities permitted
by Section 6.04 and (ii) delivery of common stock of Parent upon (x) conversion,
exchange or settlement of any Convertible Debt Security or (y) the exercise,
unwinding, termination or cancellation of the Closing Date Warrants;

 

(r)                the discontinuation, abandonment, allowing to lapse or
expire, or other disposition of any intellectual property which, in the
reasonable judgment of the Borrower, is no longer economically practicable to
maintain or necessary in any material respect for the conduct of the business of
the Credit Parties and their Subsidiaries, taken as a whole; and

 

(s)                so long as no Event of Default shall have occurred and be
continuing or would result therefrom, the Credit Parties and their Subsidiaries
may sell, transfer, convey or otherwise dispose of assets in an aggregate amount
in any Fiscal Year of up to $1,000,000.

 

Section 6.03        Restricted Payments. The Credit Parties will not, and will
not permit any of the Subsidiaries to, directly or indirectly, authorize, make
or pay any Restricted Payments, except that:

 

(a)               (i) any Subsidiary of the Borrower may make Restricted
Payments to the Borrower or to any Wholly Owned Domestic Subsidiary and (ii) any
Non-Wholly Owned Subsidiary may make Restricted Payments to its shareholders,
members or partners generally so long as Parent, the Borrower or a Subsidiary
which owns the Equity Interests in the Subsidiary making such Restricted
Payments receives at least its proportionate share thereof (based upon its
relative holding of the Equity Interests in the Subsidiary making such
Restricted Payments);

 

(b)               So long as no Default or Event of Default (or in the case of
clause (iii)(A) below, no Default or Event of Default under Section 7.01(a),
Section 7.01(f) or Section 7.01(c) (in respect of Section 5.10(c))) has occurred
and is continuing or would result therefrom (including non-compliance with
Section 6.15 after giving effect to such Restricted Payment) the Borrower may
make Restricted Payments to Parent to enable Parent to (and Parent may make such
Restricted Payments to):

 

(i)                 make payment of Dividends in the amount, and at the times,
required pursuant to the Existing Preferred Stock, including the Preferred Stock
Accumulated Dividends;

 

(ii)              declare and pay a Dividend in respect of the Equity Interests
of Parent constituting common stock in an aggregate amount (together with all
other declarations and payments of such Dividends pursuant to this clause (ii)
on or after the Closing Date) not to exceed 100% of consolidated net income
(determined in accordance with GAAP) of the Borrower and its Subsidiaries
generated on or after July 1, 2020 and prior to the date of the declaration of
such Dividend; and

 

(iii)            to the extent the declaration and payment of Dividends under
clause (b)(ii) of this Section 6.03 is not then permitted or, in the case of
clause (A) hereof, not sufficient, pay Dividends in respect of the Equity
Interests of Parent constituting common stock at the time and in an amount not
to exceed the greater of (A) the minimum Dividend necessary to maintain Parent’s
status as a REIT under Sections 856 through 860 of the Code and, so long as no
Default is continuing or would result therefrom, avoid the payment by Parent of
any federal, state or local entity-level income or excise tax, including
pursuant to Sections 857, and 4981 of the Code and (B) $0.01 per share of such
Equity Interests of Parent constituting common stock;

 

67

 

 

(iv)             to the extent the declaration and payment of such Dividends
under clause (b)(ii) and (iii) of this Section 6.03 is not then permitted,
declare and pay ordinary Dividends in respect of the Equity Interests of Parent
constituting common stock (up to the full amount as approved and declared by the
board of directors of the Parent, but excluding any special dividend) in an
aggregate amount (together with all other declarations and payments of such
Dividends pursuant to clauses (i), (ii) and (iii) above and this clause (iv), in
each case on or after the Closing Date) not to exceed 100% of the difference, if
positive, in the Economic Book Value of the Borrower and its Subsidiaries on the
date of the declaration of such Dividend and the Economic Book Value of the
Borrower and its Subsidiaries on June 30, 2020;

 

(c)                Parent may (A) repurchase Equity Interests in connection with
the exercise of stock options or warrants to the extent such Equity Interests
represent a portion of the exercise price of those stock options or warrants and
(B) repurchase Equity Interests or options to purchase Equity Interests in
connection with the exercise of stock options to the extent necessary to pay
applicable withholding taxes;

 

(d)               Parent may pay cash in lieu of fractional shares upon
conversion or exchange of any Convertible Debt Security;

 

(e)               Parent may deliver common stock and cash payments upon
unwinding, termination cancellation or exercise of the Closing Date Warrants;

 

(f)                [reserved]; and

 

(g)               so long as no Event of Default shall have occurred and be
continuing or be caused thereby, the Credit Parties and their Subsidiaries may
make Restricted Payments in an aggregate amount not to exceed $15,000,000.

 

Section 6.04        Indebtedness. The Credit Parties will not, and will not
permit any of the Subsidiaries to, directly or indirectly, contract for, create,
incur, assume or suffer to exist any Indebtedness, except:

 

(a)               Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;

 

(b)               (i) the Asset Level Term Loan and (ii) any Permitted
Refinancing thereof; provided that (A) other than for extensions of the Asset
Level Term Loan in accordance with the provisions contemplated by the Asset Base
Term Loan Commitment Letter, the Debt to Value Ratio (as determined on a pro
forma basis) is no greater than 0.80 to 1.00 immediately after such Permitted
Refinancing, and (B) the holders of such Permitted Refinancing Indebtedness have
entered into written agreement, in form and substance reasonably satisfactory to
the Lenders, with the Lenders to the effect that (x) the Lenders may purchase
the obligations in respect of such Permitted Refinancing Indebtedness from the
holders thereof during the continuation of certain events of default thereunder,
and (y) may participate in any auction of any collateral securing such Permitted
Refinancing Indebtedness, and (C) 100% of the Equity Interests in each Asset
Level Borrower must be pledged as Pledged Collateral under the Pledge Agreement
(unless any such Asset Level Borrower is Wholly Owned by another Asset Level
Borrower and 100% of such owning Asset Level Borrower’s Equity Interests are
pledged as Pledged Collateral under the Pledge Agreement);

 

68

 

 

(c)               Permitted Subordinated Debt and any Permitted Refinancing
thereof;

 

(d)               Permitted Funding Indebtedness of the Borrower or any
Subsidiary of the Borrower so long as the Debt to Value Ratio (as determined on
a pro forma basis) is no greater than 0.80 to 1.00 immediately after any
incurrence thereof (it being understood that the Debt to Value Ratio is not
required to be re-tested in connection with the “rolling” or “continuation” of
any Permitted Repo Indebtedness arising under any master repurchase agreement
but the Debt to Value Ratio is required to be re-tested in connection with the
incurrence of any new money under any Permitted Funding Indebtedness or the
establishment of any new facility for Permitted Funding Indebtedness);

 

(e)               Indebtedness of Parent, the Borrower and any Subsidiary of the
Borrower under (i) Interest Rate Protection Agreements so long as the entering
into of such Interest Rate Protection Agreements are bona fide hedging
activities in the Ordinary Course of Business and are not for speculative
purposes and (ii) Permitted Credit Default Swaps;

 

(f)                Indebtedness of the Borrower and any Subsidiary of the
Borrower evidenced by Capitalized Lease Obligations described in Section 6.01(f)
and purchase money Indebtedness described in Section 6.01(g), provided that in
no event shall the sum of the aggregate principal amount of all Capitalized
Lease Obligations and purchase money Indebtedness permitted by this clause (f)
exceed $1,000,000 at any time outstanding;

 

(g)               Indebtedness constituting Intercompany Loans to the extent
permitted by Section 6.05(f);

 

(h)               Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn against
insufficient funds in the Ordinary Course of Business, so long as such
Indebtedness is extinguished within five (5) Business Days of its incurrence;

 

(i)                 Indebtedness of Parent and the Subsidiaries with respect to
performance bonds, surety bonds, appeal bonds or customs bonds required in the
Ordinary Course of Business or in connection with the enforcement of rights or
claims of the Borrower or any Subsidiary or in connection with judgments that do
not result in a Default or an Event of Default;

 

(j)                 Indebtedness of the Borrower and any Subsidiary of the
Borrower which may be deemed to exist in connection with customary agreements
providing for indemnification, purchase price adjustments and similar
obligations in connection with the acquisition or disposition of assets in
connection with transactions otherwise permitted hereunder, so long as any such
obligations are those of the Person making the respective acquisition or sale,
and are not guaranteed by any other Person;

 

69

 

 

(k)               Indebtedness with respect to any Convertible Debt Security;

 

(l)                 The 2042 Notes and Permitted Refinancings thereof;

 

(m)             so long as no Event of Default shall have occurred and be
continuing or be caused thereby, the Credit Parties may incur Indebtedness in an
aggregate amount not to exceed $15,000,000; and

 

(n)               Indebtedness incurred pursuant to letters of credit, bank
guarantees and similar support instruments in an aggregate amount not to exceed
$5,000,000 at any time outstanding.

 

Section 6.05        Advances, Investments and Loans. The Credit Parties will
not, and will not permit any of the Subsidiaries to, directly or indirectly,
make or permit to exist any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase, hold or acquire
any Equity Interest, bonds, notes, debentures, evidence of indebtedness or other
securities of, or acquire any assets constituting all or substantially all of
the assets of or assets constituting all or substantially all of the assets of a
business, division or product line of, any Person (each of the foregoing an
“Investment” and, collectively, “Investments”), except that the following shall
be permitted:

 

(a)               the Borrower and any Subsidiary of the Borrower may acquire
and hold accounts or notes receivables owing to any of them, if created or
acquired in the Ordinary Course of Business and consistent with past practice;

 

(b)               the Borrower and any Subsidiary of the Borrower may acquire
and hold cash and Cash Equivalents;

 

(c)               the Borrower and any Subsidiary of the Borrower may acquire
and own REO Assets and other investments (including debt obligations) received
in connection with the bankruptcy or reorganization of suppliers and customers
and in good faith settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the Ordinary Course of Business;

 

(d)               the Borrower and any Subsidiary of the Borrower may make loans
and advances to their officers and employees in the ordinary course of business
(including for travel, entertainment and relocation expenses) in an aggregate
amount not to exceed $100,000 at any time outstanding;

 

(e)               the Parent, the Borrower and the Subsidiaries may enter into
Interest Rate Protection Agreements and Permitted Credit Default Swaps, in each
case to the extent permitted by Section 6.04(e) and perform their obligations
thereunder;

 

(f)                (i) the Credit Parties and their Subsidiaries may make
intercompany loans and advances between or among one another and (ii)
collectively, the “Intercompany Loans”); provided that (A) to the extent that
any Intercompany Loan made by a Credit Party is evidenced by a note, such note
shall be delivered to the Administrative Agent, (B) each Intercompany Loan made
by any Subsidiary that is not a Credit Party to a Credit Party shall be subject
to the subordination provisions contained in the Intercompany Subordination
Agreement and (C) any Intercompany Loans made to any Subsidiary Guarantor or any
Wholly Owned Subsidiary pursuant to this clause (f) shall cease to be permitted
by this clause (f) if such Subsidiary Guarantor or Wholly Owned Subsidiary, as
the case may be, ceases to constitute a Subsidiary Guarantor that is a Wholly
Owned Domestic Subsidiary or a Wholly Owned Subsidiary, as the case may be;

 

70

 

 

(g)               (i) the Borrower and any Subsidiary of the Borrower may make
capital contributions to, or acquire Equity Interests of, any Subsidiary and
(ii) any Subsidiary of the Borrower may make capital contributions to, or
acquire Equity Interests of, any other Subsidiary of the Borrower, and may
capitalize or forgive any Indebtedness owed to it by a Subsidiary of the
Borrower;

 

(h)               the Borrower and the Subsidiaries may own the Equity Interests
of their respective Subsidiaries created or acquired in accordance with the
terms of this Agreement (so long as all amounts invested in such Subsidiaries
are independently justified under another provision of this Section 6.05);

 

(i)                 Contingent Obligations permitted by Section 6.04, to the
extent constituting Investments;

 

(j)                 the Borrower and any Subsidiary of the Borrower may receive
and hold promissory notes and other non-cash consideration received in
connection with any asset sale permitted by Section 6.02(j);

 

(k)               the Borrower and any Subsidiary of the Borrower may in the
Ordinary Course of Business make advances in the form of a prepayment of
expenses to vendors, suppliers and trade creditors, so long as such expenses
were incurred in the Ordinary Course of Business and consistent with the past
practice of the Borrower or such Subsidiary;

 

(l)                 the Borrower or any Subsidiary of the Borrower may make
contributions to the capital of any Securitization Entity, any Repo Debt Entity,
any REO Subsidiary or any Repo Subsidiary of any Permitted Funding Assets in
connection with any Permitted Funding Indebtedness;

 

(m)               (i) Investments by the Borrower or any of its Subsidiaries in
Permitted Funding Assets in the Ordinary Course of Business, so long as,
immediately after giving effect to such Investment (as determined on a pro forma
basis), Liquidity is greater than the Liquidity Threshold, and (ii) Investments
by the Borrower or any of its Subsidiaries that are otherwise permitted under
the Operating Policies of Parent (as in effect on the date hereof and without
giving effect to anjy change thereto), so long as, immediately after giving
effect to such Investment (as determined on a pro forma basis), (A) Liquidity is
greater than the Liquidity Threshold and (B) the Debt to Value Ratio is no
greater than 0.80 to 1.00;

 

(n)               to the extent constituting an Investment, the consummation of
the Transactions;

 

(o)               the settlement, unwinding, termination or cancellation of the
Closing Date Warrants, any Interest Rate Protection Agreement or any Permitted
Credit Default Swap;

 

(p)               (i) the conversion, exchange or settlement of any Convertible
Debt Security and (ii) the redemption of any Convertible Debt Security to the
extent permitted by Section 6.12;

 

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(q)               Investments in existence on the Effective Date which are
listed in Schedule 6.05; and

 

(r)                the Borrower and any Subsidiary of the Borrower may make
Investments in loan originators and servicers, consistent with the past practice
of the Borrower or such Subsidiary, in an aggregate amount not to exceed
$150,000,000, so long as (i) no Default or Event of Default shall have occurred
and be continuing or would result therefrom, (ii) immediately after giving
effect to such Investment (as determined on a pro forma basis), Liquidity is
greater than the Liquidity Threshold and (iii) immediately after giving effect
to such Investment (as determined on a pro forma basis), the Debt to Value Ratio
is no greater than 0.80 to 1.00 and (iv) such Investments would not result in
Parent failing to satisfy the REIT asset tests in Section 856(c)(4) of the Code.

 

Section 6.06        Transactions with Affiliates. The Credit Parties will not,
and will not, directly or indirectly, permit any of the Subsidiaries to, enter
into any transaction or series of transactions with any Affiliate, other than on
terms and conditions that when taken as a whole are not less favorable to the
Credit Parties or such Subsidiary as would reasonably be obtained by the Credit
Parties or such Subsidiary at that time in a comparable arm’s-length transaction
with a Person other than an Affiliate; provided that, the foregoing restriction
shall not apply to (a) any transaction between Parent, the Borrower and any one
(1) or more Subsidiaries of the Borrower or among Subsidiaries of the Borrower,
in each case that is otherwise permitted by this Agreement, (b) reasonable and
customary fees paid to members of the board of directors (or similar governing
body) of Parent and its Subsidiaries; (c) employment, severance, compensation,
benefit and indemnification arrangements for directors, officers and other
employees of the Borrower and its Subsidiaries entered into in the ordinary
course of business or approved in good faith by the board of directors of
Parent; (d) the payment of fees and expenses in connection with the consummation
of the transactions contemplated by the Credit Documents; (e) transactions or
any series of related transactions involving aggregate payments or consideration
less than $1,000,000; and (f) any transaction with an Affiliate that is approved
by a majority of disinterested members of the board of directors of Parent in
good faith.

 

Section 6.07        Modifications of Certain Agreements. The Credit Parties will
not, and will not permit any of the Subsidiaries to, amend, modify, change or
waive, or permit the amendment, modification or changing of, any terms of the
2042 Notes, any Convertible Debt Security, Permitted Subordinated Debt and, in
each case, any Permitted Refinancing thereof permitted under Section 6.04 if
such amendment, modification, change or waiver (i) could reasonably be expected
to materially increase the obligations of the obligors thereunder, (ii) confers
any additional material rights on the holders thereof or any Permitted
Refinancing thereof and (iii) decreases the weighted average life to maturity or
shortens the maturity date applicable thereto; provided this Section 6.07 shall
not prohibit modifications related to conversion rate or exchange rate
adjustments pursuant to the terms of the Convertible Debt Security.

 

Section 6.08        Limitation on Certain Restrictions on Subsidiaries. The
Credit Parties will not, and will not permit any of the Subsidiaries to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Subsidiary
to (a) pay dividends or make any other distributions on its capital stock or any
other Equity Interest or participation in its profits owned by the Borrower or
any Subsidiary of the Borrower, or pay any Indebtedness owed to the Borrower or
any Subsidiary of the Borrower, (b) make loans or advances to the Borrower or
any Subsidiary of the Borrower or (c) transfer any of its properties or assets
to the Borrower or any Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) applicable law, (ii) this
Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing any leasehold interest of the
Borrower or any Subsidiary of the Borrower, (iv) customary provisions
restricting assignment of any licensing agreement (in which the Borrower or any
such Subsidiary is the licensee) or other contract entered into by the Borrower
or any such Subsidiary in the Ordinary Course of Business and which restrictions
apply solely to the licensed property covered thereby or assets covered by such
agreement, (v) restrictions on the transfer of any asset or any Subsidiary of
the Borrower pending the close of the sale of such asset or such Subsidiary,
(vi) restrictions on the transfer of any Permitted Funding Asset securing any
Permitted Funding Indebtedness or the Indebtedness permitted by Section 6.04(d);
provided that such restrictions are limited to the applicable individual
agreements and/or the property or assets subject to such agreements, (vii)
customary provisions applicable to a Securitization Entity, a Repo Debt Entity,
a REO Subsidiary or a Repo Subsidiary; provided that such restrictions are
limited to the applicable individual agreements and/or the property or assets
subject to such agreements and (viii) provisions in documentation with respect
to the Indebtedness permitted by Section 6.04(b), in each case, so long as such
provisions are no more restrictive than the corresponding provisions hereof.

 

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Section 6.09        Limitation on Issuance of Equity Interests. The Credit
Parties will not, and will not permit any of the Subsidiaries to, issue (i) any
Preferred Equity other than (A) in the case of Parent, Preferred Equity that
constitutes Qualified Equity Interests and (B) in the case of the Borrower or
any Subsidiary of the Borrower, the issuance of Preferred Equity to Parent or
any Wholly Owned Subsidiary of the Borrower or (ii) any redeemable common stock
or other redeemable common Equity Interests of the Borrower or any Subsidiary of
the Borrower other than in the case of Borrower and any Wholly Owned Subsidiary
of the Borrower, common stock or other redeemable common Equity Interests that
is or are redeemable at the sole option of the Borrower or such Subsidiary, as
applicable.

 

Section 6.10        Business; Etc. The Credit Parties will not, and will not
permit any of their Subsidiaries to, engage directly or indirectly in any
business other than the businesses engaged in by the Credit Parties and the
Subsidiaries as of the Closing Date and reasonable extensions and developments
thereof and businesses reasonably similar, ancillary or complimentary to any of
the foregoing (it being understood and agreed that this Section6.10 shall not
prohibit the entry into any non-qualified mortgage loan securitization or
Permitted Funding Indebtedness with respect to any REO Assets).

 

Section 6.11        Limitation on Creation of Subsidiaries. The Credit Parties
will not, and will not permit any of their Subsidiaries to, establish, create or
acquire after the Closing Date any Subsidiary, provided that the Borrower and
its Wholly Owned Subsidiaries, but not Parent, shall be permitted to establish,
create and, to the extent permitted by this Agreement, acquire Wholly Owned
Subsidiaries.

 

Section 6.12        Prepayments of Other Indebtedness. The Credit Parties will
not, and will not permit any of their Subsidiaries to, directly or indirectly,
voluntarily or optionally prepay, repurchase, redeem or otherwise optionally or
voluntarily satisfy or defease, or make any payment in violation of any
subordination terms of, whether in cash, property, securities or a combination
thereof, or otherwise acquire for consideration, or set apart any sum for the
aforesaid purposes, the 2042 Notes, any Convertible Debt Security, Permitted
Subordinated Debt or and any other Indebtedness secured by a Lien that is junior
to or subordinated in right of payment to the Obligations, except (a) pursuant
to a Permitted Refinancing, (b) the conversion or exchange of any such
Indebtedness to or for Qualified Equity Interests of Parent and (c) the
settlement of any Convertible Debt Security at maturity and cash payments in
lieu of fractional shares upon conversion or exchange of any Convertible Debt
Security.

 

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Section 6.13        Anti-Layering. The Credit Parties will not, and will not
permit any of the Subsidiaries to, directly or indirectly, incur or suffer to
exist any Indebtedness (other than the Loans) that is (a) pari passu with, or
senior to, the Loans in right of payment (other than Permitted Funding
Indebtedness (excluding any Contingent Obligations in respect thereof)), (b) in
the form of a guaranty of any Permitted Funding Indebtedness (other than
unsecured guarantees from Parent as set forth in the definition of “Permitted
Funding Indebtedness” in respect of any Permitted Funding Indebtedness in
existence on the date hereof) or (c) other than with respect to Permitted
Funding Indebtedness, that is secured by Liens on the assets of the Borrower or
any Subsidiary of the Borrower, other than Liens securing Permitted Funding
Indebtedness and the Asset Level Term Loan (and any Permitted Refinancing
thereof in accordance with Section 6.04(b)) and Liens otherwise permitted under
this Agreement (if any) that are expressly subordinated to the Loans and the
other Obligations on terms acceptable to the Administrative Agent.

 

Section 6.14        Permitted Activities of Parent and the Borrower.

 

The Parent and the Borrower each covenant that it will not, directly or
indirectly, engage in any business or conduct any activity (including the making
of any Investment or Restricted Payment), transfer any of its assets (directly
or indirectly) or enter into, deliver or perform any agreement (including any
agreement for incurrence or assumption of Indebtedness, any purchase, sale,
lease or exchange of any property or the rendering of any service), between
itself and any other Person, other than (a) the entering into, delivery and
performance of the Credit Documents to which it is a party, office leases,
Convertible Debt Securities (with respect to the Parent only), Interest Rate
Protection Agreements, Permitted Credit Default Swaps and any other agreement
reasonably incidental to the activities not otherwise prohibited by this Section
6.14 or any other provision of this Agreement (collectively, the “Holdings
Documents”), (b) the making of Investments by the Parent in the Borrower and by
the Borrower in its Subsidiaries to the extent not otherwise prohibited by this
Section 6.14 or any other provision of this Agreement, (c) the performance of
its obligations, and the exercise of its remedies, under the Holdings Documents
in accordance with the terms thereof, (d) engaging in any other activities
incidental, ancillary or related to the Borrower (in the case of Parent) or its
Subsidiaries (in the case of the Borrower) and other activities referred to in
the other clauses of this Section 6.14 and (e) the performance of ministerial
activities and the payment of any taxes and administrative fees and expenses
related thereto or arising therefrom.

 

Section 6.15        Minimum Liquidity. The Borrower shall not permit the
aggregate Liquidity of Parent, the Borrower and the Subsidiaries to be less than
$100,000,000 at any time.

 

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ARTICLE 7
EVENTS OF DEFAULT

 

Section 7.01        Events of Default. Upon the occurrence of any of the
following specified events following the Closing Date (each, an “Event of
Default”):

 

(a)               Payments. (i) Default shall be made in the payment of any
principal of any Loan when and as the same shall become due and payable, whether
at the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise or (ii) default shall be made in the payment
of any interest on any Loan or any Fee or any other amount (other than an amount
referred to in clause (i)) due under any Credit Document, when and as the same
shall become due and payable, and in the case of this clause (ii) such default
shall continue unremedied for a period of five (5) Business Days; or

 

(b)               Representations, etc. Any representation, warranty or
certification or other statement made or deemed made by any Credit Party herein
or in any other Credit Document or in any report, certificate, financial
statement or other instrument or document delivered to the Administrative Agent
or any Lender pursuant hereto or thereto shall be untrue in any material respect
on the date as of which made or deemed made or delivered; or

 

(c)               Covenants. The Borrower or any Subsidiary shall (i) default in
the due performance or observance by it of any term, covenant or agreement
contained in Section 2.12, Section 5.01(e), Section 5.04 (with respect to the
existence of the Credit Parties), Section 5.08, Section 5.10(c) (taking into
account the cure provisions under Sections 856 through 860 of the Code),
Section 5.11 or Article 6, or (ii) default in the due performance or observance
by it of any other term, covenant or agreement contained in this Agreement
(other than those set forth in Section 7.01(a) and Section 7.01(b)) and such
default shall continue unremedied for a period of 30 days after the delivery of
written notice thereof to the Borrower by the Administrative Agent or the
Required Lenders; or

 

(d)               [Reserved]; or

 

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(e)               Default Under Other Agreements. (i) Any Credit Party or any
Subsidiary shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect of
any Indebtedness (other than Indebtedness under the Credit Documents or
Indebtedness consisting of any Interest Rate Protection Agreement or Permitted
Credit Default Swap) having an aggregate principal amount of more than
$50,000,000, in each case beyond the applicable grace period with respect
thereto, if any; (ii) any Credit Party or any Subsidiary shall fail to observe
or perform any other agreement or condition relating to any Indebtedness having
an aggregate principal amount of more than $50,000,000 (or in the case of any
Indebtedness consisting of Interest Rate Protection Agreements or Permitted
Credit Default Swaps, having a Swap Termination Value of more than $50,000,000
in the aggregate) or contained in any instrument or agreement evidencing,
securing or relating thereto (other than Indebtedness under the Credit
Documents), or any other event occurs (other than, with respect to Indebtedness
consisting Interest Rate Protection Agreements or Permitted Credit Default
Swaps, termination events or equivalent events pursuant to the terms of such
Interest Rate Protection Agreement or Permitted Credit Default Swap not as a
result of any default thereunder by any Credit Party or any Subsidiary), the
effect of which default or other event is to cause, or to permit the holder or
holders or beneficiary or beneficiaries of such Indebtedness (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice, if required, such Indebtedness to become due
or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity or (iii) any Credit Party
or any Subsidiary shall fail to make when due one or more required payments
under any Interest Rate Protection Agreement or Permitted Credit Default Swap
due as a result of the occurrence of an “Early Termination Date” (as defined in
such Interest Rate Protection Agreement or Permitted Credit Default Swap or the
master agreement governing such Interest Rate Protection Agreement or Permitted
Credit Default Swap and including any substantially similar term) arising from
an “Event of Default” or a “Termination Event” (in each case, as defined in any
Interest Rate Protection Agreement or Permitted Credit Default Swap or the
master agreement governing such Interest Rate Protection Agreement or Permitted
Credit Default Swap and including any substantially similar term) with respect
to which such Credit Party or Subsidiary is a “Defaulting Party” (as defined in
such Interest Rate Protection Agreement or Permitted Credit Default Swap or the
master agreement governing such Interest Rate Protection Agreement or Permitted
Credit Default Swap and including any substantially similar term) where the
“Non-defaulting Party” or “Non-affected Party” (in each case, as defined in such
Interest Rate Protection Agreement or Permitted Credit Default Swap or the
master agreement governing such Interest Rate Protection Agreement or Permitted
Credit Default Swap or any substantially similar term), as applicable, has
designated such “Early Termination Date” (or any other substantially similar
term) for all outstanding transactions under the relevant master agreement
governing such Interest Rate Protection Agreement or Permitted Credit Default
Swap, where such payments due are in an aggregate amount for all such Interest
Rate Protection Agreements and Permitted Credit Default Swaps exceeding
$50,000,000; provided that this clause (e)(ii) shall not apply to (A) secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of
the property or assets securing such Indebtedness, if such sale or transfer is
permitted hereunder and under the documents providing for such Indebtedness and
such Indebtedness is repaid when required under the documents providing for such
documents; provided that any events of default in respect of Indebtedness that
are subject to the Third Forbearance Agreement shall not be deemed to result in
an Event of Default under this clause (e) on any date prior to the earlier of
(x) the end of the “Forbearance Period” under the Third Forbearance Agreement
and (y) the funding of the Loans hereunder (which events of default, after the
end of such period ending on the earlier of the times contemplated by the
foregoing clauses (x) and (y) shall be deemed to result in Events of Default
under this clause (e) or (B) to any event as a result of which any Convertible
Debt Security becomes convertible or exchangeable pursuant to the terms thereof;
or

 

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(f)                Bankruptcy, etc. (i) An involuntary proceeding shall be
commenced or an involuntary petition shall be filed in a court of competent
jurisdiction seeking (x) relief in respect of Parent, the Borrower or any
Material Subsidiary, or of a substantial part of the property or assets of
Parent, the Borrower or any Subsidiary, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (y) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for Parent, the Borrower or any Subsidiary or for a substantial part of the
property or assets of the Borrower or a Subsidiary or (z) the winding-up or
liquidation of Parent, the Borrower or any Subsidiary; and such proceeding or
petition shall continue undismissed, bonded or discharged for 60 consecutive
days or an order or decree approving or ordering any of the foregoing shall be
entered; or (ii) Parent, the Borrower or any Subsidiary shall (t) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(u) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(i) above, (v) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Parent, the
Borrower or any Subsidiary or for a substantial part of the property or assets
of Parent, the Borrower or any Subsidiary, (w) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (x)
make a general assignment for the benefit of creditors, (y) become unable, admit
in writing its inability or fail generally to pay its debts as they become due
or (z) take any action for the purpose of effecting any of the foregoing; or

 

(g)               ERISA. An ERISA Event shall have occurred that, in the
reasonable opinion of the Required Lenders, when taken together with all other
such ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect; or

 

(h)               Security Documents. Any of the Security Documents shall cease
to be in full force and effect (other than by reason of a release of Collateral
in accordance with the terms hereof or the satisfaction in full of the
Obligations (other than contingent indemnification and expense reimbursement
obligations for which no claim has been made), or shall cease to give the
Collateral Agent for the benefit of the Secured Creditors the Liens, rights,
powers and privileges purported to be created thereby (including a perfected (to
the extent required under the Pledge Agreement) security interest in, and Lien
on, all of the Collateral (other than, in the aggregate, immaterial portions of
the Collateral)), in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 6.01), and subject
to no other Liens (except as permitted by Section 6.01), or any of Parent, the
Borrower and each Subsidiary shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to any such Security Document and such default shall continue beyond
the period of grace, if any, specifically applicable thereto pursuant to the
terms of such Security Document or Parent, the Borrower or any Subsidiary shall
assert that any security interest purported to be created by any Security
Document is not a valid, perfected(to the extent required under the Pledge
Agreement), first priority (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in the Collateral covered
thereby; or

 

(i)                 Guaranties. Any Guaranty or any provision thereof shall
cease to be in full force or effect as to any Guarantor (except as a result of a
release of any Guarantor in accordance with the terms thereof), or any Guarantor
or any Person acting for or on behalf of such Guarantor shall deny or disaffirm
such Guarantor’s obligations under the Guaranty or any Guarantor shall default
in the due performance or observance of any term, covenant or agreement on its
part to be performed or observed pursuant to the Guaranty; or

 

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(j)                 Judgments. One (1) or more final, non-appealable judgments
or decrees in an aggregate amount in excess of $50,000,000 shall be entered
against Parent, the Borrower or any Subsidiary involving in the aggregate for
Parent, the Borrower and each Subsidiary a liability (not paid or to the extent
not covered by insurance which has not denied coverage) and such judgments and
decrees either shall be final and non-appealable or shall not be satisfied,
vacated, discharged or stayed or bonded pending appeal for any period of thirty
(30) consecutive days and the aggregate amount of all such judgments equals or
exceeds $50,000,000; or

 

then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent may, and upon the written
request of the Required Lenders shall, by written notice to the Borrower, take
any or all of the following actions (provided that, if an Event of Default
specified in Section 7.01(e) shall occur with respect to the Borrower or any
Subsidiary (other than any Subsidiary that is a Securitization Entity), the
result which would occur upon the giving of written notice by the Administrative
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Commitments terminated,
whereupon all Commitments of each Lender shall terminate immediately; (ii)
declare the principal of and any accrued interest and Fees in respect of all
Loans and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Credit Party, anything contained herein or in any other
Credit Document to the contrary notwithstanding; (iii) enforce, as Collateral
Agent, all of the Liens and security interests created pursuant to the Security
Documents; and (iv) enforce the Guaranty.

 

Section 7.02        Application of Payment. Notwithstanding anything herein to
the contrary, following the occurrence and during the continuance of an Event of
Default, and notice thereof to the Administrative Agent by the Borrower or the
Required Lenders, all payments received on account of the Obligations shall be
applied by the Administrative Agent (or the Collateral Agent, as applicable) as
follows:

 

(a)                first, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts (including fees and
disbursements and other charges of counsel payable under Article 8 and amounts
payable under the Agent Fee Letter) payable to the Administrative Agent and the
Collateral Agent in their capacity as such;

 

(b)                second, to the payment of that portion of Obligations
constituting accrued and unpaid interest on Protective Advances ratably among
the applicable Lenders in proportion to the respective amounts described in this
clause (b) payable to them;

 

(c)                third, to the payment of that portion of Obligations
constituting the unpaid principal balance of Protective Advances ratably among
the applicable Lenders in proportion to the respective amounts described in this
clause (c) payable to them;

 

(d)                fourth, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal and
interest) payable to the Lenders (including fees and disbursements and other
charges of counsel payable under any Credit Document) arising under the Credit
Documents, ratably among them in proportion to the respective amounts described
in this clause (d) payable to them;

 

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(e)                fifth, to payment of that portion of the Obligations
constituting accrued and unpaid interest on the Loans (other than Protective
Advances), ratably among the Lenders in proportion to the respective amounts
described in this clause (e) payable to them;

 

(f)                 sixth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans (other than Protective Advances)
ratably among the Lenders in proportion to the respective amounts described in
this clause (f) payable to them;

 

(g)                seventh, to the payment in full of all other Obligations, in
each case ratably among the Administrative Agent, the Collateral Agent and the
Lenders based upon the respective aggregate amounts of all such Obligations
owing to them in accordance with the respective amounts thereof then due and
payable; and

 

(h)                finally, the balance, if any, after all Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by law.

 

ARTICLE 8
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT

 

Each Lender hereby irrevocably appoints each of Administrative Agent and the
Collateral Agent (for purposes of this Article 8, the Administrative Agent and
the Collateral Agent are referred to collectively as the “Agents”) as its agent
and authorizes the Agents to take such actions on its behalf and to exercise
such powers as are delegated to such Agents by the terms of the Credit
Documents, together with such actions and powers as are reasonably incidental
thereto. Without limiting the generality of the foregoing, the Agents are hereby
expressly authorized to (i) execute the Credit Documents to which it is a party
and any and all documents (including releases) with respect to the Collateral
and the rights of the Secured Creditors with respect thereto, as contemplated by
and in accordance with the provisions of this Agreement and the Security
Documents and (ii) negotiate, enforce or settle any claim, action or proceeding
affecting the Lenders in their capacity as such, at the direction of the
Required Lenders, which negotiation, enforcement or settlement will be binding
upon each Lender. Each of the Lenders acknowledges and agrees that an Agent may
also act as the collateral agent or as collateral trustee for the lenders under
certain other Indebtedness permitted hereunder and each Lender hereby waives any
conflict of interest, now contemplated or arising hereafter, in connection
therewith and agrees not to assert against such Agent or any of its Related
Parties any claims, causes of action, damages or liabilities of whatever kind or
nature relating thereto. The Administrative Agent may perform any of its
respective duties hereunder by or through its officers, directors, agents,
employees, affiliates or designees.

 

The institution serving as the Administrative Agent and/or the Collateral Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not an Agent, and
such bank and its Affiliates may accept deposits from, lend money to, own
securities of and generally engage in any kind of banking, trust, financial
advisory or other business with Parent, the Borrower or any Subsidiary or other
Affiliate thereof as if it were not an Agent hereunder (including the acceptance
of fees and other consideration for services in connection herewith and
otherwise without having to account for the same to Lenders).

 

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Neither Agent shall have any duties or obligations except those expressly set
forth in the Credit Documents. Without limiting the generality of the foregoing,
(a) neither Agent shall be subject to any fiduciary or other implied duties,
regardless of whether a Default or Event of Default has occurred and is
continuing, (b) neither Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that such Agent is instructed in writing to
exercise by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in
Section 9.08); provided that no Agent shall be required to take any action that,
in its opinion or the opinion of its counsel, may expose such Agent to liability
or that is contrary to any Credit Document or applicable law, including any
action that may be in violation of the automatic stay under any Debtor Relief
Law or that may effect a forfeiture, modification or termination of property of
a Defaulting Lender in violation of any Debtor Relief Law, and (c) except as
expressly set forth in the Credit Documents, neither Agent shall have any duty
to disclose, nor shall it be liable for the failure to disclose, any information
relating to any Credit Party that is communicated to or obtained by the bank
serving as Administrative Agent and/or Collateral Agent or any of its Affiliates
in any capacity. Neither Agent shall be liable for any action taken or not taken
by it with the written consent or at the written request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.08) or in the absence of its own
gross negligence or willful misconduct. Neither Agent shall be deemed to have
knowledge of any Default or Event of Default unless and until written notice
thereof is given to such Agent by the Borrower or a Lender, and neither Agent
shall be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Credit
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Credit Document, (iv) the validity, enforceability, effectiveness
or genuineness of any Credit Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article 4 or
elsewhere in any Credit Document, other than to confirm receipt of items
expressly required to be delivered to such Agent.

 

Notwithstanding anything else to the contrary herein, whenever reference is made
in this Agreement or any other Credit Document to any discretionary action by,
consent, designation, specification, requirement or approval of, notice, request
or other communication from, or other direction given or action to be undertaken
or to be (or not to be) suffered or omitted by the Administrative Agent or the
Collateral Agent or to any election, decision, opinion, acceptance, use of
judgment, expression of satisfaction, reasonable satisfaction or other exercise
of discretion, rights or remedies to be made (or not to be made) by the
Administrative Agent or the Collateral Agent, it is understood that in all cases
that any such permissive rights shall not be construed as a duty and such Agents
shall be fully justified in failing or refusing to take any such action under
this Agreement or the applicable Credit Document if it shall not have received
such written instruction, advice or concurrence of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.08), as it deems appropriate. This
provision is intended solely for the benefit of the Administrative Agent, the
Collateral Agent and its successors and permitted assigns and is not intended to
and will not entitle the other parties hereto to any defense, claim or
counterclaim, or confer any rights or benefits on any party hereto.

 

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Except for action expressly required of an Agent hereunder and under the other
Credit Documents, each Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Lenders of their indemnification
obligations under Section 9.05 against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.

 

Each Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
opinion, document or other writing believed by it to be genuine and to have been
signed or sent by the proper Person. Each Agent may also rely upon any statement
made to it orally or by telephone and believed by it to have been made by the
proper Person, and shall not incur any liability for relying thereon. Each Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.

 

Each Agent may perform any and all its duties and exercise its rights and powers
by or through any one (1) or more sub-agents appointed by it and shall not be
responsible for any acts, omissions, negligence or misconduct of any sub-agent
appointed by such Agent with due care. Each Agent and any such sub-agent may
perform any and all its duties and exercise its rights and powers by or through
their respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-agent and to the Related Parties of each
Agent and any such sub-agent.

 

The Agents shall not have any liability for any action taken, or errors in
judgment made, in good faith by it or any of its officers, employees or agents,
unless it shall have been negligent in ascertaining the pertinent facts. Nothing
in this Agreement shall require an Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers hereunder. In no event shall
an Agent be responsible or liable for special, indirect, punitive, incidental or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit) irrespective of whether such Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action. No Agent
nor any of its directors, officers, employees, agents or affiliates shall be
responsible for nor have any duty to monitor the performance or any action of
the Borrower or any other Credit Party, or any of their directors, members,
officers, agents, affiliates or employee, nor shall it have any liability in
connection with the malfeasance or nonfeasance by such parties. Each Agent may
assume performance by all such Persons of their respective obligations. No Agent
shall have any enforcement or notification obligations relating to breaches of
representations or warranties of any other Person.

 

Neither the Administrative Agent nor the Collateral Agent shall be responsible
or liable for any failure or delay in the performance of its obligations under
this Agreement or any other Credit Document arising out of or caused, directly
or indirectly, by circumstances beyond its control, including without
limitation, any act or provision of any present or future law or regulation or
governmental authority; acts of God; earthquakes; fires; floods; wars;
terrorism; civil or military disturbances; sabotage; epidemics; pandemics;
riots; interruptions, loss or malfunctions of utilities, computer (hardware or
software) or communications service; accidents; labor disputes; acts of civil or
military authority or governmental actions; or the unavailability of the Federal
Reserve Bank wire or telex or other wire or communication facility.

 

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No Agent shall be responsible for and makes any representation as to the
existence, genuineness, value or protection of any Collateral, for the legality,
effectiveness or sufficiency of any Security Document, or for the creation,
perfection, priority, sufficiency or protection of any liens securing the
Obligations. For the avoidance of doubt, nothing herein shall require any Agent
to file financing statements or continuation statements, or be responsible for
maintaining the security interests purported to be created as described herein
or in any other Security Document (except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder or under any other Credit Document) and such responsibility shall be
solely that of the Borrower and the other Credit Parties.

 

If at any time an Agent is served with any judicial or administrative order,
judgment, decree, writ or other form of judicial or administrative process
(including orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of any collateral), such Agent is
authorized to comply therewith in any manner as it or its legal counsel of its
own choosing deems appropriate, and if such Agent complies with any such
judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, such Agent shall not be liable to any of the
parties hereto or to any other Person even though such order, judgment, decree,
writ or process may be subsequently modified or vacated or otherwise determined
to have been without legal force or effect. Subject to the appointment and
acceptance of a successor Agent as provided below, either Agent may resign at
any time by notifying the Lenders and the Borrower at least thirty (30) days in
advance. Upon any such resignation, the Required Lenders shall have the right,
in consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then such Agent’s resignation shall become effective and the
Required Lenders shall thereafter perform all the duties of such Agent hereunder
and/or under any other Credit Document until such time, if any, as the Required
Lenders appoint a successor Administrative Agent and/or Collateral Agent, as the
case may be. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the rights
(other than any right to receive any fees, expenses, indemnities or other
payments due and owing to the retiring Agent and which accrued to such Agent’s
resignation), powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Agent’s resignation hereunder, the provisions of this
Article 8 and Section 9.05 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while acting as
Agent.

 

Any Person (i) into which an Agent may be merged or consolidated, (ii) which may
result from any merger, conversion or consolidation to which an Agent shall be a
party or (iii) which may succeed to all or substantially all of the corporate
trust business of an Agent, shall be the successor of such Agent hereunder and
the other Credit Documents, without the execution or filing of any instrument or
any further act on the part of any of the parties.

 

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Each Lender acknowledges that it has, independently and without reliance upon
the Agents or any other Lender and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agents or any other Lender and based on such documents
and information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement or any other Credit Document, any related agreement or any document
furnished hereunder or thereunder.

 

Each Lender authorizes and directs the Collateral Agent to enter into the
Security Documents for the benefit of the Lenders and the other Secured
Creditors. Each Lender hereby agrees, and each holder of any Note by the
acceptance thereof will be deemed to agree, that, except as otherwise set forth
herein, any action taken by the Required Lenders in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by the
Required Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. The Collateral Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any notice to or further
consent from any Lender, from time to time prior to an Event of Default, to take
any action pursuant to the terms of this Agreement or the Security Documents
with respect to any Collateral or Security Documents which may be necessary to
perfect and maintain perfected the security interest in and liens upon the
Collateral granted pursuant to the Security Documents.

 

The Lenders hereby authorize the Collateral Agent, at its option and in its
discretion, to release any Lien granted to or held by the Collateral Agent upon
any Collateral (i) upon the occurrence of the Termination Date, (ii)
constituting property (including Equity Interests) being sold or otherwise
disposed of (to Persons other than the Borrower and its Subsidiaries) upon the
sale or other disposition thereof in compliance with Section 6.02, (iii) if
approved, authorized or ratified in writing by the Required Lenders (or all of
the Lenders hereunder, to the extent required by Section 9.08), (iv) that is an
Excluded Pledge pursuant to clause (d) of the definition thereof or (v) as
otherwise may be expressly provided in the relevant Security Documents. Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Collateral Agent’s authority to release particular types or items of
Collateral pursuant to this Article 8.

 

The provisions of this Article 8 are solely for the benefit of Agents and
Lenders and except with respect to the appointment of successor agents and the
forgoing paragraph no Credit Party shall have any rights as a third party
beneficiary of any of the provisions thereof.

 

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ARTICLE 9
MISCELLANEOUS

 

Section 9.01        Notices; Electronic Communications. Notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by facsimile transmission, as follows:

 

(a)           if to the Borrower, to:

 

MFResidential Assets Holding Corp.
Attention of: General Counsel
350 Park Avenue, 20th Floor

New York, NY 10022
Phone: 212-207-6454
Fax Number 212-207-6420
Email: Legal@mfafinancial.com

 

(b)           if to the Administrative Agent, to each of:

 

Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention of: Annmarie Warren
Phone: 612-217-5669
Fax Number 612-217-5651
Email: awarren@wilmingtontrust.com

 

and (which shall not constitute notice)

 

Alston & Bird LLP
101 S. Tryon Street, Suite 4000
Charlotte, NC 28280-4000
Attention:  Jason Solomon

Phone: 704-444-1295
Fax: 704-444-1111
Email: jason.solomon@alston.com

 

and (which shall not constitute notice)

 

Athene USA Corporation

c/o Apollo Insurance Solutions Group LP

2121 Rosecrans Avenue

Suite 5300

El Segundo, California 90245

Attn:    Yoni Fife; Jessica McMillin; Angelo Lombardo; Anthony Bruno; Matt
O’Mara; Nancy De Liban

Phone: 310-698-4414
Email: ProjectOmahaNotices@Apollo.com; YFife@athene.com; JMcMillin@athene.com;
alombardo@apollo.com; abruno@apollo.com; ndeliban@apollo.com; Momara@apollo.com

 

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(c)           if to the Collateral Agent, to:

 

Wilmington Trust, National Association
50 South Sixth Street, Suite 1290
Minneapolis, MN 55402
Attention of: Annmarie Warren
Phone: 612-217-5669
Fax Number 612-217-5651
Email: awarren@wilmingtontrust.com

 

and (which shall not constitute notice)

 

Alston & Bird LLP
101 S. Tryon Street, Suite 4000
Charlotte, NC 28280-4000
Attention:  Jason Solomon

Phone: 704-444-1295
Fax: 704-444-1111
Email: jason.solomon@alston.com

 

and (which shall not constitute notice)

 

Athene USA Corporation

c/o Apollo Insurance Solutions Group LP

2121 Rosecrans Avenue

Suite 5300

El Segundo, California 90245

Attn:    Yoni Fife; Jessica McMillin; Angelo Lombardo; Anthony Bruno; Matt
O’Mara; Nancy De Liban

Phone: 310-698-4414
Email: ProjectOmahaNotices@Apollo.com; YFife@athene.com; JMcMillin@athene.com;
alombardo@apollo.com; abruno@apollo.com; ndeliban@apollo.com; Momara@apollo.com

 

All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
facsimile transmission (except that, if not given during the normal business
hours of the recipient on a Business Day, shall be deemed to have been given at
the opening of business on the next Business Day) or on the date five (5)
Business Days after dispatch by certified or registered mail if mailed, in each
case delivered, sent or mailed (properly addressed) to such party as provided in
this Section 9.01 or in accordance with the latest unrevoked direction from such
party given in accordance with this Section 9.01. As agreed to among the
Borrower, the Administrative Agent, the Collateral Agent, and the applicable
Lenders from time to time, notices and other communications may also be
delivered by e-mail to the e-mail address of a representative of the applicable
Person provided from time to time by such Person. Notices and other
communications may also be delivered by e-mail to the e-mail address of a
representative of the applicable Person provided from time to time by such
Person and shall be deemed delivered upon (i) sending (or if not sent during the
normal business hours of the recipient on a Business Day, at the opening of
business on the next Business Day) unless a delivery failure notification (which
shall not include an “out of office” or similar message) is received within one
(1) hour of sending and (ii) acknowledgement of receipt by the recipient.

 

85

 

 

Each Credit Party hereby agrees, unless directed otherwise by the Administrative
Agent or unless the electronic mail address referred to below has not been
provided by the Administrative Agent to the Borrower, that it will, or will
cause the Subsidiaries to, provide to the Administrative Agent all information,
documents and other materials that it is obligated to furnish to the
Administrative Agent pursuant to the Credit Documents or to the Lenders under
Article 5, including all notices, requests, financial statements, financial and
other reports, certificates and other information materials, but excluding any
such communication that (i) relates to the payment of any principal or other
amount due under this Agreement prior to the scheduled date therefor, (ii)
provides notice of any Default or Event of Default under this Agreement or any
other Credit Document or (iii) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Agreement and/or the making of
the Loans hereunder or other extension of credit hereunder (all such
non-excluded communications being referred to herein collectively as
“Communications”), by transmitting the Communications in an electronic/soft
medium that is properly identified in a format acceptable to the Administrative
Agent to an electronic mail address as directed by the Administrative Agent. In
addition, each Credit Party agrees, and agrees to cause the Subsidiaries, to
continue to provide the Communications to the Administrative Agent or the
Lenders, as the case may be, in the manner specified in the Credit Documents but
only to the extent requested by the Administrative Agent.

 

The Borrower hereby acknowledges that (a) the Administrative Agent may make
available to the Lenders materials and/or information provided by or on behalf
of the Borrower hereunder (collectively, the “Borrower Materials”) by posting
the Borrower Materials on Intralinks or another similar electronic system (the
“Platform”) and (b) certain of the Lenders may be “public-side” Lenders (i.e.,
Lenders that do not wish to receive material non-public information with respect
to the Borrower or its securities) (each, a “Public Lender”). The Borrower
hereby agrees that (w) all Borrower Materials that are to be made available to
Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a
minimum, shall mean that the word “PUBLIC” shall appear prominently on the first
page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrower shall be
deemed to have authorized the Administrative Agent and the Lenders to treat such
Borrower Materials as not containing any material non-public information with
respect to the Borrower or its securities for purposes of United States federal
and state securities laws (provided that to the extent such Borrower Materials
constitute Information, they shall be treated as set forth in Section 9.16); (y)
all Borrower Materials marked “PUBLIC” are permitted to be made available
through a portion of the Platform designated as “Public Investor;” and (z) the
Administrative Agent shall be entitled to treat any Borrower Materials that are
not marked “PUBLIC” as being suitable only for posting on a portion of the
Platform not marked as “Public Investor.” Notwithstanding the foregoing, the
following Borrower Materials shall be marked “PUBLIC”, unless the Borrower
notifies the Administrative Agent promptly that any such document contains
material non-public information: (1) the Credit Documents and (2) notification
of changes in the terms of this Agreement.

 

86

 

 

Each Public Lender agrees to cause at least one (1) individual at or on behalf
of such Public Lender to at all times have selected the “Private Side
Information” or similar designation on the content declaration screen of the
Platform in order to enable such Public Lender or its delegate, in accordance
with such Public Lender’s compliance procedures and applicable law, including
United States federal and state securities laws, to make reference to
Communications that are not made available through the “Public Side Information”
portion of the Platform and that may contain material non-public information
with respect to the Borrower or its securities for purposes of United States
federal or state securities laws.

 

THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. NEITHER THE ADMINISTRATIVE
AGENT NOR ANY OF ITS RELATED PARTIES WARRANTS THE ACCURACY OR COMPLETENESS OF
THE COMMUNICATIONS OR THE ADEQUACY OF THE PLATFORM AND EACH EXPRESSLY DISCLAIMS
LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS IS MADE BY THE ADMINISTRATIVE AGENT
OR ANY OF ITS RELATED PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE
PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT OR ANY OF ITS RELATED
PARTIES HAVE ANY LIABILITY TO ANY CREDIT PARTY, ANY LENDER OR ANY OTHER PERSON
FOR DAMAGES OF ANY KIND, WHETHER OR NOT BASED ON STRICT LIABILITY AND INCLUDING
DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR
EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY CREDIT
PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE
INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY SUCH PERSON IS FOUND IN A
FINAL RULING BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY
FROM SUCH PERSON’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

The Administrative Agent agrees that the receipt of the Communications by the
Administrative Agent at its e-mail address set forth above shall constitute
effective delivery of the Communications to the Administrative Agent for
purposes of the Credit Documents. Each Lender agrees that receipt of notice to
it (as provided in the next sentence) specifying that the Communications have
been posted to the Platform shall constitute effective delivery of the
Communications to such Lender for purposes of the Credit Documents. Each Lender
agrees to notify the Administrative Agent in writing (including by electronic
communication) from time to time of such Lender’s e-mail address to which the
foregoing notice may be sent by electronic transmission and that the foregoing
notice may be sent to such e-mail address.

 

Nothing herein shall prejudice the right of the Administrative Agent, the
Collateral Agent or any Lender to give any notice or other communication
pursuant to any Credit Document in any other manner specified in such Credit
Document.

 

87

 

 

Section 9.02        Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Credit Document shall be considered to
have been relied upon by the Lenders and shall survive the making by the Lenders
of the Loans, regardless of any investigation made by the Lenders or on their
behalf, and shall continue in full force and effect as long as the principal of
or any accrued interest on any Loan or any Fee or any other amount payable under
this Agreement or any other Credit Document is outstanding and unpaid and so
long as the Commitments have not been terminated. The provisions of Section
2.13, Section 2.17 and Section 9.05 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the invalidity or unenforceability
of any term or provision of this Agreement or any other Credit Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender.

 

Section 9.03        Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower, the Agents, the Lenders and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto.

 

Section 9.04        Successors and Assigns.

 

(a)               Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the permitted successors
and assigns of such party; and all covenants, promises and agreements by or on
behalf of the Borrower, the Administrative Agent, the Collateral Agent or the
Lenders that are contained in this Agreement shall bind and inure to the benefit
of their respective successors and assigns.

 

88

 

 

(b)               Each Lender may assign to one (1) or more Eligible Assignees
all or a portion of its interests, rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it), with the prior consent of the Borrower (which consent shall not be
unreasonably withheld or delayed) and with notice to the Administrative Agent;
provided that (i) (A) notwithstanding anything to the contrary, no Lender may
assign or transfer by participation any of its rights or obligations hereunder
to any Person that is a Disqualified Lender (and any failure of the Borrower to
respond to any request for consent of assignment shall not cause such Person to
cease to constitute a Disqualified Lender), (B) the consent of the Borrower (1)
shall not be required to any such assignment made (x) to another Lender, an
Affiliate of a Lender or a Related Fund of a Lender or (y) after the occurrence
and during the continuance of any Event of Default under Section 7.01(a) or
Section 7.01(h) and (2) shall be deemed to have been given if the Borrower has
not responded with ten (10) Business Days of a written request for such consent,
(C) the amount of the Commitment or Loans of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
be in an integral multiple of, and not less than, $1,000,000 (or, if less, the
entire remaining amount of such Lender’s Commitment or Loans); provided that
simultaneous assignments by two (2) or more Related Funds shall be combined for
purposes of determining whether the minimum assignment requirement is met, (ii)
the parties to each assignment shall (A) manually execute and deliver to the
Administrative Agent an Assignment and Acceptance or (B) if previously agreed
with the Administrative Agent, execute and deliver to the Administrative Agent
an Assignment and Acceptance via an electronic settlement system acceptable to
the Administrative Agent, and, in each case, shall pay to the Administrative
Agent a processing and recordation fee of $3,500 (which fee may be waived or
reduced in the sole discretion of the Administrative Agent), and (iii) the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire (in which the assignee shall designate one (1)
or more credit contacts to whom all syndicate-level information (which may
contain material non-public information about the Credit Parties and their
Related Parties or their respective securities) will be made available and who
may receive such information in accordance with the assignee’s compliance
procedures and applicable laws, including federal and state securities laws),
all applicable forms described in Section 2.17(f), and any other related
documentation reasonably requested by the Administrative Agent. Upon acceptance
and recording pursuant to clause (e) of this Section 9.04, from and after the
effective date specified in each Assignment and Acceptance, (A) the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement and (B) the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Section 2.13,
Section 2.17 and Section 9.05, as well as to any Fees accrued for its account
and not yet paid); provided that except to the extent otherwise expressly agreed
by the affected parties, no assignment by a Defaulting Lender will constitute a
waiver or release of any claim of any party hereunder arising from that Lender
having been a Defaulting Lender. In connection with any assignment of rights and
obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Administrative Agent in an aggregate amount sufficient, upon distribution
thereof as appropriate to pay and satisfy in full all payment liabilities then
owed by such Defaulting Lender to the Administrative Agent and each Lender
hereunder (and interest accrued thereon). Notwithstanding the foregoing, in the
event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable law without compliance with
the provisions of this clause (b), then the assignee of such interest shall be
deemed to be a Defaulting Lender for all purposes of this Agreement until such
compliance occurs. Any assignment that is made prior to the Closing Date shall
not be effective until the occurrence of the Closing Date; provided that it is
understood and agreed that AUSA may assign all or a portion of its Commitments
to any of its Affiliates and/or Related Funds on the Closing Date, and such
Affiliates and/or Related Funds may fund the portion of the Loan to be funded
hereunder by AUSA on the Closing Date (but AUSA shall not be relieved of its
obligation to fund the Loan on the Closing Date until the funding by such
Affiliates and/or Related Funds has occurred).

 

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(c)               By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitment and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance; (ii) except as set forth in clause (i)
above, such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Credit Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Credit Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is an Eligible Assignee legally authorized to enter into
such Assignment and Acceptance; (iv) such assignee confirms that it has received
a copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 3.05 or delivered pursuant to Section 5.01 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(v) such assignee will independently and without reliance upon the
Administrative Agent, the Collateral Agent, such assigning Lender or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers under this Agreement as are delegated to
the Administrative Agent and the Collateral Agent, respectively, by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Agreement are required to be
performed by it as a Lender. In the event that any Disqualified Lender or any
Affiliate of a Disqualified Lender delivers an Assignment and Acceptance and the
Borrower has not given its prior consent to such Assignment and Acceptance,  (i)
the Borrower may require such Person to assign its rights and obligations to one
or more Eligible Assignees at a purchase price equal to the lesser of par and
the amount such Person paid to acquire such Loan, (ii) if such Person does not
execute and deliver to the Administrative Agent a duly executed Assignment and
Acceptance reflecting such assignment within five (5) Business Days of the date
on which such Eligible Assignee executes and such Eligible Assignee (or the
Administrative Agent on its behalf) delivers such Assignment and Acceptance to
such Person, then such Person shall be deemed to have executed and delivered
such Assignment and Acceptance without any action on its part, (iii) no such
Person shall receive any information or reporting provided by the Borrower, the
Administrative Agent or any Lender, (iv) for purposes of voting, any Loans held
by such Person shall be deemed not to be outstanding, and any such Person shall
have no voting or consent rights with respect to “Required Lender” votes or
consents, (v) for purposes of any matter requiring the vote or consent of each
Lender affected by any amendment or waiver, such Person shall be deemed to have
voted or consented to approve such amendment or waiver if a majority of the
Loans so approves such matter (after giving effect to clause (iv)) and (vi) no
such Person shall be entitled to any expense reimbursement or indemnification
rights.

 

(d)               The Administrative Agent, acting for this purpose as a
non-fiduciary agent of the Borrower, shall maintain at one (1) of its offices in
the United States of America a copy of each Assignment and Acceptance delivered
to it and a register for the recordation of the names and addresses of the
Lenders, and the Commitment of, and principal amount (and stated interest) of
the Loans owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”). The entries in the Register shall be conclusive and the
Borrower, the Administrative Agent, the Collateral Agent and the Lenders shall
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower, the Collateral Agent and any Lender, at any reasonable time and from
time to time upon reasonable prior notice. This Section 9.04(d) is intended to
be construed so that the Loans are at all times maintained in “registered form”
within the meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code.

 

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(e)               Upon its receipt of, and consent to, a duly completed
Assignment and Acceptance executed by an assigning Lender and an assignee, an
Administrative Questionnaire completed in respect of the assignee (if applicable
to such assignee), the processing and recordation fee referred to in clause (b)
above, if applicable, and the written consent of the Administrative Agent and,
if required, the Borrower to such assignment and any applicable forms described
in Section 2.17(f), the Administrative Agent shall promptly (i) accept such
Assignment and Acceptance and (ii) record the information contained therein in
the Register. No assignment shall be effective unless it has been recorded in
the Register as provided in this clause (e).

 

(f)                Each Lender may without the consent of the Borrower or the
Administrative Agent sell participations to one (1) or more banks or other
Persons in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (i) such Lender’s obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participating banks or
other Persons shall be entitled to the benefit of the cost protection provisions
contained in Section 2.13 and Section 2.17 (subject to the requirements and
limitations therein, including the requirements under Section 2.17(f) (it being
understood that the documentation required under Section 2.17(f) shall be
delivered to the participating Lender)) to the same extent as if they were
Lenders, provided that such participating banks or other Persons shall not be
entitled to receive any greater payment under Section 2.13 or Section 2.17, with
respect to any participation, than its participating Lender would have been
entitled to receive, except to the extent such entitlement to receive a greater
payment results from a Change in Law that occurs after such participating banks
or other Persons acquired the applicable participation, and (iv) the Borrower,
the Administrative Agent and the Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement, and such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to the Loans and to approve any
amendment, modification or waiver of any provision of this Agreement (other than
amendments, modifications or waivers decreasing any fees payable to such
participating bank or Person hereunder or the amount of principal of or the rate
at which interest is payable on the Loans in which such participating bank or
Person has an interest, extending any scheduled principal payment date or date
fixed for the payment of interest on the Loans in which such participating bank
or Person has an interest, (which shall not in any event include a waiver of
default interest or a waiver or modification of any prepayment provisions)
increasing or extending the Commitments in which such participating bank or
Person has an interest or releasing any Guarantor (other than in connection with
the sale of such Guarantor in a transaction permitted by Section 6.02) or all or
substantially all of the Collateral). To the extent permitted by law, each
participating bank or other Person also shall be entitled to the benefits of
Section 9.06 as though it were a Lender; provided that such participating bank
or other Person agrees to be subject to Section 2.15 as though it were a Lender.
Each Lender that sells a participation shall, acting solely for this purpose as
a non-fiduciary agent of the Borrower, maintain a register on which it enters
the name and address of each participant and the principal amounts (and stated
interest) of each participant’s interest in the Loans or other obligations under
this Agreement (the “Participant Register”); provided that no Lender shall have
any obligation to disclose all or any portion of the Participant Register to any
Person (including the identity of any participant or any information relating to
a participant’s interest in any Commitments, Loans or its other obligations
under any Credit Document) except to the extent that such disclosure is
necessary to establish that such Commitment, Loan or other obligation is in
registered form under Section 5f.103-1(c) of the United States Treasury
Regulations. The entries in the Participant Register shall be conclusive absent
manifest error, and the Borrower, the Lenders and the Administrative Agent shall
treat each Person whose name is recorded in the Participant Register as the
owner of such participation for all purposes of this Agreement, notwithstanding
any notice to the contrary. For the avoidance of doubt, the Administrative Agent
(in its capacity as Administrative Agent) shall not have any responsibility for
maintaining a Participant Register.

 

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(g)               Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower furnished to such Lender
by or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.

 

(h)               Any Lender may at any time assign all or any portion of its
rights under this Agreement to secure extensions of credit to such Lender or in
support of obligations owed by such Lender (including any such assignment or
pledge in support of obligations owed to a Federal Reserve Bank or any other
central banking authority); provided that no such assignment shall release a
Lender from any of its obligations hereunder or substitute any such assignee for
such Lender as a party hereto.

 

(i)                 Notwithstanding anything to the contrary contained herein,
any Lender (a “Granting Lender”) may grant to a special purpose funding vehicle
(an “SPV”), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPV to
make any Loan and (ii) if an SPV elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPV hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPV shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one (1) year and one (1) day after the payment
in full of all outstanding commercial paper or other senior indebtedness of any
SPV, it will not institute against, or join any other Person in instituting
against, such SPV any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under the laws of the United States or any State
thereof. In addition, notwithstanding anything to the contrary contained in this
Section 9.04, any SPV may (i) with notice to, but without the prior written
consent of, the Borrower and the Administrative Agent and without paying any
processing fee therefor, assign all or a portion of its interests in any Loans
to the Granting Lender or to any financial institutions (consented to by the
Borrower and Administrative Agent) providing liquidity and/or credit support to
or for the account of such SPV to support the funding or maintenance of Loans
and (ii) disclose on a confidential basis any non-public information relating to
its Loans to any rating agency, commercial paper dealer or provider of any
surety, guarantee or credit or liquidity enhancement to such SPV.

 

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(j)                 The Borrower shall not assign or delegate any of its rights
or duties hereunder without the prior written consent of the Administrative
Agent and each Lender, and any attempted assignment without such consent shall
be null and void.

 

(k)               Notwithstanding anything to the contrary contained herein,
neither the Administrative Agent nor any Lender shall have any responsibility or
have any liability for, or have any duty to ascertain, inquire into, monitor or
enforce, compliance with the provisions of this Agreement relating to
Disqualified Lenders or Affiliate of a Lenders or assignment or participations
to Disqualified Lenders. Without limiting the generality of the foregoing, the
Administrative Agent shall not (x) be obligated to ascertain, monitor or inquire
as to whether any Lender or prospective Lender is a Disqualified Lender or
Affiliate of a Lender or (y) have any liability with respect to or arising out
of any assignment of Loans, or disclosure of confidential information to any
Disqualified Lender or Affiliate of a Lender.

 

Section 9.05        Expenses; Indemnity.

 

(a)               The Borrower agrees to pay (i) all reasonable out-of-pocket
expenses incurred by the Administrative Agent, the Collateral Agent and each
Related Party of any of the foregoing Persons in connection with the
preparation, execution, delivery and administration of this Agreement and the
other Credit Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
hereby or thereby contemplated shall be consummated) (but limited, with respect
to legal expenses, to the reasonable and documented fees, disbursements and
other charges of one (1) single firm of primary counsel, one (1) single firm of
special counsel and one (1) firm of additional local counsel for each applicable
jurisdiction to the Administrative Agent and the Collateral Agent taken as a
whole, and one (1) additional single firm of primary counsel and one (1) firm of
additional local counsel for each applicable jurisdiction to the Lenders, taken
as a whole) and (ii) all documented (in summary form) out-of-pocket expenses
incurred by the Administrative Agent, the Collateral Agent each Lender and each
Related Party of any of the foregoing Persons in connection with the enforcement
or protection of its rights in connection with this Agreement and the other
Credit Documents or in connection with the Loans made hereunder or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a “work-out” or pursuant to any insolvency or
bankruptcy proceedings (but limited, with respect to legal expenses, to the
reasonable and documented fees, disbursements and other charges of one (1)
single firm of primary counsel, one (1) firm of special counsel and one (1) firm
of additional local counsel for each applicable jurisdiction to the
Administrative Agent and the Collateral Agent taken as a whole, and one (1)
additional single firm of primary counsel and one (1) firm of additional local
counsel for each applicable jurisdiction to the Lenders, taken as a whole).

 

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(b)               The Borrower agrees to indemnify the Administrative Agent, the
Collateral Agent, each Lender and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”) against, and to hold
each Indemnitee harmless from, any and all losses, penalties, claims, damages,
liabilities, obligations, fines and related expenses, including reasonable
counsel fees, charges and disbursements (but limited, with respect to legal
expenses, to the reasonable and documented fees, disbursements and other charges
of one (1) single firm of primary counsel to the Administrative Agent and the
Collateral Agent (and their Related Parties) taken as a whole, one (1) single
firm of primary counsel to all other Indemnitees taken as a whole, one (1) firm
of special counsel and one (1) additional firm of local counsel for each
applicable jurisdiction for all similarly situated Indemnitees (it being agreed
that, in the case of any actual or perceived conflict of interest between or
among any Indemnitees, such Indemnitees shall be deemed not to be similarly
situated and each such group of Indemnitees shall be entitled to additional
counsel as set forth herein)), incurred by or asserted against any Indemnitee
arising out of, in any way connected with, or as a result of or by reason of (i)
the execution or delivery of this Agreement or any other Credit Document or any
agreement or instrument contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder or the consummation of the
Transactions and the other transactions contemplated thereby, (ii) the use of
the proceeds of the Loans, (iii) any claim, litigation, investigation or
proceeding relating to any of the foregoing (including in connection with the
enforcement of this Section 9.05), whether or not any Indemnitee is a party
thereto (and regardless of whether such matter is initiated by a third party or
Credit Party or any of their respective Affiliates) or (iv) the actual or
alleged presence of, or exposure to, Hazardous Materials in the indoor or
outdoor air, surface water or groundwater or on the surface or subsurface of any
Real Property at any time owned, leased or operated by the Borrower or any of
its Subsidiaries, the generation, storage, transportation, handling, Release or
disposal of Hazardous Materials by the Borrower or any of its Subsidiaries at
any location, whether or not owned, leased or operated by the Borrower or any of
its Subsidiaries, the non-compliance by, or liability of or relating to, the
Borrower, any of its Subsidiaries or any Real Property at any time owned, leased
or operated by the Borrower or any of its Subsidiaries with, relating to, or
under any Environmental Law (including applicable permits thereunder), or any
Environmental Claim threatened or asserted against or relating to the Borrower,
any of its Subsidiaries or any Real Property at any time owned, leased or
operated by the Borrower or any of its Subsidiaries; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted primarily from the gross negligence or willful misconduct of such
Indemnitee. This Section 9.05(b) shall not apply with respect to Taxes other
than any Taxes that represent losses, claims, damages, etc., arising from any
non-Tax claim.

 

(c)               To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Collateral Agent and
their Related Parties under clause (a) or (b) of this Section, each Lender
severally agrees to pay to the Administrative Agent, the Collateral Agent or
their Related Parties, as the case may be, such Lender’s pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Administrative Agent, the
Collateral Agent in its capacity as such. For purposes hereof, a Lender’s “pro
rata share” shall be determined based upon its share of the outstanding Loans at
the time.

 

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(d)               To the extent permitted by applicable law, no Credit Party
shall assert, and each Credit Party hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential,
incidental or punitive damages (as opposed to direct or actual damages) arising
out of, in connection with, or as a result of, this Agreement, any other Credit
Document or any agreement or instrument contemplated hereby or thereby, the
Transactions or any Loan or the use of the proceeds thereof.

 

(e)               All amounts due under this Section 9.05 shall be payable on
written demand therefor.

 

Section 9.06        Right of Setoff.

 

(a)               If an Event of Default shall have occurred and be continuing,
each Lender is hereby authorized at any time and from time to time, except to
the extent prohibited by law, without presentment, demand, protest or other
notice of any kind to any Credit Party or to any other Person, any such notice
being hereby expressly waived, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (including by branches and
agencies of such Lender wherever located) to or for the credit or the account of
the Borrower against any of and all the obligations of the Borrower now or
hereafter existing under this Agreement and other Credit Documents held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or such other Credit Document and although such obligations
may be unmatured; provided that in the event that any Defaulting Lender shall
exercise any such right of setoff, (x) all amounts so set off shall be paid over
immediately to the Administrative Agent for further application in accordance
with the provisions of Section 2.19 and, pending such payment, shall be
segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Administrative Agent and the Lenders, and (y) the
Defaulting Lender shall provide promptly to the Administrative Agent a statement
describing in reasonable detail the Obligations owing to such Defaulting Lender
as to which it exercised such right of setoff. The rights of each Lender under
this Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have. Each Lender agrees to notify the
Borrower and the Administrative Agent promptly after any such setoff and
application; provided that the failure to give such notice shall not affect the
validity of such setoff and application.

 

(b)               NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME THAT
THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED IN
CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF, LIEN OR COUNTERCLAIM OR
TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE
ANY PROVISION OF THIS AGREEMENT OR ANY NOTE UNLESS IT IS TAKEN WITH THE CONSENT
OF THE REQUIRED LENDERS OR APPROVED IN WRITING BY THE ADMINISTRATIVE AGENT, IF
SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO CALIFORNIA CODE
OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF
CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR
OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY OR ENFORCEABILITY OF THE
LIENS GRANTED TO THE COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE
ENFORCEABILITY OF THE NOTES AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED
EXERCISE BY ANY LENDER OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE
REQUIRED LENDERS OR THE ADMINISTRATIVE AGENT SHALL BE NULL AND VOID. THIS
SUBSECTION (b) IS FOR THE SOLE BENEFIT OF THE LENDERS AND SHALL NOT AFFORD ANY
RIGHT TO, OR CONSTITUTE A DEFENSE AVAILABLE TO, ANY CREDIT PARTY.

 

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Section 9.07        Applicable Law. THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER CREDIT DOCUMENTS) AND ANY
CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT OR ANY
SUCH OTHER CREDIT DOCUMENTS (INCLUDING ANY CLAIMS SOUNDING IN CONTRACT LAW OR
TORT LAW ARISING OUT OF THE SUBJECT MATTER HEREOF) SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

 

Section 9.08        Waivers; Amendment.

 

(a)               No failure or delay of the Administrative Agent, the
Collateral Agent, any Lender in exercising any power or right hereunder or under
any other Credit Document and no course of dealing between any other Credit
Party and the Administrative Agent, the Collateral Agent or any Lender shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent and the Lenders hereunder and under
the other Credit Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of this
Agreement or any other Credit Document or consent to any departure by any Credit
Party therefrom shall in any event be effective unless the same shall be
permitted by clause (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Borrower in any case shall entitle the Borrower to any
other or further notice or demand in similar or other circumstances.

 

(b)               Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Administrative Agent (acting at the
direction of the Required Lenders); provided that no such agreement shall (i)
decrease the principal amount of, or extend the maturity of or any scheduled
principal payment date or any date for the payment of any interest on any Loan,
or waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan, without the prior written consent of each Lender directly
adversely affected thereby, (ii) decrease or extend the date for payment of any
Fees of any Lender without the prior written consent of such Lender; provided
that only the consent of the Required Lenders shall be necessary to amend the
interest rate described in Section 2.07 or to waive any obligation of the
Borrower to pay interest at the interest rate provided for in Section 2.07,
(iii) amend or modify the pro rata requirements of Section 2.14, the provisions
of Section 9.04 or the provisions of this Section or release any Guarantor
(other than in connection with the sale of such Guarantor in a transaction
permitted by Section 6.02) or all or substantially all of the Collateral,
without the prior written consent of each Lender, (iv)[reserved], (v) modify the
protections afforded to an SPV pursuant to the provisions of Section 9.04(i)
without the written consent of such SPV or (vi) reduce the percentage contained
in the definition of the term “Required Lenders” without the prior written
consent of each Lender; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent or
the Collateral Agent hereunder or under any other Credit Document without the
prior written consent of the Administrative Agent or the Collateral Agent.

 

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(c)               Notwithstanding the foregoing, this Agreement may be amended
(or amended and restated) with the written consent of the Required Lenders, the
Administrative Agent and the Borrower (i) to add one (1) or more additional
credit facilities to this Agreement and to permit the extensions of credit from
time to time thereunder and the accrued interest and fees in respect thereof to
share ratably in the benefits of this Agreement and the other Credit Documents
with the Loans and the accrued interest and fees in respect thereof, (ii) to
include appropriately the Lenders holding such credit facilities in any
determination of the Required Lenders and (iii) to permit any such additional
credit facilities which are term facilities to share ratably with the Loans in
the application of prepayments.

 

(d)               In addition, notwithstanding the foregoing, if the
Administrative Agent and the Borrower shall have jointly identified an obvious
error or any error or omission of a technical or immaterial nature in any
provision of the Credit Documents, then the Administrative Agent and the
Borrower shall be permitted to amend such provision and such amendment shall
become effective without any further action or consent of any other party to any
Credit Document if the same is not objected to in writing by the Required
Lenders within five (5) Business Days after notice thereof.

 

Section 9.09        Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the maximum
lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 9.09 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.

 

Section 9.10        Entire Agreement. This Agreement and the other Credit
Documents constitute the entire contract between the parties relative to the
subject matter hereof. Any other previous agreement among the parties with
respect to the subject matter hereof is superseded by this Agreement and the
other Credit Documents. Nothing in this Agreement or in the other Credit
Documents, expressed or implied, is intended to confer upon any Person (other
than the parties hereto and thereto, their respective successors and assigns
permitted hereunder and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Collateral Agent and
the Lenders) any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Credit Documents.

 

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Section 9.11        WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

 

Section 9.12        Severability. In the event any one (1) or more of the
provisions contained in this Agreement or in any other Credit Document should be
held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby (it being understood that
the invalidity of a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties shall endeavor in good-faith negotiations to replace
the invalid, illegal or unenforceable provisions with valid provisions the
economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.

 

Section 9.13        Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile or other
form of electronic transmission (e.g. “pdf” or “tif.” via electronic mail) shall
be as effective as delivery of a manually signed counterpart of this Agreement.

 

Section 9.14        Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

Section 9.15        Jurisdiction; Consent to Service of Process.

 

(a)               Each Credit Party hereby irrevocably and unconditionally
submits, for itself and its property, to the exclusive jurisdiction of any New
York state court or federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or the other Credit Documents, or
for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York state or,
to the extent permitted by law, in such federal court; provided that suit for
the recognition or enforcement of any judgment obtained in any such New York
state or federal court may be brought in any other court of competent
jurisdiction. Each of the parties hereto 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.
Nothing in this Agreement shall affect any right that the Administrative Agent,
the Collateral Agent or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Credit Documents against the
Borrower or its properties in the courts of any jurisdiction.

 

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(b)               The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Credit
Documents in any New York state or federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

 

(c)               Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

Section 9.16        Confidentiality. Each of the Administrative Agent, the
Collateral Agent and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates’ officers, directors, employees and agents, including
accountants, legal counsel and other advisors, and to numbering, administration
and settlement service providers (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority or quasi-regulatory authority (such
as the National Association of Insurance Commissioners), (c) to the extent
required by applicable laws or regulations or by any subpoena or similar legal
process, (d) in connection with the exercise of any remedies hereunder or under
the other Credit Documents or any suit, action or proceeding relating to the
enforcement of its rights hereunder or thereunder, (e) subject to an agreement
containing provisions substantially the same as those of this Section 9.16 to
(i) any actual or prospective assignee of or participant (other than a
Disqualified Lender) in any of its rights or obligations under this Agreement
and the other Credit Documents (it being agreed that any such actual or
prospective assignee or participant shall be deemed to have entered into such an
agreement if such assignee or participant “clicks through” or takes other
affirmative action to electronically acknowledge its agreement to any electronic
notification containing provisions substantially the same as those in this
Section 9.16 in accordance with the standard syndication processes of the Person
disclosing such Information or customary market standards for dissemination of
such type of information) or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower or any
Subsidiary or any of their respective obligations, (f) with the consent of the
Borrower, (g) to the extent such Information becomes publicly available other
than as a result of a breach of this Section 9.16 or (h) to the Administrative
Agent or any other Lender; provided that no disclosure shall be made to any
Disqualified Lender. For the purposes of this Section, “Information” shall mean
all information received from or on behalf of the Credit Parties or related to
the Credit Parties, their Subsidiaries and their respective businesses, other
than any such information that was available to the Administrative Agent, the
Collateral Agent or any Lender on a nonconfidential basis prior to its
disclosure by the Borrower; provided that, in the case of Information received
from the Borrower after the Closing Date, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section 9.16 shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord its own confidential information.

 

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Section 9.17        Lender Action. Each Lender agrees that it shall not take or
institute any actions or proceedings, judicial or otherwise, for any right or
remedy against any Credit Party or any other obligor under any of the Credit
Documents (including the exercise of any right of setoff, rights on account of
any banker’s lien or similar claim or other rights of self-help), or institute
any actions or proceedings, or otherwise commence any remedial procedures, with
respect to any Collateral or any other property of any such Credit Party, unless
expressly provided for herein or in any other Credit Document, without the prior
written consent of the Administrative Agent. The provisions of this Section 9.17
are for the sole benefit of the Lenders and shall not afford any right to, or
constitute a defense available to, any Credit Party.

 

Section 9.18        USA PATRIOT Act Notice. Each Lender and the Administrative
Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower
that pursuant to the requirements of the USA PATRIOT Act, it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender or the Administrative Agent, as applicable, to
identify the Borrower in accordance with the USA PATRIOT Act.

 

Section 9.19        Acknowledgement and Consent to Bail-In of Affected Financial
Institutions. Notwithstanding anything to the contrary in any Credit Document or
in any other agreement, arrangement or understanding among any such parties,
each party hereto acknowledges that any liability of any Affected Financial
Institution arising under any Credit Document, to the extent such liability is
unsecured, may be subject to the Write-Down and Conversion Powers of the
applicable Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

 

(a)               the application of any Write-Down and Conversion Powers by an
applicable Resolution Authority to any such liabilities arising hereunder which
may be payable to it by any party hereto that is an Affected Financial
Institution; and

 

(b)               the effects of any Bail-In Action on any such liability,
including, if applicable:

 

(i)                 a reduction in full or in part or cancellation of any such
liability;

 

(ii)              a conversion of all, or a portion of, such liability into
shares or other instruments of ownership in such Affected Financial Institution,
its parent undertaking, or a bridge institution that may be issued to it or
otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any such
liability under this Agreement or any other Credit Document; or

 

(iii)            the variation of the terms of such liability in connection with
the exercise of the Write-Down and Conversion Powers of the applicable
Resolution Authority.

 

100

 

 

Section 9.20        WAIVER. THE BORROWER HEREBY EXPRESSLY WAIVES THE PROVISIONS
OF ANY PRESENT OR FUTURE STATUTE OR LAW THAT PROHIBITS OR MAY PROHIBIT THE
COLLECTION OF THE SPECIAL REDEMPTION PREMIUM IN SECTION 2.05(B) AND/OR THE MAKE
WHOLE PREMIUM IN SECTION 2.10(A) OR SECTION 2.11(D).  THE BORROWER HEREBY
EXPRESSLY AGREES THAT (I) THE SPECIAL REDEMPTION PREMIUM AND THE MAKE WHOLE
PREMIUM ARE REASONABLE AND ARE THE PRODUCT OF AN ARM’S LENGTH TRANSACTION
BETWEEN SOPHISTICATED BUSINESS PEOPLE, ABLY REPRESENTED BY COUNSEL, (II) THE
SPECIAL REDEMPTION PREMIUM AND THE MAKE WHOLE PREMIUM SHALL BE PAYABLE
NOTWITHSTANDING THE THEN PREVAILING MARKET RATES AT THE TIME PAYMENT IS MADE,
(III) THERE HAS BEEN A COURSE OF CONDUCT BETWEEN THE LENDERS AND THE BORROWER
GIVING SPECIFIC CONSIDERATION IN THIS TRANSACTION FOR SUCH AGREEMENT TO PAY THE
SPECIAL REDEMPTION PREMIUM AND THE MAKE WHOLE PREMIUM, (IV) THE BORROWER SHALL
BE ESTOPPED HEREAFTER FROM CLAIMING DIFFERENTLY THAN AS AGREED TO IN THIS
SECTION 9.20, (V) ITS AGREEMENT TO PAY THE SPECIAL REDEMPTION PREMIUM AND THE
MAKE WHOLE PREMIUM IS A MATERIAL INDUCEMENT TO THE LENDERS TO MAKE THE LOANS,
AND (VI) THE SPECIAL REDEMPTION PREMIUM AND THE MAKE WHOLE PREMIUM REPRESENT A
GOOD FAITH, REASONABLE ESTIMATE AND CALCULATION OF THE LOST PROFITS OR DAMAGES
OF THE LENDERS AND THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO
ASCERTAIN THE ACTUAL AMOUNT OF DAMAGES TO ANY LENDER OR PROFITS LOST BY SUCH
LENDER AS A RESULT OF ANY EVENT GIVING RISE TO THE SPECIAL REDEMPTION PREMIUM OR
THE MAKE WHOLE PREMIUM.

 

Section 9.21        Specific Performance. The parties hereto agree that
irreparable damage for which monetary relief, even if available, would not be an
adequate remedy, would occur in the event that the parties hereto do not perform
the provisions of this Agreement in accordance with its specified terms or
otherwise breach such provisions.  Accordingly the parties acknowledge and agree
that the parties shall be entitled to an injunction or injunctions, specific
performance or other equitable relief to prevent breaches of this Agreement and
to enforce specifically the terms and provisions hereof in the courts without
proof of damages or otherwise, this being in addition to any other remedy to
which they are entitled under this Agreement and this right of specific
enforcement is an integral part of the Transactions and without that right, the
parties would not have entered into this Agreement.  The parties agree not to
assert that a remedy of specific enforcement is unenforceable, invalid, contrary
to law or inequitable for any reason, and agree not to assert that a remedy of
monetary damages would provide an adequate remedy or that the parties otherwise
have an adequate remedy at law.  The parties acknowledge and agree that any
party shall not be required to provide any bond or other security in connection
with its pursuit of an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof.

 

[Remainder of Page Intentionally Left Blank; Signature Pages to Follow]

 

101

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized signatories as of the day and year first
above written.

 

  MFRESIDENTIAL ASSET HOLDING CORP.,   as the Borrower       By: /s/ Harold E.
Schwartz   Name: Harold E. Schwartz   Title: Vice President and Secretary      
MFA FINANCIAL, INC.,   as Parent       By: /s/ Harold E. Schwartz   Name: Harold
E. Schwartz   Title: Senior Vice President, General Counsel and Secretary

 

102

 

 

  WILMINGTON TRUST, NATIONAL ASSOCIATION,   as the Administrative Agent and the
Collateral Agent       By: /s/ Annmarie Warren   Name: Annmarie Warren   Title:
Banking Officer

 

103

 

 

  OMAHA DEBT AGGREGATOR, L.P.,   as a Lender       By: AP Omaha Advisors, LLC,
its general partner       By: Apollo Hybrid Value Advisors, L.P., its sole
member       By: Apollo Hybrid Value Capital Management, LLC, its general
partner       By: /s/ Joseph D. Glatt   Name: Joseph D. Glatt   Title: Vice
President

 

104

 

 

  Athene USA Corporation,   as a Lender       By: Apollo Insurance Solutions
Group LP,   its investment adviser       By: Apollo Capital Management, L.P.,  
its sub-adviser       By: Apollo Capital Management GP, LLC,   its General
Partner       By: /s/ Joseph D. Glatt   Name: Joseph D. Glatt   Title: Vice
President

 

105