MULTI-PARTY AGREEMENT
AMONG [SBA LENDER],[INDENTURE TRUSTEE],[TRUST AGREEMENT], [FISCAL AND TRANSFER AGENT], AND THE UNITED STATES
SMALL BUSINESS ADMINISTRATION
This Agreement is entered into as of , 201 (the “Agreement”), by and among (the “SBA Lender”), , not in its individual capacity but solely as the Indenture Trustee (the “Indenture Trustee”), [NAME OF TRUST] (the “Trust”), Colson Services Corp. (“FTA”), and the United States Small Business Administration (“SBA”).
The SBA Lender has made and intends to continue to make loans to small businesses under the Small Business Act, as amended.
SBA guarantees a portion of each SBA Lender Loan (as defined herein) in accordance with 13 C.F.R. Part 120 and one or more Small Business Administration Loan Guaranty Agreements (SBA Form 750), between SBA and the SBA Lender (as amended, supplemented or replaced from time to time, the “SBA Agreements”).
Because SBA guarantees a portion of each SBA Lender Loan (as defined herein), SBA has an interest in the SBA Lender Loans, the underlying collateral, and the Loan Documents (as defined herein).
The SBA Lender has entered into certain Secondary Participation Guaranty Agreements on SBA Form 1086 (each, a “Participation Agreement”) under which the SBA Lender has sold the guaranteed portion (the “Guaranteed Interest”) in the SBA Lender Loans and SBA has caused FTA to issue a Guaranteed Interest Certificate to each Registered Holder (as defined herein) which entitles the Registered Holder to receive the payments of principal relating to the Guaranteed Interest on the related SBA Lender Loan, together with interest on the Guaranteed Interest at a per annum rate in effect from time to time in accordance with the Participation Agreement.
The SBA Lender and , as owner trustee (the “Trustee”), have entered into an Amended and Restated Trust Agreement, dated as of (the “Trust Agreement”), which establishes the Trust. The SBA Lender and the Trust have entered into a Pooling and Servicing Agreement, dated as of (the “Pooling and Servicing Agreement”), pursuant to which the Conveyed Interest (as defined herein) will be sold by the SBA Lender to the Trust, and the SBA Lender will agree to service the SBA Lender Loans for the Trust. The Trust will issue evidencing rights to receive the Unguaranteed Interest (as defined herein) in the SBA Lender Loans. The Trust and the Indenture Trustee have entered into an Indenture, dated as of (the “Indenture”), governing the terms of [FORM OF SECURITY ISSUED BY TRUST] and granting to the Indenture Trustee for the benefit of the holders of the [FORM OF SECURITY INTEREST ISSUED BY TRUST] a security interest in the Unguaranteed Interest.
SBA Rules and Regulations require the SBA Lender to obtain SBA’s written consent before it sells the Unguaranteed Interest to the Trust.
The SBA Lender, the Trust, the Indenture Trustee, and SBA want to assure consistency between the SBA Agreements, the Trust Agreement and the Indenture and clarify the respective rights of the parties.
The SBA Lender, the Trust, the Indenture Trustee, FTA and SBA agree as follows:
1.Definitions. In this Agreement, the following terms have the following meanings:
a.“Conveyed Interest”: the sum of (i) that portion of the SBA Lender Loans not guaranteed by the SBA pursuant to SBA Rules and Regulations and not constituting the Required Holdback Amount and the FTA’s Fee and (ii) the Excess Spread (the terms “FTA’s Fee”, “Required Holdback Amount” and “Excess Spread” have the respective meanings as defined in the Pooling and Servicing Agreement).
b.“[FORM OF SECURITY ISSUED BY TRUST]”: as defined in the Trust Agreement.
c.“Event of Default”: as defined in the Pooling and Servicing Agreement.
d.“Loan Documents”: all Notes, mortgages, deeds of trust, security deeds, security agreements, instruments of hypothecation, guarantees and other agreements and documents that relate to the SBA Lender Loans.
e.“Notes”: the notes evidencing the SBA Lender Loans.
f.“Registered Holder”: as defined in the Pooling and Servicing Agreement.
g.“SBA Lender Loan Debtor”: any person, including a guarantor, obligated under an SBA Lender Loan.
h.“SBA Lender Loans”: the loans listed on Exhibit A, as amended or supplemented from time to time, of the Pooling and Servicing Agreement and any other loans included in the Trust Fund (as defined in the Pooling and Servicing Agreement from time to time).
i.“SBA Rules and Regulations”: means the Small Business Act, as amended, codified at 15 U.S.C. 631 et seq., all legislation binding on the SBA, all rules and regulations promulgated from time to time thereunder, all Participation Agreements relating to the SBA Lender Loans, and all the Loan Guaranty Agreement and SBA Standard Operating Procedures and official notices as from time to time are in effect.
j.“Servicer”: the “Servicer” (as defined in the Pooling and Servicing Agreement) and, if applicable, any Subservicer (as defined in the Pooling and Servicing Agreement).
k.“Unguaranteed Interest”: the portion of each SBA Lender Loan not guaranteed by SBA.
l.“Well Capitalized”: with respect to the SBA Lender, means that the SBA Lender maintains a minimum unencumbered paid in capital and paid in surplus equal to at least 10% of its assets, excluding the guaranteed portion of its Section 7(a)loans(as defined in 13C.F.R.§120.420(a)). This capital charge applies to the remaining balance outstanding on the unguaranteed portion of the securitizer’s 7(a) loans in its portfolio and in any securitization pools.
Other capitalized terms used herein without definition shall have the respective meanings assigned to such terms in the Pooling and Servicing Agreement.
2.Acknowledgment of Rights.(a) The SBA Lender, the Servicer, the Trust (for itself and on behalf of the holders of the [FORM OF SECURITY INTEREST ISSUED BY TRUST]), the Indenture Trustee (on behalf of the holders of the [FORM OF SECURITY INTEREST ISSUED BY TRUST]) and FTA acknowledge SBA’s interest in the Guaranteed Interest in the SBA Lender Loans and acknowledge the rights of FTA in the FTA’s Fee and the Servicer in the Required Holdback Amount.
(b)SBA acknowledges that it has no interest in the Unguaranteed Interest in any SBA Lender Loan which does not constitute the Required Holdback Amount or the FTA’s Fee.
(c)All parties hereto acknowledge the collateral for each SBA Lender Loan secures the Guaranteed Interest and the Unguaranteed Interest, pro rata.
(d)All parties hereto acknowledge all payments and recoveries with respect to the SBA Lender Loans from any source, including recoveries from collateral, insurance and guarantees, will be shared pro rata determined in accordance with applicable SBA Rules and Regulations, including SBA Rules and Regulations with respect to the sharing of costs and expenses. All such payments and recoveries will be distributed in accordance with SBA Rules and Regulations, this Agreement and to the extent there is no conflict, the Pooling and Servicing Agreement, the Trust Agreement and the Indenture. Unless the SBA Lender is no longer acting as the Servicer under the Pooling and Servicing Agreement, the Trust shall not be entitled to receive or retain any amount to which the Servicer is entitled under SBA Rules and Regulations, this Agreement or the Pooling and Servicing Agreement, whether or not any fees, expenses, costs or other amounts to which the Trust or the parties to the Trust Agreement are entitled have been paid. No amount to which any Registered Holder, FTA or SBA is entitled pursuant to any Participation Agreement, and other SBA Rules and Regulations or this Agreement shall be distributed to or retained by any person other than the Registered Holder, SBA or FTA.
(e)The SBA Lender, the Servicer, the Trust, for itself and on behalf of the holders of the [FORM OF SECURITY INTEREST ISSUED BY TRUST], and the Indenture Trustee will execute any release, assignment, endorsement or other document, in the form and substance acceptable to each of the parties hereto, as SBA may from time to time reasonably request with respect to the Guaranteed Interest.
(f)The SBA Lender, the Servicer, the Trust, for itself and on behalf of the holders of the [FORM OF SECURITY INTEREST ISSUED BY TRUST], and the Indenture Trustee (on behalf of the holders of the [FORM OF SECURITY INTEREST ISSUED BY TRUST]) recognize and agree to uphold SBA’s rights under the SBA Rules and Regulations.
3.[Intentionally Omitted].
4.SBA Consent; No Cross Default; Waiver of Rights to Accounts. (a) SBA consents to the SBA Lender’s execution and performance of the Pooling and Servicing Agreement, the Trust Agreement, and the Indenture and the transactions contemplated thereby, including, but not limited to, the sales of [FORM OF SECURITY INTEREST ISSUED BY TRUST]. The SBA shall expeditiously grant its approval to any transfer by the to a wholly owned subsidiary of the SBA Lender pursuant to 13 C.F.R.§120.470(b)(6) if the SBA is satisfied that the SBA Lender is in compliance with the requirements of 13 C.F.R. §120.424, 120.471 an 120.472 and is SBA regulatory good standing as defined in §120.420(f). After the granting of any such approval, the SBA shall interpose no objection to the sale by a wholly-owned subsidiary of the SBA Lender of interests to third parties.
(b)Notwithstanding anything to the contrary contained in the Pooling and Servicing Agreement, the Trust Agreement, and the Indenture, a default by the SBA Lender under another agreement or a default by an entity other than the SBA Lender under another agreement may not be an event of default under the Pooling and Servicing Agreement, the Trust Agreement, or the Indenture.
(c)The Trust and the Indenture Trustee each hereby waives any rights it may have, including rights of set-off, recoupment and banker’s liens, to any account of the SBA Lender, any successor Servicer or any other person into which payments from the SBA Lender Loan Debtors or recoveries with respect to the SBA Lender Loans from any source, including recoveries from collateral, insurance and guarantees are received. This waiver shall not apply to the Collection Account and the Reserve Account (as defined in the Pooling and Servicing Agreement).
5.The SBA Lender or Wholly Owned Subsidiary to Retain the [Form of Subordinated Tranche]. As required, subject to the final sentence of this Section 5, by 13 C.F.R. Section 120.425(b), the SBA Lender, or its wholly owned subsidiary, will retain the legal and beneficial interest in the [Form of Subordinated Tranche] for a period of 6 years after the issue date of the [Form of Subordinated Tranche]. The [Form of Subordinated Tranche]will bear the legend required under 13 C.F.R. §120.425(b). Upon initial issuance, the [Form of Subordinated Tranche]will be issued to and registered in the name of the SBA Lender which will retain legal and beneficial ownership of the [Form of Subordinated Tranche]until six years after the issue date of the [Form of Subordinated Tranche]. The SBA Lender agrees not to sell, pledge, transfer, assign, sell participations in or otherwise convey, in whole or in part, [Form of Subordinated Tranche] until six years after the issue date of the [Form of Subordinated Tranche].
6.Required Holdback Amount. The SBA Lender, or if the SBA Lender is not the Servicer, the Servicer, will retain the Required Holdback Amount with respect to all the SBA Lender Loans.
7.Covenants and Representations of the SBA Lender. The SBA Lender represents, warrants and covenants that (i)the Unguaranteed Interests in the SBA Lender Loans will be transferred free and clear of any liens other than Permitted Liens, (ii)the Guaranteed Interest in each SBA Lender Loan has been sold pursuant to a Participation Agreement prior to transfer of the Unguaranteed Interest to the Trust, and (iii)SBA has not purchased and has not been requested to purchase the Guaranteed Interest in any SBA Lender Loan.
8.FTA To Hold Original SBA Lender Notes; Possession of Transaction Documents. (a) The SBA Lender will deliver all original Notes to FTA, accompanied by a receipt in the form of Exhibit1 completed for each applicable Note, within 30 days of the issuance of the Investor Notes and Equity Certificate. Upon receiving a Note accompanied by a completed receipt, FTA will deliver the receipt for such Note in accordance with the provisions of the receipt. Each Note will be endorsed by means of an allonge (which may be a blanket allonge) as follows: “Pay to the order of [Name of Trustee], and its successors and assigns, as the owner trustee under that certain Trust Agreement dated as of , as the same may be amended from time to time, for the benefit of the United States Small Business Administration and holders of the [Form of Subordinated Tranche] as their respective interests may appear, subject to the MultiParty Agreement dated as of , as the same may be amended from time to time, without recourse.”
(b)The Notes are being delivered to FTA for the purposes of protecting the interests of SBA and the holders of the [FORM OF SECURITY INTERESTS ISSUED BY TRUST] . SBA appoints FTA as its fiscal and transfer agent and as its agent to hold the Notes and FTA will hold the Notes as agent for SBA. FTA will act as bailee for the Trust for the purpose of accepting delivery of and holding the Notes. FTA does not and will not during the term of this Agreement have any interest in the SBA Lender Loans or the related Transaction Documents.
(c)FTA will not release any Note to either the SBA Lender or any other person except (i) upon receipt from the SBA Lender or a Successor Servicer of a written Request for Release of Note in the form of Exhibit 2, executed by the SBA Lender and acknowledged by the Indenture Trustee, or (ii) with SBA’s prior written consent or instruction. Within three Business Days after the later of the receipt of the written request and the written consent required in clause (i) or the written consent or instruction required in clause (ii), FTA will release the identified Note. The Servicer will return the Notes to FTA in accordance with the appropriate provisions of the Pooling and Servicing Agreement and upon receiving a Note accompanied by a receipt in the form of Exhibit 1 completed for such Note, FTA will deliver the receipt for such Note in accordance with the provisions of the receipt. FTA will have no obligation to make sure any Note is returned to it. SBA will notify the Indenture Trustee, in writing, if FTA releases any Note solely upon the instructions of SBA.
(d)Upon reasonable notice to FTA, each of the Trust and SBA will have the right during normal business hours to inspect the original Notes at FTA’s office.
(e)The SBA Lender will deliver to the Trust, the Loan Documents and assignments of Loan Documents in accordance with the Pooling and Servicing Agreement. All instruments of assignment will assign the applicable collateral to the Trust, and its successors and assigns, under that certain Trust Agreement dated as of , as the same may be amended from time to time, for the benefit of the United States Small Business Administration and holders of [FORM OF SECURITY INTERESTS ISSUED BY TRUST] , subject to this Agreement dated as of , as the same may be amended from time to time. All financing statements related to the transfer of the Unguaranteed Interests from the SBA Lender to the Trust will name the Trust as secured party. All financing statements related to the grant of the lien under the Indenture will name the Indenture Trustee as secured party. Any power of attorney from the SBA Lender to the Indenture Trustee must require the Indenture Trustee to deal with applicable collateral in accordance with the terms of the Pooling and Servicing Agreement, the Indenture and this Agreement.
(f)If the Servicer or SBA must be the record owner or secured party with respect to any Note or any collateral securing any Note or any Loan Document for any purpose, including, without limitation, to liquidate (including by any judicial means) or otherwise pursue remedies against any SBA Lender Loan Debtor or any collateral securing any Note or any other source, the Trust will assign such Note, collateral or Loan Document to the Servicer, or SBA, as necessary.
9.Servicing of the SBA Lender Loans. (a) The Servicer will service the SBA Lender Loans. The Servicer must perform all servicing activities in accordance with SBA Rules and Regulations and prudent servicing standards, and, to the extent there is no conflict, the Pooling and Servicing Agreement. Any servicing actions required of the Servicer under the Pooling and Servicing Agreement or this Agreement may be performed by a Subservicer (as defined in the Pooling and Servicing Agreement) approved by SBA under an agreement approved by SBA, but performance by such Subservicer will not limit or reduce the Servicer’s obligations or liabilities as the Servicer under the Pooling and Servicing Agreement or this Agreement.
(b)So long as the SBA Lender is the Servicer, the SBA Lender will deposit (or cause to be deposited) in the Collection Account in accordance with the terms of the Pooling and Servicing Agreement all funds received by the SBA Lender from the SBA Lender Loan Debtors or any other source with respect to the Unguaranteed Interest, including payments and recoveries from collateral, insurance and guarantees.