FS Investment Corporation II 8-K [fsicii-8k_121514.htm]

 

Exhibit 10.2

 

 

Execution Version

 

 

 

 

 

GREEN CREEK LLC,
ISSUER

AND

CitiBANK, N.A.,
TRUSTEE

 

INDENTURE

 

Dated as of December 15, 2014

 

COLLATERALIZED LOAN OBLIGATIONS

 

 

 

 

Table of Contents

 

Page

 

ARTICLE I.    DEFINITIONS 2 Section 1.1 Definitions 2 Section 1.2 Assumptions as
to Collateral Obligations 30 Section 1.3 Rules of Construction and Certain Other
Matters 30 ARTICLE II.    THE NOTES 31 Section 2.1 Forms Generally 31 Section
2.2 Forms of Notes and Certificate of Authentication 31 Section 2.3 Authorized
Amount; Note Interest Rate; Stated Maturity; Denominations 32 Section 2.4
Execution, Authentication, Delivery and Dating 32 Section 2.5 Registration,
Registration of Transfer and Exchange 33 Section 2.6 Mutilated, Destroyed, Lost
or Stolen Notes 40 Section 2.7 Payment of Principal and Interest, Preservation
of Rights 40 Section 2.8 Persons Deemed Owners 43 Section 2.9 Cancellation 43
Section 2.10 Rule 144A Global Notes; Temporary Notes 43 Section 2.11 No Gross Up
45 Section 2.12 Notes Beneficially Owned by Non-Permitted Holders 45 Section
2.13 Increases on the Notes 45 ARTICLE III.    CONDITIONS PRECEDENT; CERTAIN
PROVISIONS RELATING TO COLLATERAL 47 Section 3.1 General Provisions 47 Section
3.2 Security for the Notes 48 Section 3.3 Delivery of Pledged Obligations 50
Section 3.4 Purchase and Delivery of Collateral Obligations and Other Actions
During the Initial Investment Period; Effective Date Requirements 51 ARTICLE IV.
   SATISFACTION AND DISCHARGE 51 Section 4.1 Satisfaction and Discharge of
Indenture 51 Section 4.2 Application of Trust Money 53 Section 4.3 Repayment of
Monies Held by Paying Agent 53

 

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Table of Contents

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ARTICLE V.   REMEDIES 53 Section 5.1 Events of Default 53 Section 5.2
Acceleration of Maturity; Rescission and Annulment 54 Section 5.3 Collection of
Indebtedness and Suits for Enforcement by Trustee 55 Section 5.4 Remedies 57
Section 5.5 Optional Preservation of Collateral 58 Section 5.6 Trustee May
Enforce Claims Without Possession of the Notes 60 Section 5.7 Application of
Money Collected 60 Section 5.8 Limitation on Suits 60 Section 5.9 Unconditional
Rights of Holders of the Notes to Receive Principal and Interest 61 Section 5.10
Restoration of Rights and Remedies 61 Section 5.11 Rights and Remedies
Cumulative 61 Section 5.12 Delay or Omission Not Waiver 61 Section 5.13 Control
by Noteholders 62 Section 5.14 Waiver of Past Defaults 62 Section 5.15
Undertaking for Costs 62 Section 5.16 Waiver of Stay or Extension Laws 63
Section 5.17 Sale of Collateral 63 Section 5.18 Action on the Notes 64 ARTICLE
VI.   THE TRUSTEE 64 Section 6.1 Certain Duties and Responsibilities 64 Section
6.2 Notice of Default 65 Section 6.3 Certain Rights of Trustee 66 Section 6.4
Not Responsible for Recitals or Issuance of the Notes 69 Section 6.5 May Hold
Notes 69 Section 6.6 Money Held in Trust 69 Section 6.7 Compensation and
Reimbursement 69 Section 6.8 Corporate Trustee Required; Eligibility 71 Section
6.9 Resignation and Removal; Appointment of Successor 71 Section 6.10 Acceptance
of Appointment by Successor 73

 

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Table of Contents

(continued)

Page

 

Section 6.11 Merger, Conversion, Consolidation or Succession to Business of
Trustee 73 Section 6.12 Co-Trustees and Separate Trustee 73 Section 6.13 Certain
Duties of Trustee Related to Delayed Payment of Proceeds 74 Section 6.14
Representations and Warranties of the Trustee 75 Section 6.15 Authenticating
Agents 75 Section 6.16 Representative for Holders of the Notes Only; Agent for
all other Secured Parties 76 Section 6.17 Right of Trustee in Capacity of
Registrar, Paying Agent, Calculation Agent or Securities Intermediary 76 ARTICLE
VII.   COVENANTS 77 Section 7.1 Payment of Principal and Interest 77 Section 7.2
Compliance With Laws, Etc 77 Section 7.3 Maintenance of Books and Records 77
Section 7.4 Maintenance of Office or Agency 77 Section 7.5 Money for Security
Payments to be Held in Trust 77 Section 7.6 Existence of Issuer 79 Section 7.7
Protection of Collateral 80 Section 7.8 Opinions as to Collateral 82 Section 7.9
Performance of Obligations 82 Section 7.10 Negative Covenants 83 Section 7.11 No
Consolidation 85 Section 7.12 Participations 85 Section 7.13 No Other Business;
Etc 86 Section 7.14 Compliance with Investment Management Agreement 86 Section
7.15 Reporting 86 Section 7.16 Calculation Agent 87 Section 7.17 Certain Tax
Matters 88 Section 7.18 Representations Relating to Security Interests in the
Collateral 90 Section 7.19 Certain Regulations 92 Section 7.20
Section 3(c)(7) Procedures 92

 

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Table of Contents

(continued)

Page

 

Section 7.21 Capital Contributions 93 Section 7.22 Other Accounts 94 ARTICLE
VIII.   SUPPLEMENTAL INDENTURES 94 Section 8.1 Supplemental Indentures 94
Section 8.2 Execution of Supplemental Indentures 94 Section 8.3 Effect of
Supplemental Indentures 94 Section 8.4 Reference in Notes to Supplemental
Indentures 94 Section 8.5 Effect on the Investment Manager; Effect on the
Collateral Administrator 95 ARTICLE IX.   REDEMPTION OF SECURITIES 95 Section
9.1 Optional Redemption 95 Section 9.2 Notice to Trustee of Optional Redemption
97 Section 9.3 Notice by the Issuer of Optional Redemption or of Maturity 97
Section 9.4 Notes Payable on Redemption Date 98 ARTICLE X.   ACCOUNTS,
ACCOUNTINGS AND RELEASES 99 Section 10.1 Collection of Money 99 Section 10.2
Interest Collection Account 100 Section 10.3 Principal Collection Account;
Payment Account; and Expense Reserve Account 101 Section 10.4 Reports by Trustee
103 Section 10.5 Accountings 104 Section 10.6 Custodianship and Release of
Collateral 109 Section 10.7 [Reserved] 111 Section 10.8 Additional Reports 111
Section 10.9 Procedures Relating to the Establishment of Issuer Accounts
Controlled by the Trustee 111 Section 10.10 Notices to Holders of the Notes 112
ARTICLE XI.   APPLICATION OF MONIES 112 Section 11.1 Disbursements of Monies
from Payment Account 112 ARTICLE XII.   SALE OF COLLATERAL OBLIGATIONS;
SUBSTITUTION 116 Section 12.1 Sales of Collateral Obligations 116

 

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Table of Contents

(continued)

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Section 12.2 Trading Restrictions 118 Section 12.3 Affiliate Transactions 119
ARTICLE XIII.    NOTEHOLDERS’ RELATIONS 119 Section 13.1 Subordination and
Non-Petition 119 Section 13.2 Standard of Conduct 120 ARTICLE XIV.
   MISCELLANEOUS 120 Section 14.1 Form of Documents Delivered to Trustee 120
Section 14.2 Acts of the Noteholders 121 Section 14.3 Notices 122 Section 14.4
Notices to Noteholders; Waiver 122 Section 14.5 Effect of Headings and Table of
Contents 123 Section 14.6 Successors and Assigns 123 Section 14.7 Severability
123 Section 14.8 Benefits of Indenture 123 Section 14.9 Governing Law 123
Section 14.10 Submission to Jurisdiction 124 Section 14.11 Counterparts 124
Section 14.12 Waiver Of Jury Trial 124 Section 14.13 Legal Holiday 124 ARTICLE
XV.    ASSIGNMENT OF INVESTMENT MANAGEMENT AGREEMENT 125 Section 15.1 Assignment
of Investment Management Agreement 125

 

 

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Schedule A Schedule of Collateral Obligations Schedule B LIBOR Formula    
Exhibit A Form of Rule 144A Global Note Exhibit B [Reserved] Exhibit C
[Reserved] Exhibit D Form of Owner Certificate Exhibit E Form of Section 3(c)(7)
Reminder Notice Exhibit F Form of Important Section 3(c)(7) Notice Exhibit G
Form of Increase Request

 

 

 

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INDENTURE, dated as of December 15, 2014, between Green Creek LLC, a
newly-formed Delaware limited liability company (the “Issuer”), and Citibank,
N.A., a national banking association, organized and existing under the laws of
United States of America, as trustee (the “Trustee”).

PRELIMINARY STATEMENT

The Issuer is duly authorized to execute and deliver this Indenture to provide
for the Notes issuable as provided in this Indenture. All covenants and
agreements made by the Issuer herein are for the benefit and security of the
Secured Parties. The Issuer is entering into this Indenture, and the Trustee is
accepting the trusts created hereby, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.

All things necessary to make this Indenture a valid agreement of the Issuer in
accordance with the terms of this Indenture have been done.

GRANTING CLAUSE

The Issuer hereby Grants to the Trustee for the benefit and security of the
Secured Parties, all of its right, title and interest in, to and under, in each
case, whether now owned or existing, or hereafter acquired or arising,

(a)

the Collateral Obligations listed, as of the Closing Date, in Schedule A to this
Indenture and as such Schedule A may be modified, amended and revised subsequent
to the Closing Date by the Issuer, including any part thereof which consists of
general intangibles relating thereto, all payments made or to be made thereon or
with respect thereto, and all Collateral Obligations including any part thereof
which consists of general intangibles relating thereto, which are delivered or
credited to the Trustee, or for which a Security Entitlement is delivered or
credited to the Trustee or which are credited to one or more of the Issuer
Accounts on or after the Closing Date and all payments made or to be made
thereon or with respect thereto,

(b)

the Investment Management Agreement as and to the extent set forth in Article
XV, the Sale and Contribution Agreement, each Transfer Supplement, the
Collateral Administration Agreement, the Note Purchase Agreement, each other
Transaction Document and the Issuer’s rights under each of them,

(c)

the Issuer Accounts and any other accounts of the Issuer, Eligible Investments
purchased with funds on deposit therein or credited thereto, and all funds or
Financial Assets now or hereafter deposited therein and income from the
investment of funds therein or credited thereto, including any part thereof
which consists of general intangibles relating thereto,

(d)

all money (as defined in the UCC) delivered to the Trustee (or its bailee),

(e)

all securities, investments, investment property, instruments, money, deposit
accounts and agreements of any nature in which the Issuer has an interest,
including any part thereof which consists of general intangibles relating
thereto, and

 

 

 

 

(f)

all Proceeds of any of the foregoing.

Such Grants are made, however, in trust, to secure the Secured Obligations
equally and ratably without prejudice, priority or distinction between the
Secured Obligations by reason of difference in time of issuance or incurrence or
otherwise, except as expressly provided in this Indenture (including Section
2.7, Article XI and Article XIII), and to secure (i) the payment of all amounts
due on the Secured Obligations in accordance with their terms and (ii)
compliance with the provisions of this Indenture and each related document, all
as provided herein and therein.

Except to the extent otherwise provided herein, this Indenture shall constitute
a security agreement under the laws of the State of New York applicable to
agreements made and to be performed therein, for the benefit of the Secured
Parties. Upon the occurrence of any Event of Default hereunder, and in addition
to any other rights available under this Indenture or any other instruments
included in the Collateral held, subject to Section 6.16 hereof, for the benefit
and security of the Secured Parties, the Trustee shall have all rights and
remedies of a secured party on default under the laws of the State of New York
and other applicable law to enforce the assignments and security interests
contained herein and, in addition, shall have the right, subject to compliance
with any mandatory requirements of applicable law and the terms of this
Indenture, to sell or apply any rights and other interests assigned or pledged
hereby in accordance with the terms hereof at public and private sale.

The Trustee acknowledges such Grants, accepts the trusts hereunder in accordance
with the provisions hereof, and agrees to perform the duties herein in
accordance with the provisions hereof such that, subject to Section 6.16, the
interests of the Secured Parties may be adequately and effectively protected.

ARTICLE I.

DEFINITIONS

Section 1.1

Definitions.

Except as otherwise specified herein or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms and to the
masculine, feminine and neuter genders of such terms. Whenever any reference is
made to an amount the determination or calculation of which is governed by
Section 1.2, the provisions of Section 1.2 shall be applicable to such
determination or calculation, whether or not reference is specifically made to
Section 1.2, unless some other method of determination or calculation is
expressly specified in the particular provision.

“Act”: The meanings specified in Section 14.2(a).

“Additional Notes”: The meaning specified in Section 2.13(a).

 

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“Administrative Expenses”: Amounts (other than any Reserved Expenses) due or
accrued with respect to any Payment Date and payable in the following order to:

(i)

the Trustee pursuant to Section 6.7 and other provisions under this Indenture;

(ii)

the Collateral Administrator under the Collateral Administration Agreement or
this Indenture;

(iii)

the Investment Manager (other than the Investment Management Fees) under the
Investment Management Agreement, including legal fees and expenses of counsel to
the Investment Manager;

(iv)

the Independent Managers pursuant to the Independent Manager Agreement in
respect of certain services provided to the Issuer;

(v)

the agents and counsel of the Issuer for fees, including retainers, and
expenses; and

(vi)

without duplication, any Person in respect of any other reasonable fees or
expenses of the Issuer (including in respect of any indemnity obligations, if
applicable) not prohibited under this Indenture and any reports and documents
delivered pursuant to or in connection with this Indenture and the Notes.

“Affected Bank”: A “bank” for purposes of Section 881 of the Code or an entity
affiliated with such a bank that neither (x) is a “United States person” (within
the meaning of section 7701(a)(30) of the Code) nor (y) is entitled to a 0%
withholding tax rate on interest derived from sources within the United States
under an applicable income tax treaty.

“Affiliate” or “Affiliated”: With respect to a Person, (i) any other Person who,
directly or indirectly, is in control of, or controlled by, or is under common
control with, such Person or (ii) any other Person who is a director, officer or
employee (a) of such Person, (b) of any subsidiary or parent company of such
Person or (c) of any Person described in subclause (i) above. For purposes of
this definition, control of a Person shall mean the power, direct or indirect,
(i) to vote more than 50% of the securities having ordinary voting power for the
election of directors of any such Person or (ii) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. With respect to the Issuer, this definition shall exclude the
Independent Managers, their Affiliates and any other special purpose vehicle to
which the Independent Managers are or will be providing administrative services,
as a result solely of the Independent Managers acting in such capacity or
capacities.

“Agent Members”: Members of, or participants in, DTC.

“Aggregate Outstanding Amount”: When used with respect to any or all of the
Notes, the aggregate principal of such Notes Outstanding on the date of
determination.

“Aggregate Principal Amount”: When used with respect to any or all of the
Collateral Obligations, Eligible Investments or Cash, the aggregate of the
Principal Balances of such Collateral Obligations, Eligible Investments or Cash
on the date of determination.

 

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“Applicable Period”: For (i) the first Interest Accrual Period, the period from
and including the Closing Date (except with respect to any Increase, from and
including the effective date of such Increase) to but excluding the First
Payment Date and (ii) each Interest Accrual Period thereafter, three months
(except with respect to the last Applicable Period, the period from and
including the immediately preceding Payment Date to but excluding the Stated
Maturity or the final Redemption Date, as applicable).

“Authenticating Agent”: With respect to the Notes, the Person, if any,
designated by the Trustee to authenticate such Notes on behalf of the Trustee
pursuant to Section 6.15.

“Authorized Officer”: With respect to the Issuer, any Officer or any other
Person who is authorized to act for the Issuer in matters relating to, and
binding upon, the Issuer. With respect to the Investment Manager, any officer,
employee or agent of the Investment Manager who is authorized to act for the
Investment Manager in matters relating to, and binding upon, the Investment
Manager with respect to the subject matter of the request, certificate or order
in question. With respect to the Collateral Administrator, any officer, employee
or agent of the Collateral Administrator who is authorized to act for the
Collateral Administrator in matters relating to, and binding upon, the
Collateral Administrator with respect to the subject matter of the request,
certificate or order in question. With respect to the Trustee or any other bank
or trust company acting as trustee of an express trust or as custodian, a Trust
Officer. Each party may receive and accept a certification of the authority of
any other party as conclusive evidence of the authority of any Person to act,
and such certification may be considered as in full force and effect until
receipt by such other party of written notice to the contrary.

“Balance”: On any date, with respect to Cash or Eligible Investments in any
account, the aggregate of (i) the current balance of Cash, demand deposits, time
deposits, certificates of deposit and federal funds; (ii) the principal amount
of interest-bearing corporate and government securities, money market accounts
and repurchase obligations; and (iii) the purchase price or the accreted value,
as applicable, (but not greater than the face amount) of non-interest-bearing
government and corporate securities and commercial paper.

“Bank”: Citibank, N.A., a national banking association, in its individual
capacity and not as Trustee, and any successor thereto.

“Bankruptcy Code”: The United States Bankruptcy Code, as set forth in Title 11
of the United States Code, as amended.

“Benefit Plan Investor”: Any (a) employee benefit plan (as defined in Section
3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (b) plan
as defined in Section 4975(e)(1) of the Code that is subject to Section 4975 of
the Code or (c) entity whose underlying assets include “plan assets” (within the
meaning of the Plan Asset Regulation, as modified by Section 3(42) of ERISA) by
reason of any such employee benefit plan’s or plan’s investment in the entity.

“Board of Managers”: The Board of Managers specified in the Limited Liability
Company Agreement.

 

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“Bonds”: Collateral Obligations (other than Defaulted Obligations) that, at the
time of determination, bear interest at a fixed rate.

“Business Day”: Any day on which commercial banks are open for general business
in (a) New York, New York and London, England and (b) solely with respect to the
calculation of LIBOR, London, England.

“Calculation Agent”: The meaning specified in Section 7.16(a).

“Cash”: Such coin or currency of the United States of America as at the time
shall be legal tender for payment of all public and private debts.

“Cause”: The meaning specified in the Investment Management Agreement.

“Certificate of Authentication”: The Trustee’s or Authenticating Agent’s
certificate of authentication on any Note.

“Certificated Security”: The meaning specified in Section 8-102(a)(4) of the
UCC.

“Clearing Agency”: An organization registered as a “clearing agency” pursuant to
Section 17A of the Exchange Act.

“Clearing Corporation”: The meaning specified in Section 8-102(a)(5) of the UCC.

“Clearing Corporation Security”: A Collateral Obligation that is a Financial
Asset that is registered in the name of a Clearing Corporation or the nominee of
such Clearing Corporation and, if a Certificated Security, is held in the
custody of such Clearing Corporation.

“Closing Date”: December 15, 2014.

“Code”: The United States Internal Revenue Code of 1986, as amended.

“Collateral”: All money, instruments, investment property and other property and
rights and all Proceeds that have been Granted by the Issuer to the Trustee
under the Granting Clause.

“Collateral Account”: The segregated trust account or accounts established
pursuant to Section 10.2(c).

“Collateral Administration Agreement”: An agreement dated as of the Closing
Date, among the Issuer, the Investment Manager and the Collateral Administrator,
as amended from time to time.

“Collateral Administrator”: Virtus Group, LP, solely in its capacity as
Collateral Administrator under the Collateral Administration Agreement, until a
successor Person shall have become the Collateral Administrator pursuant to the
applicable provisions of the Collateral Administration Agreement, and thereafter
“Collateral Administrator” shall mean such successor Person.

 

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“Collateral Obligation”: Means (a) with respect to any Loan or Bond originated
by the Issuer or its Affiliates, that, at the time it is purchased (or a
commitment is made to purchase such obligation) by the Issuer, satisfies each of
the following criteria:

(i)

it has been approved by a Majority of the Noteholders in accordance with the
procedures set forth in Section 12.2(a);

(ii)

it does not cause the Aggregate Principal Amount of the Collateral to consist of
greater than 60% of Private Collateral Obligations (or, if such limit was out of
compliance prior to such purchase or commitment, such purchase or commitment
does not worsen the level of non-compliance);

(iii)

it does not cause the Aggregate Principal Amount of the Collateral to consist of
greater than 15% of Collateral Obligations that are Participations (or, if such
limit was out of compliance prior to such purchase or commitment, such purchase
or commitment does not worsen the level of non-compliance); and all of the
Participations are Qualified Participations; and

(iv)

it does not cause the number of unique Private Collateral Obligations that are
Loans and Bonds to exceed 8; and

(b) with respect to any other Loan or Bond, that, at the time it is purchased
(or a commitment is made to purchase such obligation) by the Issuer, satisfies
each of the following criteria:

(v)

it is not more than 20% of the related debt issuance thereof;

(vi)

it has been approved by a Majority of the Noteholders in accordance with the
procedures set forth in Section 12.2(a);

(vii)

it does not mature more than 8 years after the date on which it was purchased or
entered into;

(viii)

it does not cause all Loans or Bonds of a single issuer to constitute more than
20% of (x) prior to the Effective Date, the Maximum Principal Amount; and (y) on
and after the Effective Date, the Aggregate Principal Amount of the Collateral
(or, for each of clauses (x) and (y), if such limit was out of compliance prior
to such purchase or commitment, such purchase or commitment does not worsen the
level of non-compliance);

(ix)

it does not cause the Aggregate Principal Amount of the Collateral to consist of
greater than 60% of Private Collateral Obligations (or, if such limit was out of
compliance prior to such purchase or commitment, such purchase or commitment
does not worsen the level of non-compliance);

(x)

it does not cause the Aggregate Principal Amount of the Collateral to consist of
greater than 15% of Collateral Obligations that are Participations (or, if such
limit was out of compliance prior to such purchase or commitment, such purchase
or commitment does not worsen the level of non-compliance); and all of the
Participations are Qualified Participations;

 

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(xi)

it does not cause the number of unique Private Collateral Obligations that are
Loans and Bonds to exceed 8; and

(xii)

it is U.S. Dollar denominated and is neither convertible by the issuer thereof
into, nor payable in, any other currency;

(xiii)

it is not a Defaulted Obligation or a Credit Risk Obligation;

(xiv)

it is not a lease (including a finance lease);

(xv)

it is not an Interest Only Security;

(xvi)

it provides for a fixed amount of principal payable in Cash on scheduled payment
dates and/or at maturity and does not by its terms provide for earlier
amortization or prepayment at a price of less than par;

(xvii)

it does not constitute Margin Stock;

(xviii)

it is an obligation with respect to which the Issuer will receive payments due
under the terms of such obligation and proceeds from disposing of such asset
free and clear of withholding tax, other than (A) withholding tax as to which
the obligor or issuer must make additional payments so that the net amount
received by the Issuer after satisfaction of such tax is the amount due to the
Issuer before the imposition of any withholding tax and (B) withholding tax on
(x) late payment fees, prepayment fees or other similar fees and (y) amendment,
waiver, consent and extension fees;

(xix)

it is not a debt obligation whose repayment is subject to substantial non-credit
related risk as determined by the Investment Manager;

(xx)

it is not an obligation pursuant to which any future advances or payments to the
borrower or the obligor thereof may be required to be made by the Issuer (other
than to indemnify an agent or representative for lenders pursuant to the
Reference Instruments);

(xxi)

it is not a Structured Finance Obligation;

(xxii)

the purchase of such obligation will not require the Issuer or the pool of
Collateral to be registered as an investment company under the Investment
Company Act;

(xxiii)

such obligation is not, by its terms, convertible into or exchangeable for an
Equity Security at any time over its life;

(xxiv)

such obligation does not mature after the Stated Maturity of the Notes;

(xxv)

such obligation is Registered;

 

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(xxvi)

such obligation is not a Synthetic Security;

(xxvii)

such obligation does not include or support a letter of credit;

(xxviii)

such obligation is not an interest in a grantor trust;

(xxix)

such obligation is issued by an obligor that is domiciled in the United States,
Canada or any other jurisdiction approved by a Majority of the Noteholders;

(xxx)

such obligation is not issued by an issuer located in a country, which country
on the date on which the obligation is acquired by the Issuer imposed foreign
exchange controls that effectively limit the availability or use of U.S. Dollars
to make when due the scheduled payments of principal thereof and interest
thereon;

(xxxi)

it does not cause the Aggregate Principal Amount of the Collateral to consist of
greater than 35% of Collateral Obligations that are issued by obligors that
belong to any single Bloomberg Industry Classification System (or, if such limit
was out of compliance prior to such purchase or commitment, such purchase or
commitment does not worsen the level of non-compliance); and

(xxxii)

it does not cause the Aggregate Principal Amount of the Collateral to consist of
greater than the Second Lien Cap Percentage of second lien loans (or, if such
limit was out of compliance prior to such purchase or commitment, such purchase
or commitment does not worsen the level of non-compliance),

provided, however, that one or more of the foregoing requirements may be waived
in writing by the Majority of the Noteholders (in their sole and absolute
discretion) prior to the Issuer’s commitment to purchase a Collateral
Obligation.

“Collateral Portfolio”: On any date of determination, all Pledged Obligations
and all Cash held in any Issuer Account (excluding Eligible Investments and Cash
constituting, in each case, Interest Proceeds).

“Corporate Trust Office”: With respect to the Trustee, the principal corporate
trust office of the Trustee, (a) for note transfer purposes and for purposes of
presentment and surrender of the Notes for the final distributions thereon,
Citibank, N.A., 480 Washington Boulevard, 30th Floor, Jersey City, New Jersey
07310, Attention: Citibank Agency & Trust, and (b) for all other purposes,
Citibank, N.A., 388 Greenwich Street, 14th Floor, New York, New York 10013,
Attention: Citibank Agency & Trust – Green Creek LLC, telecopy no.: (212)
816-5527, email address: call (800) 422-2006 to obtain Citibank, N.A. account
manager’s email address, or such other address as the Trustee may designate from
time to time by notice to the Noteholders, the Issuer and the Investment
Manager, or the principal corporate trust office of any successor Trustee.

“Credit Risk Obligation”: Any Collateral Obligation that, in the Investment
Manager’s judgment exercised in accordance with the Investment Management
Agreement, has a significant risk of declining in credit quality or price.

 

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“Default”: Any event or any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.

“Defaulted Interest”: Any interest due and payable in respect of any Note which
is not punctually paid or duly provided for on the Stated Maturity.

“Defaulted Obligation”: Any Collateral Obligation shall constitute a “Defaulted
Obligation” if with respect to such Collateral Obligation there has occurred any
one or more of the following: (1) a Bankruptcy (as defined in the 2003 ISDA
Credit Derivatives Definitions as published by the International Swap and
Derivatives Association, Inc.) with respect to the related obligor and (2) after
the expiration of any applicable grace period (however defined in such
Collateral Obligation’s Reference Instrument), the occurrence of a non-payment
of a payment of interest that would accrue during the related calculation period
for such Collateral Obligation or principal on the Collateral Obligation when
due, in accordance with the terms of the Reference Instrument at the time of
such failure.

“Deferred Interest”: The meaning specified in Section 2.7.

“Definitive Note”: Any Note delivered in exchange for a Rule 144A Global Note
under Section 2.10.

“Deliver” or “Delivery”: The taking of the following steps:

(i)

in the case of each Certificated Security (other than a Clearing Corporation
Security) or instrument, (A) causing the delivery to the Issuer Accounts
Securities Intermediary of the original executed certificate or other writing
that constitutes or evidences such Certificated Security or instrument,
registered in the name of the Issuer Accounts Securities Intermediary or
endorsed to the Issuer Accounts Securities Intermediary or in blank by an
effective endorsement (unless such Certificated Security or instrument is in
bearer form in which case delivery alone shall suffice), (B) causing the Issuer
Accounts Securities Intermediary to maintain continuous possession of such
Certificated Security or instrument and (C) causing the Issuer Accounts
Securities Intermediary to continuously identify on its books and records that
such Certificated Security or instrument is credited to the relevant Issuer
Account;

(ii)

in the case of each Uncertificated Security (other than a Clearing Corporation
Security), (A) causing such Uncertificated Security to be continuously
registered on the books of the issuer thereof to the Issuer Accounts Securities
Intermediary and (B) causing the Issuer Accounts Securities Intermediary to
continuously identify on its books and records that such Uncertificated Security
is credited to the relevant Issuer Account;

(iii)

in the case of each Clearing Corporation Security, causing (A) the relevant
Clearing Corporation to continuously credit such Clearing Corporation Security
to the securities account of the Issuer Accounts Securities Intermediary at such
Clearing Corporation and (B) the Issuer Accounts Securities Intermediary to
continuously identify on its books and records that such Clearing Corporation
Security is credited to the relevant Issuer Account;

 

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(iv)

in the case of any Financial Asset that is maintained in book-entry form on the
records of a Federal Reserve Bank, causing (A) the continuous crediting of such
Financial Asset to a securities account of the Issuer Accounts Securities
Intermediary at any Federal Reserve Bank and (B) the Issuer Accounts Securities
Intermediary to continuously identify on its books and records that such
Financial Asset is credited to the relevant Issuer Account;

(v)

in the case of Cash or money, (A) causing the delivery of such Cash or money to
the Issuer Accounts Securities Intermediary, (B) causing the Issuer Accounts
Securities Intermediary to treat such Cash or money as a Financial Asset
maintained by the Issuer Accounts Securities Intermediary for credit to the
relevant Issuer Account in accordance with the provisions of Article 8 of the
UCC, and (C) causing the Issuer Accounts Securities Intermediary to continuously
indicate by book-entry that such Cash or money is credited to the relevant
Issuer Account;

(vi)

in the case of each Financial Asset not covered by the foregoing subclauses (i)
through (v), (A) causing the transfer of such Financial Asset to the Issuer
Accounts Securities Intermediary in accordance with applicable law and
regulation and (B) causing the Issuer Accounts Securities Intermediary to
continuously credit such Financial Asset to the relevant Issuer Account; and

(vii)

in the case of any general intangible (including any participation interest not
evidenced by an instrument or Certificated Security), by:

(A)

causing the Issuer to become and remain the owner thereof and causing a UCC-1
financing statement describing the Collateral and naming the Issuer as debtor
and the Trustee as secured party to be filed (and remain effective) by the
Issuer with the Secretary of State of Delaware within ten (10) days after the
Closing Date, or

(B)

(1) causing the Issuer Accounts Securities Intermediary to become and remain the
owner thereof, (2) causing the Issuer Accounts Securities Intermediary to credit
and continuously identify such general intangible to the relevant Issuer
Account, (3) causing the Issuer Accounts Securities Intermediary to agree to
treat such general intangible as a Financial Asset and (4) causing the Issuer
Accounts Securities Intermediary to agree pursuant to the Securities Account
Control Agreement to comply with Entitlement Orders related thereto originated
by the Trustee without further consent by the Issuer.

 

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In addition, with respect to clause (vii), the Investment Manager on behalf of
the Issuer will use commercially reasonable efforts to obtain any and all
consents required by the underlying agreements relating to any such general
intangibles for the transfer of ownership and/or pledge hereunder (except to the
extent that the requirement for such consent is rendered ineffective under
Section 9-406 or 9-408 of the UCC).

Notwithstanding the foregoing, any property or asset will also be “delivered”
for purpose of this definition if it is delivered in a method specified in an
Opinion of Counsel as sufficient to result in a first priority perfected
security interest in favor of the Trustee.

“Deposit”: Any Cash deposited with the Trustee by the Issuer on or before the
Closing Date, for inclusion as Collateral and deposited by the Trustee in the
Principal Collection Account on the Closing Date.

“deposit accounts”: The meaning specified in the UCC.

“Determination Date”: With respect to a Payment Date, the last Business Day of
the immediately preceding Due Period.

“Distribution”: Any payment of principal or interest or any dividend, premium or
fee payment made on, or any other distribution in respect of, a security or
obligation.

“Dollar” or “$”: A dollar or other equivalent unit in such coin or currency of
the United States of America as at the time shall be legal tender for all debts,
public and private.

“DTC”: The Depository Trust Company, its nominees, and their respective
successors.

“Due Date”: Each date on which a Distribution is due on a Pledged Obligation.

“Due Period”: With respect to any Payment Date, the period commencing on the day
immediately following the eighth Business Day prior to the preceding Payment
Date (or in the case of the Due Period relating to the First Payment Date,
beginning on the Closing Date) and ending on (and including) the eighth Business
Day prior to such Payment Date (or, (i) in the case of the Due Period relating
to the First Payment Date, ending on the seventh Business Day prior to such
First Payment Date and (ii) in the case of a Due Period that is applicable to
the Payment Date relating to the Stated Maturity of any Note or the final
Redemption Date ending on (and including) the Business Day immediately preceding
such Payment Date).

“Effective Date”: The date that is three months following the Closing Date.

 

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“Eligible Investment”: Any (a) Cash or (b) Dollar denominated investment that,
at the time it, or evidence of it, is Delivered to the Trustee (directly or
through an intermediary or bailee), is one or more of the following obligations
or securities:

(i)

direct Registered debt obligations of, and Registered debt obligations the
timely payment of principal and interest on which is fully and expressly
guaranteed by, the United States of America or any agency or instrumentality of
the United States of America the obligations of which are expressly backed by
the full faith and credit of the United States of America that satisfies the
Eligible Investment Required Ratings at the time of such investment or
contractual commitment providing for such investment;

(ii)

demand and time deposits in, certificates of deposit of, trust accounts with,
bankers’ acceptances issued by, or federal funds sold by any depository
institution or trust company incorporated under the laws of the United States of
America (including the Bank) or any state thereof and subject to supervision and
examination by federal and/or state banking authorities, in each case payable
within 183 days of issuance, so long as the commercial paper and/or the debt
obligations of such depository institution or trust company (or, in the case of
the principal depository institution in a holding company system, the commercial
paper or debt obligations of such holding company) at the time of such
investment or contractual commitment providing for such investment have the
Eligible Investment Required Ratings;

(iii)

unleveraged repurchase obligations with respect to (a) any security described in
clause (i) above or (b) any other security issued or guaranteed by an agency or
instrumentality of the United States of America, in either case entered into
with a depository institution or trust company (acting as principal) described
in clause (ii) above or entered into with an entity (acting as principal) with,
or whose parent company has, the Eligible Investment Required Ratings;

(iv)

Registered debt securities bearing interest or sold at a discount with
maturities up to 365 days (but in any event such securities will mature by the
next succeeding Payment Date) issued by any entity formed under the laws of the
United States of America or any State thereof that have a S&P rating of “AA” at
the time of such investment or contractual commitment providing for such
investment;

(v)

commercial paper or other short-term debt obligations with the Eligible
Investment Required Ratings and that either bear interest or are sold at a
discount from the face amount thereof and have a maturity of not more than 183
days from their date of issuance; provided that this clause (v) will not include
extendible commercial paper or asset backed commercial paper; and

(vi)

money market funds which have, at the time of such reinvestment, a credit rating
of “AAA” by S&P;

 

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subject, in each case, to such obligations or securities having a maturity date
not later than the earlier of (A) the date that is 60 days after the date of
Delivery thereof and (B) the Business Day immediately preceding the Payment Date
immediately following the date of Delivery thereof; provided that Eligible
Investments shall not include (a) any interest-only security, any security
purchased at a price in excess of 100% of the par value thereof or any security
whose repayment is subject to substantial non-credit related risk as determined
in the sole judgment of the Investment Manager, (b) any security whose rating
assigned by S&P includes the subscript “f”, “p”, “q”, “pi”, “r”, “sf” or “t” (c)
any security that is subject to an Offer, (d) any other security that is an
asset the payments on which are subject to withholding tax if owned by the
Issuer unless the issuer or obligor or other Person (and guarantor, if any) is
required to make “gross-up” payments that cover the full amount of any such
withholding taxes, or (e) any security secured by real property. Eligible
Investments may include those investments with respect to which the Bank or an
Affiliate of the Bank is an obligor or provides services.

“Eligible Investment Required Ratings”: A long-term senior unsecured debt rating
of at least “A” and a short-term credit rating of at least “A-1” by S&P (or, if
such institution has no short-term credit rating, a long-term senior unsecured
debt rating of at least “A+” by S&P).

“Entitlement Order”: The meaning specified in Section 8-102(a)(8) of the UCC.

“Equity Owner”: Means FS Investment Corporation II or its successor or assigns,
as the owner of the entire membership interest of the Issuer. After the date
hereof, FS Investment Corporation II may merge with FS Investment Corporation or
may be subject to some other fundamental change transaction the result of which
effectively combines the ownership and/or assets of FS Investment Corporation II
and FS Investment Corporation. 

“Equity Security”: (i) Any equity security or any other security that is not
eligible for purchase by the Issuer hereunder and is received with respect to a
Collateral Obligation or (ii) any security purchased as part of a “unit” with a
Collateral Obligation and that itself is not eligible for purchase by the Issuer
hereunder.

“ERISA”: The United States Employee Retirement Income Security Act of 1974, as
amended.

“Event of Default”: The meaning specified in Section 5.1.

“Exchange Act”: The United States Securities Exchange Act of 1934, as amended.

“Excess Market Value Amount”: As of any Determination Date, the maximum amount
of Principal Proceeds that may be distributed to the Issuer for distribution to
the Equity Owner in accordance with Section 11.1(a)(B)(ii) hereof that would
permit the Issuer to continue to satisfy the Market Value Test after such
distribution.

“Expense Reserve Account”: The trust account established pursuant to Section
10.3(d).

“Expense Reserve Amount”: $50,000.

“FATCA”: Sections 1471 through 1474 of the Code, any current or future
regulations or official interpretations thereof, any agreement entered into
pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation
rules or practices adopted pursuant to any intergovernmental agreement entered
into in connection with the implementation of such Sections of the Code.

 

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“Financial Asset”: The meaning specified in Section 8-102(a)(9) of the UCC.

“First Payment Date”: May 15, 2015.

“general intangibles”: The meaning specified in the UCC.

“Grant”: To grant, bargain, sell, warrant, alienate, remise, demise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in and right of set-off against, deposit, set over or confirm. A Grant of the
Collateral, or of any other instrument, shall include all rights, powers and
options (but none of the obligations) of the granting party thereunder,
including the immediate continuing right to claim for, collect, receive and
receipt for principal and interest payments in respect of the Collateral, and
all other monies payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise,
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.

“Holder” or “Noteholder”: With respect to any Note, the Person in whose name
such Note is registered in the Register, or for purposes of voting and
determinations hereunder, as long as such Note is in global form, a beneficial
owner thereof.

“Important Section 3(c)(7) Notice”: A notice substantially in the form of
Exhibit F.

“Increase”: The meaning specified in Section 2.13(b).

“Increase Request”: A request substantially in the form of Exhibit G.

“Indenture”: This instrument as originally executed and, if from time to time
supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof, as so supplemented or
amended.

“Independent”: As to any Person, any other Person (including a firm of
accountants or lawyers and any member thereof or an investment bank and any
member thereof) who (i) does not have and is not committed to acquire any
material direct or any material indirect financial interest in such Person or in
any Affiliate of such Person, (ii) is not connected with such Person as an
officer, employee, promoter, underwriter, voting trustee, partner, director or
Person performing similar functions and (iii) is not Affiliated with a firm that
fails to satisfy the criteria set forth in (i) and (ii). “Independent” when used
with respect to any accountant may include an accountant who audits the books of
any Person if in addition to satisfying the criteria set forth above the
accountant is independent with respect to such Person within the meaning of Rule
101 of the Code of Ethics of the American Institute of Certified Public
Accountants.

“Independent Manager Agreement”: That certain agreement relating to the
designation of Independent Managers, among the Issuer and/or Member and Lord
Securities Corporation, as such agreement may be amended from time to time.

“Independent Managers”: The Independent Managers appointed in the Limited
Liability Company Agreement of the Issuer.

 

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“Initial Investment Period”: On and after the Closing Date, the period from, and
including, the Closing Date to, but excluding, the Effective Date.

“Initial Principal Amount”: The initial principal amount of the Notes on the
Closing Date, which is $130,000,000.

“instruments”: The meaning specified in the UCC.

“Interest Accrual Period”: Subject to Section 14.13, the period from and
including the Closing Date (except with respect to any Increase, from and
including the effective date of such Increase) to but excluding the First
Payment Date, and each successive period thereafter from and including each
Payment Date to but excluding the following Payment Date (except with respect to
the Payment Date preceding the Stated Maturity or the final Redemption Date, to
but excluding the Stated Maturity or such Redemption Date, as the case may be).

“Interest Collection Account”: The trust account or accounts established
pursuant to Section 10.2(a).

“Interest Distribution Amount”: With respect to any Payment Date, an amount
equal to the sum of:

(a)

the aggregate amount of interest accrued, at the Note Interest Rate, during the
related Interest Accrual Period on the Aggregate Outstanding Amount of the Notes
as of the first day of such Interest Accrual Period (it being understood that
with respect to the initial Interest Accrual Period, the aggregate amount of
interest accrued shall be equal to the sum of (i) the aggregate amount of
interest accrued with respect to the principal amount of Additional Notes issued
in each Increase, plus (ii) the amount of accrued interest with respect to the
Initial Principal Amount); plus

(b)

any unpaid Defaulted Interest relating to the Notes; plus

(c)

any unpaid Deferred Interest from any prior Payment Date (together with any
interest accrued on such Deferred Interest at the Note Interest Rate).

“Interest Only Security”: Any obligation or security that does not provide in
the related Reference Instruments for the payment or repayment of a stated
principal amount in one or more installments on or prior to its stated maturity.

 

“Interest Proceeds”: With respect to any Payment Date and the Stated Maturity,
without duplication:

(i)

all payments of interest and dividends, commitment fees, facility fees and fees
payable with respect to the approval of amendments, waivers and similar actions
received during the related Due Period on the Pledged Obligations (including
Reinvestment Income, if any), other than (x) any payment of interest received on
any Defaulted Obligation if the outstanding principal amount thereof then due
and payable has not been received by the Issuer after giving effect to the
receipt of such payments of interest and (y) the amounts as specified in clause
(vi) of the definition of Principal Proceeds;

 

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(ii)

to the extent not included in the definition of “Sale Proceeds,” if so
designated by the Investment Manager and notice thereof is conveyed in writing
to the Trustee and the Collateral Administrator, any portion of the accrued
interest received during the related Due Period in connection with the sale of
any Pledged Obligations (excluding accrued interest received in connection with
the sale of (x) Defaulted Obligations if the outstanding principal amount
thereof has not been received by the Issuer after giving effect to such sale,
(y) Pledged Obligations in connection with an optional redemption of the Notes
or (z) an asset that was acquired with Principal Proceeds);

(iii)

unless otherwise designated by the Investment Manager as Principal Proceeds and
notice thereof is conveyed in writing to the Trustee and the Collateral
Administrator, all amendment and waiver fees, all late payment fees and all
other fees received during such Due Period in connection with the Pledged
Obligations, excluding (A) fees received in connection with Defaulted
Obligations (but only to the extent that the outstanding principal amount
thereof has not been received by the Issuer); (B) premiums (including prepayment
premiums) constituting Principal Proceeds in accordance with subclause (iii) of
the definition thereof); and (C) fees received in connection with the
lengthening of the maturity of the related Collateral Obligation or the
reduction of the par of the related Collateral Obligation, in each case, as
determined by the Investment Manager with notice to the Trustee and the
Collateral Administrator;

(iv)

any recoveries on Defaulted Obligations in excess of the outstanding principal
amount thereof;

(v)

(x) any amounts remaining on deposit in the Interest Collection Account from the
immediately preceding Payment Date and (y) any Principal Proceeds and unused
proceeds transferred to the Interest Collection Account for application as
Interest Proceeds as set forth in Sections 10.3(b) and 10.3(d);

(vi)

the aggregate amount of the Investment Management Fees, if any, that the
Investment Manager has elected to waive in the manner described under Section
8(c) of the Investment Management Agreement (to the extent not included in
Principal Proceeds); and

(vii)

all payments of principal and interest on Eligible Investments purchased with
the proceeds of any of subclauses (i) through (vi) of this definition (without
duplication);

provided, however, that in connection with the final Payment Date, Interest
Proceeds shall include any amount referred to in subclauses (i) through (vi)
above that is received from the sale of Collateral Obligations on or prior to
the day immediately preceding the final Payment Date.

 

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“Investment Company Act”: The United States Investment Company Act of 1940, as
amended.

“Investment Management Agreement”: An agreement dated as of the Closing Date,
between the Issuer and the Investment Manager relating to the Investment
Manager’s performance on behalf of the Issuer of certain investment management
duties with respect to the Collateral, as amended from time to time in
accordance with the terms thereof and hereof.

“Investment Management Fee”: The Investment Management Fee as defined in the
Investment Management Agreement.

“Investment Manager”: FS Investment Corporation II, a Maryland corporation,
until a successor Person shall have become the investment manager pursuant to
the provisions of the Investment Management Agreement, and thereafter
“Investment Manager” shall mean such successor Person. Each reference herein to
the Investment Manager shall be deemed to constitute a reference as well to any
agent of the Investment Manager and to any other Person to whom the Investment
Manager has delegated any of its duties hereunder in accordance with the terms
of the Investment Management Agreement, in each case during such time as and to
the extent that such agent or other Person is performing such duties. After the
date hereof, FS Investment Corporation II may merge with FS Investment
Corporation or may be subject to some other fundamental change transaction the
result of which effectively combines the ownership and/or assets of FS
Investment Corporation II and FS Investment Corporation. 

“investments”: The meaning specified in the UCC.

“investment property”: The meaning specified in the UCC.

“instruments”: The meaning specified in the UCC.

“Issuer”: Green Creek LLC, a Delaware limited liability company, unless and
until a successor Person shall have become the Issuer pursuant to the applicable
provisions of this Indenture, and thereafter Issuer shall mean such successor
Person.

“Issuer Accounts”: The Interest Collection Account, the Payment Account, the
Collateral Account, the Principal Collection Account and the Expense Reserve
Account.

“Issuer Accounts Securities Intermediary”: The person acting as Securities
Intermediary under the Securities Account Control Agreement.

“Issuer Order” and “Issuer Request”: A written order or request dated and signed
in the name of the Issuer by an Authorized Officer of the Issuer or by an
Authorized Officer of the Investment Manager, as the context may require or
permit.

“LIBOR”: The meaning set forth in Schedule B attached hereto.

“LIBOR Determination Date”: The second Business Day prior to the commencement of
each Interest Accrual Period.

 

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“Limited Liability Company Agreement”: The governing organizational document of
the Issuer.

“Liquidation Proceeds”: With respect to any optional redemption: (i) all Sale
Proceeds from Collateral Obligations sold in connection with such redemption;
and (ii) all Cash and Eligible Investments on deposit in the Issuer Accounts.

“Loans”: Collectively, commercial loans and Participations.

“Majority”: With respect to the Notes, the Holders of more than 50% of the
Aggregate Outstanding Amount of the Notes.

“Margin Stock”: Margin stock as defined under Regulation U issued by the Board
of Governors of the Federal Reserve Board, including any debt security which is
by its terms convertible into “Margin Stock”.

 

“Market Value”: With respect to any Collateral Obligation, the fair market value
of such Collateral Obligation, as determined by the Investment Manager in good
faith in accordance with the Investment Management Agreement; provided that
solely for purposes of calculating the Market Value Numerator, to the extent
that the Notes are subject to any repurchase financing transaction and the
related purchaser thereunder delivers to the Issuer or the Investment Manager a
market value determination for any Collateral Obligation hereunder, the Market
Value for such Collateral Obligation shall be equal to such market value
determination delivered by such purchaser in connection with such repurchase
financing transaction. With respect to any Eligible Investment, (i) the average
of at least three firm bids obtained by the Investment Manager from nationally
recognized dealers (that are Independent of the Investment Manager and
Independent of each other) that the Investment Manager determines (in its sole
discretion) to be reasonably representative of the Eligible Investment’s current
market value and reasonably reflective of current market conditions; (ii) if
only two such bids can be obtained, the lower of such two bids shall be the
Market Value of the Eligible Investment; (iii) if only one such bid can be
obtained, such bid shall be the Market Value of the Eligible Investment; and
(iv) if no such bids can be obtained, then, the Market Value of such the
Eligible Investment shall be zero. The Investment Manager shall give notice to
the Trustee and the Collateral Administrator of the Market Value of each
Collateral Obligation.

“Market Value Numerator”: An amount (without duplication) equal to the sum of:

(i)

the Market Value of the Collateral Obligations; plus

(ii)

the principal amount of any Cash and Eligible Investments (together with any
uninvested amounts on deposit in the Issuer Accounts) representing Principal
Proceeds or Liquidation Proceeds (in each case excluding Reinvestment Income).

 

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“Market Value Ratio”: The ratio determined as of any Determination Date
(expressed as a percentage), obtained by dividing:

(a) the Market Value Numerator; by

(b) the Aggregate Outstanding Amount of the Notes.

“Market Value Test”: A test satisfied as of any Determination Date if the Market
Value Ratio is equal to or greater than 100%.

“Material Action”: To: (i) file or consent to the filing of any bankruptcy,
insolvency or reorganization petition under any applicable federal, state or
other law relating to a bankruptcy naming the Issuer as debtor or other
initiation of bankruptcy or insolvency proceedings by or against the Issuer, or
otherwise seek, with respect to the Issuer, relief under any laws relating to
the relief from debts or the protection of debtors generally; (ii) seek or
consent to the appointment of a receiver, liquidator, conservator, assignee,
trustee, sequestrator, custodian or any similar official for the Issuer or all
or any portion of its properties; (iii) make or consent to any assignment for
the benefit of the Issuer’s creditors generally; (iv) admit in writing the
inability of the Issuer to pay its debts generally as they become due; (v)
petition for or consent to substantive consolidation of the Issuer with any
other person; (vi) amend or alter or otherwise modify or remove all or any part
of Section 9(j) of the Issuer’s Limited Liability Company Agreement; or (vii)
amend, alter or otherwise modify or remove all or any part of the definition of
“Independent Manager” or the definition of “Material Action” in the Issuer’s
Limited Liability Company Agreement.

“maturity”: With respect to any Collateral Obligation, the date on which such
obligation shall be deemed to mature (or its maturity date) shall be the earlier
of (x) the Stated Maturity of such obligation and (y) if the Issuer has a right
to require the issuer or obligor of such Collateral Obligation to purchase,
redeem or retire such Collateral Obligation (at par) on any one or more dates
prior to its Stated Maturity (a “put right”) and the Investment Manager
determines that it shall exercise such put right on any such date, the maturity
date shall be the date specified in a certification provided to the Trustee and
Collateral Administrator.

“Maturity”: With respect to any Note, the date on which any unpaid principal or
notional amount, as applicable, of such Note becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.

“Maximum Principal Amount”: $690,000,000.

“Member”: FS Investment Corporation II, as the initial member of the Issuer, and
any Person admitted as an additional member of the Issuer or a substitute member
of the Issuer pursuant to the provisions of Limited Liability Company Agreement,
each in its capacity as a member of the Company; provided, however, the term
“Member” shall not include the Independent Managers. After the date hereof, FS
Investment Corporation II may merge with FS Investment Corporation or may be
subject to some other fundamental change transaction the result of which
effectively combines the ownership and/or assets of FS Investment Corporation II
and FS Investment Corporation. 

 

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“money”: The meaning specified in the UCC.

“Monthly Report”: The monthly report provided to the Trustee pursuant to Section
10.5(a), summarizing the account transactions with respect to the Collateral.

“Moody’s”: Moody’s Investors Service, Inc. and any successor or successors
thereto.

“Net Purchased Loan Balance” means, as of any date of determination, an amount
equal to (a) the Aggregate Principal Amount of all Collateral Obligations
acquired by the Issuer prior to such date minus (b) the Aggregate Principal
Amount of all Warranty Transferred Asset repurchased by the Equity Owner prior
to such date.

“Non-Permitted Holder”: The meaning specified in Section 2.5(g)(ii).

“Non-Private Collateral Obligation”: A Collateral Obligation designated as such
pursuant to Section 12.2(a).

“Note Interest Amount”: As to each Interest Accrual Period, the amount of
interest for such Interest Accrual Period payable in respect of each $1,000
principal amount of the Notes.

“Note Interest Rate”: With respect to the Notes, the annual rate at which
interest accrues thereon, as specified in Section 2.3 and in such Notes.

“Notes”: The floating rate Notes having the Note Interest Rate and Stated
Maturity as set forth in Section 2.3.

“Offer”: (i) With respect to any Collateral Obligation or Eligible Investment,
any offer by the issuer of such security or borrower with respect to such debt
obligation or by any other Person made to all of the holders of such security or
debt obligation to purchase or otherwise acquire such security or debt
obligation or to exchange such security or debt obligation for any other
security, debt obligation, Cash or other property (other than, in any case,
pursuant to any redemption in accordance with the terms of any related Reference
Instrument or for the purpose of registering the security or debt obligation) or
(ii) with respect to any Collateral Obligation or Eligible Investment that
constitutes a bond, any solicitation by the issuer of such security or borrower
with respect to such debt obligation or any other Person to amend, modify or
waive any provision of such security or debt obligation.

“Officer”: With respect to the Issuer or any other limited liability company,
any manager, officer or other person authorized pursuant to, or by resolutions
approved in accordance with, the operating agreement of such limited liability
company to act on behalf of such limited liability company; with respect to any
corporation, any director, the Chairman of the Board, the President, any Vice
President, the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer of such entity or such person’s attorney-in-fact; with respect to any
partnership, any general partner thereof or such person’s attorney-in-fact; and
with respect to the Trustee or any bank or trust company acting as trustee of an
express trust or as custodian, any Trust Officer.

 

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“Officer’s Certificate”: With respect to any Person, a certificate signed by an
Authorized Officer of such Person.

“Opinion of Counsel”: A written opinion addressed to the Trustee, in form and
substance reasonably satisfactory to the Trustee, of a nationally or
internationally recognized law firm or an attorney at law admitted to practice
(or law firm, one or more of the partners of which are admitted to practice)
before the highest court of any state of the United States of America or the
District of Columbia, which attorney may, except as otherwise expressly provided
in this Indenture, be counsel for the Issuer or the Investment Manager and which
attorney or firm shall be reasonably satisfactory to the Trustee. Whenever an
Opinion of Counsel is required hereunder, such Opinion of Counsel may rely on
opinions of other counsel who are so admitted and otherwise satisfactory which
opinions of other counsel shall accompany such Opinion of Counsel and shall be
addressed to the Trustee or shall state that the Trustee shall be entitled to
rely thereon.

“Original Notes”: The meanings specified in Section 2.13(a).

“Outstanding”: With respect to the Notes, as of any date of determination, all
of such Notes, theretofore authenticated and delivered under this Indenture
except:

(a)

Notes theretofore cancelled by the Registrar or delivered to the Registrar for
cancellation or registered in the Register on the date that the Trustee provides
notice to Holders pursuant to Section 4.1 that the Indenture has been
discharged;

(b)

Notes or, in each case, portions thereof for whose payment or redemption funds
in the necessary amount have been theretofore irrevocably deposited with the
Trustee or any Paying Agent in trust for the Holders of such Notes; provided
that if such Notes or portions thereof are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture;

(c)

Notes in exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture, unless proof satisfactory to the
Trustee is presented that any such original Notes are held by a Protected
Purchaser;

(d)

Notes alleged to have been mutilated, destroyed, lost or stolen for which
replacement Notes have been issued as provided in Section 2.6 of this Indenture;

(e)

in determining whether the Holders of the requisite Outstanding amount have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder Notes that a Trust Officer of the Trustee has actual knowledge are
owned by the Issuer shall be disregarded and deemed not to be Outstanding;

(f)

Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee that
the pledgee has the right so to act with respect to such Notes and the pledgee
is not the Issuer or any other obligor upon the Notes or any Affiliate of the
Issuer or such other obligor.

 

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“Owner Certificate”: A certificate to be signed by the beneficial owner of a
Note, in the form attached hereto as Exhibit D.

“Par Value Numerator”: An amount (without duplication) equal to the sum of:

(i)

the Aggregate Principal Amount of the Collateral Obligations (other than
Defaulted Obligations); plus

(ii)

the principal amount of any Cash and Eligible Investments together with any
uninvested amounts on deposit in the Issuer Accounts representing Principal
Proceeds or Liquidation Proceeds (in each case excluding Reinvestment Income);
plus

(iii)

the sum of the Principal Balance of all Defaulted Obligations.

“Participation”: An interest in a commercial loan acquired indirectly by way of
participation from a Selling Institution.

“Paying Agent”: Any Person authorized by the Issuer to pay the principal of or
interest on any Notes on behalf of the Issuer, as specified in Section 7.4.

“Payment Account”: The trust account established pursuant to Section 10.3(c).

“Payment Date”: Each of the following, as applicable: (a) the First Payment
Date, (b) thereafter, each three-month anniversary of the First Payment Date to,
but excluding, the Stated Maturity (subject to Section 14.13), and (c) the
Stated Maturity. If such date is not a Business Day, the next following Business
Day. For the avoidance of doubt, any Redemption Date shall be deemed to be a
Payment Date.

“Payment Default”: Any Event of Default specified in subclauses (a), (b), (c),
(d) or (e) of Section 5.1.

“Person”: An individual, corporation (including a business trust), partnership,
limited liability company, joint venture, association, joint stock company,
trust (including any beneficiary thereof), bank, unincorporated association or
government or any agency or political subdivision thereof or any other entity of
a similar nature.

“Plan Asset Regulation”: The U.S. Department of Labor’s “plan assets”
regulation, set forth at 29 C.F.R. Section 2510.3-101.

“Pledged Obligations”: On any date of determination, the Collateral Obligations
and the Eligible Investments owned by the Issuer that have been Granted to the
Trustee.

 

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“Principal Balance”: As of any date of determination, with respect to (x) any
Collateral Obligation, the outstanding principal amount (excluding any deferred
or capitalized interest thereon) of such Collateral Obligation on such date; and
(y) any Eligible Investment or Cash, the outstanding principal amount of such
Eligible Investment or Cash; provided, however, that:

(i)

the Principal Balance of each Defaulted Obligation shall be deemed to be zero;
provided that (1) for the purpose of calculating the amounts payable to the
Trustee pursuant to this Indenture and the Collateral Administrator pursuant to
the Collateral Administration Agreement, the Principal Balance of a Defaulted
Obligation shall be the outstanding principal amount of such Defaulted
Obligation, (2) for the purpose of calculating the Investment Management Fee,
the Principal Balance of a Defaulted Obligation shall be the outstanding
principal amount of such Defaulted Obligation and (3) for the purpose of
calculating the Par Value Numerator, the Principal Balance of a Defaulted
Obligation (A) that has been held by the Issuer for less than three years shall
be the Market Value of such Defaulted Obligation as of the relevant date of
determination or (B) that has been held by the Issuer for three years or more
shall be deemed to have a Principal Balance of zero;

(ii)

the Principal Balance of each Equity Security shall be deemed to be zero; and

(iii)

the Principal Balance of any Collateral Obligations and any Eligible Investments
in which the Trustee does not have a first priority perfected security interest
shall be deemed to be zero; provided that for the purpose of calculating the
Management Fees and the amounts payable to the Trustee pursuant to this
Indenture and the Collateral Administrator pursuant to the Collateral
Administration Agreement, the Principal Balance of such Collateral Obligation or
Eligible Investment shall be the outstanding principal amount thereof.

“Principal Collection Account”: The account or accounts so designated and
established pursuant to Section 10.3(a).

“Principal Payments”: With respect to any Payment Date, an amount equal to the
sum of any payments of principal (including optional or mandatory redemptions or
prepayments) received on the Pledged Obligations during the related Due Period,
including payments of principal received in respect of exchange offers and
tender offers and recoveries on Defaulted Obligations up to the outstanding
principal amount thereof, but not including Sale Proceeds received during the
Reinvestment Period.

“Principal Proceeds”: With respect to any Payment Date and the Stated Maturity,
without duplication:

(i)

all Principal Payments received during the related Due Period on the Pledged
Obligations;

 

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(ii)

any amounts, distributions or proceeds (including resulting from any sale)
received on any Defaulted Obligations (other than proceeds that constitute
Interest Proceeds under subclause (ii) or (v) of the definition thereof) during
the related Due Period to the extent the outstanding principal amount thereof
then due and payable has not been received by the Issuer after giving effect to
the receipt of such amounts, distributions or proceeds, as the case may be;

(iii)

all premiums (including prepayment premiums) received during the related Due
Period on the Collateral Obligations;

(iv)

(A) any amounts constituting unused proceeds remaining in the Principal
Collection Account from the issuance of the Notes at the end of the Reinvestment
Period, (B) all amounts transferred to the Principal Collection Account from the
Expense Reserve Account during the related Due Period and (C) any Principal
Proceeds and unused proceeds designated for application as Principal Proceeds as
set forth in Section 10.3(b);

(v)

Sale Proceeds received during the related Due Period (excluding any Sale
Proceeds received in connection with an optional redemption of the Notes);

(vi)

any accrued interest purchased after the Closing Date with Principal Proceeds
that is received after the First Payment Date;

(vii)

the aggregate amount of the Investment Management Fees, if any, that the
Investment Manager has elected to waive in the manner described under Section
8(c) of the Investment Management Agreement (to the extent not included in
Interest Proceeds); and

(viii)

all other payments received during the related Due Period on the Collateral not
included in Interest Proceeds;

provided that any of the amounts referred to in subclauses (i) through (viii)
above shall be excluded from Principal Proceeds to the extent such amounts were
previously reinvested in Collateral Obligations or are designated by the
Investment Manager (with notice to the Trustee and the Collateral Administrator)
as retained for investment or funding in accordance with certain restrictions
set forth herein; provided, however, that with respect to the final Payment
Date, “Principal Proceeds” shall include any amounts referred to in subclauses
(i) through (viii) above that are received from the sale of Collateral
Obligations on or prior to the day immediately preceding the final Payment Date.

“Priority of Payments”: The meaning specified in Section 11.1(a).

“Private Collateral Obligation”: A Collateral Obligation designated as such
pursuant to Section 12.2(a).

“Proceeding”: Any suit in equity, action at law or other judicial or
administrative proceeding.

“Proceeds”: (i) Any property (including but not limited to Cash and securities)
received as a Distribution on the Collateral or any portion thereof, (ii) any
property (including but not limited to Cash and securities) received in
connection with the sale, liquidation, exchange or other disposition of the
Collateral or any portion thereof and (iii) all proceeds (as such term is
defined in the UCC) of the Collateral or any portion thereof.

 

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“Protected Purchaser”: The meaning specified in Section 8-303 of the UCC.

“Qualified Institutional Buyer”: A qualified institutional buyer as defined in
Rule 144A.

“Qualified Participation”: A Participation in a Loan that meets each of the
following criteria:

(i)

the Selling Institution is a lender on such Loan;

(ii)

the Selling Institution is (a) any of FS Investment Corporation, FS Investment
Corporation II, FS Investment Corporation III, FS Energy and Power Fund, FS
Energy and Power Fund II or FS Global Credit Opportunities Fund, (b) any other
fund hereafter sponsored and managed by Franklin Square Holdings, L.P. (provided
in each case that such fund is not a special purpose vehicle used or intended to
be used in a financing transaction), as notified by the Issuer or the Equity
Owner to the Trustee or (c) a bank organized in the United States or is a U.S.
branch of a bank organized in an OECD country;

(iii)

the aggregate participation in the Loan granted by such Selling Institution to
any one or more participants does not exceed the principal amount or commitment
with respect to which the Selling Institution is a lender under such Loan;

(iv)

such Participation does not grant, in the aggregate, to the participant in such
Participation a greater interest than the Selling Institution holds in the Loan
that is the subject of the participation;

(v)

the entire purchase price for such Participation is paid in full (without the
benefit of financing from the Selling Institution) at the time of the Issuer’s
acquisition thereof;

(vi)

the Participation provides the participant all of the economic benefit and risk
of the whole or part of the Loan that is the subject of the Participation;

(vii)

such participation is documented under a Loan Syndications and Trading
Association or similar agreement standard for loan participation transactions
among institutional market participants; and

(viii)

such Participation is not a sub-participation interest.

“Qualified Purchaser”: Any Person that, at the time of its acquisition,
purported acquisition or proposed acquisition of the Notes, is a qualified
purchaser for purposes of Section 3(c)(7) of the Investment Company Act.

“Redemption Control Class”: With respect to any optional redemption in
accordance with Article IX, the Equity Owner or the Majority of the Noteholders.

 

25

 

 

“Redemption Date”: Any Business Day specified for a redemption of the Notes
pursuant to Section 9.1.

“Redemption Date Statement”: The meaning specified in Section 10.5(d).

“Redemption Price”: With respect to the Notes (unless otherwise consented to by
a Majority of the Noteholders thereof), (i) in connection with any optional
redemption in whole, an amount equal to the Aggregate Outstanding Amount thereof
on such Redemption Date and (ii) in connection with any optional redemption in
part, an amount equal to the share of such Notes to aggregate principal amount
of the Notes to be redeemed.

“Redemption Record Date”: With respect to any optional redemption of the Notes,
a date fixed pursuant to Section 9.1.

“Reference Instrument”: The indenture, credit agreement or other agreement
pursuant to which a Collateral Obligation has been issued or created and each
other agreement that governs the terms of or secures the obligations represented
by such Collateral Obligation or of which the holders of such Collateral
Obligation are the beneficiaries (including, in the case of Collateral
Obligations that are Participations, the related participation agreement).

“Register”: The register maintained by the Trustee or any Registrar with respect
to the Notes pursuant to Section 2.5.

“Registered”: A debt obligation that is issued after July 18, 1984 and that is
in registered form within the meaning of Section 881(c)(2)(B)(i) of the Code and
the United States Treasury regulations promulgated thereunder; provided that an
interest in a grantor trust will be considered to be Registered if such interest
is in registered form and each of the obligations or securities held by such
trust was issued after July 18, 1984.

“Registrar”: The meaning specified in Section 2.5(a).

“Regular Record Date”: The date as of which the Holders entitled to receive a
payment of principal or interest on the succeeding Payment Date are determined,
such date as to any Payment Date being the fifteenth day (whether or not a
Business Day) preceding such Payment Date.

“Reinvestment Income”: Any interest or other earnings on unused proceeds
deposited in the Principal Collection Account.

“Reinvestment Period”: The period from the Closing Date to and including the
earlier to occur of (i) the Business Day immediately preceding the Payment Date
in November 2018, and (ii) the occurrence of an Event of Default that results in
an acceleration of the Notes in accordance with Section 5.2.

“Related Collateral Obligations”: The meaning specified in Section 3.2(f).

“Reserved Expenses”: The meaning specified in Section 10.3(d).

 

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“Rule 144A”: Rule 144A under the Securities Act.

“Rule 144A Global Notes”: One or more permanent global notes for the Notes in
fully registered form without interest coupons sold in reliance on exemption
from registration under Rule 144A with the applicable legends added to the form
of the Notes as set forth in Exhibit A.

“Rule 144A Information”: Such information as is specified pursuant to Section
(d)(4) of Rule 144A (or any successor provision thereto).

“S&P”: Standard & Poor’s Ratings Services, a Standard & Poor’s Financial
Services LLC business or any successor to the ratings business thereof.

“Sale and Contribution Agreement”: The Amended and Restated Sale and
Contribution Agreement dated as of the Closing Date, between FS Investment
Corporation II and the Issuer.

“Sale Proceeds”: All amounts representing:

(i)

proceeds from the sale or other disposition of any Collateral Obligation or an
Equity Security;

(ii)

at the Investment Manager’s sole discretion (with notice to the Trustee and the
Collateral Administrator), any accrued interest received in connection with any
Eligible Investment purchased with any proceeds described in subclause (i)
above; and

(iii)

any proceeds of the foregoing, including from the sale of Eligible Investments
purchased with any proceeds described in subclause (i) above (including any
accrued interest thereon, but only to the extent so provided in subclause (ii)
above).

In the case of each of subclauses (i) through (iii), Sale Proceeds (a) shall
only include proceeds received on or prior to the last day of the relevant Due
Period (or with respect to the final Payment Date, the day immediately preceding
the final Payment Date) and (b) shall be net of any reasonable fees, expenses or
indemnities incurred by the Investment Manager, the Collateral Administrator or
the Trustee in connection with such sale or other disposition.

“Schedule of Collateral Obligations”: The schedule of Collateral Obligations set
forth on Schedule A hereto or any other schedule substantially in the form of
Schedule A and supplemented, in either case, by additional information regarding
Collateral Obligations acquired by the Issuer and in which a security interest
is Granted to the Trustee on or before the Effective Date and as amended from
time to time to reflect the release of Collateral Obligations pursuant to
Article X, and the inclusion of Substitute Collateral Obligations as provided in
Section 12.2.

 

27

 

 

“Second Lien Cap Percentage”: On any date:

(a)

50%; minus

(b)

the percent (if any) by which the percent of Private Collateral Obligations (by
Aggregate Principal Amount) in the Collateral on such date exceeds 40%;

provided that the Second Lien Cap Percentage will not be less than 40%.

“Section 3(c)(7) Reminder Notice”: A notice from the Issuer to the Noteholders
(to be delivered in accordance with Section 10.5(f)) in substantially the form
of Exhibit E.

“Secured Obligations”: Collectively, all of the indebtedness, liabilities and
obligations owed from time to time by the Issuer to any of the Secured Parties
whether for principal, interest, fees, costs, expenses or otherwise (including
all amounts which would become due but for the operation of the automatic stay
under Section 362(a) of the Bankruptcy Code and the operation of Sections 502(b)
and 506(b) thereof or any analogous provisions of any similar laws).

“Secured Parties”: (i) The Trustee, (ii) the Holders of the Notes, (iii) the
Investment Manager and (iv) the Collateral Administrator.

“securities”: The meaning specified in the UCC.

“Securities Account Control Agreement”: An Agreement dated the Closing Date
between the Issuer and the Bank, as Collateral Agent and Securities
Intermediary.

“Securities Act”: The U.S. Securities Act of 1933, as amended.

“Securities Intermediary”: The meaning specified in Section 8-102(a)(14) of the
UCC.

“Security Entitlement”: The meaning specified in Section 8-102(a)(17) of the
UCC.

“Selling Institution”: Each institution from which a Participation is acquired.

“Special Payment Date”: With respect to the payment of any Defaulted Interest
for the Notes, a date described in Section 2.7(f)(i) or, if such date is not a
Business Day, the next following Business Day.

“Specified Change”: Any amendment or waiver of, or supplement to, a Reference
Instrument or to the terms of the related Collateral Obligation that:

 

(a) modifies the amortization schedule with respect to such Collateral
Obligation in a manner that:

(i) reduces the Dollar amount of any scheduled distribution by more than the
greater of (x) 20% and (y) $250,000;

(ii) postpones any scheduled distribution by more than two payment periods or
eliminates a scheduled distribution; or

 

28

 

 

(iii) causes the weighted average life of the applicable Collateral Obligation
to increase by more than 10%;

(b) reduces or increases the Cash interest rate payable by the obligor
thereunder by more than 100 basis points (excluding any increase in an interest
rate arising by operation of a default or penalty interest clause under a
Collateral Obligation);

(c) extends the stated maturity date of such Collateral Obligation by more than
24 months (but only if such extension would cause the weighted average life of
such Collateral Obligation to increase by more than 25%);

(d) releases any party from its obligations under such Collateral Obligation, if
such release would have a material adverse effect on the Collateral Obligation;

(e) reduces the principal amount thereof; or

(f) in the reasonable business judgment of the Investment Manager, has a
material adverse impact on the value of such Collateral Obligation.

“Special Record Date”: With respect to the payment of any Defaulted Interest for
the Notes, a date fixed by the Trustee pursuant to Section 2.7(f)(i).

“Specified Holder” means a Holder of Notes designated by the Issuer by written
notice to the Trustee on the Closing Date, together with its successors and
assigns that are affiliates of the initial Specified Holder. If the Specified
Holder transfers all of its Notes after the Closing Date to an affiliate, such
affiliate will be deemed to be the Specified Holder; if the Specified Holder
transfers all of its Notes after the Closing Date to an unaffiliated third
party, such assignee will not become the Specified Holder and the rights given
to the Specified Holder herein shall cease to be effective. The Specified
Holder, by its acquisition of Notes, will agree to notify the Issuer and the
Trustee if it assigns any or all of its Notes.

“Specified Optional Redemption”: The meaning specified in Section 9.1(b).

“Stated Maturity”: With respect to any security or debt obligation, including a
Note, the date specified in such security or debt obligation as the fixed date
on which the final payment of principal of such security or debt obligation is
due and payable or, if such date is not a Business Day, the next following
Business Day. The Stated Maturity with respect to the Notes will be February 15,
2026.

“State Street”: State Street Bank & Trust, a Massachusetts trust company.

“Structured Finance Obligation”: Any obligation secured directly by, referenced
to, or representing ownership of, a pool of receivables or other financial
assets of any obligor, including collateralized debt obligations and
mortgage-backed securities.

“Subordinate Interests”: The rights of the Is suer and the Equity Owner in and
to the Collateral.

 

29

 

 

“Subsequent Holder”: Any holder of a Note that is considered to own such Note
for U.S. income tax purposes and is not the sole Equity Owner.

“Substitute Collateral Obligation”: A Collateral Obligation that is acquired by
the Issuer in connection with the sale or other disposal of another Collateral
Obligation.

“Synthetic Security”: A security or swap transaction that has payments
associated with either payments of interest on and/or principal of a reference
obligation or the credit performance of a reference obligation.

“Tax Event”: An event that will occur upon a change in or the adoption of any
U.S. or non-U.S. tax statute or treaty, or any change in or the issuance of any
regulation (whether final, temporary or proposed), ruling, practice, procedure
or any formal or informal interpretation of any of the foregoing, which change,
adoption or issuance results or will result in (i) any portion of any payment
due from any obligor under any Collateral Obligation causing the Issuer to be
properly subject to the imposition of U.S. or foreign withholding tax, which
withholding tax is not compensated for by a provision under the terms of such
Collateral Obligation that would result in the net amount actually received by
the Issuer (free and clear of taxes, whether assessed against such obligor
thereof, the counterparty with respect thereto, or the Issuer) being equal to
the full amount that the Issuer would have received had no such deduction or
withholding been required, or (ii) any jurisdiction’s properly imposing net
income, profits or similar tax on the Issuer; provided, that the total amount of
(A) the tax or taxes imposed on the Issuer as described in clause (ii) of this
definition, and (B) the total amount withheld from payments to the Issuer that
is not compensated for by a “gross-up” provision as described in clause (i) of
this definition are determined to be in excess of 5% of the aggregate interest
due and payable on the Collateral Obligations during the Due Period.

“Transaction Documents”: This Indenture, the Investment Management Agreement,
the Collateral Administration Agreement, the Securities Account Control
Agreement, the Sale and Contribution Agreement, the Transfer Supplements, the
Note Purchase Agreement and the Limited Liability Company Agreement.

“Transfer Agent”: The Person or Persons, which may be the Issuer, authorized by
the Issuer to exchange or register the transfer of the Notes.

“Transfer Date”: Each Subsequent Conveyance Date under the Sale and Contribution
Agreement.

“Transfer Supplement”: The supplement to the Schedule of Collateral Obligations,
as defined in accordance with the Sale and Contribution Agreement, delivered on
each Transfer Date.

“Trust Officer”: When used with respect to the Trustee, any officer within the
Corporate Trust Services Division (or any successor group of the Trustee)
including any director, managing director, vice president, assistant vice
president, associate or officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, or to whom any corporate trust matter is referred at the Corporate
Trust Office because of his knowledge of and familiarity with the particular
subject, in each case having direct responsibility for the administration of
this Indenture.

 

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“Trustee”: Citibank, N.A., solely in its capacity as Trustee for the
Noteholders, unless a successor Person shall have become the Trustee pursuant to
the applicable provisions of this Indenture, and thereafter “Trustee” shall mean
such successor Person.

“UCC”: The Uniform Commercial Code as in effect in the state of the United
States that governs the relevant security interest as amended from time to time.

“Uncertificated Securities”: The meaning specified in Section 8-102(a)(18) of
the UCC.

“Unregistered Securities”: Securities or debt obligations issued without
registration under the Securities Act.

“U.S. Person”: The meaning specified under Regulation S.

“U.S. Tax Person”: A “United States person” as defined in Section 7701(a)(30) of
the Code.

“Valuation Report”: The meaning specified in Section 10.5(b).

“Warranty Transferred Assets” has the meaning set forth in Section 6.1 of the
Sale and Contribution Agreement.

“Withholding Tax Security”: A Collateral Obligation if (a) any payments thereon
to the Issuer are subject to deduction or withholding for or on account of any
withholding or similar tax imposed by any jurisdiction or taxing authority
thereof or therein and (b) under the Reference Instrument with respect to such
Collateral Obligation, the issuer of or counterparty with respect to such
Collateral Obligation is not required to make payments to the Issuer that would
result in the net amount actually received by the Issuer (free and clear of
taxes, whether assessed against such obligor thereof, the counterparty with
respect thereto, or the Issuer) being equal to the full amount that the Issuer
would have received had no such deduction or withholding been required.

Section 1.2

Assumptions as to Collateral Obligations.

(a)

In connection with all calculations required to be made pursuant to this
Indenture with respect to Distributions on any Pledged Obligations, or any
payments on any other assets included in the Collateral, and with respect to the
income that can be earned on Distributions on such Pledged Obligations and on
any other amounts that may be received for deposit in the Interest Collection
Account or the Principal Collection Account, the provisions set forth in this
Section 1.2 shall be applied.

(b)

All calculations with respect to Distributions on the Pledged Obligations shall
be made by the Investment Manager on the basis of information as to the terms of
each such Pledged Obligation and upon report of payments, if any, received on
such Pledged Obligation that are furnished by or on behalf of the issuer of or
borrower with respect to such Pledged Obligation and, to the extent they are not
manifestly in error, such information or report may be conclusively relied upon
in making such calculations. To the extent they are not manifestly in error, any
information or report received by the Investment Manager (other than those
prepared by the Investment Manager), the Collateral Administrator or the Trustee
with respect to the Collateral Obligations may be conclusively relied upon in
making such calculations.

 

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(c)

For each Due Period, the Distribution on any Pledged Obligation (other than a
Defaulted Obligation or other Collateral which is assigned a Principal Balance
of zero, which shall be, until any Distribution is actually received by the
Issuer from such Defaulted Obligation or Collateral Obligation, assumed to have
a Distribution of zero) shall be the minimum amount, including coupon payments,
accrued interest, scheduled Principal Payments, if any, by way of sinking fund
payments which are assumed to be on a pro rata basis or other scheduled
amortization of principal, return of principal, and redemption premium, if any,
assuming that any index applicable to any payments on a Pledged Obligation that
is subject to change is not changed, that, if paid as scheduled, will be
available in the Interest Collection Account or the Principal Collection
Account, at the end of the Due Period net of withholding or similar taxes to be
withheld from such payments (but taking into account payments made in respect of
such taxes that result in the net amount actually received by the Issuer (free
and clear of taxes, whether assessed against such obligor thereof, the
counterparty with respect thereto, or the Issuer) being equal to the full amount
that the Issuer would have received had no such deduction or withholding been
required).

Section 1.3

Rules of Construction and Certain Other Matters.

(a)

All references in this Indenture to designated “Articles,” “Sections,”
“Subsections” and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed.
The words “herein,” “hereof,” “hereunder,” and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision. The term “including” shall mean “including
without limitation”.

(b)

The Investment Manager’s judgment in all cases under this Indenture shall be
subject to Section 2 of the Investment Management Agreement.

(c)

For purposes of (i) the Schedule of Collateral Obligations or a list of
Collateral Obligations prepared in accordance with Section 3.4(d), (ii) the
Valuation Reports, (iii) the Monthly Reports, (iv) the Additional Reports
prepared in accordance with Section 10.8 and (v) preparing any other reports
hereunder, Collateral Obligations committed to be purchased by the Issuer shall
be treated as owned or acquired by the Issuer (with the Issuer deemed to have a
perfected security interest in such Collateral Obligation) and Collateral
Obligations committed to be sold by the Issuer shall be treated as having been
sold by the Issuer and shall not be treated as owned by the Issuer.

 

32

 

 

ARTICLE II.
THE NOTES

Section 2.1

Forms Generally.

The Notes and the Certificate of Authentication shall be in substantially the
forms required by this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon, as may be consistent herewith,
determined by the Authorized Officers of the Issuer.

Any portion of the text of any Note may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Note.

Section 2.2

Forms of Notes and Certificate of Authentication.

(a)

The forms of the Notes, including the Certificate of Authentication, shall be as
set forth in the applicable Exhibit hereto.

(b)

Notes offered and sold to Qualified Institutional Buyers (in reliance on Section
4(2), Rule 144A or another exemption under the Securities Act) and to Qualified
Purchasers shall be issued in the form of a Rule 144A Global Note, which shall
be deposited with the Trustee, as custodian for DTC, and registered in the name
of DTC or the nominee of DTC, in each case, duly executed by the Issuer and
authenticated by the Trustee in accordance with Section 2.2(c). The aggregate
principal amount of the Rule 144A Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee or DTC
or its nominee, as the case may be, as hereinafter provided.

(c)

This Section 2.2(c) shall apply only to Rule 144A Global Notes deposited with or
on behalf of DTC.

The Issuer shall execute and the Trustee shall upon receipt of an Issuer Order,
in accordance with this Section 2.2(c), authenticate and deliver initially one
or more Rule 144A Global Notes, that (i) shall be registered in the name of DTC
for such Rule 144A Global Note or Rule 144A Global Notes or the nominee of DTC
and (ii) is held by the Trustee, as custodian for DTC.

Agent Members shall have no rights under this Indenture with respect to any Rule
144A Global Note held on their behalf by DTC or under the Rule 144A Global Note,
and DTC may be treated by the Issuer, the Trustee, and any agent of the Issuer
or the Trustee as the absolute owner of such Rule 144A Global Note for all
purposes whatsoever (except to the extent otherwise provided herein).
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee, or any agent of the Issuer or the Trustee, from giving effect to any
written certification, proxy or other authorization furnished by DTC or impair,
as between DTC and its Agent Members, the operation of customary practices
governing the exercise of the rights of a Holder of any Note.

 

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(d)

Except as provided in Section 2.10, owners of beneficial interests in Rule 144A
Global Notes will not be entitled to receive physical delivery of Definitive
Notes.

Section 2.3

Authorized Amount; Note Interest Rate; Stated Maturity; Denominations.

Subject to the provisions set forth below, the aggregate principal amount of the
Notes that may be authenticated and delivered under this Indenture is limited to
$690,000,000, except for (i) Notes authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Section 2.5 or 2.6 of this Indenture and (ii) Notes issued in accordance with
Article VIII.

Such Notes shall have the designation, original principal amount, Note Interest
Rate and Stated Maturity as follows:

Designation Aggregate
Outstanding
Amount/Original
Notional Amount Note Interest Rate Stated Maturity Notes $130,000,000 LIBOR1 +
4.00% February 15, 2026

_______________

 

1       LIBOR refers to LIBOR for the Applicable Period.

The Notes shall be issuable in the following minimum denomination:

 

Note Minimum Denomination (integral multiples) Notes Rule 144A:  $500,000
($1,000 in excess thereof)

 

Section 2.4

Execution, Authentication, Delivery and Dating.

The Notes shall be executed on behalf of the Issuer by one of the Authorized
Officers of the Issuer. The signature of such Authorized Officer on the Notes
may be manual or facsimile.

Notes bearing the manual or facsimile signatures of individuals who were at any
time the Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding the fact that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of issuance of such Notes.

At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Notes executed by the Issuer to the Trustee or
the Authenticating Agent for authentication, and the Trustee or the
Authenticating Agent, upon Issuer Order, shall authenticate and deliver such
Notes as provided in this Indenture and not otherwise.

 

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Each Note authenticated and delivered by the Trustee or the Authenticating Agent
to or upon Issuer Order on the Closing Date shall be dated as of the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose under this Indenture shall be dated the date of their
authentication.

Notes issued upon transfer, exchange or replacement of other Notes shall be
issued in authorized denominations, if applicable, reflecting the original
aggregate principal amount or notional amount, as the case may be, of the Notes
so transferred, exchanged or replaced, but shall represent only the current
Outstanding principal amount or notional amount, as the case may be, of the
Notes so transferred, exchanged or replaced. In the event that any Note is
divided into more than one Note in accordance with this Article II, the original
principal amount or notional amount, as the case may be, of such Note shall be
proportionately divided among the Notes delivered in exchange therefor and shall
be deemed to be the original aggregate principal amount or notional amount, as
the case may be, of such subsequently issued Notes.

No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Note a Certificate of
Authentication, substantially in the form provided for herein, executed by the
Trustee or by the Authenticating Agent by the manual signature of one of their
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.

Section 2.5

Registration, Registration of Transfer and Exchange.

(a)

The Issuer shall cause to be kept the Register in which, subject to such
reasonable regulations as it may prescribe, the Issuer shall provide for the
registration of the Notes (including the identity of the Holder and the
outstanding principal amounts or outstanding notional amounts, as the case may
be, on the Note, which amounts shall include the amounts of any Increases under
Section 2.13) and the registration of all assignments and transfers of the
Notes. The Trustee is hereby initially appointed as agent of the Issuer to act
as “Registrar” for the purpose of registering and recording in the Register the
Notes and assignments and transfers of such Notes as herein provided. Upon any
resignation or removal of the Registrar, the Issuer shall promptly appoint a
successor.

If a Person other than the Trustee is appointed by the Issuer as Registrar, the
Issuer will give the Trustee prompt written notice of the appointment of a
Registrar and of the location, and any change in the location, of the Registrar,
and the Trustee shall have the right to inspect the Register at all reasonable
times and to obtain copies thereof and the Trustee shall have the right to rely
upon a certificate executed on behalf of the Registrar by an Officer thereof as
to the names and addresses of the Holders of the Notes and the principal amounts
or notional amounts, as the case may be, of such Notes.

Subject to this Section 2.5, upon surrender for registration of transfer of any
Notes at the office or agency of the Issuer to be maintained as provided in
Section 7.4, the surrendered Notes shall be returned to the Issuer marked
“canceled,” or retained by the Trustee in accordance with its standard retention
policy and the Issuer shall execute, and the Trustee or the Authenticating
Agent, as the case may be, upon Issuer Order, shall authenticate and deliver in
the name of the designated transferee or transferees, one or more new Notes of
any authorized denomination and of a like aggregate principal amount or notional
amount, as the case may be.

 

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The Issuer or the Investment Manager, as applicable, will notify the Trustee in
writing of any Note beneficially owned by or pledged to the Issuer or the
Investment Manager or any of their respective Affiliates promptly upon its
knowledge of the acquisition thereof or the creation of such pledge.

All Notes issued and authenticated upon any registration of transfer or exchange
of the Notes shall be the valid obligations of the Issuer, evidencing the same
debt and entitled to the same benefits under this Indenture as the Notes
surrendered upon such registration of transfer or exchange.

A Note, and the rights to payments evidenced thereby, may be assigned or
otherwise transferred in whole or in part pursuant to the terms of this Section
2.5 only by the registration of such assignment and transfer of such Note (and
each Note shall so expressly provide on the Register). No transfer of a Note
shall be effective unless such transfer shall have been recorded in the Register
by the Registrar as provided in this Section 2.5. Any assignment or transfer of
all or part of such Note shall be registered on the Register only upon
presentment or surrender for registration of transfer or exchange shall be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Issuer and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. The Registrar may request
evidence reasonably satisfactory to it proving the identity of the transferee or
the transferor or the authenticity of their signatures. Prior to the due
presentment for registration of transfer of any Note and in the absence of
manifest error, the Issuer, the Trustee and the Registrar shall treat the Person
in whose name such Note is registered as the owner thereof for the purpose of
receiving all payments or distribution thereon as the case may be, and subject
to the provision of Section 2.8 hereof, for all other purposes, notwithstanding
any notice to the contrary.

No service charge shall be made to a Holder for any exchange of the Notes, but
the Issuer may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any exchange of the
Notes.

The Issuer shall not be required (i) to issue, register the transfer of or
exchange any Note during a period beginning at the opening of business 15 days
before any selection of the Notes to be redeemed and ending at the close of
business on the day of the mailing of the relevant notice of redemption, or (ii)
to register the transfer of or exchange any Note so selected for redemption.

(b)

No Note may be sold or transferred (including, by pledge or hypothecation)
unless such sale or transfer is exempt from the registration requirements of the
Securities Act and is exempt under applicable state securities laws.

(c)

For so long as any of the Notes are Outstanding, the Issuer shall issue or
permit the transfer of any equity of the Issuer only to Persons that are both
U.S. Persons and United States Persons within the meaning of Section 7701(a)(30)
of the Code.

(d)

During the Initial Investment Period, no Note may be sold or transferred
(including, by pledge or hypothecation) to an Affected Bank.

 

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(e)

Upon final payment due on the Maturity of a Note, the Holder thereof shall
present and surrender such Note at the Corporate Trust Office of the Trustee or
at the office of any Paying Agent on or prior to such Maturity; provided,
however, that if there is delivered to the Issuer and the Trustee such security
or indemnity as may be required by them to save each of them harmless and an
undertaking thereafter to surrender such certificate, then, in the absence of
notice to the Issuer or the Trustee that the applicable Note has been acquired
by a Protected Purchaser, such final payment shall be made without presentation
or surrender.

(f)

(i)

Definitive Notes. In the event that a Rule 144A Global Note is exchanged for the
Notes in definitive registered form without interest coupons, pursuant to
Section 2.10 such Note may be exchanged for another only in accordance with such
procedures and restrictions as are substantially consistent as determined by the
Issuer to insure that such transfers comply with Rule 144A or another exemption
from registration requirements of the Securities Act.

(ii)

Restrictions on Transfers. Transfers of interests in a Rule 144A Global Note to
a Non-Permitted Holder shall be null and void and shall not be given effect for
any purpose hereunder, and the Trustee, upon a Trust Officer obtaining actual
knowledge of such transfer, to the extent it obtains possession of any funds
conveyed by the intended transferee of such interest in such Rule 144A Global
Note for the transferor, shall promptly reconvey such funds to such Person in
accordance with the written instructions thereof delivered to the Trustee at its
address listed in Section 14.3.

(g)

Each Holder of a beneficial interest in a Rule 144A Global Note will be deemed
to have represented and agreed with the Issuer as follows:

(i)

(A) The Holder is a Qualified Institutional Buyer and a Qualified Purchaser, (B)
the Holder is purchasing the Notes for its own account or the account of another
Qualified Purchaser that is also a Qualified Institutional Buyer as to which the
Holder exercises sole investment discretion, (C) the Holder and any such account
is acquiring the Notes as principal for its own account for investment and not
for sale in connection with any distribution thereof, (D) the Holder and any
such account was not formed solely for the purpose of investing in the Notes
(except when each beneficial owner of the Holder or any such account is a
Qualified Purchaser), (E) to the extent the Holder (or any account for which it
is purchasing the Notes) is a private investment company formed on or before
April 30, 1996, the Holder and each such account has received the necessary
consent from its beneficial owners, (F) the Holder is not a broker-dealer that
owns and invests on a discretionary basis less than $25,000,000 in securities of
unaffiliated issuers, (G) the Holder is not a pension, profit-sharing or other
retirement trust fund or plan in which the partners, beneficiaries or
participants or affiliates may designate the particular investment to be made,
(H) the Holder agrees that it and each such account shall not hold such Notes
for the benefit of any other Person and shall be the sole beneficial owner
thereof for all purposes and that it shall not sell participation interests in
the Notes or enter into any other arrangement pursuant to which any other Person
shall be entitled to a beneficial interest in the distributions on the Notes
(except when each beneficial owner of the Holder or any such account is a
Qualified Purchaser), (I) the Notes purchased directly or indirectly by the
Holder or any account for which it is purchasing the Notes constitute an
investment of no more than 40% of the Holder’s and each such account’s assets
(except when each beneficial owner of the Holder or any such account is a
Qualified Purchaser), (J) the Holder and each such account is holding the Notes
in a principal amount of not less than the minimum denomination requirement for
the Holder and each such account, (K) the Holder will provide notice of the
transfer restrictions set forth in this Indenture (including the exhibits
hereto) to any transferee of its Notes, (L) the Holder understands and agrees
that the Issuer may receive a list of participants in the Notes from one or more
book-entry depositories and (M) the Holder understands and agrees that any
purported transfer of the Notes to a Holder that does not comply with the
requirements of this subclause (i) shall be null and void ab initio.

 

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(ii)

If any Person that is not both (i) a Qualified Institutional Buyer and (ii) a
Qualified Purchaser at the time it acquires an interest in a Note or becomes the
beneficial owner of any Note (any such Person, a “Non-Permitted Holder”), the
Issuer shall, promptly after discovery that such Person is a Non-Permitted
Holder by the Issuer or the Trustee (and notice by the Trustee to the Issuer, if
the Trustee makes the discovery), send notice to such Non-Permitted Holder
demanding that such Non-Permitted Holder transfer its interest to a Person that
is not a Non-Permitted Holder within 30 days of the date of such notice. If such
Non-Permitted Holder fails to transfer its Notes, the Issuer shall have the
right, without further notice to the Non-Permitted Holder, to sell such Notes or
interest in Notes to a Holder selected by the Issuer that is not a Non-Permitted
Holder on such terms as the Issuer may choose. The Issuer, an investment bank
selected by the Issuer, or the Trustee at the written direction of the Issuer
(and approved by the Investment Manager) may select the Holder by soliciting one
or more bids from one or more brokers or other market professionals that
regularly deal in securities similar to the Notes, and selling such Notes to the
highest such bidder. However, the Issuer or the Trustee, at the written
direction of the Issuer, may select a Holder by any other means determined by it
in its sole discretion. The Holder of each Note, the Non-Permitted Holder and
each other Person in the chain of title from the Holder to the Non-Permitted
Holder, by its acceptance of an interest in the Notes, agrees to cooperate with
the Issuer and the Trustee to effect such transfers. The proceeds of such sale,
net of any commissions, expenses, including fees of attorneys and agents, and
taxes due in connection with such sale shall be remitted to the Non-Permitted
Holder. The terms and conditions of any sale under this paragraph shall be
determined in the sole discretion of the Issuer, and none of the Issuer, the
Collateral Administrator, or the Trustee shall be liable to any Person having an
interest in the Notes sold as a result of any such sale or the exercise of such
discretion (including for the price of any such sale).

(iii)

The Holder understands and agrees that the Notes have not been and will not be
registered or qualified under the Securities Act or any applicable state
securities laws or the securities laws of any other jurisdiction and the sale of
the Notes to the Holder is being made in reliance on an exemption from
registration under the Securities Act, and may be reoffered, resold or pledged
or otherwise transferred only (A) to a Person whom the Holder reasonably
believes is a Qualified Institutional Buyer purchasing for its own account or
for the account of a Qualified Institutional Buyer as to which the Holder
exercises sole investment discretion in a transaction meeting the requirements
of Rule 144A, and (B) in accordance with all applicable securities laws of the
states of the United States. The Holder also understands that the Issuer and the
Collateral have not been registered under the Investment Company Act and,
therefore, no transfer having the effect of causing the Issuer or the Collateral
to be required to be registered as an investment company under the Investment
Company Act will be recognized. The Holder understands and agrees that any
purported transfer of the Notes to a Person that does not comply with the
requirements of this subclause (iii) shall be null and void ab initio.

 

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(iv)

The Holder is not purchasing the Notes with a view toward the resale,
distribution or other disposition thereof in violation of the Securities Act.
The Holder understands and agrees that an investment in the Notes involves
certain risks, including the risk of loss of its entire investment in the Notes
under certain circumstances. The Holder has had access to such financial and
other information concerning the Issuer and the Notes as it deemed necessary or
appropriate in order to make an informed investment decision with respect to its
purchase of the Notes, including an opportunity to ask questions of, and request
information from, the Issuer.

(v)

In connection with the purchase of the Notes: (A) none of the Issuer, the
Trustee, the Investment Manager (except such representation is not made by
Affiliates of the Investment Manager that purchase any Notes, with respect to
the Investment Manager), the Collateral Administrator or the Registrar (or any
of their respective Affiliates) is acting as a fiduciary or financial or
investment adviser for the Holder; (B) the Holder is not relying (for purposes
of making any investment decision or otherwise) upon any advice, counsel or
representations (whether written or oral) of the Issuer, the Trustee, the
Investment Manager (except such representation is not made by Affiliates of the
Investment Manager that purchase any Notes, with respect to the Investment
Manager), the Collateral Administrator or the Registrar (or any of their
respective Affiliates) other than any representations expressly set forth in a
written agreement with the Issuer and the Investment Manager; (C) none of the
Issuer, the Trustee, the Investment Manager (except such representation is not
made by Affiliates of the Investment Manager that purchase any Notes, with
respect to the Investment Manager), the Collateral Administrator or the
Registrar (or any of their respective Affiliates) has given to the Holder
(directly or indirectly through any other Person) any assurance, guarantee, or
representation whatsoever as to the expected or projected success,
profitability, return, performance, result, effect, consequence or benefit
(including legal, regulatory, tax, financial, accounting or otherwise) as to an
investment in the Notes; (D) the Holder has consulted with its own legal,
regulatory, tax, business, investment, financial and accounting advisers to the
extent it has deemed necessary, and it has made its own investment decisions
(including decisions regarding the suitability of any transaction pursuant to
this Indenture) based upon its own judgment and upon any advice from such
advisers as it has deemed necessary and not upon any view expressed by the
Issuer, the Trustee, the Investment Manager (except such representation is not
made by Affiliates of the Investment Manager that purchase any Notes, with
respect to the Investment Manager), the Collateral Administrator or the
Registrar (or any of their respective Affiliates); (E) the Holder has evaluated
the terms and conditions of the purchase and sale of the Notes with a full
understanding of all of the risks thereof (economic and otherwise), and it is
capable of assuming and willing to assume (financially and otherwise) those
risks; (F) the Holder is a sophisticated investor; and (G) if acquiring the
Notes for any account, the Holder has not made any disclosure, assurance,
guarantee or representation not consistent with the provisions and the
requirements contained herein.

 

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(vi)

By acquiring a Note (or interest therein), each purchaser and transferee (and,
if the purchaser or transferee is an employee benefit plan or other plan, its
fiduciary) shall be deemed to represent and warrant that (i) it is not acquiring
the Note (or interest therein) with the assets of a Benefit Plan Investor, (ii)
if the purchaser or transferee is a governmental plan or church plan, its
acquisition and holding of the Note (or interest therein) will not give rise to
a nonexempt violation of any state, local or other law that is similar to the
fiduciary and prohibited transaction provisions of ERISA or Section 4975 of the
Code and (iii) if the purchaser or transferee is acquiring the Note during the
Initial Investment Period, such purchaser or transferee is not an Affected Bank.
Any purported transfer of a Note (or interest therein) to a purchaser or
transferee that does not comply with the applicable requirements of this
restriction shall be null and void ab initio.

(vii)

The Rule 144A Global Notes will bear the legend set forth in Exhibit A.

(viii)

The purchaser understands that Executive Orders issued by the President of the
United States of America, Federal regulations administered by the U.S. Treasury
Department’s Office of Foreign Assets Control (“OFAC”) and other federal laws
prohibit, among other things, U.S. persons or persons under the jurisdiction of
the United States from engaging in certain transactions with certain foreign
countries, territories, entities and individuals, and that the lists of
prohibited countries, territories, entities and individuals can be found on,
among other places, the OFAC website at www.treas.gov/ofac. Neither the
purchaser nor any of its Affiliates, owners, directors or officers is, or is
acting on behalf of, a country, territory, entity or individual named on such
lists, nor is the purchaser or any of its Affiliates, owners, directors or
officers a natural person or entity with whom dealings are prohibited under any
OFAC regulation or other applicable federal law or acting on behalf of such a
natural person or entity.

(h)

Notwithstanding a request made to remove the legend on any Note or any legend
pursuant to Section 4(1) of the Securities Act from any of the Notes, such Notes
shall bear the applicable legend, and the applicable legend shall not be
removed, unless there is delivered to the Issuer and the Trustee such
satisfactory evidence, which may include an Opinion of Counsel satisfactory to
the Issuer, as may be reasonably required by the Issuer to the effect that
neither the applicable legend nor the restrictions on transfer set forth therein
are required to ensure that transfers thereof comply with the provisions of Rule
144A or Section 4(1) of the Securities Act, as applicable, and the Investment
Company Act. Upon provision of such satisfactory evidence, the Trustee, upon
receipt of an Issuer Order, shall authenticate and deliver the Notes that do not
bear such legend.

(i)

Any transfer of a Note in definitive registered form to a Person that is not a
Qualified Purchaser shall be null and void and shall not be given effect for any
purpose hereunder, and the Trustee shall hold any funds conveyed by the intended
transferee of such definitive registered Note for the transferor and shall
promptly reconvey such funds to such Person in accordance with the written
instructions thereof delivered to the Trustee at its address listed in Section
14.3.

 

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(j)

Any purported transfer of a Note or any shares of the Issuer not in accordance
with this Section 2.5 shall be null and void and shall not be given effect for
any purpose hereunder.

(k)

Nothing in this Section 2.5 shall be construed to limit any contractual
restrictions on transfers of the Notes or interests therein that may apply to
any Person.

(l)

Notwithstanding any provision to the contrary herein, so long as a Rule 144A
Global Note remains Outstanding and is held by or on behalf of DTC, transfers of
a Rule 144A Global Note, in whole or in part, shall (i) only be made accordance
with Sections 2.2 and 2.5 and (ii) shall be limited to transfers of such Rule
144A Global Note in whole, but not in part, to nominees of DTC or to a successor
of DTC or such successor’s nominee.

(m)

If a Rule 144A Global Note is exchanged for a Note in definitive registered
form, without interest coupons, pursuant to Section 2.10, such Rule 144A Global
Note may be exchanged only in accordance with such procedures and restrictions
as are substantially consistent as determined by the Issuer to insure that such
transfers comply with Rule 144A or another exemption from registration
requirements of the Securities Act.

(n)

Notwithstanding anything contained herein to the contrary, neither the Trustee
nor the Registrar shall be responsible for ascertaining whether any transfer
complies with the registration provisions of or any exemptions from the
Securities Act, applicable state securities laws or the applicable laws of any
other jurisdiction, ERISA, the USA Patriot Act, the Code or the Investment
Company Act; provided, that if a certificate is specifically required by the
express terms of Section 2.4 or this Section 2.5 to be delivered to the Trustee
by a Holder or transferee of a Note, the Trustee shall be under a duty to
receive and examine the same to determine whether or not the certificate
substantially conforms on its face to the requirements of this Indenture and
shall promptly notify the party delivering the same if such certificate does not
comply with such terms. For the avoidance of doubt, it is hereby acknowledged
that the Trustee will not have the ability to monitor transfers of beneficial
interests in Rule 144A Global Notes and will have no liability for such
transfers in violation of the transfer restrictions described herein.

Section 2.6

Mutilated, Destroyed, Lost or Stolen Notes.

If (i) any mutilated Note is surrendered to a Transfer Agent, or if there shall
be delivered to the Issuer, the Trustee and the relevant Transfer Agent evidence
to their reasonable satisfaction of the destruction, loss or theft of any Note
and (ii) there is delivered to the Issuer, the Trustee and such Transfer Agent
such security or indemnity as may be required by them to save each of them and
any agent of any of them harmless, then, in the absence of written notice to the
Issuer, a Trust Officer of the Trustee or such Transfer Agent that such Note has
been acquired by a Protected Purchaser, the Issuer shall execute and, upon
Issuer Request, the Trustee shall authenticate and deliver, in lieu of any such
mutilated, destroyed, lost or stolen Note, a new Note of same tenor and
principal amount or notional amount, as applicable, and bearing a number not
contemporaneously outstanding.

 

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If, after delivery of such new Note, a Protected Purchaser of the predecessor
Note presents for payment, transfer or exchange such predecessor Note, the
Issuer, the Transfer Agent and the Trustee shall be entitled to recover such new
Note from the Person to whom it was delivered or any Person taking therefrom,
and shall be entitled to recover upon the security or indemnity provided
therefor to the extent of any loss, damage, cost or expense incurred by the
Issuer, the Trustee and the Transfer Agent in connection therewith.

In case any such mutilated, destroyed, lost or stolen Note has become due and
payable, the Issuer in its discretion may, instead of issuing a new Note pay
such Note without requiring surrender thereof except that any mutilated Note
shall be surrendered.

Upon the issuance of any new Note under this Section 2.6, the Issuer, the
Trustee or a Transfer Agent may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith.

Every new Note issued pursuant to this Section 2.6 in lieu of any mutilated,
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, and such new Note shall be entitled,
subject to the second paragraph of this Section 2.6, to all the benefits of this
Indenture equally and proportionately with any and all other Notes duly issued
hereunder.

The provisions of this Section 2.6 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.

Section 2.7

Payment of Principal and Interest, Preservation of Rights.

The Notes shall accrue interest during each Interest Accrual Period at the Note
Interest Rate specified in Section 2.3. Interest on the Notes shall be due and
payable on each Payment Date immediately following the related Interest Accrual
Period. Notwithstanding the foregoing, in the event funds are not sufficient (in
accordance with Article XI hereof) to pay the Interest Distribution Amount in
full on any Payment Date, any deficient amount shall not be due and payable on
such Payment Date and shall be deferred and included in the Interest
Distribution Amount on future Payment Dates until such funds are available to
pay the Interest Distribution Amount in full (“Deferred Interest”). To the
extent lawful and enforceable, interest on Deferred Interest shall accrue at the
Note Interest Rate until paid as provided herein.

(a)

The principal of each Note shall be due and payable on the Stated Maturity
thereof unless the unpaid principal of such Note becomes due and payable at an
earlier date by declaration of acceleration, call for redemption or otherwise.

 

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(b)

Interest and principal due on any Payment Date on the Notes shall be payable by
the Paying Agent by wire transfer in immediately available funds to a Dollar
account maintained by the Holder thereof or its nominee or, if appropriate
instructions are not received prior to the relevant Regular Record Date, by
Dollar check drawn on a bank in the United States of America. In the case of a
check, such check shall be mailed to the Person entitled thereto at his address
as it appears on the Register and, in the case of a wire transfer, such wire
transfer shall be sent in accordance with written instructions provided by such
Person. Upon final payment due on the Maturity of a Note, the Holder thereof
shall present and surrender such Note at the Corporate Trust Office of the
Trustee or at the office of any Paying Agent on or prior to such Maturity;
provided, however, that if there is delivered to the Issuer and the Trustee such
security or indemnity as may be required by them to save each of them harmless
and an undertaking thereafter to surrender such certificate, then, in the
absence of notice to the Issuer or the Trustee that the applicable Note has been
acquired by a Protected Purchaser, such final payment shall be made without
presentation or surrender. In the case where any final payment of principal and
interest is to be made on any Note (other than at the Stated Maturity thereof)
the Issuer or, upon Issuer Request, the Trustee, in the name and at the expense
of the Issuer shall, not more than 30 nor less than 10 days (or not less than 3
days, in the case of a distribution pursuant to Section 5.7) prior to the date
on which such payment is to be made, mail to the Persons entitled thereto at
their addresses appearing on the Register, a notice which shall state the date
on which such payment will be made, the amount of such payment per $100,000
initial principal amount of the Notes and shall specify the place where such
Notes may be presented and surrendered for such payment.

(c)

Subject to the provisions of Sections 2.7(a) and (b) and Section 5.9, the
Holders of the Notes as of the Regular Record Date in respect of a Payment Date
shall be entitled to the interest accrued and payable in accordance with the
Priority of Payments and the principal payable in accordance with the Priority
of Payments on such Payment Date. All such payments that are mailed or wired and
returned to the Corporate Trust Office of the Trustee or at the office of any
Paying Agent shall be held for payment as herein provided at the office or
agency of the Issuer to be maintained as provided in Section 7.4.

(d)

Interest on any Note which is payable, and is punctually paid or duly provided
for, on any Payment Date shall be paid to the Person in whose name that Note (or
one or more predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest. Payments of principal to Holders of the
Notes shall be made in the proportion that the Aggregate Outstanding Amount of
the Notes registered in the name of each such Holder on such Regular Record Date
or Redemption Record Date bears to the Aggregate Outstanding Amount of all the
Notes on such Regular Record Date or Redemption Record Date.

(e)

(i)

Subject to Section 2.7(a), following the Stated Maturity of the Notes in which
any Defaulted Interest is due, the Trustee shall make payment of such Defaulted
Interest and any accrued and unpaid interest thereon on such date that is not
more than three Business Days after sufficient funds are available therefor in
the Interest Collection Account (a “Special Payment Date”). The special record
date (a “Special Record Date”) for the payment of such Defaulted Interest shall
be one Business Day prior to the Special Payment Date as fixed by the Trustee.
The Trustee shall notify the Issuer, the Paying Agent and the applicable Holders
of the Notes of such Special Payment Date and the Special Record Date at least
two Business Days prior to the Special Payment Date. Defaulted Interest shall be
paid on such Special Payment Date based on the principal amount Outstanding to
the Holders of the applicable Notes as of the close of business on such Special
Record Date in accordance with the priorities set forth in Section 11.1(a)(A).

 

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(ii)

Notwithstanding the foregoing, payment of any Defaulted Interest may be made in
any other lawful manner in accordance with the priorities set forth in Section
11.1(a)(A) if notice of such payment is given by the Trustee to the Issuer and
the Holders of the Notes and such manner of payment shall be deemed practicable
by the Trustee.

(f)

Interest accrued with respect to the Notes shall be computed on the basis of the
actual number of days elapsed in the applicable Interest Accrual Period divided
by 360, commencing on the Closing Date.

(g)

All reductions in the principal amount of a Note (or one or more predecessor
Notes) effected by payments of installments of principal made on any day shall
be binding upon all future Holders of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note.

(h)

Notwithstanding any other provision of this Indenture, the obligations of the
Issuer under this Indenture and the Notes are limited recourse obligations of
the Issuer payable solely from the Collateral in accordance with the terms of
this Indenture. After having realized the Collateral and distributed the net
proceeds thereof in accordance with this Indenture, none of the Trustee, the
Holders of the relevant Notes nor any other Secured Party may take any further
steps against the Issuer in respect of any sums still unpaid in respect of the
relevant Notes or any other obligations of the Issuer under this Indenture and
all obligations of and claims against either or both of the Issuer hereunder or
under the Notes or in connection herewith or therewith shall be extinguished and
shall not revive. No recourse shall be had for the payment of any amount owing
in respect of the Notes against any agent, officer, manager, member, employee or
incorporator of the Issuer, the Investment Manager or any successors or assigns
thereof for any amounts payable under the Notes or this Indenture. It is
understood that the foregoing provisions of this paragraph (i) shall not (i)
prevent recourse to the Collateral for the sums due or to become due under any
security, instrument or agreement which is part of the Collateral or (ii)
constitute a waiver, release or discharge of any indebtedness or obligation
evidenced by the Notes or secured by this Indenture, and the same shall continue
until paid or discharged out of the Collateral or until the Collateral has been
exhausted. It is further understood that the foregoing provisions of this
paragraph (i) shall not limit the right of any Person to name the Issuer as a
party defendant in any action or suit or in the exercise of any other remedy
under the Notes or this Indenture, so long as no judgment in the nature of a
deficiency judgment or seeking personal liability shall be asked for or (if
obtained) enforced against any such Person.

(i)

Subject to the foregoing provisions of this Section 2.7, each Note delivered
under this Indenture and upon registration of transfer of or in exchange for or
in lieu of any other Note shall carry the rights of unpaid interest and
principal that were carried by such other Note.

(j)

Notwithstanding any of the foregoing provisions with respect to payments of
principal of and interest on the Notes, if the Notes have become or been
declared due and payable following an Event of Default and such acceleration of
Maturity and its consequences have not been rescinded and annulled, then
payments of principal of and interest on such Notes shall be made in accordance
with Section 5.7.

 

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Section 2.8

Persons Deemed Owners.

The Issuer, the Trustee, and any agent of the Issuer or the Trustee may treat
the Person in whose name any Note is registered as the owner of such Note on the
Register on the applicable Regular Record Date, Redemption Record Date or
Special Record Date for the purpose of receiving payments of principal and
interest on such Note and on any other date for all other purposes whatsoever
(whether or not such Note is overdue), and neither the Issuer nor the Trustee
nor any agent of the Issuer or the Trustee shall be affected by notice to the
contrary; provided, however, that DTC, or its nominee, shall be deemed the owner
of the Rule 144A Global Notes, and except as otherwise provided herein, owners
of beneficial interests in Rule 144A Global Notes will not be considered the
owners of any Notes.

Section 2.9

Cancellation.

All Notes surrendered for payment, registration of transfer, exchange or
redemption, or deemed lost or stolen, shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section 2.9, except as expressly permitted by this
Indenture. All cancelled Notes held by the Trustee shall be destroyed or held by
the Trustee in accordance with its standard retention policy unless the Issuer
shall direct by an Issuer Order that they be returned to the Issuer. No Notes
shall be cancelled except under the circumstances specified in this Section 2.9.

Section 2.10

Rule 144A Global Notes; Temporary Notes.

(a)

A Rule 144A Global Note deposited with DTC pursuant to Section 2.2 shall be
transferred to the beneficial owners thereof only if such transfer complies with
Section 2.5 of this Indenture and either (i) DTC notifies the Issuer that it is
unwilling or unable to continue as depositary for such Rule 144A Global Note or
if at any time such depositary ceases to be a Clearing Agency and a successor
depositary is not appointed by the Issuer within 90 days of such notice, or
(ii) as a result of any amendment to or change in, the laws or regulations of
the United States or of any authority therein or thereof having power to tax or
in the interpretation or administration of such laws or regulations which become
effective on or after the Closing Date, the Issuer or the Paying Agent becomes
aware that it is or will be required to make any deduction or withholding from
any payment in respect of the Notes which would not be required if the Notes
were in definitive form. In addition, the owner of a beneficial interest in a
Rule 144A Global Note will be entitled to receive a Definitive Note in exchange
for such interest if an Event of Default has occurred and is continuing.

 

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(b)

Any Rule 144A Global Note that is transferable to the beneficial owners thereof
pursuant to this Section 2.10 shall be surrendered by DTC to the Trustee’s
Corporate Trust Office or its office or agent located in the Borough of
Manhattan, The City of New York, to be so transferred, in whole or from time to
time in part, without charge, and the Issuer shall execute and the Trustee
shall, upon Issuer Order, authenticate and deliver, upon such transfer of each
portion of such Rule 144A Global Note, an equal aggregate principal amount or
notional amount, as the case may be, of the Notes, as applicable, of authorized
denominations. Any portion of a Rule 144A Global Note transferred pursuant to
this Section 2.10 shall be executed, authenticated and delivered in
denominations of $500,000 and integral multiples of $1,000 in excess thereof.
None of the Issuer, the Investment Manager, the Registrar nor the Trustee shall
be liable for any delay in delivery of such direction and may conclusively rely
on, and shall be protected in relying on, such registration directions. None of
the Issuer, the Investment Manager, the Registrar nor the Trustee shall have any
responsibility for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the Rule 144A Global Notes held by
the Depository or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests. Any Note delivered by the Trustee or its
agent in exchange for an interest in a Rule 144A Global Note shall, except as
otherwise provided by Section 2.5(g), bear the legend set forth in Exhibit A.

(c)

Subject to the provisions of Section 2.10(b) above, the registered Holder of a
Rule 144A Global Note may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.

(d)

Upon receipt of notice from DTC of the occurrence of either of the events
specified in paragraph (a) of this Section 2.10 or upon the written request of
any beneficial owner of an interest in a Rule 144A Global Note following the
occurrence and continuation of an Event of Default, the Issuer shall use its
commercially reasonable efforts to make arrangements with DTC for the exchange
of interests in the Rule 144A Global Notes for Definitive Notes and cause the
requested Definitive Notes to be executed and delivered to the Registrar in
sufficient quantities and authenticated by or on behalf of the Trustee for
delivery to Holders of the Rule 144A Global Notes. In the event that Definitive
Notes are not so issued by the Issuer to such beneficial owners of interests in
Rule 144A Global Notes, the Issuer expressly acknowledges that such beneficial
owners shall be entitled to pursue any remedy that the Holders of a Rule 144A
Global Notes would be entitled to pursue in accordance with Article V of this
Indenture (but only to the extent of such beneficial owner’s interest in the
Rule 144A Global Notes) as if Definitive Notes had been issued.

Pending the preparation of certificates for such Notes, pursuant to this Section
2.10, the Issuer may execute, and upon Issuer Order the Trustee shall
authenticate and deliver, temporary certificates for such Notes, that are
printed, lithographed, typewritten, mimeographed or otherwise reproduced, in any
authorized denomination, substantially of the tenor of the definitive
certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the Officers
executing such temporary certificates may determine, as conclusively evidenced
by their execution of such certificates.

If temporary certificates for Notes are issued, the Issuer will cause such Notes
to be prepared without unreasonable delay. The definitive certificates shall be
printed, lithographed or engraved, or provided by any combination thereof, or in
any other manner permitted by the rules and regulations of any applicable
securities exchange, all as determined by the Officers executing such definitive
certificates. After the preparation of definitive certificates, the temporary
certificates shall be exchangeable for definitive certificates upon surrender of
the temporary certificates at the office or agency maintained by the Issuer for
such purpose, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary certificates, the Issuer shall execute, and, upon
Issuer Order, the Trustee shall authenticate and deliver, in exchange therefor
the same aggregate principal amount of definitive certificates of authorized
denominations. Until so exchanged, the temporary certificates shall in all
respects be entitled to the same benefits under this Indenture as definitive
certificates.

 

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Persons exchanging interests in a Rule 144A Global Note for individual
definitive Notes will be required to provide to the Trustee, through DTC,
written instructions and other information required by the Issuer and the
Trustee to complete, execute and deliver such individual definitive Notes. In
all cases, individual definitive Notes delivered in exchange for any Rule 144A
Global Note or beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by DTC. None of the Issuer, the
Registrar or the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions as to the names of the beneficial owners in whose names such
Notes shall be registered or as to delivery instructions for such Notes.

Section 2.11

No Gross Up. Neither the Equity Owner nor the Issuer shall be obligated to pay
any additional amounts to the Holders or beneficial owners of the Notes to
compensate for any withholding or deduction for, or on account of, any present
or future taxes, duties, assessments or governmental charges required with
respect to amounts payable under the Notes.

Section 2.12

Notes Beneficially Owned by Non-Permitted Holders.

Notwithstanding anything to the contrary elsewhere in this Indenture, any
transfer of a beneficial interest in any Notes to a Person that is not both a
Qualified Institutional Buyer and a Qualified Purchaser shall be null and void
ab initio and any such purported transfer of which the Issuer or the Trustee
shall have notice may be disregarded by the Issuer and the Trustee for all
purposes.

Section 2.13

Increases on the Notes.

(a)

The Notes will be issued on the Closing Date in initial aggregate principal
amounts equal to the Initial Principal Amount (the “Original Notes”), and
additional Notes (“Additional Notes”) may be issued from time to time subject to
the terms and conditions herein, including the terms set forth in subsections
(b) and (c) below. The Registrar will make a record of each such additional
issuance of Notes in the Register.

(b)

After the Closing Date through and including the three-month anniversary of the
Closing Date, Additional Notes may be issued (each such issuance of Additional
Notes, an “Increase”), in connection with the acquisition of Collateral
Obligations permitted to be acquired hereunder or to be retained by the Issuer
in anticipation of such acquisition; provided that an Issuer Order from the
Investment Manager substantially in the form of Exhibit G (an “Increase
Request”) is delivered by, or on behalf of, the Issuer and received by the
Trustee. Notwithstanding the foregoing, the Issuer (or the Investment Manager on
its behalf) shall not submit an Increase Request, and no such requested Increase
may occur, if the Increase requested thereby will cause the quotient of the
Aggregate Outstanding Amount of the Notes divided by Par Value Numerator to
exceed 100%.

 

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(c)

Additional Notes may be issued on any Business Day pursuant to subsection (b)
above, only upon satisfaction of each of the following conditions with respect
to each proposed Increase:

(i)

No more than 10 issuances of Additional Notes may occur after the Closing Date.

(ii)

The aggregate principal amount of Additional Notes issued in any Increase shall
be in a minimum amount of $1,000,000 (and in integral multiple of $50,000 in
excess thereof), unless the excess of the Maximum Principal Amount over the
aggregate principal amount of Original Notes and Additional Notes then
outstanding is less than such minimum amount, in which case Additional Notes may
be issued in such lesser amount.

(iii)

No Event of Default has occurred and is continuing.

(iv)

After giving effect to such Increase, the aggregate principal amount of Original
Notes and Additional Notes issued does not exceed the Maximum Principal Amount.

(v)

The Trustee shall have received an Increase Request substantially in the form of
Exhibit G (i) specifying the aggregate principal amount of Additional Notes to
be issued in such Increase and the effective date of such Increase and (ii)
certifying that all conditions precedent to such Increase on such Business Day
have been satisfied.

(vi)

The prior written consent of the Majority of the Noteholders with respect to
such Increase has been provided to the Issuer.

(vii)

No redemption of Notes under Section 9.1 has theretofore occurred, and no
redemption of Notes is then pending.

(d)

Upon receipt of the cash proceeds of such Increase by or on behalf of the
Issuer, the Trustee shall deposit such proceeds in the Principal Collection
Account and shall instruct the Registrar to make appropriate notations on the
Register or on its books and records of the amount of such Additional Notes so
issued, and the Issuer hereby authorizes the Trustee to make such notations on
the Register and on its books and records as aforesaid. Further, in accordance
with DTC’s procedures, the Trustee, as Registrar, will credit or cause to be
credited to the account of the purchaser of such Additional Notes a principal
amount of such Notes equal to such Increase.

(e)

Notwithstanding the foregoing, or any other provision of this Indenture
(including without limitation Article XI), the Issuer, at the option of the
Equity Owner, shall have the right to direct the Trustee (such direction to be
given no later than the Business Day immediately following the receipt of the
cash proceeds of the final Increase such that the Outstanding Principal Amount
of the Notes equals the Maximum Principal Amount) to make a cash distribution
from the cash proceeds of such Increase to the Equity Owner but only if, and
only to the extent that, after giving effect to such cash distribution, the
Market Value Test is satisfied as evidenced by an Officer’s Certificate of the
Issuer or the Investment Manager on behalf of the Issuer provided to the Trustee
upon which the Trustee shall be entitled to fully rely with no liability
therefor; provided, for purposes of this calculation, any Collateral Obligation
that was a Defaulted Obligation on the Closing Date shall be deemed to have a
Principal Balance of zero unless such Collateral Obligation ceases to meet the
definition of a Defaulted Obligation prior to the Effective Date.

 

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ARTICLE III.

CONDITIONS PRECEDENT; CERTAIN PROVISIONS
RELATING TO COLLATERAL

Section 3.1

General Provisions.

The Notes to be issued on the Closing Date may be executed by the Issuer and
delivered to the Trustee for authentication and thereupon the same shall be
authenticated and delivered by the Trustee upon Issuer Request, upon compliance
with Section 3.2 and upon receipt by the Trustee of the following:

(a)

an Officer’s Certificate of the Issuer (A) evidencing the authorization by
company resolutions of the execution and delivery of, among other documents,
this Indenture, the Investment Management Agreement, the Sale and Contribution
Agreement, the Transfer Supplements, the Securities Account Control Agreement,
the Note Purchase Agreement, the Collateral Administration Agreement and the
Limited Liability Company Agreement, the execution, authentication and delivery
of the Notes and specifying the Stated Maturity, the principal amount and Note
Interest Rate of the Notes to be authenticated and delivered; and (B) certifying
that (1) the attached copy of the company resolutions is a true and complete
copy thereof, (2) such resolutions have not been rescinded and are in full force
and effect on and as of the Closing Date and (3) the Officers authorized to
execute and deliver such documents hold the offices and have the signatures
indicated thereon;

(b)

either (A) a certificate of the Issuer or other official document evidencing the
due authorization, approval or consent of any governmental body or bodies, at
the time having jurisdiction in the premises, together with an Opinion of
Counsel on which the Trustee is entitled to rely, to the effect that no other
authorization, approval or consent of any governmental body is required for the
valid issuance of the Notes or (B) an Opinion of Counsel of the Issuer to the
Trustee, to the effect that no such authorization, approval or consent of any
governmental body is required for the valid issuance of such Notes except as may
have been given for purposes of the foregoing;

(c)

an opinion of Dechert LLP, counsel to the Investment Manager and the Issuer
dated the Closing Date;

(d)

an opinion of Dentons US LLP, counsel to the Trustee dated the Closing Date;

(e)

an Officer’s Certificate stating that, to the best of the signing Officer’s
knowledge, the Issuer is not in Default under this Indenture and that the
issuance of the Notes will not result in a breach of any of the terms,
conditions or provisions of, or constitute a default under, the Limited
Liability Company Agreement or other organizational documents of the Issuer, any
indenture or other agreement or instrument to which the Issuer is a party or by
which it is bound, or any order of any court or administrative agency entered in
any Proceeding to which the Issuer is a party or by which it may be bound or to
which it may be subject; and that all conditions precedent provided in this
Indenture relating to the authentication and delivery of the Notes have been
complied with;

 

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(f)

an executed copy of each other Transaction Document;

(g)

an Officer’s certificate of the Investment Manager, dated as of the Closing
Date, to the effect that each Collateral Obligation to be Delivered by the
Issuer on the Closing Date and each Collateral Obligation with respect to which
the Investment Manager on behalf of the Issuer has entered into a binding
commitment to purchase or enter into is listed in the Schedule of Collateral
Obligations and:

(i)

in the case of each such Collateral Obligation in the Schedule of Collateral
Obligations, immediately prior to the Delivery of any Collateral Obligations on
the Closing Date, the information with respect to each such Collateral
Obligation in the Schedule of Collateral Obligations is complete and correct in
all material respects; and

(ii)

in the case of (x) each such Collateral Obligation in the Schedule of Collateral
Obligations to be Delivered on the Closing Date, immediately prior to the
Delivery thereof on the Closing Date, it satisfies, and (y) each Collateral
Obligation that the Investment Manager on behalf of the Issuer committed to
purchase on or prior to the Closing Date, each such Collateral Obligation, upon
its acquisition, will satisfy, the applicable requirements of the definition of
“Collateral Obligation” in this Indenture;

(h)

such other documents as the Trustee may reasonably require; provided that
nothing in this subclause (h) shall imply or impose a duty on the Trustee to so
require.

Section 3.2

Security for the Notes.

The Notes to be issued on the Closing Date may be executed by the Issuer, and
delivered to the Trustee for authentication, and thereupon the same shall be
authenticated and delivered to the Issuer by the Trustee upon Issuer Order and
upon delivery by the Issuer to the Trustee, and receipt by the Trustee, of the
following:

(a)

Grant of Collateral Obligations. Fully executed copies of this Indenture and
copies of any other instrument or document, fully executed (as applicable),
necessary to consummate and perfect the Grant set forth in the Granting Clauses
of this Indenture of a perfected security interest that is of first priority,
free of any adverse claim or the legal equivalent thereof in favor of the
Trustee on behalf of the Holders of the Notes in all of the Issuer’s right,
title and interest in and to the Collateral Obligations and any Deposit pledged
to the Trustee for inclusion in the Collateral on the Closing Date, including
compliance with the provisions of Section 3.3.

(b)

Certificate of the Issuer. A certificate of an Authorized Officer of the Issuer,
dated as of the Closing Date, to the effect that, in the case of each Collateral
Obligation and any Deposit pledged to the Trustee for inclusion in the
Collateral on the Closing Date and immediately prior to the Delivery thereof on
the Closing Date:

 

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(i)

the Issuer has good and marketable title to such Collateral Obligation and
Deposit free and clear of any liens, claims, encumbrances or defects of any
nature whatsoever except (1) for those which are being released on the Closing
Date or (2) for those encumbrances arising from due bills, if any, with respect
to interest, or a portion thereof, accrued on such Collateral Obligation prior
to the Closing Date and owed by the Issuer to the seller of such Collateral
Obligation;

(ii)

the Issuer has acquired its ownership in such Collateral Obligation and Deposit
in good faith without notice of any adverse claim, except as described in
paragraph (i) above;

(iii)

the Issuer has not assigned, pledged or otherwise encumbered any interest in
such Collateral Obligation and Deposit (or, if any such interest has been
assigned, pledged or otherwise encumbered, it has been released) other than
interests Granted pursuant to this Indenture;

(iv)

the Issuer has full right to Grant a security interest in and assign and pledge
such Collateral Obligation and Deposit to the Trustee;

(v)

the information set forth with respect to such Collateral Obligation in Schedule
A is correct; and

(vi)

upon Grant by the Issuer and the taking of the relevant actions contemplated by
Section 3.3, the Trustee has a perfected security interest in the Collateral
that is of first priority, free of any adverse claim or the legal equivalent
thereof.

(c)

(i)

[Reserved]

(ii)

Deposit to Expense Reserve Account. On the Closing Date, the Issuer shall have
delivered the Expense Reserve Amount to the Trustee for deposit in the Expense
Reserve Account.

(d)

Issuer Accounts. Evidence of the establishment of the Issuer Accounts.

(e)

Issuer Requests. An Issuer Request from the Issuer directing the Trustee to
authenticate the Notes in the amounts and names set forth therein.

(f)

Related Collateral Obligations. Any asset that is subject to a commitment to
acquire on the Closing Date shall be termed a “Related Collateral Obligation”.
The Investment Manager, on behalf of the Issuer, shall use commercially
reasonable efforts to complete the legal assignment of the Related Collateral
Obligations to the Issuer in a timely manner after the Closing Date and, in any
event, no later than the 90 Business Days after such Closing Date. If the
completion of the legal assignment of a Related Collateral Obligation has not
occurred within 90 Business Days of the Closing Date, then, upon the direction
of the Majority of the Noteholders, as set forth in the relevant sale and
participation agreement, the trade with respect to such Related Collateral
Obligation shall be deemed cancelled, the Issuer shall have no monetary
obligation to the Equity Owner and the Related Collateral Obligation(s) shall
not be considered part of the Collateral hereunder.

 

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(g)

Direction to State Street. Evidence that the Issuer has irrevocably directed
State Street to remit all monies received in all of the Issuer’s accounts at
State Street to the applicable Issuer account.

Section 3.3

Delivery of Pledged Obligations.

(a)

The Trustee shall credit all Collateral Obligations and Eligible Investments
purchased in accordance with this Indenture and Cash to the relevant Issuer
Account established and maintained pursuant to Article X, as to which in each
case the Trustee and the Issuer shall have entered into the Securities Account
Control Agreement.

(b)

Each time that the Issuer, or the Investment Manager on behalf of the Issuer,
shall direct or cause the acquisition of any Collateral Obligation or Eligible
Investment, the Issuer or the Investment Manager on behalf of the Issuer shall,
if such Collateral Obligation or Eligible Investment has not already been
transferred to the relevant Issuer Account, cause such Collateral Obligation or
Eligible Investment to be Delivered. The security interest of the Trustee in the
funds or other property utilized in connection with such acquisition shall,
immediately and without further action on the part of the Trustee, thereupon be
released. The security interest of the Trustee shall nevertheless come into
existence and continue in such Collateral Obligation or Eligible Investment so
acquired, including all rights of the Issuer in and to any contracts related to
and proceeds of such Collateral Obligation or Eligible Investment.

(c)

Without limiting the foregoing, the Issuer, or the Investment Manager on behalf
of the Issuer, will use its commercially reasonable efforts to direct the Issuer
Accounts Securities Intermediary to take such different or additional action as
may be necessary in order to maintain the perfection or priority of the security
interest in the event of any change in applicable law or regulation, including
without limitation Articles 8 and 9 of the UCC, in accordance with Section 7.7.

(d)

In addition to the steps specified in subclauses (b) and (c) above, the Issuer
or the Investment Manager (at the sole cost and expense of the Issuer) on behalf
of the Issuer will use commercially reasonable efforts to take all actions
necessary or advisable under the laws of the applicable jurisdiction of
organization of the Issuer to protect the security interest of the Trustee.

Section 3.4

Purchase and Delivery of Collateral Obligations and Other Actions During the
Initial Investment Period; Effective Date Requirements.

(a)

Investment of Deposit in Collateral Obligations. The Investment Manager on
behalf of the Issuer shall seek to invest the Deposits and Increases, as
applicable, in Collateral Obligations in accordance with the provisions hereof.
Subject to the provisions of this Section 3.4, all or any portion of the Deposit
or Increases may be applied prior to the end of the Reinvestment Period to
purchase a Collateral Obligation or one or more Eligible Investments for
inclusion in the Collateral upon (i) in the case of a purchase of a Collateral
Obligation, compliance with the conditions to purchase such Collateral
Obligation in Article 12 and (ii) receipt by the Trustee of an Issuer Order with
respect thereto directing the Trustee to pay out the amount specified therein
against delivery of the Collateral Obligations or Eligible Investments specified
therein.

 

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(b)

Investment of Deposit in Eligible Investments. Any portion of the Deposit or any
Increase that is not invested in Collateral Obligations at 3:00 p.m., New York
City time, on any Business Day during the Reinvestment Period shall, on the next
succeeding Business Day or as soon as practicable thereafter, be invested in
Eligible Investments as directed by the Investment Manager in writing (which may
be in the form of standing instructions).

(c)

[Reserved].

(d)

Schedule of Collateral Obligations. The Issuer shall cause to be delivered to
the Trustee, the Collateral Administrator and the Noteholders, as promptly as
practicable on or after the Effective Date, either an amended Schedule of
Collateral Obligations to this Indenture or a list of Collateral Obligations
setting forth all Collateral Obligations acquired by the Issuer and Granted to
the Trustee pursuant to Section 3.2 and this Section 3.4 between the Closing
Date and the Effective Date, which schedule or list shall supersede any prior
Schedule of Collateral Obligations delivered to the Trustee and the Collateral
Administrator, and which schedule or list shall include all Collateral
Obligations held as of the Effective Date.

 

ARTICLE IV.

SATISFACTION AND DISCHARGE

Section 4.1

Satisfaction and Discharge of Indenture. This Indenture shall cease to be of
further effect with respect to the Notes except as to (i) rights of registration
of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or
stolen Notes, (iii) rights of Holders to receive payments of principal thereof,
interest thereon and distributions as provided herein, (iv) the rights and
immunities of the Trustee hereunder and the obligations of the Trustee in
respect of the matters described in this Section 4.1, and in the last sentence
of Section 4.1(c), (v) the rights and immunities of the Investment Manager
hereunder and under the Investment Management Agreement, (vi) the rights and
immunities of the Collateral Administrator hereunder and under the Collateral
Administration Agreement and (vii) the rights of Holders as beneficiaries hereof
with respect to the property deposited with the Trustee and payable to all or
any of them, and the Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when:

(a)

either

(i)

all Notes theretofore authenticated and delivered (other than (A) Notes which
have been mutilated, destroyed, lost or stolen and which have been replaced or
paid as provided in Section 2.6 and (B) Notes for whose payment money has
theretofore irrevocably been deposited in trust and thereafter repaid to the
Issuer or discharged from such trust as provided in Section 7.5) have been
delivered to the Trustee for cancellation; or

 

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(ii)

all Notes not theretofore delivered to the Trustee for cancellation (A) have
become due and payable, or (B) will become due and payable at their Stated
Maturity within one year, or (C) are to be called for redemption within one year
pursuant to Section 9.1 under an arrangement satisfactory to the Trustee and
there has been given notice of redemption by the Issuer pursuant to Section 9.3
and, in the case of (A), (B) or (C) the Issuer has irrevocably deposited or
caused to be deposited with the Trustee in an account which account shall be
maintained for the benefit of the Holders, in trust for such purpose, Cash or
non-callable direct obligations of the United States of America, provided that
(x) the obligations are Eligible Investments, in an amount sufficient, as
verified by a firm of certified public accountants which are nationally
recognized, to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for principal and
interest to the date of such deposit (in the case of the Notes which have become
due and payable), or to the Stated Maturity or the Redemption Date, as the case
may be and (y) the obligations constitute all of the Eligible Investments owned
by the Issuer, the Issuer owns no Collateral Obligations and all such
obligations mature no later than the Stated Maturity; provided, however, that
this subsection (ii) shall not apply if an election to act in accordance with
the provisions of Section 5.5(a) shall have been made and not rescinded;

(b)

the Issuer has paid or caused to be paid all other sums payable hereunder and
under the Investment Management Agreement by the Issuer; and

(c)

(i)

the Issuer has delivered to the Trustee an Officer’s Certificate and an Opinion
of Counsel stating that all conditions precedent relating to the satisfaction
and discharge of this Indenture have been complied with; or

(ii)

the Issuer has delivered to the Trustee an Officer’s Certificate stating that
(i) there are no Pledged Obligations that remain subject to the lien of this
Indenture and (ii) all funds on deposit in the Issuer Accounts have been
distributed in accordance with the terms of this Indenture (including the
Priority of Payments) or have otherwise been irrevocably deposited in trust with
the Trustee for such purpose.

Notwithstanding the satisfaction and discharge of this Indenture, the rights and
obligations of the Issuer, the Trustee, the Collateral Administrator and, if
applicable, the Investment Manager and the Noteholders, as the case may be,
under Sections 2.5, 2.6, 2.7, 4.2, 5.4(c), 5.9, 5.18, 6.1, 6.3, 6.4, 6.5, 6.6,
6.7, 6.8, 6.11, 6.16, 6.17, 7.1, 7.4, 7.5, 7.16(d) and Article XIII and Article
XIV shall survive the satisfaction and discharge of this Indenture.

Section 4.2

Application of Trust Money.

All monies deposited with the Trustee pursuant to Section 4.1 shall be held in
trust and applied by it in accordance with the provisions of the Notes and this
Indenture, including the Priority of Payments, to the payment of the principal,
interest and either directly or through any Paying Agent, as the Trustee may
determine, to the Person entitled thereto of the principal and interest for
whose payment such money has been deposited with the Trustee; but such money
need not be segregated from other funds except to the extent required herein or
required by law.

 

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Section 4.3

Repayment of Monies Held by Paying Agent.

In connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all monies then held by any Paying Agent other than the Trustee
under the provisions of this Indenture shall, upon demand of the Issuer, be paid
to the Trustee to be held and applied pursuant to Section 7.5 and in accordance
with the Priority of Payments and thereupon such Paying Agent shall be released
from all further liability with respect to such monies.

ARTICLE V.

REMEDIES

Section 5.1

Events of Default.

“Event of Default,” wherever used herein, means any one of the following events:

(a)

a default in the payment, when due and payable, of any Interest Distribution
Amount on any Note at its Stated Maturity or Redemption Date (unless notice of
such redemption has been timely withdrawn), which default shall continue for a
period of five Business Days (or, in the case of a default in payment resulting
solely from an administrative error or omission by the Trustee, any Paying Agent
or the Registrar, such default continues for a period of seven or more Business
Days after the Trustee receives written notice of or a Trust Officer has actual
knowledge of such administrative error or omission);

(b)

a default in the payment of principal on any Note at its Stated Maturity or
Redemption Date (unless notice of such redemption has been timely withdrawn);

(c)

the failure on any Payment Date to disburse amounts available in the Payment
Account in excess of $1,000 in accordance with the Priority of Payments and
continuation of such failure for a period of ten Business Days (provided, if
such failure results solely from an administrative error or omission by the
Trustee, such default continues for a period of ten or more Business Days after
the Trustee receives written notice of or a Trust Officer has actual knowledge
of such administrative error or omission);

(d)

the entry of a decree or order by a court having competent jurisdiction
adjudging the Issuer as bankrupt or insolvent or granting an order for relief or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Issuer under the Bankruptcy
Code or any other applicable law, or appointing a receiver, liquidator,
assignee, or sequestrator (or other similar official) of the Issuer or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs; or an involuntary case or Proceeding shall be commenced against the
Issuer seeking any of the foregoing and such case or Proceeding shall continue
in effect for a period of 60 consecutive days;

(e)

the institution by the Issuer of Proceedings to be adjudicated as bankrupt or
insolvent, or the consent by it to the institution of bankruptcy or insolvency
Proceedings against it, or the filing by the Issuer of a petition or answer or
consent seeking reorganization or relief under the Bankruptcy Code or any other
applicable law, or the consent by it to the filing of any such petition or to
the appointment of a receiver, liquidator, assignee, trustee or sequestrator (or
other similar official) of the Issuer or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of any action by the Issuer in furtherance of any
such action;

 

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(f)

the Issuer or the portfolio of Collateral becomes an investment company required
to be registered under the Investment Company Act and such status continues
unremedied for 45 days; or

(g)

except as otherwise provided in this Section 5.1, a default in the performance,
or the breach, of any other covenant or other agreement of the Issuer in this
Indenture, or the failure of any representation or warranty of the Issuer made
in this Indenture or in any other Transaction Document or in any certificate or
other writing delivered pursuant hereto or thereto or in connection herewith or
therewith to be correct when the same shall have been made, when such default,
breach or failure has had a material adverse effect on the Holders of the Notes
and the continuation of such default, breach or failure for a period of 45 days
after notice to the Issuer and the Investment Manager by registered or certified
mail or overnight courier, by the Trustee, the Issuer or the Investment Manager,
or to the Issuer, the Investment Manager and the Trustee at the direction of the
Holders of at least a Majority of the Noteholders, specifying such default,
breach or failure and requiring it to be remedied and stating that such notice
is a “Notice of Default” hereunder.

Upon the occurrence of an Event of Default, the Issuer shall promptly notify the
Trustee, the Collateral Administrator, the Investment Manager, the Holders and
each Paying Agent in writing.

Section 5.2

Acceleration of Maturity; Rescission and Annulment.

(a)

If an Event of Default occurs and is continuing (other than an Event of Default
specified in Section 5.1(d) or 5.1(e)), the Trustee may by notice to the Issuer
or shall, at the written direction of a Majority of the Noteholders by notice to
the Issuer (and the Trustee shall in turn provide notice to the Holders of all
the Notes then Outstanding) declare the principal of and accrued and unpaid
interest on all the Notes to be immediately due and payable, and upon any such
declaration such principal, together with all accrued and unpaid interest
thereon, and other amounts payable hereunder, shall become immediately due and
payable. If an Event of Default specified in Section 5.1(d) or (e) occurs, all
unpaid principal, together with all accrued and unpaid interest thereon, of all
the Notes, and other amounts payable hereunder, shall automatically become due
and payable without any declaration or other act on the part of the Trustee or
any Noteholder.

(b)

At any time after such a declaration of acceleration of the Stated Maturity of
the Notes has been made and before a judgment or decree for payment of the money
due has been obtained by the Trustee as hereinafter provided in this Article V,
a Majority of the Noteholders, by written notice to the Issuer and the Trustee,
may rescind and annul such declaration and its consequences if:

(i)

the Issuer has paid or deposited with the Trustee a sum sufficient to pay, and
shall pay:

(A)

all overdue installments of interest on and principal of the Notes (other than
amounts due solely as a result of such acceleration);

 

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(B)

to the extent that payment of such interest is lawful, interest upon any
Defaulted Interest at the Note Interest Rate;

(C)

all unpaid taxes and Administrative Expenses and other sums paid or advanced by
the Trustee and the Collateral Administrator hereunder and the reasonable
compensation, expenses, disbursements and advances of the Trustee and the
Collateral Administrator and their agents and counsel; and

(ii)

the Trustee has determined that either (1) all Events of Default, other than the
non-payment of the interest on or principal of the Notes that have become due
solely by such acceleration, have been cured and a Majority of the Noteholders
by written notice to the Trustee has agreed with such determination or (2) a
Majority of the Noteholders by written notice to the Trustee has waived such
Event of Default as provided in Section 5.14.

No such rescission shall affect any subsequent Default or impair any right
consequent thereon.

Section 5.3

Collection of Indebtedness and Suits for Enforcement by Trustee.

If an Event of Default has occurred and is continuing and the Notes have been
declared due and payable and such declaration and its consequences have not been
rescinded and annulled, or at any time on or after the Stated Maturity of the
Notes, the Trustee may in its discretion after written notice to the Holders of
the Notes and shall upon written direction of a Majority of the Noteholders
(subject to the terms hereof) proceed to protect and enforce its rights and the
rights of the Secured Parties by such appropriate Proceedings, in its own name
and as trustee of an express trust, as the Trustee shall reasonably deem most
effective (if no direction by a Majority of the Noteholders is received by the
Trustee) or as the Trustee may be directed by a Majority of the Noteholders, to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Trustee by this Indenture or by law.

In case there shall be pending Proceedings relative to the Issuer or any other
obligor upon the Notes under the Bankruptcy Code or any other applicable
bankruptcy, insolvency or other similar law, or in case a receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, sequestrator or similar
official shall have been appointed for or taken possession of the Issuer or its
property or such other obligor or its property, or in case of any other
comparable Proceedings relative to the Issuer or other obligor upon the Notes,
or the creditors or property of the Issuer or such other obligor, the Trustee,
regardless of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and regardless of whether
the Trustee shall have made any demand pursuant to the provisions of this
Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:

 

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(a)

to file and prove a claim or claims for the whole amount of principal and
interest owing and unpaid in respect of each of the Notes and, to file such
other papers or documents and take such other actions as may be necessary,
including sitting on a committee of creditors, or advisable in order to have the
claims of the Trustee (including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee) and of the Holders
of the Notes allowed in any Proceedings relative to the Issuer or other obligor
upon the Notes or to the creditors or property of the Issuer or such other
obligor;

(b)

unless prohibited by applicable law and regulations, to vote on behalf of the
Holders of the Notes in any election of a trustee or a standby trustee in
arrangement, reorganization, liquidation or other bankruptcy or insolvency
Proceedings or a Person performing similar functions in comparable Proceedings;
and

(c)

to collect and receive any monies or other property payable to or deliverable on
any such claims, and to distribute all amounts received with respect to the
claims of the Holders of the Notes and of the Trustee on their behalf; and any
trustee, receiver or liquidator, custodian or other similar official is hereby
authorized by each of the Holders of the Notes to make payments to the Trustee,
and, in the event that the Trustee shall consent to the making of payments
directly to the Holders of the Notes, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and all
other reasonable expenses and liabilities incurred, and all advances made, by
the Trustee and each predecessor Trustee, except as a result of its negligence
or bad faith.

Nothing herein contained shall be deemed to authorize the Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such Proceeding except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar Person.

In any Proceedings brought by the Trustee on behalf of the Holders of the Notes
(and any such Proceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party), the Trustee shall be held to
represent all the Holders of the Notes.

Section 5.4

Remedies.

(a)

If an Event of Default shall have occurred and be continuing, and the Notes have
been declared due and payable and such declaration and its consequences have not
been rescinded and annulled, the Issuer agrees that the Trustee may (and shall,
subject to the terms hereof, upon written direction by a Majority of the
Noteholders), to the extent permitted by applicable law, exercise one or more of
the following rights, privileges and remedies:

(i)

institute Proceedings for the collection of all amounts then payable on the
Notes or otherwise payable under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Collateral monies
adjudged due;

(ii)

sell all or a portion of the Collateral or rights of interest therein, at one or
more public or private sales called and conducted in any manner permitted by law
and in accordance with Section 5.17 and provided such sale of all or a portion
of the Collateral is at market prices obtained at public auction;

 

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(iii)

institute Proceedings from time to time for the complete or partial foreclosure
of this Indenture with respect to the Collateral;

(iv)

exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Secured
Parties hereunder; and

(v)

to the extent not inconsistent with subclauses (i) through (iv), exercise any
other rights and remedies that may be available at law or in equity;

provided, however, that the Trustee may not sell or liquidate the Collateral or
institute Proceedings in furtherance thereof pursuant to this Section 5.4 unless
any of the conditions specified in Section 5.5(a) is met or the preservation of
the Collateral by the Trustee is prohibited by applicable law.

The Trustee may, but need not, obtain and rely upon an opinion or advice of an
Independent investment banking firm of national reputation as to the feasibility
and recommended manner of any action proposed to be taken in accordance with
this Section 5.4 and as to the sufficiency of the Proceeds and other amounts
receivable with respect to the Collateral to make the required payments of
principal and interest on the Notes, which opinion shall be conclusive evidence
as to such feasibility or sufficiency and the fees and expenses of any firm so
retained shall be Administrative Expenses.

(b)

Upon any sale, whether made under the power of sale hereby given or by virtue of
judicial proceedings, any Secured Party, to the extent permitted by the UCC, may
bid for and purchase the Collateral or any part thereof and, upon compliance
with the terms of sale, may hold, retain, possess or dispose of such property in
its or their own absolute right without accountability; and any purchaser at any
such sale may, in paying the purchase money, turn in any of the Notes in lieu of
Cash equal to the amount which shall, upon distribution of the net proceeds of
such sale, be payable on the Notes so turned in by such Holder (taking into
account any amounts payable prior to such Secured Party in accordance with the
Priority of Payments and Article XIII). Said Notes, in case the amounts so
payable thereon shall be less than the amount due thereon, shall be returned to
the Holders thereof after proper notation has been made thereon to show partial
payment.

Upon any sale, whether made under the power of sale hereby given or by virtue of
judicial proceedings, the receipt of the Trustee, or of the officer making a
sale under judicial proceedings, shall be a sufficient discharge to the
purchaser or purchasers at any sale for its or their purchase money, and such
purchaser or purchasers shall not be obliged to see to the application thereof.

Any such sale, whether under any power of sale hereby given or by virtue of
judicial proceedings, shall bind the Issuer, the Trustee and the Secured
Parties, shall operate to divest all right, title and interest whatsoever,
either at law or in equity, of each of them in and to the property sold, and
shall be a perpetual bar, both at law and in equity, against each of them and
their successors and assigns, and against any and all Persons claiming through
or under them.

 

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(c)

Notwithstanding any other provision of this Indenture, neither the Trustee, in
its own capacity, or on behalf of any Holder of the Notes, nor any Secured
Parties may, prior to the date which is one year and one day (or, if longer, the
applicable preference period) after the payment in full of all the Notes,
institute against, or join any other Person in instituting against, the Issuer
any bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceedings, or other proceedings under United States federal or
state bankruptcy or similar laws. Subject to Section 2.7(i), nothing in this
Section 5.4 shall preclude, or be deemed to stop, the Trustee (i) from taking
any action prior to the expiration of the aforementioned one year and one day
(or longer) period in (A) any case or proceeding voluntarily filed or commenced
by the Issuer or (B) any involuntary insolvency proceeding filed or commenced by
a Person other than the Trustee or (ii) from commencing against the Issuer or
any of its properties any legal action which is not a bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceeding.

Section 5.5

Optional Preservation of Collateral.

(a)

If an Event of Default shall have occurred and be continuing and an acceleration
has occurred, the Trustee shall retain the Collateral, collect and cause the
collection of the proceeds thereof and make and apply all payments and deposits
and maintain all accounts hereunder in accordance with the provisions of Article
X, Article XI, Article XII and Article XIII unless:

(i)

the Trustee determines (based upon information provided to it by the Investment
Manager in accordance with Section 5.5(c) or, if Cause has occurred under the
Investment Management Agreement, a Majority of the Noteholders), and a Majority
of the Noteholders agree with such determination, that the anticipated proceeds
of a sale or liquidation of the Collateral (after deducting the expenses of such
sale or liquidation) would be sufficient to pay in full the sum of:

(A)

the principal and accrued interest with respect to all the Outstanding Notes;
and

(B)

all items prior to payments on the Outstanding Notes pursuant to Section
11.1(a)(D); or

(ii)

with respect to any Event of Default, a Majority of the Noteholders, subject to
the terms and conditions set forth below, direct the sale and liquidation of the
Collateral.

(b)

Nothing contained in Section 5.5(a) shall be construed to require the Trustee to
sell the Collateral if the conditions set forth in Section 5.5(a) are not
satisfied. Nothing contained in Section 5.5(a) shall be construed to require the
Trustee to preserve the Collateral if prohibited by applicable law or if the
Trustee is directed to liquidate the Collateral pursuant to Section 5.5(a)(ii).

 

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(c)

In determining whether the conditions specified in Section 5.5(a)(i) are
satisfied, the Trustee shall rely upon the bid prices obtained by the Investment
Manager (or if Cause has occurred under the Investment Management Agreement, a
Majority of the Noteholders) with respect to each security and debt obligation
contained in the Collateral from two nationally recognized dealers(or in the
event that there is only one market maker, then the Investment Manager (or a
Majority of the Noteholders, as applicable) shall obtain a bid price from that
market maker), as specified by the Investment Manager (or a Majority of the
Noteholders, as applicable) in writing, at the time making a market in such
securities and debt obligations and shall compute the anticipated proceeds of
sale or liquidation on the basis of the lower of such bid prices (or if only one
bid price is received, on the basis of such bid price) for each such security
and debt obligation. In addition, in determining issues relating to whether the
conditions specified in Section 5.5(a)(i) are satisfied and to the terms of a
bid and sale, the Trustee may retain and rely on an opinion or advice of an
Independent investment banking firm of national reputation and their fees will
be an Administrative Expense. So long as the Investment Manager obtains bid
prices from at least two nationally recognized dealers (unaffiliated with the
Investment Manager or its affiliates) for any security or debt obligation
contained in the Collateral Portfolio, the Investment Manager and its
affiliates, subject to Section 12.3, will also be permitted to bid on such
security or debt obligation and submit such bid to the Trustee.

(d)

The Trustee shall promptly deliver to the Holders of the Notes and the
Investment Manager a report stating the results of any determination required
pursuant to Section 5.5(a)(i). The Trustee shall make the determinations
required by Section 5.5(a)(i) within 30 days after an Event of Default and
acceleration which is continuing and at the request of a Majority of the
Noteholders at any time during which the Trustee retains the Collateral pursuant
to Section 5.5(a)(i). In the case of each calculation made by the Trustee
pursuant to Section 5.5(a)(i), the Trustee shall, at the expense of the Issuer,
obtain a letter of an Independent certified public accountant of national
reputation confirming the mathematical accuracy of the computations of the
Trustee and certifying their conformity to the requirements of this Indenture.

Section 5.6

Trustee May Enforce Claims Without Possession of the Notes. All rights of action
and claims under this Indenture or the Notes may be prosecuted and enforced by
the Trustee without the possession of any of the Notes or the production thereof
in any Proceeding relating thereto, and any such Proceeding instituted by the
Trustee shall be brought in its own name as Trustee of an express trust, and any
recovery of judgment, subject to the payment of the reasonable expenses,
disbursements and compensation of the Trustee, each predecessor Trustee and its
agents and attorneys in counsel, shall be applied as set forth in Section 5.7.

Section 5.7

Application of Money Collected.

The application of any money collected by the Trustee pursuant to this Article V
and any money that may then be held or thereafter received by the Trustee
hereunder shall be applied on one or more dates fixed by the Trustee (which may
be dates other than Payment Dates, and which may be dates directed by a Majority
of Noteholders in writing to the Trustee) subject to Section 13.1, and otherwise
in accordance with Section 11.1(a)(D). For the avoidance of doubt, any such
application of money under this Indenture shall be made only in accordance with
the Priority of Payments set forth in Section 11.1(a)(D) except to the extent
provided otherwise in Section 13.1.

 

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Section 5.8

Limitation on Suits.

No Noteholder shall have any right to institute any Proceedings, judicial or
otherwise, with respect to this Indenture, or for the appointment of a receiver
or Trustee, or for any other remedy hereunder, unless:

(a)

such Holder has previously given written notice to the Trustee of a continuing
Event of Default;

(b)

except as otherwise provided in Section 5.9, the Holders of at least 25% of the
Aggregate Outstanding Amount of the Notes shall have made a written request to
the Trustee to institute Proceedings in respect of such Event of Default in its
own name as the Trustee hereunder;

(c)

such Holder or Holders have offered to the Trustee indemnity reasonably
satisfactory to it against the costs, expenses and liabilities to be incurred in
compliance with such request;

(d)

the Trustee for 30 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such Proceeding; and

(e)

no direction inconsistent with such written request has been given to the
Trustee during such 30-day period by a Majority of the Noteholders;

it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of the Notes or to obtain or to seek to obtain priority or preference over any
other Holders of the Notes or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all the
Holders of the Notes, subject to and in accordance with Section 13.1 and
otherwise in accordance with the Priority of Payments. In addition, any action
taken by any one or more Holders of the Notes shall be subject to the same
restrictions imposed on the Trustee in accordance with Section 5.4(b).

In the event the Trustee shall receive conflicting or inconsistent requests and
indemnity pursuant to this Section 5.8 from two or more groups of Holders of the
Notes, each representing less than a Majority of the Notes, the Trustee shall
act on the direction of the group of Holders representing the greater percentage
of the Notes and if the groups shall represent the same percentage, the Trustee
in its sole discretion may determine what action, if any, shall be taken,
notwithstanding any other provisions of this Indenture.

Section 5.9

Unconditional Rights of Holders of the Notes to Receive Principal and Interest.

(a)

Notwithstanding any other provision in this Indenture (but subject to Section
2.7(i)), the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
as such principal and interest become due and payable in accordance with the
Priority of Payments, except as provided otherwise in Section 13.1.

 

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Section 5.10

Restoration of Rights and Remedies.

If the Trustee or any Holder of the Notes has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder of the Notes then and in every such case the
Issuer, the Trustee and such Holder of the Notes shall, subject to any
determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders of the Notes shall continue as though no such Proceeding
had been instituted.

Section 5.11

Rights and Remedies Cumulative.

No right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of the Notes is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing by law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

Section 5.12

Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.

Section 5.13

Control by Noteholders.

A Majority of the Noteholders shall have the right to cause the institution of
and direct the time, method and place of conducting any Proceeding for any
remedy available to the Trustee or exercising any trust, right, remedy or power
conferred on the Trustee; provided that:

(a)

such direction be in writing and shall not be in conflict with any rule of law
or with this Indenture;

(b)

the Trustee may take any other action deemed proper by it that is not
inconsistent with such direction or this Indenture; provided, however, that,
subject to Section 6.1, it need not take any action that it determines might
involve it in liability;

(c)

the Trustee shall have been provided with indemnity reasonably satisfactory to
it; and

 

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(d)

any direction to the Trustee to undertake a sale of the Collateral shall be by
the Noteholders secured thereby representing the percentage of the Aggregate
Outstanding Amount of the Notes specified in Section 5.4 or 5.5, as applicable.

Section 5.14

Waiver of Past Defaults.

Prior to the time a judgment or decree for payment of the money due has been
obtained by the Trustee as provided in this Article V, a Majority of the
Noteholders may on behalf of the Holders of all the Notes waive any past Default
and its consequences, except a Default:

(a)

constituting a Payment Default; or

(b)

in respect of a covenant or provision for the individual protection or benefit
of the Trustee, without its consent.

In the case of any such waiver, the Issuer, the Trustee and the Holders shall be
restored to their former positions and rights hereunder, respectively, but no
such waiver shall extend to any subsequent or other Default or impair any right
consequent thereto. The Trustee shall promptly give notice of any such waiver to
the Investment Manager.

Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture, but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereto.

Section 5.15

Undertaking for Costs.

All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken, or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.15 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder of the Notes, or group of Holders
of the Notes, holding in the aggregate more than 10% of the Aggregate
Outstanding Amount of the Notes, or to any suit instituted by any Holder of the
Notes for the enforcement of the payment of the principal of or interest on any
Note on or after the Stated Maturity expressed in such Note (or, in the case of
redemption, on or after the applicable Redemption Date).

Section 5.16

Waiver of Stay or Extension Laws.

The Issuer covenants (to the extent that they may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants, the performance
of or any remedies under this Indenture; and the Issuer (to the extent that it
may lawfully do so) hereby expressly waive all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

 

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Section 5.17

Sale of Collateral.

(a)

The power to effect any sale of any portion of the Collateral pursuant to
Sections 5.4 and 5.5 shall not be exhausted by any one or more sales as to any
portion of such Collateral remaining unsold, but shall continue unimpaired
(subject to Section 5.5(d) in the case of sales pursuant to Section 5.5) until
the entire Collateral shall have been sold or all amounts secured by the
Collateral shall have been paid. The Trustee may and shall, upon written
direction of a Majority of the Noteholders, from time to time postpone any sale.
The Trustee hereby expressly waives its rights to any amount fixed by law as
compensation for any sale; provided that the Trustee shall be authorized to
deduct the reasonable costs, charges and expenses incurred by it in connection
with such sale from the proceeds thereof notwithstanding the provisions of
Section 6.7.

(b)

The Trustee may bid for and acquire any portion of the Collateral in connection
with a public sale thereof. The Trustee may hold, lease, operate, manage or
otherwise deal with any property so acquired in any manner permitted by law in
accordance with this Indenture.

(c)

If any portion of the Collateral consists of Unregistered Securities, the
Trustee may seek an Opinion of Counsel, or, if no such Opinion of Counsel can be
obtained and with the consent of a Majority of the Noteholders, seek a no-action
position from the Securities and Exchange Commission or any other relevant
federal or state regulatory authorities, regarding the legality of a public or
private sale of such Unregistered Securities.

(d)

The Trustee shall execute and deliver an appropriate instrument of conveyance
transferring its interest, without recourse, representation or warranty, in any
portion of the Collateral in connection with a sale thereof. In addition, the
Trustee is hereby irrevocably appointed the agent and attorney-in-fact of the
Issuer to transfer and convey its interest in any portion of the Collateral in
connection with a sale thereof, and to execute and deliver any instruments and
take all action (whether in its name or in the name of the Issuer) necessary to
effect such sale. No purchaser or transferee at such a sale shall be bound to
ascertain the Trustee’s authority, to inquire into the satisfaction of any
conditions precedent or see to the application of any monies.

Section 5.18

Action on the Notes.

The Trustee’s right to seek and recover judgment on the Notes or under this
Indenture shall not be affected by the seeking or obtaining of or application
for any other relief under or with respect to this Indenture. Neither the lien
of this Indenture nor any rights or remedies of the Trustee or the Holders of
the Notes shall be impaired by the recovery of any judgment by the Trustee
against the Issuer or by the levy of any execution under such judgment upon any
portion of the Collateral or upon any of the assets of the Issuer.

 

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ARTICLE VI.

THE TRUSTEE

Section 6.1

Certain Duties and Responsibilities.

(a)

Except during the continuance of an Event of Default actually known to a Trust
Officer of the Trustee:

(i)

the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and

(ii)

in the absence of bad faith on its part, the Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; provided, however, that in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they substantially conform on their
face to the requirements of this Indenture and shall promptly notify the party
delivering the same if such certificate or opinion does not conform. If a
corrected form shall not have been delivered to the Trustee within fifteen (15)
days after such notice from the Trustee, the Trustee shall so notify the
Noteholders.

(b)

In case an Event of Default actually known to a Trust Officer of the Trustee has
occurred and is continuing, the Trustee shall, prior to the receipt of
directions, if any, from a Majority of the Noteholders, exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in its exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs.

(c)

No provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:

(i)

this subsection shall not be construed to limit the effect of subsection (a) of
this Section 6.1;

(ii)

the Trustee shall not be liable for any error of judgment made in good faith by
a Trust Officer, unless it shall be proven that the Trustee was negligent in
ascertaining the pertinent facts;

(iii)

the Trustee shall not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the direction of the Issuer or
the Investment Manager and/or a Majority (or such larger percentage as may be
expressly required by the terms hereof) of the Noteholders relating to its
obligations as set forth herein and relating to the time, method and place of
conducting any Proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture;

 

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(iv)

no provision of this Indenture shall require the Trustee to expend or risk its
own funds or otherwise incur any financial liability in the performance of any
of its duties hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of such funds or
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it unless such risk or liability relates to its ordinary services,
including mailing of notices under Article V under the Indenture; and

(v)

in no event shall the Trustee be liable for special, indirect, or consequential
loss or damage (including loss profits) even if the Trustee has been advised of
the likelihood of such damages and regardless of such action.

(d)

For all purposes under this Indenture, the Trustee shall not be deemed to have
notice or knowledge of any Default or Event of Default described in 5.1(d),
5.1(e), 5.1(f) or 5.1(g) unless a Trust Officer assigned to and working in the
Corporate Trust Office has actual knowledge thereof or unless written notice of
any event which is in fact such an Event of Default or Default is received by
the Trustee at the Corporate Trust Office, and such notice references the Notes
generally, the Issuer, the Collateral or this Indenture. For purposes of
determining the Trustee’s responsibility and liability hereunder, whenever
reference is made in this Indenture to such an Event of Default or a Default,
such reference shall be construed to refer only to such an Event of Default or
Default of which the Trustee is deemed to have notice as described in this
Section 6.1.

(e)

Whether or not therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection to
the Trustee shall be subject to the provisions of this Section 6.1 and Section
6.3.

Section 6.2

Notice of Default.

Promptly (and in no event later than three Business Days) after the occurrence
of any Default actually known to a Trust Officer of the Trustee or after any
declaration of acceleration has been made or delivered to the Trustee pursuant
to Section 5.2, the Trustee shall transmit by mail or telecopy to the Investment
Manager and to all Holders of the Notes, as their names and addresses appear on
the Register, notice of all Defaults hereunder actually known to a Trust Officer
of the Trustee, unless such Default shall have been cured or waived.

Section 6.3

Certain Rights of Trustee.

Except as otherwise provided in Section 6.1:

(a)

the Trustee may conclusively rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, note or other paper or
document (including the Valuation Report) reasonably believed by it to be
genuine and to have been signed or presented by the proper party or parties;

(b)

any request or direction of the Issuer mentioned herein shall be sufficiently
evidenced by an Issuer Request or Issuer Order, as the case may be;

 

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(c)

whenever in the administration of this Indenture the Trustee shall (i) deem it
desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer’s Certificate or (ii) be required to determine the value of any
Collateral or funds hereunder or the cashflows projected to be received
therefrom, the Trustee may, in the absence of bad faith on its part, rely on
reports, opinions or advice of nationally recognized accountants, investment
bankers or other persons qualified to provide the information required to make
such determination, including nationally recognized dealers in securities of the
type being valued and securities or loan pricing quotation services;

(d)

as a condition to the taking or omitting of any action by it hereunder, the
Trustee may consult with counsel and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of
any action taken or omitted by it hereunder in good faith and in reliance
thereon;

(e)

the Trustee shall be under no obligation to exercise or to honor any of the
rights or powers vested in it by this Indenture or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request or
direction of any of the Noteholders pursuant to this Indenture, unless such
Noteholders shall have offered to the Trustee security or indemnity satisfactory
to it against all costs, expenses (including reasonable attorneys’ fees and
expenses) and liabilities which might reasonably be incurred by it in compliance
with such request or direction;

(f)

the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, note or other paper or
documents, but the Trustee, in its discretion, may and, upon the written
direction of a Majority of the Noteholders, shall make such further inquiry or
investigation into such facts or matters as it may see fit or as it shall be
directed, and the Trustee shall be entitled to receive, on reasonable prior
notice to the Investment Manager, copies of the books and records of the
Investment Manager relating to the Notes and the Collateral, and on reasonable
prior notice to the Issuer, to examine the books and records relating to the
Notes and the Collateral and the premises of the Issuer personally or by agent
or attorney during the Issuer’s normal business hours; provided that the Trustee
shall, and shall cause its agents, to hold in confidence all such information,
except (i) to the extent disclosure may be required by law or by any regulatory
or governmental authority and (ii) except to the extent that the Trustee in its
sole judgment may determine that such disclosure is consistent with its
obligations hereunder; provided, further, that the Trustee may disclose on a
confidential basis any such information to its agents, attorneys and auditors in
connection with the performance of its responsibilities hereunder.

(g)

the Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys; provided
that the Trustee shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by it hereunder;

 

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(h)

the Trustee shall not be liable for any action it takes or omits to take in good
faith that it reasonably and, after the occurrence and during the continuance of
an Event of Default, subject to Section 6.1(b), prudently believes to be
authorized or within its rights or powers hereunder;

(i)

for the avoidance of doubt, any permissive right or discretionary act of the
Trustee to take or refrain from taking any actions enumerated in this Indenture
shall not be construed as a duty and the Trustee shall not be responsible for
other than its own negligent action, its own negligent failure to act, or its
own willful misconduct with respect to the performance of such act;

(j)

the Trustee shall not be responsible for the accuracy of the books or records
of, or for any acts or omissions of, DTC, any Transfer Agent (other than the
Bank acting in such capacity), Issuer Accounts Securities Intermediary (other
than the Bank acting in such capacity), any Calculation Agent (other than the
Trustee itself acting in such capacity) or any Paying Agent (other than the Bank
acting in that capacity);

(k)

in making or disposing of any investment permitted by this Indenture, the
Trustee is authorized to deal with itself (in its individual capacity) or with
any one or more of its Affiliates, whether it or such Affiliate is acting as a
subagent of the Trustee or for any third person or dealing as principal for its
own account. If otherwise qualified, obligations of the Bank or any of its
Affiliates shall qualify as Eligible Investments hereunder;

(l)

the Trustee shall not be liable for the actions or omissions of the Investment
Manager, and without limiting the foregoing, the Trustee shall not (except to
the extent expressly provided in this Indenture) be under any obligation to
monitor, evaluate or verify compliance by the Investment Manager with the terms
hereof or the Investment Management Agreement, or to verify or independently
determine the accuracy of information received by it from the Investment Manager
(or from any selling institution, agent bank, trustee or similar source) with
respect to the Collateral and the Trustee shall have no additional duties
following the resignation or removal of the Investment Manager;

(m)

the Trustee shall have no duty (i) to see to any recording, filing, or
depositing of this Indenture or any Indenture referred to herein or any
financing statement or continuation statement evidencing a security interest, or
to see to the maintenance of any such recording or filing or depositing or to
any rerecording, refiling or redepositing of any thereof or (ii) to see to any
insurance;

(n)

the Trustee shall not be required to give any bond or surety in respect of the
execution of this Indenture or the powers granted hereunder;

(o)

nothing herein shall be construed to impose an obligation on the part of the
Trustee to recalculate, evaluate, verify or independently determine the accuracy
of any report, certificate or information received from the Issuer or Investment
Manager;

 

 

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(p)

the Trustee shall not be responsible or liable for any failure or delay in the
performance of its obligations under this Indenture arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control,
including without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; epidemics; 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 (it being understood that the Trustee shall use
commercially reasonable efforts to resume performance as soon as practicable
under the circumstances);

(q)

the Trustee or its Affiliates are permitted to receive additional compensation
that could be deemed to be in the Trustee’s economic self-interest for (i)
serving as investment adviser, administrator, shareholder, servicing agent,
custodian or sub-custodian with respect to certain of the Eligible Investments,
(ii) using Affiliates to effect transactions in certain Eligible Investments and
(iii) effecting transactions in certain Eligible Investments. Such compensation
is not payable or reimbursable under Section 6.7 of this Indenture;

(r)

to help fight the funding of terrorism and money laundering activities, the
Trustee will obtain, verify, and record information that identifies individuals
or entities that

establish a relationship or open an account with the Trustee. The Trustee will
ask for the name, address, tax identification number and other information that
will allow the Trustee to identify the individual or entity who is establishing
the relationship or opening the account. The Trustee may also ask for formation
documents such as articles of incorporation, an offering memorandum, or other
identifying documents to be provided; and

(s)

Notwithstanding anything to the contrary herein, any and all communications
(both text and attachments) by or from the Trustee that the Trustee in its sole
discretion deems to contain confidential, proprietary, and/or sensitive
information and sent by electronic mail will be encrypted. The recipient of the
email communication will be required to complete a one-time registration
process. Information and assistance on registering and using the email
encryption technology can be found at the Trustee’s secure website
www.citi.com/citi/citizen/privacy/email.htm or by calling (866) 535-2504 (in the
U.S.) or (904) 954-6181 at any time.

(t)

The Collateral Administrator shall have the same rights, privileges and
indemnities afforded to the Trustee in this Article VII.

Section 6.4

Not Responsible for Recitals or Issuance of the Notes.

The recitals contained herein and in the Notes, other than the Certificate of
Authentication thereon with respect to the Trustee, shall be taken as the
statements of the Issuer, and the Trustee assumes no responsibility for their
correctness. Except as set forth in Section 6.14, the Trustee makes no
representation as to the validity or sufficiency of this Indenture (except as
may be made with respect to the validity of the Trustee’s obligations
hereunder), of the Collateral or of the Notes. The Trustee shall not be
accountable for the use or application by the Issuer of the Notes or the
Proceeds thereof or any money paid to the Issuer pursuant to the provisions
hereof.

 

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Section 6.5

May Hold Notes.

The Trustee, any Paying Agent, Registrar or any other agent of the Issuer, in
its individual or any other capacity, may become the owner or pledgee of the
Notes and may otherwise deal with the Issuer or any of its Affiliates, with the
same rights it would have if it were not Trustee, Paying Agent, Registrar or
such other agent.

Section 6.6

Money Held in Trust.

Money held by the Trustee hereunder shall be held in trust to the extent
required herein. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed upon with the Issuer
and except to the extent of income or other gain on investments that are
deposits in or certificates of deposit of the Trustee in its commercial capacity
and income or other gain actually received by the Trustee on Eligible
Investments.

Section 6.7

Compensation and Reimbursement.

(a)

The Issuer agrees:

(i)

to pay the Trustee on each Payment Date, the compensation set forth in the
letter agreement dated November 7, 2014 (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);

(ii)

except as otherwise expressly provided herein, to reimburse the Trustee (subject
to any written agreement between the Issuer and the Trustee) in a timely manner
upon its request for all reasonable expenses, costs, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture relating to the maintenance and administration of the Collateral, the
administration of the terms of this Indenture, the performance of its duties
hereunder, or in the enforcement of any provision hereof or exercise of any
rights or remedies hereunder (including securities transaction charges and the
reasonable compensation and expenses and disbursements of its agents and legal
counsel and of any accounting firm or investment banking firm employed by the
Trustee pursuant to Section 5.4, 5.5, 5.17 or 10.5, except any such expense,
disbursement or advance as may be attributable to its negligence, willful
misconduct or bad faith);

(iii)

to indemnify the Trustee and its officers, directors, employees and agents for,
and to hold them harmless against, any loss, liability or expense (including
reasonable attorneys’ fees and expenses) incurred without negligence, willful
misconduct or bad faith on their part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending themselves against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder; and

(iv)

to pay the Trustee reasonable additional compensation together with its expenses
(including reasonable counsel fees) for any collection action taken pursuant to
Section 6.13.

 

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(b)

The Issuer shall pay the Trustee the fees and expenses specified in this Section
6.7 in accordance with Section 11.1 of this Indenture.

(c)

The Trustee hereby agrees not to cause the filing of a petition in bankruptcy
against the Issuer for the non-payment to the Trustee of any amounts provided by
this Section 6.7 until at least one year and one day (or, if longer, the
applicable preference period) after the payment in full of all of the Notes.

(d)

The amounts payable to the Trustee on any Payment Date pursuant to Section
6.7(a), or which may be deducted by the Trustee pursuant to Section 6.7(b) shall
not exceed the amounts permitted to be applied to such Administrative Expenses
on such Payment Date as provided in and in accordance with the Priority of
Payments, and the Trustee shall have a lien ranking senior to that of the
Holders upon all property and funds held or collected as part of the Collateral
to secure payment of amounts payable to the Trustee under Section 6.7 not to
exceed such amount with respect to any Payment Date; provided, however, that the
Trustee shall not institute any Proceeding for the enforcement of such lien
except in connection with an action pursuant to Section 5.3 for the enforcement
of the lien of this Indenture for the benefit of the Secured Parties; provided,
further, that the Trustee may only enforce such a lien in conjunction with the
enforcement of the rights of Holders in the manner set forth in Sections 5.4 and
5.5. For the avoidance of doubt, any amount payable to the Trustee pursuant to
Section 6.7(a) and not paid on any Payment Date pursuant to this paragraph shall
remain outstanding and be payable on the next Payment Date (subject to the
limitations of this paragraph and the Priority of Payments).

The fees payable to the Trustee shall be computed on the basis of the actual
number of days elapsed in the applicable Due Period divided by 360, and fees
applicable to periods shorter or longer than a calendar quarterly period shall
be prorated based on the number of days within such period. The Trustee shall
apply amounts pursuant to Section 5.7 and Section 11.1(a)(A), (B) or (D) only to
the extent that the payment thereof will not result in an Event of Default and
the failure to pay such amounts to the Trustee will not, by itself, constitute
an Event of Default. Subject to Section 6.1(c)(iv) and Section 6.9, the Trustee
shall continue to serve as Trustee under this Indenture notwithstanding the fact
that the Trustee shall not have received amounts due it hereunder. No direction
by a Majority of the Noteholders shall affect the right of the Trustee to
collect amounts owed to it under this Indenture.

The payment of any fee or expense due to the Trustee is subject to the
availability of funds and the Priority of Payments. If, on any date when a fee
shall be payable to the Trustee pursuant to this Indenture, insufficient funds
are available for the payment thereof, any portion of a fee not so paid shall be
deferred and payable, together with compensatory interest thereon (at a rate not
to exceed the federal funds rate), on such later date on which a fee shall be
payable and sufficient funds are available therefor.

 

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Section 6.8

Corporate Trustee Required; Eligibility.

There shall at all times be a Trustee hereunder which shall be an organization,
corporation, association or other entity Independent of the Issuer, organized
and doing business under the laws of the United States of America or of any
state thereof, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least U.S.$200,000,000, subject to
supervision or examination by federal or state authority, having a long term
senior unsecured debt rating of at least “BBB” by S&P and having an office
within the United States. If such organization, corporation, association or
other entity publishes reports of condition at least annually, pursuant to law
or to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section 6.8, the combined capital and surplus of such
organization, corporation, association or other entity shall be deemed to be its
combined capital and surplus as set forth in its most recent published report of
condition. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.8, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article VI.

Section 6.9

Resignation and Removal; Appointment of Successor.

(a)

No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article VI shall become effective until the acceptance
of appointment by the successor Trustee under Section 6.10. The indemnification
in favor of the Trustee in Section 6.7 shall survive any resignation or removal
of the Trustee (to the extent of indemnified liabilities, costs, expenses and
other indemnified amounts arising or incurred prior to, or arising as a result
of actions or omissions occurring prior to, such resignation or removal).

(b)

The Trustee may resign at any time by giving 30 days prior written notice
thereof to the Issuer, the Noteholders and the Investment Manager.

(c)

The Trustee may be removed at any time by Act of a Majority of the Noteholders,
or may be removed at any time when an Event of Default shall have occurred and
be continuing, by Act of a Majority of the Noteholders, delivered to the
Trustee, the Investment Manager and the Issuer.

(d)

If at any time:

(i)

the Trustee shall cease to be eligible under Section 6.8 and shall fail to
resign after written request therefor by the Issuer or by a Majority of the
Noteholders; or

(ii)

the Trustee shall become incapable of acting or shall be adjudged as bankrupt or
insolvent or a receiver or liquidator of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;

then, in any such case (subject to Section 6.9(a)), (A) the Issuer, by Issuer
Order, may remove the Trustee or (B) subject to Section 5.15, any Holder may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

 

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(e)

Upon (i) receiving any notice of resignation of the Trustee, (ii) any
determination that the Trustee be removed, or (iii) any vacancy in the position
of Trustee, then the Issuer shall promptly appoint a successor Trustee or
Trustees by written instrument, in duplicate, executed by an Authorized Officer
of the Issuer, one copy of which shall be delivered to the Trustee so resigning
and one copy to the successor Trustee or Trustees; provided that such successor
Trustee shall be appointed (i) only upon the written consent of a Majority of
the Noteholders, and (ii) subject to the approval of the Investment Manager, not
to be unreasonably withheld. If the Issuer shall fail to appoint a successor
Trustee within 30 days after such notice of resignation, determination of
removal or the occurrence of a vacancy, a successor Trustee may be appointed by
Act of a Majority of the Noteholders with the consent of the Investment Manager
(not to be unreasonably withheld). If no successor Trustee shall have been
appointed and an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 60 days after the giving of such notice of
resignation, determination of removal or the occurrence of a vacancy, then the
Trustee to be replaced, or any Noteholder, on behalf of himself and all others
similarly situated, may petition any court of competent jurisdiction for the
appointment of a successor Trustee. Notwithstanding the foregoing, at any time
that an Event of Default shall have occurred and be continuing, a Majority of
the Noteholders shall have in lieu of the Issuer the Issuer’s rights to appoint
a successor Trustee, such rights to be exercised by notice delivered to the
Issuer and the retiring Trustee. Any successor Trustee shall, forthwith upon its
acceptance of such appointment in accordance with Section 6.10, become the
successor Trustee and supersede any successor Trustee.

(f)

The Issuer shall give prompt notice of each resignation and each removal of the
Trustee and each appointment of a successor Trustee (which shall be subject to
the approval of the Investment Manager, not to be unreasonably withheld) to the
Investment Manager and to the Holders of the Notes as their names and addresses
appear in the Register. Each notice shall include the name of the successor
Trustee and the address of its Corporate Trust Office. If the Issuer fails to
mail any such notice within 10 days after acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be given at
the expense of the Issuer.

Section 6.10

Acceptance of Appointment by Successor.

Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Issuer and the retiring Trustee an instrument accepting such
appointment. Upon delivery of the required instruments, the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, duties and obligations of the retiring Trustee;
but, on request of the Issuer or a Majority of the Noteholders or the successor
Trustee, such retiring Trustee shall, upon payment of its charges then unpaid,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee, and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject nevertheless to its lien, if any,
provided for in Section 6.7(d). Upon request of any such successor Trustee, the
Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.

 

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Section 6.11

Merger, Conversion, Consolidation or Succession to Business of Trustee.

Any corporation or association into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee (which for purposes of
this Section 6.11 shall be deemed to be the Trustee) shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any of the Notes have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes.

Section 6.12

Co-Trustees and Separate Trustee.

At any time or times, for the purpose of meeting the legal requirements of any
jurisdiction in which any part of the Collateral may at the time be located, the
Issuer and the Trustee (which for purposes of this Section 6.12 shall be deemed
to be the Trustee) shall have power to appoint one or more Persons to act as
co-Trustee jointly with the Trustee of all or any part of the Collateral, with
the power to file such proofs of claim and take such other actions pursuant to
Section 5.4 and to make such claims and enforce such rights of action on behalf
of the Noteholders subject to the other provisions of this Section 6.12.

The Issuer shall join with the Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint a
co-Trustee. If the Issuer does not join in such appointment within 15 days after
the receipt by it of a request to do so, the Trustee shall have power to make
such appointment.

Should any written instrument from the Issuer be required by any co-Trustee so
appointed for more fully confirming to such co-Trustee such property, title,
right or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Issuer. The Issuer agrees to pay (but only
from and to the extent of the Collateral, after payment in full of the amounts
payable pursuant to subclauses (i) through (v) of Section 11.1(a)(A)) for any
reasonable fees and expenses in connection with such appointment.

Every co-trustee shall, to the extent permitted by law, but to such extent only,
be appointed subject to the following terms:

(a)

the Notes shall be authenticated and delivered by, and all rights, powers,
duties and obligations hereunder in respect of the custody of securities, Cash
and other personal property held by, or required to be deposited or pledged
with, the Trustee hereunder, shall be exercised solely by, the Trustee;

(b)

the rights, powers, duties and obligations hereby conferred or imposed upon the
Trustee in respect of any property covered by the appointment of a co-Trustee
shall be conferred or imposed upon and exercised or performed by the Trustee or
by the Trustee and such co-Trustee jointly in the case of the appointment of a
co-Trustee, except to the extent that under any law of any jurisdiction in which
any particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by a co-Trustee;

 

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(c)

the Trustee at any time, by an instrument in writing executed by it, with the
concurrence of the Issuer evidenced by an Issuer Order with a copy to the
Investment Manager, may accept the resignation of or remove any co-Trustee
appointed under this Section 6.12, and in case an Event of Default has occurred
and is continuing, the Trustee shall have the power to accept the resignation
of, or remove, any such co-Trustee without the concurrence of the Issuer. A
successor to any co-Trustee so resigned or removed may be appointed in the
manner provided in this Section 6.12.

(d)

no co-Trustee hereunder shall be personally liable by reason of any act or
omission of the Trustee hereunder;

(e)

the Trustee shall not be liable by reason of any act or omission of a
co-Trustee; and

(f)

any Act of the Noteholders delivered to the Trustee shall be deemed to have been
delivered to each co-Trustee.

Section 6.13

Certain Duties of Trustee Related to Delayed Payment of Proceeds.

In the event that in any month the Trustee determines based upon the information
contained in the Monthly Report or information received from the Collateral
Administrator that it has not received a payment with respect to any Pledged
Obligation on its Due Date, (a) the Trustee shall promptly notify the Issuer and
the Investment Manager in writing and (b) unless within three Business Days (or
the end of the applicable grace period for such payment, if longer), after such
notice such payment shall have been received by the Trustee, or the Issuer, in
its absolute discretion (but only to the extent permitted by Section 10.2(a)),
shall have made provision for such payment satisfactory to the Trustee in
accordance with Section 10.2(a), the Trustee shall request the issuer of such
Pledged Obligation, the trustee under the related Reference Instrument or Paying
Agent designated by either of them, as the case may be, to make such payment as
soon as practicable after such request but in no event later than three Business
Days after the date of such request. In the event that such payment is not made
within such time period, the Trustee, subject to the provisions of subclause
(iv) of Section 6.1(c), shall take such action as the Investment Manager shall
reasonably direct in writing. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture. In the event
that the Issuer or the Investment Manager requests a release of a Pledged
Obligation in connection with any such action under the Investment Management
Agreement, such release shall be subject to Section 10.6 and Article XII of this
Indenture, as the case may be. Notwithstanding any other provision hereof, the
Trustee shall deliver to the Issuer or its designee any payment with respect to
any Pledged Obligation received after the Due Date thereof to the extent the
Issuer previously made provisions for such payment satisfactory to the Trustee
in accordance with this Section 6.13 and such payment shall not be deemed part
of the Collateral.

 

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Section 6.14

Representations and Warranties of the Trustee.

The Trustee represents and warrants that: (a) the Trustee is a national banking
association or a state-chartered banking association or corporation with trust
powers, duly and validly existing under the laws of the United States or a state
thereof, with corporate power and authority to execute, deliver and perform its
obligations under this Indenture, and is duly eligible and qualified to act as
Trustee under this Indenture; (b) this Indenture has been duly authorized,
executed and delivered by the Trustee and constitutes the valid and binding
obligation of the Trustee, enforceable against it in accordance with its terms
except (i) as limited by bankruptcy, fraudulent conveyance, fraudulent transfer,
insolvency, reorganization, liquidation, receivership, moratorium or other
similar laws now or hereafter in effect relating to creditors’ rights generally
and by general equitable principles, regardless of whether considered in a
proceeding in equity or at law, and (ii) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought; (c) neither the execution or delivery by the Trustee of this
Indenture nor performance by the Trustee of its obligations under this Indenture
requires the consent or approval of, the giving notice to or the registration or
filing with, any governmental authority or agency under any existing law of the
United States governing the banking or trust powers of the Trustee; (d) there is
no charge, investigation, action, suit or proceeding before or by any court
pending or, to the best knowledge of a Trust Officer of the Trustee, threatened
that, if determined adversely to the Trustee, would have a material adverse
effect upon the performance by the Trustee of its duties under, or on the
validity or enforceability of, this Indenture; (e) the Trustee is not in breach
or violation of or in default under any contract or agreement to which it is a
party or by which it or any of its property may be bound, or any applicable
statute or any rule, regulation or order of any court, government agency or body
having jurisdiction over the Trustee or its properties, the breach or violation
of which or default under which would have a material adverse effect on the
validity or enforceability of this Indenture or the performance by the Trustee
of its duties hereunder; and (f) as of the Closing Date, the Trustee is eligible
under Section 6.8 to serve as Trustee hereunder.

Section 6.15

Authenticating Agents.

Upon the request of the Issuer, the Trustee shall, and if the Trustee so chooses
the Trustee may, appoint one or more Authenticating Agents with power to act on
its behalf and subject to its direction in the authentication of the Notes in
connection with issuances, transfers and exchanges under Sections 2.4, 2.5, 2.6
and 8.5, as fully to all intents and purposes as though each such Authenticating
Agent had been expressly authorized by those Sections to authenticate such
Notes. For all purposes of this Indenture, the authentication of the Notes by an
Authenticating Agent pursuant to this Section 6.15 shall be deemed to be the
authentication of the Notes by the Trustee.

Any corporation into which any Authenticating Agent may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, consolidation or conversion to which any Authenticating Agent shall be a
party, or any corporation succeeding to the corporate trust business of any
Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, without the execution or filing of any further act on the part of the
parties hereto or such Authenticating Agent or such successor corporation.

Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and the Issuer. The Trustee may at any time terminate
the agency of any Authenticating Agent by giving written notice of termination
to such Authenticating Agent and the Issuer. Upon receiving such notice of
resignation or upon such a termination, the Trustee shall promptly appoint a
successor Authenticating Agent and shall give written notice of such appointment
to the Issuer if the resigning or terminated Authenticating Agent was originally
appointed at the request of the Issuer.

 

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Unless the Authenticating Agent is the same entity as the Trustee, the Issuer
agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services, and reimbursement for its reasonable expenses
relating thereto as an Administrative Expense under Section 11.1. The provisions
of Sections 2.9, 6.3, 6.4 and 6.5 shall be applicable to any Authenticating
Agent.

Section 6.16

Representative for Holders of the Notes Only; Agent for all other Secured
Parties.

With respect to the security interests created hereunder, the pledge of any item
of Collateral to the Trustee is to the Trustee as representative of the Holders
of the Notes and agent for each of the other Secured Parties; in furtherance of
the foregoing, the possession by the Trustee of any item of Collateral, the
endorsement to or registration in the name of the Trustee of any item of
Collateral (including as entitlement Holder of the Collateral Account) are all
undertaken by the Trustee in its capacity as representative of the Holders of
the Notes and agent for each of the other Secured Parties. The Trustee shall
have no fiduciary duties to each of the other Secured Parties; provided that the
foregoing shall not limit any of the express obligations of the Trustee under
this Indenture.

Section 6.17

Right of Trustee in Capacity of Registrar, Paying Agent, Calculation Agent or
Securities Intermediary.

In the event that the Trustee is also acting in the capacity of Paying Agent,
Registrar or Calculation Agent hereunder, the rights, protections, immunities or
indemnities afforded to the Trustee pursuant to this Article VI shall also be
afforded to the Trustee in its capacity as Paying Agent, Registrar or
Calculation Agent.

ARTICLE VII.

COVENANTS

Section 7.1

Payment of Principal and Interest.

The Issuer will duly and punctually pay the principal of and interest on the
Notes in accordance with the terms of the Notes and this Indenture. Amounts
properly withheld under the Code, the United States Treasury Regulations under
the Code or other applicable law, by the Issuer, the Trustee, any Paying Agent
or any other Person from a payment to any Holder of the Notes of interest,
principal, and/or distribution shall be considered as having been paid by the
Issuer to such Holder for all purposes of this Indenture, and the Issuer shall
not be obligated to pay any additional amounts to such Holder or any beneficial
owner of the Notes as a result of any withholding or deduction for, or on
account of, any present or future taxes, duties, assessments or governmental
charges.

 

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Section 7.2

Compliance With Laws, Etc.

The Issuer will comply in all material respects with applicable laws, rules,
regulations, writs, judgments, injunctions, decrees, awards and orders with
respect to it, its business and its properties. The Issuer will always maintain
at least two Independent Managers who are not Affiliates of the Investment
Manager.

Section 7.3

Maintenance of Books and Records.

The Issuer shall maintain and implement administrative and operating procedures
reasonably necessary in the performance of its obligations hereunder and the
Issuer shall keep and maintain, or cause the Board of Managers to keep or
maintain at all times, or cause to be kept and maintained at all times in the
registered office of the Issuer specified in the Limited Liability Company
Agreement, all documents, books, records, accounts and other information as are
required under the laws of Delaware.

Section 7.4

Maintenance of Office or Agency.

The Issuer hereby appoints the Trustee as a Paying Agent for the payment of
principal and interest on the Notes and where Notes may be surrendered for
registration of transfer or exchange.

Section 7.5

Money for Security Payments to be Held in Trust.

All payments of amounts due and payable with respect to any Notes that are to be
made from amounts withdrawn from the Payment Account shall be made on behalf of
the Issuer.

When the Issuer shall have a Paying Agent that is not also the Registrar, the
Issuer shall furnish, or cause the Registrar to furnish, no later than

(a)

the fifth calendar day after each Regular Record Date; and

(b)

the fifth calendar day after each Special Record Date applicable to a Special
Payment Date;

a list, if necessary, in such form as such Paying Agent may reasonably request,
of the names and addresses of the Holders and of the certificate numbers of
individual Notes held by each such Holder.

Whenever the Issuer shall have a Paying Agent other than the Trustee, the Issuer
shall, on or before the Business Day preceding each Payment Date or Special
Payment Date, as the case may be, direct the Trustee in writing to deposit on
such Payment Date with such Paying Agent, if necessary, an aggregate sum
sufficient to pay the amounts then becoming due (to the extent funds are then
available for such purpose in the Payment Account), such sum to be held in trust
for the benefit of the Persons entitled thereto and (unless such Paying Agent is
the Trustee) the Issuer shall promptly notify the Trustee of its action or
failure so to act. Any moneys deposited with a Paying Agent (other than the
Trustee) in excess of an amount sufficient to pay the amounts then becoming due
on the Notes with respect to which such deposit was made shall be paid over by
such Paying Agent to the Trustee for application in accordance with Article X.

 

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The initial Paying Agents shall be as set forth in Section 7.4. Any additional
or successor Paying Agents shall be appointed by Issuer Order with written
notice thereof to the Trustee; provided, however, that, such additional or
successor Paying Agent must either (i) have a rating of “Aa2” or its equivalent
by Moody’s and “AA” by S&P, (ii) agree not to hold any funds pursuant to this
Indenture overnight or (iii) be acceptable to the Majority of the Noteholders.
The Issuer shall not appoint any Paying Agent (other than an initial Paying
Agent) that is not, at the time of such appointment, a depositary institution or
trust company subject to supervision and examination by federal and/or state
and/or national banking authorities. The Issuer shall cause each Paying Agent
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee (and if the Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section
7.5, that such Paying Agent will:

(A)

allocate all sums received for payment or distribution to the Holders of the
Notes for which it acts as Paying Agent on each Payment Date and Special Payment
Date among such Holders in the proportion specified in the applicable report or
statement in accordance herewith, in each case to the extent permitted by
applicable law;

(B)

hold all sums held by it for the payment of amounts due with respect to the
Notes in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
pay such sums to such Persons as herein provided;

(C)

if such Paying Agent is not the Trustee, immediately resign as a Paying Agent
and forthwith pay to the Trustee all sums held by it in trust for the payment of
the Notes if at any time it ceases to meet the standards set forth above
required to be met by a Paying Agent at the time of its appointment;

(D)

if such Paying Agent is not the Trustee, at any time during the continuance of
any such Default, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such Paying Agent; and

(E)

not, prior to the date which is one year and one day (or, if longer, the
applicable preference period) after the payment in full of the Notes, institute
against the Issuer, or voluntarily join in any institution against the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar laws of any jurisdiction within or without the United
States. Nothing in this subclause (E) shall preclude, or be deemed to stop, the
Paying Agent (i) from taking any action prior to the expiration of the
aforementioned one year and one day (or longer) period in (A) any case or
proceeding voluntarily filed or commenced by the Issuer or (B) any involuntary
insolvency proceeding filed or commenced by a Person other than the Paying
Agent, or (ii) from commencing against the Issuer or any of its properties any
legal action which is not a bankruptcy, reorganization, arrangement, insolvency,
moratorium or liquidation proceeding.

 

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The Issuer may at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or by Issuer Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Issuer or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Issuer or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

Any money deposited with a Paying Agent and not previously returned that remains
unclaimed for twenty Business Days shall be returned to the Trustee. Except as
otherwise required by applicable law, any money deposited with the Trustee or
any Paying Agent in trust for the payment of the principal of or interest or
distribution on any Note and remaining unclaimed for two years after such
principal, interest or distribution has become due and payable shall be paid to
the Issuer on Issuer Request; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Issuer, and all liability of the
Trustee or such Paying Agent with respect to such trust money (but only to the
extent of the amounts so paid to the Issuer) shall thereupon cease.

Section 7.6

Existence of Issuer.

(a)

The Issuer shall take all reasonable steps to maintain its identity as a
separate legal entity from that of its members. The Issuer shall keep its
principal place of business at the address specified in Section 14.3. The Issuer
shall keep separate books and records and will not commingle its respective
funds with those of any other Person. The Issuer shall, to the maximum extent
permitted by applicable law, keep in full force and effect its rights and
franchises as a limited liability company incorporated under the laws of the
State of Delaware, shall comply with the provisions of its organizational
documents, and shall obtain and preserve its qualification to do business as a
foreign limited liability company in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes or any of the Collateral.

(b)

The Issuer shall ensure that all limited liability company or other formalities
regarding its existence (including, to the extent required by applicable law,
holding regular member and managers or other similar meetings) are followed and
shall conduct business in its name. The Issuer shall not take any action, or
conduct its affairs in a manner, that is likely to result in its separate
existence being ignored, will fail to correct any known misunderstanding
regarding its existence, or in its assets and liabilities being substantively
consolidated with any other Person in a bankruptcy, reorganization or other
insolvency proceeding. Without limiting the foregoing, the Issuer shall not (A)
have any employees (other than members, managers and any other officers
appointed in compliance with the Limited Liability Company Agreement), (B)
engage in any transaction with any member (other than the issuance of the
Issuer’s equity) that would constitute a conflict of interest (provided that the
Limited Liability Company Agreement, the Collateral Administration Agreement,
the Sale and Contribution Agreement and the Investment Management Agreement
shall not be deemed to be such a transaction that would constitute a conflict of
interest) or (C) pay dividends other than in accordance with Section 2.13,
Section 11.1 or Section 12.1 herein or any other provision of any Transaction
Document that expressly permits dividends.

 

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(c)

The Issuer shall (i) have a board of directors separate from that of any other
person (although members of the board of directors of the Issuer may serve as
directors of one or more Affiliates of the Issuer); (ii) file its own tax
returns, if any, as may be required under applicable law, to the extent (1) not
part of a consolidated group filing a consolidated return or returns or (2) not
treated as a division for tax purposes of another taxpayer, and pay any taxes so
required to be paid under applicable law; (iii) not commingle its assets with
assets of any other person; (iv) conduct its business in its own name and
strictly comply with all organizational formalities necessary to maintain its
separate existence (and all such formalities have been complied with since the
Issuer’s formation); (v) maintain separate financial statements (it being
understood that, if the Issuer’s financial statements are part of a consolidated
group with its Affiliates, then any such consolidated statements shall contain a
note indicating the Issuer’s separateness from any such Affiliates and that its
assets are not available to pay the debts of such Affiliate); (vi) pay its own
liabilities only out of its own funds; (vii) maintain an arm’s-length
relationship with its Affiliates; (viii) not hold out its credit or assets as
being available to satisfy the obligations of others; (ix) pay its fair and
reasonable share of overhead for shared office space, if any; (x) use separate
stationery, invoices and checks and not of any other entity (unless such entity
is clearly designated as being the Issuer’s agent); (xi) not pledge its assets
as security for the obligations of any other person; (xii) maintain adequate
capital in light of its contemplated business purpose, transactions and
liabilities and pay its operating expenses and liabilities from its own assets;
and (xiii) not take any Material Action without the unanimous affirmative vote
of each member of its board of directors, including, in all cases, each of the
Independent Managers.

Section 7.7

Protection of Collateral.

(a)

The Issuer shall from time to time execute and deliver all such supplements and
amendments hereto and all such financing statements, continuation statements,
instruments of further assurance and other instruments, and shall take such
other action as may be necessary to secure the rights and remedies of the
Secured Parties hereunder and to:

(i)

Grant more effectively all or any portion of the Collateral;

(ii)

maintain or preserve the lien (and the priority thereof) of this Indenture or to
carry out more effectively the purposes hereof;

(iii)

perfect, publish notice of or protect the validity of any Grant made or to be
made by this Indenture;

(iv)

enforce any of the Pledged Obligations or other instruments or property included
in the Collateral;

(v)

preserve and defend title to the Collateral and the rights therein of the
Trustee and the Secured Parties in the Collateral and the Trustee against the
claims of all persons and parties;

 

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(vi)

pay any and all taxes levied or assessed upon all or any part of the Collateral
and use its commercially reasonable efforts to minimize taxes and any other
costs arising in connection with its activities; or

(vii)

give, execute, deliver, file and/or record any financing statement, notice,
instrument, document, agreement or other papers that may be necessary or
desirable to create, preserve, perfect or validate the security interest granted
pursuant to this Agreement or to enable the Trustee to exercise and enforce its
rights hereunder with respect to such pledge and security interest, and hereby
authorizes the Trustee to file a UCC financing statement listing ‘all assets of
the debtor’ in the collateral description of such financing statement.

The Issuer hereby designates the Trustee as its agent and attorney-in-fact to
file, upon Issuer Order, any financing statement, continuation statement or
other instrument required pursuant to this Section 7.7; provided that such
appointment shall not impose upon the Trustee any of the Issuer’s obligations
under this Section 7.7. The Issuer shall cause to be filed one or more
continuation statements under the applicable UCC (it being understood that the
Issuer (and to the extent the Trustee takes any action, the Trustee) shall be
entitled to rely upon an Opinion of Counsel, including an Opinion of Counsel
delivered in accordance with Sections 3.1(c) and 7.8, as to the need to file
such financing statements and continuation statements, the dates by which such
filings are required to be made and the jurisdictions in which such filings are
required to be made).

(b)

The Trustee shall not (i) except in accordance with Section 10.6(a), (b) or (c),
as applicable, remove any portion of the Collateral that consists of Cash or is
evidenced by an instrument, certificate or other writing (A) from the
jurisdiction in which it was held at the date the most recent Opinion of Counsel
was delivered pursuant to Section 7.8 (or from the jurisdiction in which it was
held as described in the Opinion of Counsel delivered at the Closing Date
pursuant to Section 3.1(c), if no Opinion of Counsel has yet been delivered
pursuant to Section 7.8) or (B) from the possession of the Person who held it on
such date or (ii) cause or permit ownership or the pledge of any portion of the
Collateral that consists of book-entry securities to be recorded on the books of
a Person (A) located in a different jurisdiction from the jurisdiction in which
such ownership or pledge was recorded at such date or (B) other than the Person
on whose books such ownership or pledge was recorded at such date, unless the
Trustee shall have first received an Opinion of Counsel to the effect that the
lien and security interest created by this Indenture with respect to such
property will continue to be maintained after giving effect to such action or
actions.

Section 7.8

Opinions as to Collateral. On or before October 1 in each calendar year,
commencing in 2015, the Issuer shall furnish to the Trustee an Opinion of
Counsel relating to the security interest granted by the Issuer to the Trustee,
stating that, as of the date of such opinion, the lien and security interest
created by this Indenture with respect to the Collateral remain in effect and
that no further action (other than as specified in such opinion) needs to be
taken to ensure the continued effectiveness of such lien over the next year.

 

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Section 7.9

Performance of Obligations.

(a)

If an Event of Default shall have occurred and be continuing, the Issuer shall
not take any action that would release any principal obligor from any of such
principal obligor’s covenants or obligations under any Reference Instrument,
except in connection with the restructuring, default, waiver or amendment of any
Collateral; provided, that a Majority of the Noteholders shall have consented to
such action.

(b)

The Issuer may contract with other Persons, including the Investment Manager and
the Collateral Administrator, for the performance of actions and obligations to
be performed by the Issuer hereunder by such Persons and the performance of the
actions and other obligations with respect to the Collateral of the nature set
forth in the Investment Management Agreement by the Investment Manager and the
Collateral Administration Agreement by the Collateral Administrator.
Notwithstanding any such arrangement, the Issuer shall remain primarily liable
with respect thereto. In the event of such contract, the performance of such
actions and obligations by such Persons shall be deemed to be performance of
such actions and obligations by the Issuer; and the Issuer will punctually
perform, and use its commercially reasonable efforts to cause the Investment
Manager or such other Person to perform, all of their obligations and agreements
contained in the Investment Management Agreement, the Collateral Administration
Agreement or such other agreement.

(c)

The Issuer agrees to comply in all material respects with all requirements
applicable to them set forth in any Opinion of Counsel obtained pursuant to any
provision of this Indenture including satisfaction of any event identified in
any Opinion of Counsel as a prerequisite for the obtaining or maintaining by the
Trustee of a perfected security interest in any Collateral Obligation,
Substitute Collateral Obligation, Eligible Investment or other Collateral that
is of first priority, free of any adverse claim or the legal equivalent thereof,
as applicable.

Section 7.10

Negative Covenants.

(a)

The Issuer will not:

(i)

sell, transfer, assign, participate, exchange or otherwise dispose of, or
pledge, mortgage, hypothecate or otherwise encumber (by security interest, lien
(statutory or otherwise), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever or otherwise) (or
permit such to occur or suffer such to exist), any part of the Collateral,
except as expressly permitted by this Indenture, the Sale and Contribution
Agreement and the Investment Management Agreement;

(ii)

claim any credit on, or make any deduction from, the principal or interest
payable or amounts distributable in respect of the Notes (other than amounts
withheld in accordance with the Code or any other applicable law) or assert any
claim against any present or future Noteholder by reason of the payment of any
taxes levied or assessed upon any part of the Collateral (other than taxes
levied or assessed in respect of amounts required to be deducted or withheld
from the principal or interest payable in respect of the Notes);

 

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(iii)

(A) incur or assume or guarantee any indebtedness or any contingent obligations,
other than the Notes, this Indenture and the other agreements and transactions
expressly contemplated hereby and thereby or (B) issue any additional securities
(other than the issuance of the Issuer’s equity on the date hereof), it being
understood that additional capital contributions to the Issuer, to the extent
expressly permitted under Section 7.21, are not prohibited by this clause (iii);

(iv)

(A) permit the validity or effectiveness of this Indenture or any Grant
hereunder to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to this Indenture or the
Notes, except as may be expressly permitted hereby, or by the Investment
Management Agreement, (B) permit any lien, charge, adverse claim, security
interest, mortgage or other encumbrance (including any preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever or otherwise, other than the lien of this Indenture) to be created on
or extend to or otherwise arise upon or burden the Collateral or any part
thereof, any interest therein or the Proceeds thereof, or (C) take any action
that would cause the lien of this Indenture not to constitute a valid perfected
security interest in the Collateral that is of first priority, free of any
adverse claim or the legal equivalent thereof, as applicable, except as may be
expressly permitted hereby (or in connection with a disposition of Collateral
required hereby);

(v)

make or incur any capital expenditures, except as reasonably required to perform
its functions in accordance with the terms of this Indenture;

(vi)

become liable in any way, whether directly or by assignment or as a guarantor or
other surety, for the obligations of the lessee under any lease, hire any
employees or pay any dividends to the Equity Owner (other than in accordance
with this Indenture);

(vii)

enter into any transaction with any Affiliate or any Noteholder other than (A)
the transactions contemplated by this Indenture, the Limited Liability Company,
the Investment Management Agreement, the Sale and Contribution Agreement and the
Collateral Administration Agreement, (B) the transactions relating to the
offering and sale of the Notes or (C) transactions on terms that are no less
favorable than those obtainable in an arm’s-length transaction with a wholly
unaffiliated Person and on terms that are fair and equitable to the Issuer under
all the facts or circumstances under applicable law;

(viii)

maintain any bank accounts other than the Issuer Accounts and the bank accounts
referred to in Section 10.3(d);

(ix)

change its name without (i) receiving the prior written consent of the Majority
of the Noteholders, (ii) delivering to the Trustee notice thereof and (iii)
receiving an Opinion of Counsel that such name change will not adversely affect
the Trustee’s lien or the interest hereunder of the Secured Parties or the
Trustee;

 

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(x)

fail to pay any tax, assessment, charge or fee with respect to the Collateral,
or fail to defend any action, if such failure to pay or defend will adversely
affect the priority or enforceability of the lien over the Collateral created by
this Indenture;

(xi)

amend any Transaction Document without the prior written consent of the Majority
of the Noteholders;

(xii)

other than agreements involving purchase and sale relating to the Collateral
Portfolio having customary purchase and sale terms, enter into any agreement or
contract with any Person unless such contract or agreement contains “limited
recourse” provisions and such Person agrees that, prior to the date that is one
year and one day after all of the related obligations of the Issuer have been
paid in full (or, if longer, the applicable preference period under applicable
insolvency law), such Person shall not take any action or institute any
proceeding against the Issuer under any insolvency law applicable to the Issuer
or which would be reasonably likely to cause the Issuer to be subject to, or
seek protection of, any such insolvency law; provided, however, that such Person
shall be permitted to become a party to and to participate in any Proceeding or
action under any such insolvency law that is initiated by any other Person other
than one of its Affiliates;

(xiii)

amend any provision of this Indenture or any other agreement entered into by the
Issuer with respect to the transactions contemplated hereby, relating to (A) the
institution of proceedings for the Issuer to be adjudicated as bankrupt or
insolvent, (B) the consent of the Issuer to the institution of bankruptcy or
insolvency proceedings against it, (C) the filing with respect to the Issuer of
a petition or answer or consent seeking reorganization, arrangement, moratorium
or liquidation proceedings, or other proceedings under the Bankruptcy Code or
any similar laws, or (D) the consent of the Issuer to the filing of any such
petition or the appointment of a receiver, liquidator, assignee, trustee or
sequestrator (or other similar official) of the Issuer or any substantial part
of its property, respectively;

(xiv)

amend any limited recourse or non-petition provision of this Indenture or any
limited recourse provision of any other agreement entered into by the Issuer
with respect to the transactions contemplated hereby, (which limited recourse or
non-petition provision provides that the obligations of the Issuer are limited
recourse obligations of the Issuer, payable solely from the Collateral in
accordance with the terms of this Indenture and which non-petition provision
provides that no party entering into an agreement with the Issuer will initiate
insolvency or examinership proceedings against the Issuer);

(xv)

amend any non-petition provision of this Indenture or any non-petition provision
of any other agreement entered into by the Issuer with respect to the
transactions contemplated hereby;

(xvi)

acquire any assets or take any action that would require it to register as an
“investment company” under the Investment Company Act;

 

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(xvii)

fail to correct any known misunderstanding regarding its separate identity;

(xviii)

have any employees;

(xix)

pay any dividends (other than in accordance with this Indenture);

(xx)

enter into any transaction other than on arm’s length terms and at market rates
other than as expressly permitted pursuant to this Indenture;

(xxi)

take any action or make an election to classify itself as an association taxable
as a corporation for federal, state or any applicable tax purposes; or

(xxii)

acquire or form any subsidiary.

(b)

Neither the Issuer nor the Trustee shall sell, transfer, exchange or otherwise
dispose of Collateral, or enter into or engage in any business with respect to
any part of the Collateral except as expressly permitted or required by this
Indenture and the Investment Management Agreement.

Section 7.11

No Consolidation.

(a)

The Issuer shall not consolidate or merge with or into any other Person or,
other than the security interest Granted to the Trustee pursuant to this
Indenture, convey or transfer its properties and assets substantially as an
entirety to any Person.

Section 7.12

Participations.

The Issuer will use commercially reasonable efforts to “elevate” each
Participation acquired by the Issuer to an assignment of the related underlying
commercial loan, in each case unless otherwise expressly permitted by a Majority
of the Noteholders.

Section 7.13

No Other Business; Etc.

The Issuer shall not engage in any business or activity other than issuing the
Notes pursuant to this Indenture and selling the Notes, and acquiring, owning,
holding, selling, pledging, contracting for the management of and otherwise
dealing with Collateral Obligations and other Collateral in connection therewith
and such other activities which are necessary, required or advisable to
accomplish the foregoing; provided, however, that the Issuer shall be permitted
to enter into any additional agreements not expressly prohibited by Section
7.10(a).

Without limiting the foregoing, in the performance of its obligations hereunder,
the Issuer (or the Investment Manager on its behalf) may enter into any
amendment or waiver of, or supplement to, any Reference Instrument; provided
that (1) the Issuer shall give the Noteholders prompt written notice of each
such amendment or waiver of, or supplement to, any Reference Instrument; and (2)
the prior written consent of a Majority of the Noteholders to any such
amendment, waiver or supplement shall be required if such amendment, waiver or
supplement constitutes a Specified Change.

 

 

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The Issuer will not amend its Limited Liability Company Agreement without giving
notice to the Investment Manager and without the consent of a Majority of the
Noteholders.

Section 7.14

Compliance with Investment Management Agreement.

The Issuer agrees to perform all actions required to be performed by it, and to
refrain from performing any actions prohibited under, the Investment Management
Agreement. The Issuer also agrees to take all actions as may be necessary to
ensure that all of the Issuer’s representations and warranties made pursuant to
the Investment Management Agreement are true and correct as of the date thereof
and continue to be true and correct for so long as any Notes are Outstanding.
The Issuer further agrees not to authorize or otherwise to permit the Investment
Manager to act in contravention of the representations, warranties and
agreements of the Investment Manager under the Investment Management Agreement.

Section 7.15

Reporting.

At any time when the Issuer is not subject to Section 13 or 15(d) of the
Exchange Act and is not exempt from reporting pursuant to Rule 12g-3-2(b) under
the Exchange Act, upon the request of a Holder or beneficial owner of a Note,
the Issuer shall promptly furnish, or cause to be furnished by the Trustee, Rule
144A Information to such Holder or beneficial owner, to a prospective purchaser
of such Note designated by such Holder or beneficial owner, to another designee
of such Holder or beneficial owner, as the case may be, in order to permit
compliance by such Holder or beneficial owner with Rule 144A in connection with
the resale of such Note by such Holder or beneficial owner. Upon request by the
Issuer, the Trustee shall cooperate with the Issuer in mailing or otherwise
distributing (at the expense of the Issuer) to such Holders or prospective
purchasers, at and pursuant to the written direction of the Issuer, the
foregoing materials prepared and provided by the Issuer; provided, however, that
the Trustee shall be entitled to affix thereto or enclose therewith such
disclaimers as the Trustee shall deem reasonably appropriate, at its discretion
(such as, for example, a disclaimer to the effect that such Rule 144A
Information was assembled by the Issuer and not by the Trustee, that the Trustee
has not reviewed or verified the accuracy thereof, and that it makes no
representation as to the sufficiency of such information under Rule 144A or for
any other purpose).

Section 7.16

Calculation Agent.

(a)

The Issuer hereby agrees that for so long as any of the Notes remain Outstanding
there will at all times be a calculation agent appointed to calculate LIBOR in
accordance with the terms of Schedule B hereto (the “Calculation Agent”). The
Calculation Agent appointed by the Issuer must be a leading bank engaged in
transactions in Eurodollar deposits in the international Eurodollar market which
bank does not control, is not controlled by and is not under common control
with, the Issuer, the Investment Manager or any of their respective Affiliates.
The Calculation Agent may be removed by the Issuer at any time. If the
Calculation Agent is unable or unwilling to act as such or is removed by the
Issuer, or if the Calculation Agent fails to determine any of the information
required to be determined as described in subsection (b), the Issuer will
promptly appoint another leading bank meeting the qualifications set forth above
to act as Calculation Agent. The Calculation Agent may not resign its duties
without a successor having been duly appointed. The Issuer has initially
appointed the Trustee as Calculation Agent for purposes of determining LIBOR for
the Notes.

 

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(b)

The Calculation Agent shall be required to agree that, as soon as practicable
after 11:00 a.m., London time, on each LIBOR Determination Date, but in no event
later than 11:00 a.m., London time, on the Business Day following such LIBOR
Determination Date, the Calculation Agent will calculate the interest rate
applicable to the Notes for the following Interest Accrual Period or other
Applicable Period, and will as soon as practicable but in no event later than
11:00 a.m., New York time, on the Business Day following such LIBOR
Determination Date, communicate such rates, and the amount of interest payable
on the next Payment Date in respect of the Notes, with a principal amount of
$1,000 (rounded to the nearest cent, with half a cent being rounded upwards), to
the Issuer, the Trustee, the Investment Manager and each Paying Agent.

(c)

The Calculation Agent shall be required to specify to the Issuer the quotations
upon which each Note Interest Rate is based, and in any event the Calculation
Agent shall notify the Issuer before 5:00 p.m. (London time) on each LIBOR
Determination Date that either: (i) it has determined or is in the process of
determining the Note Interest Rate and the Note Interest Amount or (ii) it has
not determined and is not in the process of determining the Note Interest Rate
and the Note Interest Amount, together with its reasons therefor.

(d)

The Calculation Agent shall be required to agree that it may not, prior to the
date which is one year and one day (or, if longer, the applicable preference
period) after the payment in full of all the Notes, institute against, or join
any other Person in instituting against, the Issuer any bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceedings,
or other proceedings under federal or state bankruptcy or similar laws. Nothing
in this Section 7.16 shall preclude, or be deemed to stop, the Calculation Agent
(i) from taking any action prior to the expiration of the aforementioned one
year and one day (or longer) period in (A) any case or proceeding voluntarily
filed or commenced by the Issuer or (B) any involuntary insolvency proceeding
filed or commenced by a Person other than the Calculation Agent, or (ii) from
commencing against the Issuer or any of its properties any legal action which is
not a bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceeding.

Section 7.17

Certain Tax Matters.

(a)

FS Investment Corporation II, as tax owner of the Issuer and its assets,
including the Collateral, shall pay or cause to be paid all federal, state and
local taxes imposed on income derived from the Collateral and timely file, or
cause to be filed, all tax returns and information statements and returns
relating to the Issuer’s income and assets. It shall also provide, if required,
a duly completed IRS Form W-9 (Request for Taxpayer Identification Number and
Certification) or any successor to such IRS form, to the payor with respect to
any item included in the Collateral at the time such item is purchased or
entered into.

(b)

To the extent that the Notes are treated as issued for U.S. federal income tax
purposes, the Issuer and each Holder and beneficial owner of a Note, by
acceptance of its Note, or any interest therein, shall be deemed to have agreed
to treat, and shall treat, the Notes as unconditional debt in the Issuer (or the
Equity Owner) for U.S. federal, state and local income tax purposes, unless
otherwise required by law.

 

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(c)

Upon the Issuer’s receipt of a request of a Subsequent Holder of a Note that has
been issued with more than de minimis “original issue discount” (as defined in
Section 1273 of the Code) or written request of a Person certifying that it is
an owner of a beneficial interest in a Note that has been issued with more than
de minimis “original issue discount” for the information described in United
States Treasury Regulation Section 1.1275-3(b)(1)(i) that is applicable to such
Note, the Issuer will cause its Independent certified public accountants to
provide promptly to the Trustee and such requesting Subsequent Holder or owner
of a beneficial interest in such a Note all of such information. Any additional
issuance of additional Notes shall be accomplished in a manner that shall allow
the Independent accountants of the Issuer to accurately provide such information
relating to original issue discount required to be provided to the Subsequent
Holders of the Notes.

(d)

Each Subsequent Holder by acceptance of its Note or its interest therein, shall
be deemed to understand and acknowledge that failure to provide the Issuer, the
Equity Owner, the Trustee or any Paying Agent with the applicable U.S. federal
income forms and tax certifications, including an Internal Revenue Service Form
W-9 (or applicable successor form) in the case of a person that is a U.S. Tax
Person or the appropriate Internal Revenue Service Form W-8 (or applicable
successor form) in the case of a person that is not a U.S. Tax Person, may
result in U.S. federal withholding or back-up withholding from payments in
respect of such Note.

(e)

Each Subsequent Holder of the Notes (and any interest therein) agrees to provide
the Issuer and any relevant intermediary with any information or documentation
that is required under FATCA or that the Issuer or relevant intermediary deems
appropriate to enable the Issuer or relevant intermediary to determine their
duties and liabilities with respect to any taxes they may be required to
withhold pursuant to FATCA in respect of such Note or the holder of such Note or
beneficial interest therein. In addition, each purchaser and subsequent
transferee of the Notes will be required or deemed to understand and acknowledge
that the Issuer has the right under this Indenture to withhold on any holder or
any beneficial owner of an interest in a Note that fails to comply with FATCA.

(f)

Subject to clause (j) below, each holder of the Notes represents and agrees that
the Notes (and any interest therein) may not be acquired or owned by any Person
that is classified for U.S. federal income tax purposes as a partnership,
subchapter S corporation or grantor trust unless (i) none of the direct or
indirect beneficial owners of any interest in such Person have or ever will have
more than 40% of the value of its interest in such Person attributable to the
aggregate interest of such Person in the combined value of the Notes and the
interests of the Members in the Issuer (and any other equity interests in the
Issuer), and (ii) it is not and will not be a principal purpose of the
arrangement involving the investment of such Person in any Notes or Member
interests (or any other equity interests in the Issuer) to permit any
partnership to satisfy the 100 partner limitation of Treas. Reg. §
1.7704-1(h)(1)(ii).

 

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(g)

Subject to clause (j) below, each holder of the Notes (and any interest therein)
represents and agrees that the Notes may not be acquired, and no holder of the
Notes may sell, transfer, assign, participate, pledge or otherwise dispose of
the Notes or cause the Notes to be marketed, (i) on or through an “established
securities market” within the meaning of Section 7704(b)(1) of the Code and
Treas. Reg. § 1.7704-1(b), including without limitation, an interdealer
quotation system that regularly disseminates firm buy or sell quotations or (ii)
if such acquisition, sale, transfer, assignment, participation, pledge or other
disposition would cause the combined number of holders of the Notes and the
Member interests (and any other equity interests in the Issuer) to be held by
more than 90 Persons.

(h)

Subject to clause (j) below, each holder of the Notes (and any interest therein)
represents and agrees that it will not enter into any financial instrument
payments on which are, or the value of which is, determined in whole or in part
by reference to such Notes or the Issuer (including the amount of Issuer
distributions on such Notes, the value of the Issuer’s assets, or the result of
the Issuer’s operations), or any contract that otherwise is described in U.S.
Treasury Regulations Section 1.7704-1(a)(2)(i)(B).

(i)

Subject to clause (j) below, each holder of the Notes (and any interest therein)
acknowledges and agrees that any sale, transfer, assignment, participation,
pledge, or other disposition of the Notes (and any interest therein) that would
violate any of the three preceding paragraphs above or otherwise cause the
Issuer to be unable to rely on the “private placement” safe harbor of Treas.
Reg. § 1.7704-1(h) will be void and of no force or effect, and it will not
transfer any interest in the Notes to any person that does not agree to be bound
by the three preceding paragraphs above or by this paragraph.

(j)

Notwithstanding anything in clauses (f), (g), (h) and (i) above, a holder of
Notes (or any interest therein) may take actions inconsistent with the
provisions of such clauses if such holder obtains an opinion of nationally
recognized U.S. tax counsel that such action will not cause the Issuer to be
treated as a publicly traded partnership taxable as a corporation.

Section 7.18

Representations Relating to Security Interests in the Collateral.

(a)

The Issuer hereby represents and warrants that, as of the Closing Date (which
representations and warranties shall survive the execution of this Indenture and
be deemed to be repeated on each date on which Collateral is Granted to the
Trustee hereunder), with respect to the Collateral:

(i)

The Issuer owns and has good and marketable title to such Collateral free and
clear of any lien, claim or encumbrance of any person, other than such as are
created under, or expressly permitted by, this Indenture.

(ii)

Other than the security interest Granted to the Trustee pursuant to this
Indenture and other than any security interest granted in certain Collateral in
connection with financing prior to the Closing Date (which security interest
will be terminated as of the Closing Date), except as expressly permitted by
this Indenture, the Issuer has not pledged, assigned, sold, granted a security
interest in, or otherwise conveyed any of the Collateral. The Issuer has not
authorized the filing of and is not aware of any financing statements against
the Issuer that include a description of collateral covering the Collateral
other than any financing statement relating to the security interest granted to
the Trustee hereunder or that has been terminated; the Issuer is not aware of
any judgment, PBGC liens or tax lien filings against the Issuer.

 

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(iii)

All Issuer Accounts constitute “securities accounts”.

(iv)

This Indenture creates a valid and continuing security interest (as defined in
the UCC) in such Collateral in favor of the Trustee, for the benefit and
security of the Secured Parties, which security interest is prior to all other
liens, claims and encumbrances (except as expressly permitted otherwise in this
Indenture), and is enforceable as such against creditors of and purchasers from
the Issuer.

(b)

The Issuer hereby represents and warrants that, as of the Closing Date (which
representations and warranties shall survive the execution of this Indenture and
be deemed to be repeated on each date on which Collateral is Granted to the
Trustee hereunder), with respect to Collateral that constitutes instruments:

(i)

Either (x) the Issuer has caused or will have caused, within ten days of the
Closing Date, the filing of all appropriate financing statements in the proper
office in the appropriate jurisdictions under applicable law in order to perfect
the security interest in the instruments granted to the Trustee, for the benefit
and security of the Secured Parties, hereunder or (y)(A) all original executed
copies of each promissory note or mortgage note that constitutes or evidences
the instruments have been delivered to the Trustee or the Issuer has received
written acknowledgement from a custodian that such custodian is holding the
mortgage notes or promissory notes that constitute evidence of the instruments
solely on behalf of the Trustee and for the benefit of the Secured Parties and
(B) none of the instruments that constitute or evidence the Collateral has any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Trustee, for the benefit of the Secured
Parties.

(ii)

The Issuer has received, or expects to receive, all consents and approvals
required by the terms of the Collateral to the pledge hereunder to the Trustee
of its interest and rights in the Collateral.

(c)

The Issuer hereby represents and warrants that, as of the Closing Date (which
representations and warranties shall survive the execution of this Indenture and
be deemed to be repeated on each date on which Collateral is Granted to the
Trustee hereunder), with respect to the Collateral that constitute Security
Entitlements:

(i)

All of such Collateral has been and will have been credited to one of the Issuer
Accounts which are securities accounts within the meaning of the UCC. The Issuer
Account Securities Intermediary for each Issuer Account has agreed to treat all
assets credited to such Issuer Account as “financial assets” within the meaning
of the UCC.

(ii)

The Issuer has received all consents and approvals required by the terms of the
Collateral to the pledge hereunder to the Trustee of its interest and rights in
the Collateral.

 

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(iii)

Either (x) the Issuer has caused or will have caused, within ten days of the
Closing Date, the filing of all appropriate financing statements in the proper
office in the appropriate jurisdictions under applicable law in order to perfect
the security interest granted to the Trustee, for the benefit and security of
the Secured Parties, hereunder or (y)(A) the Issuer has delivered to the Trustee
a fully executed Securities Account Control Agreement pursuant to which the
Issuer Account Securities Intermediary has agreed to comply with all
instructions originated by the Trustee relating to the Issuer Accounts without
further consent by the Issuer or (B) the Issuer has taken all steps necessary to
cause the Issuer Accounts Securities Intermediary to identify in its records the
Trustee as the person having a security entitlement against the Issuer Accounts
Securities Intermediary in each of the Issuer Accounts.

(iv)

The Issuer Accounts are not in the name of any person other than the Issuer or
the Trustee. The Issuer has not consented to the Issuer Accounts Securities
Intermediary’s compliance with entitlement orders of any Person other than the
Trustee.

(d)

The Issuer hereby represents and warrants that, as of the Closing Date (which
representations and warranties shall survive the execution of this Indenture and
be deemed to be repeated on each date on which Collateral is Granted to the
Trustee hereunder), with respect to Collateral that constitutes general
intangibles:

(i)

The Issuer has caused or will have caused, within ten days of the Closing Date,
the filing of all appropriate financing statements in the proper filing office
in the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Collateral granted to the Trustee, for the benefit and
security of the Secured Parties, hereunder.

(ii)

The Issuer has received, or will receive, all consents and approvals required by
the terms of the Collateral to the pledge hereunder to the Trustee of its
interest and rights in the Collateral.

(e)

The Issuer and the Trustee agree that the representations and warranties
contained in this Section 7.18 may not be waived by any party, other than
through amendment effected pursuant to Article VIII hereof.

Section 7.19

Certain Regulations.

Each of the Issuer and the Investment Manager understands that Executive Orders
issued by the President of the United States of America, Federal regulations
administered by OFAC and other federal laws prohibit, among other things, U.S.
persons or persons under jurisdiction of the United States from engaging in
certain transactions with, the provision of certain services to, and making
certain investments in, certain foreign countries, territories, entities and
individuals, and that the lists of prohibited countries, territories, entities
and individuals can be found on, among other places, the OFAC website at
www.treas.gov/ofac. None of the Issuer, the Investment Manager or any of their
respective Affiliates, owners, directors or officers is, or is acting on behalf
of, a country, territory, entity or individual named on such lists, and none of
the Issuer, the Investment Manager or any of their respective Affiliates,
owners, directors or officers is a natural person or entity with whom dealings
with U.S. persons or persons under the jurisdiction of the United States are
prohibited under any OFAC regulation or other applicable federal law or acting
on behalf of such a person or entity. The Issuer does not own and will not
acquire, and the Investment Manager will not cause the Issuer to own or acquire,
any security issued by, or interest in, any country, territory, or entity whose
direct ownership by U.S. persons or persons under the jurisdiction of the U.S.
would be or is prohibited under any OFAC regulation or other applicable federal
law.

 

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Section 7.20

Section 3(c)(7) Procedures

(a)

The Issuer shall send to the Noteholders a Section 3(c)(7) Reminder Notice at
the times required under Section 10.5(f). Without limiting the foregoing, if the
Rule 144A Global Notes are issued in accordance with Section 2.2(c), the Issuer
shall send, or cause to be sent, a copy of each report referred to in
Section 10.5 to DTC, with a request that DTC forward each such report to the
relevant DTC participants for further delivery to beneficial owners of the Rule
144A Global Notes.

(b)

If the Rule 144A Global Notes are issued in accordance with Section 2.2(c), the
Issuer will direct DTC to take the following steps in connection with the Rule
144A Global Notes:

(i)

The Issuer will direct DTC to include the “3c7” marker in the DTC 20-character
security descriptor and the 48-character additional descriptor for the Rule 144A
Global Notes in order to indicate that transfers are limited to Qualified
Purchasers that are Qualified Institutional Buyers.

(ii)

The Issuer will direct DTC to cause each physical DTC deliver order ticket
delivered by DTC to purchasers to contain the DTC 20-character security
descriptor; and will direct DTC to cause each DTC deliver order ticket delivered
by DTC to purchasers in electronic form to contain the “3c7” indicator and a
related user manual for participants, which will contain a description of the
relevant restrictions.

(iii)

The Issuer will instruct DTC to send an Important Section 3(c)(7) Notice to all
DTC participants in connection with the offering of the Rule 144A Global Notes.

(iv)

The Issuer will advise DTC that it is a Section 3(c)(7) issuer and will request
DTC to include the Rule 144A Global Notes in DTC’s “Reference Directory” of
Section 3(c)(7) offerings.

(v)

The Issuer will from time to time (upon the request of the Trustee, the
Registrar or the Collateral Administrator) request DTC to deliver to the Issuer
a list of all DTC participants holding an interest in the Rule 144A Global
Notes.

(c)

If the Rule 144A Global Notes are issued in accordance with Section 2.2(c), the
Issuer shall from time to time request all third-party vendors to include on
screens maintained by such vendors appropriate legends regarding Rule 144A and
Section 3(c)(7) restrictions on the Rule 144A Global Notes. Without limiting the
foregoing, the Issuer will request Bloomberg, L.P. to include the following on
each Bloomberg screen containing information about the Rule 144A Global Notes:

 

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(i)

The “Note Box” on the bottom of the “Security Display” page describing each Rule
144A Global Note should state: “Iss’d Under 144A/3c7.”

(ii)

The “Security Display” page should have a flashing red indicator stating “See
Other Available Information.”

(iii)

Such indicator should link to an “Additional Security Information” page, which
should state that the Rule 144A Global Notes “are being offered in reliance on
the exemption from registration under Rule 144A to Persons that are both
(1) qualified institutional buyers (as defined in Rule 144A) and (2) qualified
purchasers (as defined under Section 3(c)(7) under the Investment Company Act of
1940).

The Issuer shall cause each “CUSIP” number obtained for the Rule 144A Global
Notes to have an attached “fixed field” that contains “3c7” and “144A”
indicators.

Section 7.21

Capital Contributions.

Following (but excluding) the Closing Date and for so long as the Notes are
subject to a repurchase financing transaction, the Issuer shall not permit the
Equity Owner to contribute cash (as a capital contribution) to the Issuer in an
aggregate amount that exceeds $43,000,000 (the “Cash Contribution Cap”);
provided, that any cash contributed to the Issuer (as a capital contribution) by
the Equity Owner (x) to acquire Collateral Obligations that have not settled as
of the Closing Date or (y) to redeem or prepay the Notes in whole or in part, in
each case shall be disregarded (and shall not be counted) for purposes of
determining whether the Equity Owner has contributed cash to the Issuer in
excess of such Cash Contribution Cap.

Section 7.22

Other Accounts. The Issuer shall terminate all of its deposit accounts and
securities accounts with State Street (and each other institution other than the
Trustee) as promptly after the Closing Date as commercially practicable in light
of the purposes for such accounts.

ARTICLE VIII.

SUPPLEMENTAL INDENTURES

Section 8.1

Supplemental Indentures.

Any provision of this Indenture may be amended, modified or waived if, and only
if, such amendment, modification or waiver is in writing and signed, in the case
of an amendment, by the parties hereto, or in the case of a waiver, by the party
against whom the waiver is to be effective, and in each case as to which a
Majority of the Noteholders has given its consent, not to be unreasonably
withheld or delayed,. Any purported amendment, modification or waiver that is
not in compliance with this Section 8.1 will be void ab initio.

 

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Not later than 15 Business Days prior to the execution of any proposed
supplemental indenture pursuant to this Section 8.1, the Trustee, at the expense
of the Issuer, shall mail to the Noteholders and the Investment Manager a copy
of any proposed supplemental indenture.

Promptly after the execution by the Issuer and the Trustee of any supplemental
indenture pursuant to this Section 8.1, the Trustee, at the expense of the
Issuer, shall mail to the Holders of the Notes and the Investment Manager a copy
of such supplemental indenture. Any failure of the Trustee to publish or mail
such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture.

Section 8.2

Execution of Supplemental Indentures.

In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article VIII or the modifications thereby the
Trustee shall be entitled to receive, and shall be fully protected in relying
upon an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture and that all conditions
precedent thereto have been complied with. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Section 8.3

Effect of Supplemental Indentures.

Upon the execution of any supplemental indenture under this Article VIII, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of the Notes theretofore and thereafter authenticated and delivered hereunder
shall be bound thereby.

Section 8.4

Reference in Notes to Supplemental Indentures.

Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article VIII may, and if required by the Issuer
shall, bear a notation in form approved by the Issuer as to any matter provided
for in such supplemental indenture. If the Issuer shall so determine, new Notes,
so modified as to conform in the opinion of the Trustee and the Issuer to any
such supplemental indenture, may be prepared and executed by the Issuer and
authenticated and delivered by the Trustee in exchange for Outstanding Notes.

Section 8.5

Effect on the Investment Manager; Effect on the Collateral Administrator.

(a)

Unless the Investment Manager has been given prior written notice of such
amendment and has consented thereto in writing, no supplemental indenture may
(a) affect the obligations or rights of the Investment Manager under this
Indenture or the Investment Management Agreement including, without limitation,
modifying the restrictions on the purchases or sales of Collateral Obligations
or expanding or restricting the Investment Manager’s discretion, (b) affect the
amount or priority of any fees or other amounts payable to the Investment
Manager under the Investment Management Agreement and this Indenture or (c)
otherwise materially and adversely affect the Investment Manager.

 

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(b)

Unless the Collateral Administrator has been given prior written notice of such
amendment and has consented thereto in writing, no supplemental indenture may
(a) affect the obligations or rights of the Collateral Administrator including,
without limitation, expanding or restricting the Collateral Administrator’s
discretion, (b) affect the amount or priority of any fees or other amounts
payable to the Collateral Administrator under the Collateral Administration
Agreement and this Indenture or (c) otherwise materially and adversely affect
the Collateral Administrator.

ARTICLE IX.

REDEMPTION OF SECURITIES

Section 9.1

Optional Redemption.

(a)

The Notes shall be redeemable in whole or in part by the Issuer on any
Redemption Date at the written direction of, or with the written consent of, the
Redemption Control Class; provided, however, that in the case of a partial
optional redemption, after giving effect thereto and the related sale of
Collateral Obligations to finance the same, the Aggregate Principal Amount of
the Collateral does not consist of greater than 65% of Private Collateral
Obligations. Any such redemption shall be effected from Liquidation Proceeds in
accordance with the Priority of Payments at the Redemption Price plus accrued
and unpaid interest. The determination of whether sufficient Liquidation
Proceeds are available for the optional redemption of the Notes shall be made in
compliance with the provisions of Section 9.1(c)

(b)

In connection with an optional redemption pursuant to Section 9.1(a):

(i)

in the case of an optional redemption directed by the Specified Holders (if it
constitutes a Majority of the Noteholders) or if Cause exists (after the
applicable cure and grace periods) under the Investment Management Agreement (a
“Specified Optional Redemption”), the Specified Holder shall direct the Trustee
in writing to sell, and the Trustee shall sell in the manner directed by the
Specified Holder in writing and in accordance with Section 9.2, any Collateral
Obligation and upon any such sale the Trustee shall release such Collateral
Obligations pursuant to Section 10.6; and

(ii)

in the case of each other optional redemption, the Investment Manager shall
direct the Trustee in writing to sell, and the Trustee shall sell in the manner
directed by the Investment Manager in writing and in accordance with Section
9.2, any Collateral Obligation and upon any such sale the Trustee shall release
such Collateral Obligation pursuant to Section 10.6.

(c)

Unless a Majority of the Noteholders otherwise expressly consents or directs in
writing, the Issuer may not direct the Trustee to sell (and the Trustee shall
not be obligated to release the lien upon) any Collateral Obligation unless,
there will be sufficient Liquidation Proceeds after giving effect to such sales
to pay the amounts specified in Sections 11.1(a)(C)(i) through (iii) and either:

 

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(i)

the Investment Manager shall furnish to the Trustee, at least seven Business
Days prior to the applicable Redemption Date, a certificate certifying that the
Investment Manager on behalf of the Issuer has entered into a binding agreement
or agreements (including in the form of a confirmation of sale) with a financial
institution or institutions whose short-term unsecured debt obligations have a
credit rating of at least “A-1” from S&P or with a Person that the Investment
Manager has determined to be appropriate to purchase, not later than the
Business Day immediately preceding such Redemption Date, in immediately
available funds, all or a portion of the Collateral Obligations at a purchase
price at least equal to an amount sufficient, together with any other amounts
available to be used for such optional redemption (including the proceeds of the
sale of any Eligible Investments) to pay all amounts specified in this Section
9.1(c); or

(ii)

at least ten Business Days prior to the applicable Redemption Date and prior to
selling any Collateral Obligations and/or Eligible Investments the Investment
Manager certifies to the Trustee that the expected proceeds from such sale
(calculated as provided in the next succeeding paragraph) together with any
other amounts available to be used for such optional redemption (including the
proceeds of the sale of any Eligible Investments) will be delivered to the
Trustee two Business Days prior to (but in no event later than the Business Day
immediately preceding) the Redemption Date, in immediately available funds and
will equal or exceed all amounts specified in this Section 9.1(c).

For purposes of determining the expected proceeds from a sale for purposes of
the immediately preceding paragraph, the expected proceeds shall be deemed to be
the Market Value of the Eligible Investments and, if Collateral Obligations are
to be sold on the Business Day of the certification, the Market Value of the
Collateral Obligations.

For the avoidance of doubt, the Issuer may, in effecting a sale contemplated by
subclause (i) of Section 9.1(c), enter into one or more participation agreements
or similar arrangements with the purchaser of the Collateral Obligations
whereby, in connection with the Issuer’s receipt of the purchase price with
respect to all or a portion of the Collateral Obligations, the Issuer shall
grant to such purchaser a participation interest in all or a portion of such
Collateral Obligations and agree to use commercially reasonable efforts (or such
other efforts as shall be specified) to complete the transfer of such Collateral
Obligations to such purchaser thereafter.

(d)

Installments of interest and principal due on or prior to a Redemption Date
which shall not have been paid or duly provided for shall be payable on the
Redemption Date to the Holders of the affected Notes as of the relevant
Redemption Record Dates. Upon receipt of the direction of the Redemption Control
Class, the Issuer shall deliver an Issuer Order to the Trustee directing the
Trustee to make the payment to the Paying Agent of the amounts payable or
distributable in accordance with Section 11.1(a)(C) from funds in the Issuer
Accounts in accordance with the Priority of Payments. The Issuer shall deposit,
or cause to be deposited, the funds required for an optional redemption in the
Payment Account on or before the Business Day prior to the Redemption Date.

(e)

In the case of a Specified Optional Redemption, the Specified Holder, on behalf
of the Issuer, shall set the Redemption Date and the Redemption Record Date and
give written notice thereof to the Trustee pursuant to Section 9.2. In the case
of each other optional redemption, the Investment Manager, on behalf of the
Issuer, shall set the Redemption Date and the Redemption Record Date and give
written notice thereof to the Trustee pursuant to Section 9.2.

 

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Section 9.2

Notice to Trustee of Optional Redemption.

If the Redemption Control Class desires to direct the Issuer to optionally
redeem all or a part of the Notes pursuant to Section 9.1, the Redemption
Control Class shall notify the Trustee in writing no less than forty-five (45)
days (or, in each case, such shorter period as may be acceptable to the Trustee)
prior to the proposed Redemption Date (which must be a Business Day). The
Trustee will promptly notify the Issuer, the Investment Manager, the Collateral
Administrator and the Equity Owner or the Noteholders, as the case may be, of
the receipt of such notice. If the Equity Owner also wishes to direct the Issuer
to optionally redeem the Notes, it must so notify the Trustee (who shall
promptly notify the Issuer and the Investment Manager, of such direction) within
ten Business Days after receipt of such notice. If the requirements of Section
9.1 for redemption have been met (as evidenced by an Officer’s Certificate of
the Issuer or the Investment Manager on behalf of the Issuer) or the consent of
a Majority of the Noteholders has been obtained, the Issuer shall effect an
optional redemption in whole or in part of the Notes pursuant to the procedures
described herein.

Section 9.3

Notice by the Issuer of Optional Redemption or of Maturity.

The Trustee forward the notice received by the Trustee of any optional
redemption pursuant to Section 9.1 or of the Maturity of any Notes by
first-class mail, postage prepaid, mailed to each Noteholder at such Holder’s
address in the Register, in each case not less than five days prior to the
applicable Redemption Date or Maturity.

All notices of redemption shall state:

(a)

the applicable Redemption Date and Redemption Record Date (which shall be a date
after the date on which such notice is deemed to be given pursuant to Section
14.4);

(b)

in the case of an optional redemption under Section 9.1(a), the Redemption Price
plus accrued and unpaid interest for all or a portion of the Notes, as
applicable;

(c)

the Notes that are being paid in full and that interest on such Notes shall
cease to accrue on the date specified in the notice;

(d)

the place or places where such Notes to be redeemed in whole, if applicable, are
to be surrendered for payment of the amounts specified under this Indenture,
which shall be the office or agency of the Issuer to be maintained as provided
in Section 7.4; and

(e)

that the Issuer shall have the option to withdraw such notice if certain
requirements set forth in this Indenture have not been met, and identifying the
latest possible date upon which such notice of redemption may be withdrawn.

 

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The Issuer shall have (in the case of a Specified Optional Redemption, solely at
the request of the Specified Holder) the option to withdraw the notice of
redemption on or prior to the sixth Business Day prior to the proposed
Redemption Date by written notice to the Trustee, the Equity Owner requesting or
consenting to such optional redemption and the Investment Manager, if (i) the
Specified Holder or the Investment Manager (as applicable) shall be unable to
deliver such sale agreement or agreements or certificates, as the case may be,
in the form required under Section 9.1(c) of this Indenture or (ii) the
Redemption Control Class that directed such redemption directs such notice be
withdrawn; provided, however, that such Redemption Control Class may not direct
such notice be withdrawn if the conditions set forth in Section 9.1(c) have been
satisfied. Notice of withdrawal having been given as aforesaid, the Trustee
shall provide notice of such withdrawal to each Holder of the Notes to be
redeemed at such Holder’s address appearing in the Register by overnight courier
(when possible) guaranteeing next day delivery (unless the address provided in
the Register maintained by the Registrar is insufficient for such purposes, in
which event such notice shall be given by first class mail, postage prepaid) not
later than the third Business Day prior to the scheduled Redemption Date.

Notice of redemption shall be given by the Issuer or, at the Issuer’s request,
by the Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note selected
for redemption shall not impair or affect the validity of the redemption of any
other Note.

Section 9.4

Notes Payable on Redemption Date.

Notice of redemption having been given as aforesaid and not withdrawn, the Notes
so to be redeemed shall, on the Redemption Date, become due and payable at the
amounts therein specified, and from and after the Redemption Date (unless a
default is made in the payment of any such amounts) such Notes shall cease to
bear interest. Upon final payment on a Note to be redeemed, the Holder shall
present and surrender such Note at the place specified in the notice of
redemption on or prior to such Redemption Date; provided, however, that if there
is delivered to the Issuer and the Trustee such security or indemnity as may be
required by them to save each of them harmless and an undertaking thereafter to
surrender such Note, then, in the absence of notice to the Issuer or the Trustee
that the applicable Note has been acquired by a Protected Purchaser, such final
payment shall be made without presentation or surrender.

If any Note called for optional redemption shall not be paid upon surrender
thereof for redemption, the principal thereof shall, until paid, bear interest
from the Redemption Date at the Note Interest Rate for each successive Interest
Accrual Period the Note remains Outstanding.

ARTICLE X.

ACCOUNTS, ACCOUNTINGS AND RELEASES

Section 10.1

Collection of Money.

Except as otherwise expressly provided herein, the Trustee may demand payment or
delivery of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Trustee pursuant to this Indenture,
including all payments due on the Collateral, in accordance with the terms and
conditions of such Collateral. The Trustee shall segregate and hold all such
money and property received by it in the Issuer Accounts in trust for the
Holders of the Notes and shall apply it as provided in this Indenture. If a
default occurs in the making of any payment or performance in connection with
any Collateral, the Trustee shall, subject to Section 6.13, take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate proceedings.

 

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The accounts established by the Trustee pursuant to this Indenture may include
any number of sub-accounts deemed necessary by the Trustee or requested by the
Investment Manager for convenience in administering the Accounts and the
Collateral Obligations.

Each Issuer Account shall be established and maintained (a) with a federal or
state-chartered depository institution with a short-term rating of at least
“A-1” by S&P (or a long-term rating of at least “A+” by S&P if such institution
has no short-term rating) and if such institution’s short-term rating falls
below “A-1” by S&P (or its long-term rating falls below “A+” by S&P if such
institution has no short-term rating), the assets held in such Account shall be
transferred within 60 calendar days to another institution that has a short-term
rating of at least “A-1” by S&P (or which has a long-term rating of at least
“A+” by S&P if such institution has no short-term rating) or (b) with respect to
securities accounts, in segregated trust accounts with the corporate trust
department of a federal or state-chartered deposit institution subject to
regulations regarding fiduciary funds on deposit similar to Title 12 of the Code
of Federal Regulation Section 9.10(b). Such institution shall have a combined
capital and surplus of at least U.S.$200,000,000.

All investment or application of funds in accordance with Section 10.3 shall be
made pursuant to an Issuer Order (which may be in the form of standing
instructions) executed by an Authorized Officer of the Investment Manager. The
Issuer shall at all times direct the Trustee or the Issuer Accounts Securities
Intermediary, as applicable to, and, upon receipt of such Issuer Order, the
Trustee or the Issuer Accounts Securities Intermediary shall, invest or cause
the investment of, pending application in accordance with Section 10.3, all
funds received into the Issuer Accounts (other than the Payment Account) during
a Due Period (except when such funds shall be required to be disbursed
hereunder), and amounts received in prior Due Periods and retained in any Issuer
Account, as so directed, in Eligible Investments. If, prior to the occurrence of
an Event of Default, the Issuer shall not have given any such investment
directions, the Trustee shall seek instructions from the Issuer within three
Business Days after transfer of such funds to the applicable Issuer Account. If
the Trustee does not thereupon receive written instructions from the Issuer
within five Business Days after transfer of such funds to such Issuer Account,
it shall invest and reinvest the funds held in such Issuer Account, as fully as
practicable, but only in one or more Eligible Investments maturing (as selected
by the Investment Manager in a writing delivered to the Trustee) no later than
the third Business Day prior to the next Payment Date unless such Eligible
Investments are issued by the Bank, in which event such Eligible Investments may
mature up to the Business Day preceding such Payment Date. After the occurrence
and during the continuance of an Event of Default, the Trustee shall invest and
reinvest, or cause the investment or reinvestment of, such monies as fully as
practicable in Eligible Investments (as selected by the Investment Manager in a
writing delivered to the Trustee) maturing not later than the earlier of (i) 30
days after the date of such investment or (ii) the third Business Day prior to
the next Payment Date unless such Eligible Investments are issued by the Bank,
in which event such Eligible Investments may mature up to the Business Day
preceding such Payment Date. In the absence of any direction from the Investment
Manager the Trustee shall invest amounts on deposit in each Issuer Account in
Eligible Investments of the type described in clause (ii) of the definition
thereof. All interest and other income from such Eligible Investments shall be
deposited into the applicable Issuer Accounts and transferred to the Interest
Collection Account, and any gain realized from such investments shall be
credited to the Interest Collection Account, and any loss resulting from such
investments shall be charged to the Interest Collection Account. Except as
otherwise provided herein, the Trustee shall not in any way be held liable by
reason of any insufficiency of funds in any Issuer Account resulting from any
loss relating to any such investment; and the Trustee shall not be under any
obligation to invest any funds held hereunder except as otherwise expressly set
forth herein.

 

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Section 10.2

Interest Collection Account.

(a)

The Issuer shall, on or prior to the Closing Date, establish at the Issuer
Accounts Securities Intermediary a segregated trust account in the name “Green
Creek LLC, subject to the lien of Citibank, N.A., as Trustee on behalf of the
Secured Parties,” which shall be designated as the Interest Collection Account,
which shall be held by the Issuer Accounts Securities Intermediary in accordance
with the Securities Account Control Agreement into which the Issuer shall, from
time to time, deposit all Interest Proceeds (unless simultaneously reinvested in
Collateral Obligations or in Eligible Investments) except as otherwise provided
in Article X. In addition, the Issuer may, but under no circumstances shall be
required to, deposit or cause to be deposited from time to time such monies in
the Interest Collection Account as it deems, in its sole discretion, to be
advisable. All monies deposited from time to time in the Interest Collection
Account pursuant to this Indenture shall be held in trust by the Trustee as part
of the Collateral and shall be applied to the purposes provided herein. The
Trustee agrees to give the Issuer notice as soon as practicable under the
circumstances if it becomes aware that the Interest Collection Account or any
funds on deposit therein, or otherwise to the credit of the Interest Collection
Account, shall become subject to any writ, order, judgment, warrant of
attachment, execution or similar process. The Issuer shall not have any legal,
equitable or beneficial interest in the Interest Collection Account other than
in accordance with the provisions of this Indenture and the Securities Account
Control Agreement. At all times, the Interest Collection Account shall remain at
an institution that satisfies the requirements of Section 10.1.

(b)

Subject to Section 10.3(c), all property in the Interest Collection Account,
together with any securities in which funds included in such property are or
will be invested or reinvested during the term of this Indenture, and any income
or other gain realized from such investments, shall be held by the Issuer
Accounts Securities Intermediary in the Interest Collection Account as part of
the Collateral subject to disbursement and withdrawal solely as provided in this
Section 10.2 and Section 10.3(c). The Trustee, within one Business Day after
becoming aware of the receipt of any Distribution or other Proceeds that is not
Cash, shall so notify the Investment Manager on behalf of the Issuer and the
Issuer shall, within 10 Business Days of receipt of such notice from the
Trustee, sell such Distributions or other Proceeds for Cash in an arm’s length
transaction and deposit the Proceeds thereof in the Interest Collection Account
for investment pursuant to this Section 10.2; provided, however, that the Issuer
need not sell such Distributions or other Proceeds if it delivers an Officer’s
Certificate to the Trustee certifying that such Distributions or other Proceeds
constitute Collateral Obligations or Eligible Investments and that all steps
necessary to cause the Trustee to have a perfected lien therein that is of first
priority, free of any adverse claim or the legal equivalent thereof, as
applicable, have been taken.

 

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(c)

The Issuer shall, on or prior to the Closing Date, establish at the Issuer
Accounts Securities Intermediary a segregated trust account in the name “Green
Creek LLC, subject to the lien of Citibank, N.A., as Trustee on behalf of the
Secured Parties,” which shall be designated as the Collateral Account, which
shall be held by the Issuer Accounts Securities Intermediary in accordance with
the Securities Account Control Agreement into which the Issuer shall from time
to time deposit Collateral. All Collateral deposited from time to time in the
Collateral Account pursuant to this Indenture shall be held in trust by the
Trustee as part of the Collateral and shall be applied to the purposes provided
herein. The Trustee agrees to give the Issuer notice as soon as practicable
under the circumstances if it becomes aware that the Collateral Account or any
funds on deposit therein, or otherwise to the credit of the Collateral Account,
shall become subject to any writ, order, judgment, warrant of attachment,
execution or similar process. The Issuer shall not have any legal, equitable or
beneficial interest in the Collateral Account other than in accordance with the
provisions of this Indenture and the Securities Account Control Agreement. At
all times, the Collateral Account shall remain at an institution that satisfies
the requirements of Section 10.1.

Section 10.3

Principal Collection Account; Payment Account; and Expense Reserve Account.

(a)

The Issuer shall, prior to the Closing Date, establish at the Issuer Accounts
Securities Intermediary a segregated trust account in the name “Green Creek LLC,
subject to the lien of Citibank, N.A., as Trustee on behalf of the Secured
Parties,” which shall be designated as the Principal Collection Account, which
shall be held by the Issuer Accounts Securities Intermediary in accordance with
the Securities Account Control Agreement. Any and all funds at any time on
deposit in, or otherwise to the credit of, the Principal Collection Account
shall be held in trust by the Trustee for the benefit of the Secured Parties.
The Trustee agrees to give the Issuer notice as soon as practicable under the
circumstances if the Principal Collection Account or any funds on deposit
therein, or otherwise to the credit of the Principal Collection Account, shall
become subject to any writ, order, judgment, warrant of attachment, execution or
similar process. The Issuer shall not have any legal, equitable or beneficial
interest in the Principal Collection Account other than in accordance with the
provisions of this Indenture and the Securities Account Control Agreement. At
all times, the Principal Collection Account shall remain at an institution that
satisfies the requirements of Section 10.1.

(b)

All Deposits made pursuant to Section 3.2(c), proceeds of all Increases made
pursuant to Section 2.13 and all Principal Proceeds received that have not been
reinvested in Substitute Collateral Obligations upon the receipt of such
Principal Proceeds shall be deposited into the Principal Collection Account. All
such funds, together with any Eligible Investments made with such funds, shall
be held by the Issuer Accounts Securities Intermediary in the Principal
Collection Account as part of the Collateral subject to disbursement and
withdrawal solely as provided in this Section 10.3(b) and Section 10.3(c). Any
income or other gain realized from Eligible Investments in the Principal
Collection Account shall be transferred to the Interest Collection Account and
disbursed and withdrawn in accordance with Section 10.2 above.

 

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During the Initial Investment Period, upon the receipt of an Issuer Order, the
Trustee and the Issuer Accounts Securities Intermediary shall reinvest funds on
deposit in the Principal Collection Account in Collateral Obligations as
permitted under and in accordance with Section 3.4(a) and in accordance with
Section 12.2.

After the Initial Investment Period and prior to the end Reinvestment Period,
upon the receipt of an Issuer Order, the Issuer Accounts Securities Intermediary
shall reinvest funds on deposit in the Principal Collection Account in
Collateral Obligations as permitted under and in accordance with the
requirements of Article XII and such Issuer Order. Any unused proceeds remaining
in the Principal Collection Account at the end of the Reinvestment Period (other
than Reinvestment Income (which shall be treated as Interest Proceeds)) shall be
applied as Principal Proceeds on the First Payment Date following the end of the
Reinvestment Period.

(c)

The Issuer shall, on or prior to the Closing Date, establish at the Issuer
Accounts Securities Intermediary a segregated trust account in the name “Green
Creek LLC, subject to the lien of Citibank, N.A., as Trustee on behalf of the
Secured Parties,” which shall be designated as the Payment Account, which shall
be held by the Issuer Accounts Securities Intermediary in accordance with the
Securities Account Control Agreement. Any and all funds at any time on deposit
in, or otherwise to the credit of, the Payment Account shall be held in trust by
the Trustee for the benefit of the Secured Parties. Except as provided in
Section 11.1 and in this Section 10.3, the only permitted withdrawal from or
application of funds on deposit in, or otherwise to the credit of, the Payment
Account shall be to pay the interest on and the principal of and premium, if
any, on the Notes in accordance with the provisions of this Indenture and, upon
Issuer Order to pay Administrative Expenses and other amounts specified in the
Priority of Payments in accordance with the Priority of Payments and Section
13.1. The Trustee agrees to give the Issuer notice as soon as practicable under
the circumstances if it becomes aware that the Payment Account or any funds on
deposit therein, or otherwise to the credit of the Payment Account, shall become
subject to any writ, order, judgment, warrant of attachment, execution or
similar process. The Issuer shall not have any legal, equitable or beneficial
interest in the Payment Account other than in accordance with the provisions of
this Indenture and the Securities Account Control Agreement. At all times, the
Payment Account shall remain at an institution that satisfies the requirements
of Section 10.1.

The Issuer or the Investment Manager on behalf of the Issuer shall direct the
Trustee in writing to, and upon the receipt of such written instructions, the
Trustee shall, cause the transfer to the Payment Account, for application
pursuant to Section 11.1(a), on the first Business Day preceding each Payment
Date, or, in the event such funds are permitted to be available in the Interest
Collection Account or the Principal Collection Account, as the case may be, on
the Business Day preceding each Payment Date pursuant to Section 10.1 of any
amounts then held in Cash in (i) the Interest Collection Account and (ii) the
Principal Collection Account (other than Cash that the Investment Manager is
permitted to and elects to retain in such account for subsequent reinvestment in
Collateral Obligations) and any Reinvestment Income on amounts in the Principal
Collection Account, other than Proceeds received after the end of the Due Period
with respect to such Payment Date.

 

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(d)

The Issuer shall, on or prior to the Closing Date, establish at the Issuer
Accounts Securities Intermediary a segregated trust account in the name “Green
Creek LLC, subject to the lien of Citibank, N.A., as Trustee on behalf of the
Secured Parties,” which shall be designated as the Expense Reserve Account,
which shall be held by the Issuer Accounts Securities Intermediary in accordance
with the Securities Account Control Agreement, into which the Issuer shall
deposit the Expense Reserve Amount as required pursuant to Section 3.2(c)(ii).
Any and all funds at any time on deposit in, or otherwise to the credit of, the
Expense Reserve Account shall be held in trust by the Trustee for the benefit of
the Secured Parties. At the written direction of the Investment Manager or the
Issuer, the Trustee may at any time withdraw funds deposited in the Expense
Reserve Account solely to pay for any fees or expenses incurred by or on behalf
of the Issuer in connection with (i) the structuring and consummation of the
issuance of the Notes or (ii) the Effective Date ((i) or (ii) above, the
“Reserved Expenses”). Amounts in the Expense Reserve Account will be invested in
overnight funds that are Eligible Investments in accordance with the written
instructions of the Investment Manager (which may be in the form of standing
instructions). At the written direction of the Investment Manager, the Trustee
may at any time transfer amounts deposited in the Expense Reserve Account to the
Interest Collection Account for application as Interest Proceeds and/or to the
Principal Collection Account for application as Principal Proceeds so long as
the Investment Manager has confirmed to the Trustee that there are sufficient
funds remaining in the Expense Reserve Account after such transfer to pay for
all accrued but unpaid Reserved Expenses. On the earlier of (i) the First
Payment Date and (ii) the Business Day that the Investment Manager has confirmed
to the Trustee that all Reserved Expenses have been paid by the Issuer, the
Trustee shall transfer any amount remaining in the Expense Reserve Account to
the Interest Collection Account and/or the Principal Collection Account (as
directed by the Investment Manager) and close the Expense Reserve Account. Any
amounts transferred from the Expense Reserve Account to the Principal Collection
Account will be treated as Principal Proceeds and any amounts transferred from
the Expense Reserve Account to the Interest Collection Account will be treated
as Interest Proceeds. At all times, the Expense Reserve Account shall remain at
an institution that satisfies the requirements of Section 10.1.

Section 10.4

Reports by Trustee.

The Trustee shall make available in a timely fashion to the Issuer and the
Investment Manager any information regularly maintained by the Trustee and the
Collateral Administrator that the Issuer or the Investment Manager may from time
to time reasonably request with respect to the Pledged Obligations or the Issuer
Accounts reasonably needed to complete the Valuation Report and the Monthly
Report or to provide any other information reasonably available to the Trustee
by reason of its acting as Trustee hereunder and required to be provided by
Section 10.5 or to permit the Investment Manager to perform its obligations
under the Investment Management Agreement. The Trustee or the Collateral
Administrator shall, in a timely fashion, forward to the Investment Manager
copies of notices and other writings received by it, in its capacity as Trustee
or the Collateral Administrator, as applicable, hereunder, from the obligor or
other Person with respect to any Collateral Obligation or from any Clearing
Agency with respect to any Collateral Obligation advising the holders of such
obligation of any rights that the holders might have with respect thereto
(including notices of calls and redemptions thereof) as well as all periodic
financial reports received from such obligor or other Person with respect to
such obligation and Clearing Agencies with respect to such obligor. The Issuer
and the Investment Manager shall likewise cooperate by providing in a timely
fashion to the Trustee and the Collateral Administrator such information in such
party’s possession as maintained or reasonably available to it hereunder in
respect of the Pledged Securities or otherwise reasonably necessary to permit
the Trustee or the Collateral Administrator, as applicable, to perform its
duties hereunder and, with respect to the Collateral Administrator, under the
Collateral Administration Agreement.

 

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Nothing in this Section 10.4 shall be construed to impose upon the Trustee or
the Collateral Administrator any duty to prepare any report or statement
required under Section 10.5 or to calculate or compute information required to
be set forth in any such report or statement other than information regularly
maintained by the Trustee by reason of its acting as Trustee hereunder.

Section 10.5

Accountings.

If the Trustee shall not have received any accounting provided for in this
Section 10.5 on the first Business Day after the date on which such accounting
is due to the Trustee, the Trustee on behalf of the Issuer shall cause such
accounting to be made by the applicable Payment Date or Special Payment Date, as
the case may be.

(a)

Monthly. Commencing in March 2015, (i) in the case of a month in which there is
no Payment Date, not later than the seventh (7th) Business Day prior to the 10th
day of such month and (ii) in the case of a month in which there is a Payment
Date, one Business Day prior to such Payment Date, the Issuer shall compile, or
cause to be compiled, a report (the “Monthly Report”) and the Issuer shall then
provide or make available such Monthly Report by facsimile, overnight courier or
electronic mail to the Trustee, the Collateral Administrator, the Investment
Manager and any Holder of the Notes and, upon written request in the form of
Exhibit D attached hereto, by first class mail or electronic mail to any other
Noteholder (or its designee), provided that a Monthly Report may be provided to
any such party by posting such Monthly Report on the Trustee’s website and
providing access thereto to such parties. Such written request from a Noteholder
(or its designee) may be submitted directly to the Trustee, and the Trustee
shall forward such written request to the Issuer for processing. The Monthly
Report shall contain the following information and instructions with respect to
the Collateral, determined as of (1) in the case of a month in which there is no
Payment Date, the 10th day of the applicable month and (2) in the case of a
month in which there is a Payment Date, the Determination Date for such Payment
Date:

(i)

With respect to the Collateral Portfolio:

(A)

the Aggregate Principal Amount of the Collateral Obligations and the Eligible
Investments;

(B)

the Principal Balance, annual interest rate (including the basis for such rate),
maturity date (including the later date if such maturity date is extended),
issuer of each Collateral Obligation and Eligible Investment and where the
issuer of each Collateral Obligation and Eligible Investment is organized, as
the case may be;

(C)

the CUSIP, LIN or any other security identifier, if any, of each Collateral
Obligation and Eligible Investment, as the case may be;

 

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(D)

an indication as to the classification of such Collateral Obligation (i.e.,
first lien, participation, etc.); and

(E)

whether each Collateral Obligation has been designated as a “Private Collateral
Obligation” or a “Public Collateral Obligation” pursuant to Section 12.2(a);

(ii)

the nature, source and amount of any Proceeds in each of the Issuer Accounts
including the Interest Proceeds and Principal Proceeds (stating separately the
amount of Sale Proceeds), received since the date of determination of the last
Monthly Report;

(iii)

the number, identity and, if applicable, principal amount of any Collateral that
was released for sale or other disposition (specifying the category under
Article XII under which it falls) and the number, identity and, if applicable,
par value of Collateral acquired by the Issuer and in which the Issuer, pursuant
to this Indenture, has Granted an interest to the Trustee since the date of
determination of the last Monthly Report (or, in the case of the first Monthly
Report, since the Closing Date);

(iv)

(a) the identity of each Collateral Obligation which became a Defaulted
Obligation since the date of determination of the last Monthly Report (or, in
the case of the first Monthly Report, since the Closing Date) and the date on
which such Collateral Obligation became a Defaulted Obligation, (b) the identity
of each Collateral Obligation that is a Defaulted Obligation as of the date of
determination of the current Monthly Report (or, in the case of the first
Monthly Report, as of the Closing Date), the date on which such Collateral
Obligation became a Defaulted Obligation and the Market Value of such Defaulted
Obligation as of the date of determination of the current Monthly Report, and
(c) the Aggregate Principal Amount of all Defaulted Obligations;

(v)

the purchase or sale price of each item of Collateral acquired by the Issuer and
in which the Issuer, pursuant to this Indenture, has Granted an interest to the
Trustee and each item of Collateral sold by the Issuer, in each case, since the
date of determination of the last Monthly Report (or, in the case of the first
Monthly Report, since the Closing Date) and the identity of the purchasers or
sellers thereof, if any, which are Affiliated with the Issuer or the Investment
Manager;

(vi)

(A) the identity and Principal Balance of each Collateral Obligation that was
upgraded or downgraded since the most recent Monthly Report (or, in the case of
the first Monthly Report, since the Closing Date) and (B) the Aggregate
Principal Amount of Collateral Obligations that were (1) upgraded and (2)
downgraded, respectively since the most recent Monthly Report (or, in the case
of the first Monthly Report, since the Closing Date); and

(vii)

such other information as the Trustee, Investment Manager or the Majority of the
Noteholders may reasonably request regarding the Notes and the Collateral
therefor.

 

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Upon receipt of each Monthly Report, the Trustee shall compare the information
contained therein to the information contained in its records with respect to
the Collateral and shall, within three Business Days after receipt of such
Monthly Report, notify the Issuer and the Investment Manager if the information
contained in the Monthly Report does not conform to the information maintained
by the Trustee in its records and detail any discrepancies. In the event that
any discrepancy exists, the Trustee and the Issuer, or the Investment Manager on
behalf of the Issuer, shall attempt to resolve the discrepancy. If such
discrepancy cannot be promptly resolved, the Issuer shall appoint, within five
Business Days, an Independent accountant to review such Monthly Report and the
Trustee’s records to determine the cause of such discrepancy. If such review
reveals an error in the Monthly Report or the Trustee’s records, the Monthly
Report or the Trustee’s records shall be revised accordingly and, as so revised,
shall be utilized in making all calculations pursuant to this Indenture.

(b)

Payment Date Accounting. The Issuer shall compile or cause to be compiled a
report (the “Valuation Report”) and the Issuer shall then provide, or cause to
be provided, such Valuation Report by facsimile, overnight courier or electronic
mail to the Trustee (who shall make such Valuation Report available to any
Holder of the Notes (or its designee) by access to its website or by first class
mail upon written request therefor in the form of Exhibit D attached hereto) not
later than one Business Day prior to the related Payment Date (or, with respect
to the Stated Maturity of any Note, on the Payment Date). The Valuation Report
shall contain the following information:

(i)

the Aggregate Principal Amount of the Collateral Obligations as of the close of
business on such Determination Date, after giving effect to (A) Proceeds
received on the Collateral Obligations with respect to the related Due Period
and the reinvestment of such Proceeds in Substitute Collateral Obligations or
Eligible Investments during such Due Period and (B) the release of any
Collateral Obligations during such Due Period;

(ii)

the Aggregate Outstanding Amount of the Notes as a Dollar figure and as a
percentage of the original Aggregate Outstanding Amount of the Notes at the
beginning of the Due Period, the amount of principal payments to be made on the
Notes on the next Payment Date, the amount of any Deferred Interest and the
Aggregate Outstanding Amount of the Notes as a Dollar figure and as a percentage
of the original Aggregate Outstanding Amount of the Notes, in each case after
giving effect to the principal payments, if any, for such Payment Date;

(iii)

the Interest Distribution Amount payable to the Holders of the Notes for such
Payment Date (in the aggregate) and the amount of Interest Proceeds and
Principal Proceeds payable to the Equity Owner (in each case determined as of
the related Determination Date);

(iv)

the amount of Principal Proceeds to be applied pursuant to Section 11.1(a)(B)(i)
(in each case determined as of the related Determination Date);

(v)

the Administrative Expenses payable for such Payment Date on an itemized basis
(determined as of the related Determination Date);

 

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(vi)

for the Interest Collection Account:

(A)

the Balance on deposit in the Interest Collection Account at the end of the
related Due Period;

(B)

the amounts payable from the Interest Collection Account (through a transfer to
the Payment Account) pursuant to subclauses (i) through (iv) of Section
11.1(a)(A) and subclauses (i) through (v) of Section 11.1(a)(B) for such Payment
Date; and

(C)

the Balance remaining in the Interest Collection Account immediately after all
payments and deposits to be made on such Payment Date (determined as of the
related Determination Date);

(vii)

for the Principal Collection Account:

(A)

the Balance on deposit in the Principal Collection Account at the end of the
related Due Period;

(B)

the amounts, if any, payable from the Principal Collection Account (through a
transfer to the Payment Account) as Interest Proceeds pursuant to Section
11.1(a)(A) and as Principal Proceeds pursuant to Section 11.1(a)(B) for such
Payment Date (in each case determined as of the related Determination Date); and

(C)

the Balance remaining in the Principal Collection Account immediately after all
payments and deposits to be made on such Payment Date (determined as of the
related Determination Date);

(viii)

the amount of Defaulted Interest, if any, with respect to any Notes and the
Investment Management Fee (in each case determined as of the related
Determination Date);

(ix)

the amount of any Notes that have been issued after the Closing Date and the
date of such issuances (determined as of the related Determination Date);

(x)

the Principal Payments received during the related Due Period;

(xi)

the Principal Proceeds received during the related Due Period;

(xii)

the Interest Proceeds received during the related Due Period;

(xiii)

the amounts payable pursuant to each subclause of Section 11.1(a)(A) and Section
11.1(a)(B) on the related Payment Date (in each case determined as of the
related Determination Date);

(xiv)

the identity of each Collateral Obligation that became a Defaulted Obligation
during the related Due Period;

 

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(xv)

the identity of any Collateral Obligations that were released for sale or other
disposition, indicating whether such Collateral Obligation is a Defaulted
Obligation, a Withholding Tax Security or an Equity Security and whether such
Collateral Obligation or an Equity Security was sold or disposed of pursuant to
Section 12.1(a) since the last Valuation Report; and

(xvi)

such other information as the Trustee, Investment Manager or the Majority of the
Noteholders may reasonably request regarding the Notes and the Collateral
therefor.

(c)

Payment Date Instructions. Each Valuation Report shall contain instructions to
the Trustee to withdraw on the related Payment Date from the Payment Account and
pay or transfer the amounts set forth in such report in the manner specified,
and in accordance with the priorities established, in Section 11.1 and Article
XIII.

(d)

Redemption Date Instructions. Not less than five Business Days after receiving
an Issuer Request requesting information regarding a redemption of the Notes as
of a proposed Redemption Date set forth in such Issuer Request, the Trustee
shall provide the necessary information (to the extent it is available to the
Trustee) to the Issuer, the Collateral Administrator and the Investment Manager,
and the Issuer, or, to the extent so received, the Investment Manager on behalf
of the Issuer, shall compute the following information and provide such
information in a statement (the “Redemption Date Statement”) delivered to the
Trustee:

(i)

The Aggregate Outstanding Amount of the Notes to be redeemed as of such
Redemption Date;

(ii)

(a) in the case of an optional redemption under Section 9.1(a), the amounts
payable to Holders of each Note (including the Redemption Price for the Notes),
including the amount of accrued interest due on each Note to be redeemed,
accrued to the Redemption Date; and

(iii)

The amount in the Issuer Accounts available for application to the redemption of
the Notes.

To the extent the Trustee is required to provide any information or reports that
it is not otherwise required to provide pursuant to this Section 10.5 as a
result of the failure of the Issuer or the Investment Manager to provide such
information or reports, the Trustee on behalf of the Issuer shall be entitled to
retain an Independent certified public accountant in connection therewith and
the reasonable costs for such Independent certified public accountant shall be
payable by the Issuer as Administrative Expenses.

(e)

Valuation Report/Monthly Report. Notwithstanding any provision to the contrary
contained in this Indenture, in the case of a month in which there is a Payment
Date, the Issuer, or the Investment Manager on behalf of the Issuer, need not
compile a separate Monthly Report and Valuation Report but may in lieu thereof
compile a combined report that contains the information, determined as of the
Determination Date, required by Section 10.5(a) and Section 10.5(b). Such
combined report shall otherwise be subject to all of the requirements set forth
in the first paragraphs of Section 10.5(a) and Section 10.5(b).

 

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(f)

Section 3(c)(7) Reminder Notice. Pursuant to Section 7.20, the Issuer shall
provide, or cause to be provided, to each Holder a Section 3(c)(7) Reminder
Notice on each Payment Date.

(g)

Distribution of Reports. The Trustee will make the Monthly Report and the
Valuation Report available via its internet website. The Trustee’s internet
website shall initially be located at “www.sf.citidirect.com”. Assistance in
using the website can be obtained by calling the Trustee’s customer service desk
at (800) 422-2066. Parties that are unable to use the above distribution option
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk and indicating such. The Trustee shall have the right
to change the way such statements are distributed in order to make such
distribution more convenient and/or more accessible to the above parties and the
Trustee shall provide timely and adequate notification to all above parties
regarding any such changes. As a condition to access to the Trustee’s internet
website, the Trustee may require registration and the acceptance of a
disclaimer. The Trustee shall be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided in the
Monthly Report and the Valuation Report which the Trustee disseminates in
accordance with this Indenture and may affix thereto any disclaimer it deems
appropriate in its reasonable discretion.

Section 10.6

Custodianship and Release of Collateral.

(a)

Subject to Article XII, the Issuer may, by Issuer Order delivered to the Trustee
at least two Business Days prior to the settlement date for any sale of a
Collateral Obligation (x) in the case of Defaulted Obligations, Withholding Tax
Securities, or Equity Securities, direct the Trustee to release such Collateral
Obligation and, upon receipt of such Issuer Order, the Trustee shall deliver any
such Collateral Obligation, if in physical form, duly endorsed to the broker or
purchaser designated in such Issuer Order or against receipt of the sales price
therefor as set forth in such Issuer Order; provided, however, that the Trustee
may deliver any such Collateral Obligation in physical form for examination in
accordance with street delivery custom, or (y) if no Event of Default has
occurred and is continuing, certify that (i) it has determined that a Collateral
Obligation has become a Defaulted Obligation (which certification shall contain
a short statement of the reason for such determination), and in each case, that
the sale of such Collateral Obligation will comply with Section 12.1(a), (ii)
during the Initial Investment Period, the sale of such Collateral Obligation and
the proposed purchase and delivery of Substitute Collateral Obligations will
comply with Section 3.4(a), (iii) the sale of such Collateral Obligation will
comply with Section 12.1(a), or (iv) the sale of such Collateral Obligation is
being effected in conjunction with a redemption pursuant to Section 9.1(a), and
direct the Trustee to release such Collateral Obligation and, upon receipt of
such Issuer Order, the Trustee shall deliver any such Collateral Obligation, if
in physical form, duly endorsed to the broker or purchaser designated in such
Issuer Order or against receipt of the sales price therefor as set forth in such
Issuer Order; provided, however, that the Trustee may deliver any such
Collateral Obligation in physical form for examination in accordance with street
delivery custom.

 

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(b)

Subject to Article XII, the Issuer may, by Issuer Order delivered to the Trustee
at least two Business Days prior to the date set for redemption or payment in
full of a Pledged Obligation or other item of Collateral and certifying that
such Collateral Obligation is being redeemed or paid in full, direct the
Trustee, or at the Trustee’s instructions, the Issuer Accounts Securities
Intermediary, to deliver such Collateral Obligation, if in physical form, duly
endorsed, to cause it to be presented, or otherwise appropriately deliver or
present such security or debt obligation, to the appropriate Paying Agent
therefor or other Person responsible for payment thereon on or before the date
set for redemption or payment, in each case against receipt of the redemption
price or payment in full thereof. Except with respect to Defaulted Obligations,
Withholding Tax Securities and Equity Securities, if an Event of Default has
occurred and is continuing at the time of such direction, the Trustee, if so
directed by a Majority of the Noteholders, shall disregard such direction.

(c)

Subject to Article XII, the Issuer may, by Issuer Order, delivered to the
Trustee at least two Business Days prior to the date set for an exchange, tender
or sale, certifying that a Collateral Obligation is subject to an Offer and
setting forth in reasonable detail the procedure for response to such Offer,
direct the Trustee or, at the Trustee’s instructions, the Issuer Accounts
Securities Intermediary, to deliver such security or debt obligation, if in
physical form, duly endorsed, or, if such security is a Collateral Obligation
for which a Security Entitlement has been created in an Issuer Account, to cause
it to be delivered, or otherwise appropriately deliver or present such security
or debt obligation, in accordance with such Issuer Order, in each case against
receipt of payment therefor. Except with respect to Defaulted Obligations,
Withholding Tax Securities and Equity Securities, if an Event of Default has
occurred and is continuing at the time of such direction, the Trustee, if so
directed by a Majority of the Noteholders, shall disregard such direction.

(d)

The Trustee shall deposit any proceeds received from the disposition of a
Pledged Obligation in the Principal Collection Account and/or the Interest
Collection Account, as the case may be, unless directed to simultaneously
applied to the purchase of Substitute Collateral Obligations or Eligible
Investments as permitted under and in accordance with this Article X and Article
XII.

(e)

The Trustee shall, upon receipt of an Issuer Order at such time as there are no
Notes Outstanding and all obligations of the Issuer hereunder have been
satisfied (as evidenced by an Officer’s Certificate), release the Collateral
from the lien of this Indenture.

Section 10.7

[Reserved].

Section 10.8

Additional Reports.

In addition to the information and reports specifically required to be provided
pursuant to the terms of this Indenture, the Issuer (at its expense), or the
Investment Manager on behalf of the Issuer, shall compile and the Issuer shall
then provide the Holders of any Notes (upon request of a Majority of the Notes),
with all information or reports delivered to the Trustee hereunder, and such
additional information as a Majority of the Noteholders may from time to time
reasonably request and the Issuer shall reasonably determine may be obtained and
provided without unreasonable burden or expense. Such a request from a Holder
(or its designee) may be submitted directly to the Trustee and then such request
shall be forwarded to the Issuer for processing. Such request from a Holder (or
its designee) shall be submitted to the Trustee by delivery of a written request
in the form of Exhibit D attached hereto.

 

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Section 10.9

Procedures Relating to the Establishment of Issuer Accounts Controlled by the
Trustee.

(a)

(i)

Notwithstanding any term in this Indenture to the contrary and notwithstanding
the terms of Part 5 of Article 8 of the UCC, to the extent applicable, with
respect to Collateral Obligations delivered to the Trustee, any custodian acting
on its behalf, or the Bank acting as Issuer Accounts Securities Intermediary
pursuant to the provisions of this Indenture, the Trustee, any custodian acting
on its behalf, or the Bank acting as, Issuer Accounts Securities Intermediary
shall be obligated to receive and hold until released pursuant to the terms of
this Indenture the items delivered or caused to be delivered to it by the Issuer
or the Investment Manager, and to hold the same in its custody in accordance
with the terms of this Indenture but shall have no further obligation with
respect to, or be obligated to take (or to determine whether there has been
taken) any action in connection with the delivery of such Collateral
Obligations. Without limiting the foregoing, in no instance shall the Trustee,
any such custodian or the Bank acting as Issuer Accounts Securities Intermediary
be under any duty or obligation to examine the underlying credit agreement, loan
agreement, participation agreement, indenture, trust agreement or similar
instrument that may be applicable to any Collateral Obligation in order to
determine (or otherwise to determine under applicable law) whether sufficient
actions have been taken and documents delivered (including without limitation,
any requisite obligor or agent bank consents, notices or filings) in order to
properly assign, transfer, or otherwise convey title to such Collateral
Obligations.

(ii)

In connection with the delivery of any Collateral Obligation, the Issuer or the
Investment Manager shall send to the Trustee and the Collateral Administrator a
trade ticket or transmittal letter (in form and content mutually reasonably
acceptable to them), which shall, at a minimum (in addition to other appropriate
information with regard to the subject Collateral Obligation as may be mutually
agreed upon between the Collateral Administrator and the Investment Manager),
(i) specify the purchase price for such Collateral Obligation, and (ii) identify
the Collateral Obligation and its material amount, payment and interest rate
terms. Each of the Trustee, the Collateral Administrator, any custodian acting
on its behalf and the Bank acting as Issuer Accounts Securities Intermediary
shall be entitled to assume the genuineness, validity and enforceability of each
such note, certificate, instrument and agreement delivered to it in connection
with the delivery of a Collateral Obligation, and to assume that each is what it
purports on its face to be, and to assume the genuineness and due authority of
all signatures appearing thereon.

(b)

Nothing in this Section 10.9 shall impose upon the Issuer Accounts Securities
Intermediary the duties, obligations or liabilities of the Trustee; and nothing
herein shall impose upon the Trustee the duties, obligations or liabilities of
the Issuer Accounts Securities Intermediary.

 

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Section 10.10

Notices to Holders of the Notes.

Each Monthly Report and Valuation Report shall contain or shall have attached to
it a notice to the Holders of the Notes stating that (A) each Holder of a
beneficial interest in the Notes shall be deemed to have (i) represented that
the Holder is both (1) a Qualified Institutional Buyer and (2) a Qualified
Purchaser and (ii) made all other representations set forth in the legends of
the applicable Notes, (B) the Issuer shall have the right to refuse to honor a
transfer of the Notes to a person who does not satisfy the requirements set
forth in subclause (A) of this Section 10.10 and (C) pursuant to Section 2.12,
the Issuer may require a Non-Permitted Holder to transfer its interest in the
Notes to a Person that is not a Non-Permitted Holder within 30 days of receiving
notice to such effect from the Issuer and, if such Non-Permitted Holder fails to
transfer its Notes, the Issuer shall have the right, without further notice to
the Non-Permitted Holder, to sell such Notes or interest in Notes to a purchaser
selected by the Issuer that is not a Non-Permitted Holder on such terms as the
Issuer may choose. To the extent a notice is sent to a Holder of Rule 144A
Global Notes, the Trustee will request such Holder to send the notice to the
beneficial owners of such Notes.

ARTICLE XI.

APPLICATION OF MONIES

Section 11.1

Disbursements of Monies from Payment Account.

(a)

Notwithstanding any other provision in this Indenture, but subject to the other
subsections of this Section 11.1 and Section 13.1, on or, with respect to
amounts referred to in Section 11.1(d), before each Payment Date or the Stated
Maturity, the Trustee shall disburse amounts transferred to the Payment Account
from the Interest Collection Account and, to the extent permitted hereunder,
from the Principal Collection Account pursuant to Section 10.2, Section 10.3,
Section 2.7 or Section 3.4 as follows and for application by the Trustee in
accordance with the following priorities (collectively, the “Priority of
Payments”):

(A)

On each Payment Date and on the Stated Maturity, Interest Proceeds shall be
applied as follows:

(i)

to the payment of taxes of the Issuer, if any, and any governmental fee,
including all filing, registration and annual return fees payable by the Issuer;

(ii)

to the payment of accrued and unpaid Administrative Expenses constituting (x)
fees of the Trustee and reimbursement of expenses (including indemnity payments)
of the Trustee pursuant to the terms of this Indenture and (y) fees and
reimbursement of expenses (including indemnity payments) of the Collateral
Administrator under the Collateral Administration Agreement; provided, however,
that total payments pursuant to this subclause (ii) shall not exceed, on any
Payment Date other than the First Payment Date, an amount equal to a percentage
of the Aggregate Principal Amount of the Collateral Portfolio equal to an annual
rate of 0.02%, measured as of the beginning of the Due Period preceding such
Payment Date; and, with respect to the First Payment Date, 0.005% (not
annualized) of the Aggregate Principal Amount of the Collateral Portfolio,
measured as of the beginning of the Due Period preceding such Payment Date;

 

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(iii)

to the payment (in the order set forth in the definition of Administrative
Expenses), of (a) first, remaining accrued and unpaid Administrative Expenses
(other than indemnity payments) of the Issuer including other amounts payable by
the Issuer to the Investment Manager under the Investment Management Agreement
(excluding any Investment Management Fee), and to the Trustee and the Collateral
Administrator constituting Administrative Expenses (other than indemnity
payments) not paid pursuant to subclause (ii) above, and (b) second, remaining
accrued and unpaid Administrative Expenses of the Issuer constituting indemnity
payments; provided, however, that such payments pursuant to this subclause
(iii), shall not exceed an amount equal on any Payment Date (when taken together
with any Administrative Expenses paid during the period since the preceding
Payment Date or, in the case of the First Payment Date, the Closing Date) to
$325,000 per annum;

(iv)

to the payment of the Interest Distribution Amount (to the extent funds are
available for the payment thereto);

(v)

to the payment, first, pari passu, of any accrued and unpaid fees and expenses
of the Trustee and the Collateral Administrator and second, in the order set
forth in the definition of Administrative Expenses, of any accrued and unpaid
Administrative Expenses of the Issuer (including, for the avoidance of doubt and
without limitation, (1) indemnities and amounts payable by the Issuer to the
Trustee and the Collateral Administrator and (2) indemnities and amounts payable
by the Issuer to the Investment Manager under the Investment Management
Agreement (other than any Investment Management Fee)), in each case to the
extent not paid pursuant to subclauses (ii) and (iii) above;

(vi)

to the payment to the Investment Manager of, first, the current Investment
Management Fee in accordance with the terms of the Investment Management
Agreement and, then, any accrued and previously unpaid Investment Management
Fee; and

(vii)

the balance of Interest Proceeds to the Issuer for distribution to the Equity
Owner as a dividend payment thereon or as a final distribution in redemption
thereof, as applicable.

(B)

Without limiting any other applicable provisions of this Indenture, on each
Payment Date and on the Stated Maturity, Principal Proceeds will be distributed
in the following order of priority:

(i)

to the payment of the amounts referred to in subclauses (i) through (iv) of
clause (A) of this Section 11.1(a) (in the order of priority set forth therein),
but only to the extent not paid in full thereunder;

(ii)

during the Reinvestment Period:

 

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(1)

to the purchase of Collateral Obligations or to the Principal Collection Account
for investment in Eligible Investments pending purchase of Collateral
Obligations at a later date in accordance with Section 12.2;

(2)

either (x) such Payment Date is a Redemption Date or (y) at the election of the
Issuer, to the payment of principal of the Notes (provided, in the case of this
clause (y), that, as of such Payment Date, after giving effect to all sales of
Collateral Obligations prior to such Payment Date, the Aggregate Principal
Amount of the Collateral does not consist of greater than 65% of Private
Collateral Obligations); or

(3)

to the extent the Market Value Test is satisfied as of the related Determination
Date and at the election of the Issuer (and so long as no Default has occurred
and is then continuing, no Cause has occurred and is then continuing under the
Investment Management Agreement and no Redemption is then pending), to the
Issuer for distribution to the Equity Owner in an amount equal to the Excess
Market Value Amount on such Determination Date;

(iii)

after the Reinvestment Period, to the payment of principal of the Notes, at the
Redemption Price;

(iv)

after the Notes have been paid in full, to the amounts referred to in subclause
(v) of clause (A) of this Section 11.1(a) (in the order of priority set forth
therein), but only to the extent not paid in full thereunder;

(v)

to the payment to the Investment Manager of the current Investment Management
Fee in accordance with the terms of the Investment Management Agreement and
then, any accrued and previously unpaid Investment Management Fee, in each case,
to the extent not paid pursuant to subclause (vii) of clause (A) of this Section
11.1(a); and

(vi)

the balance of Principal Proceeds to the Issuer for distribution to the Equity
Owner as a dividend payment thereon or as a final distribution in redemption
thereof, as applicable.

(C)

On each Payment Date that is a Redemption Date, pursuant to the procedures
described in Article IX, Liquidation Proceeds shall be applied as follows:

(i)

to the payment of the amounts referred to in subclause (i) of clause (B) of this
Section 11.1(a), in such order of priority;

(ii)

without duplication of the amounts paid above, to the payment of all or a
portion of the Notes then Outstanding, as applicable, at the Redemption Price
plus accrued and unpaid interest thereon;

(iii)

to the payment of the amount referred to in subclause (v) of Clause (A) of
Section 11.1(a) (in the order of priority set forth therein);

 

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(iv)

to the payment to the Investment Manager of, first, the current Investment
Management Fee in accordance with the terms of the Investment Management
Agreement and, then, any accrued and previously unpaid Investment Management
Fee; and

(v)

the balance of Liquidation Proceeds to the Issuer for distribution to the Equity
Owner as a dividend payment thereon or as a final distribution in redemption
thereof, as applicable.

(D)

After an Event of Default has occurred and is continuing, all Interest Proceeds,
Principal Proceeds and any other available funds in the Issuer Accounts will be
distributed in the following order of priority:

(i)

to the payment of the amounts referred to in subclauses (i), through (iii) of
Clause (A) of Section 11.1(a) (in the order of priority set forth therein);

(ii)

to the payment (1) first, of the Interest Distribution Amount, (2) second, of
principal of the Notes, until the Notes have been paid in full, and (3) third,
of the amount referred to in subclause (v) of Clause A of Section 11.1(a) (in
the order of priority set forth therein);

(iii)

to the payment to the Investment Manager of the current Investment Management
Fee in accordance with the terms of the Investment Management Agreement and
then, any accrued and previously unpaid Investment Management Fee; and

(iv)

the balance of such funds, if any, to the Issuer for distribution to the Equity
Owner as a final distribution in redemption thereof, as applicable.

(b)

Not later than 12:00 noon, New York time, on the Business Day preceding each
Payment Date, the Issuer shall, pursuant to Section 10.3(c), remit or cause to
be remitted to the Trustee for deposit in the Payment Account an amount of Cash
sufficient to pay the amounts described in Section 11.1(a) required to be paid
on such Payment Date.

(c)

If on any Payment Date the amount available in the Payment Account from amounts
received in the related Due Period is insufficient to make the full amount of
the disbursements required by the statements furnished by the Issuer pursuant to
Section 10.6, the Trustee shall make the disbursements called for in the order
and according to the priority set forth under Section 11.1(a) above, subject to
Article XIII, to the extent funds are available therefor.

(d)

Notwithstanding anything to the contrary contained herein, Interest Proceeds may
be applied to the payment of Administrative Expenses of the Issuer on days other
than Payment Dates; provided, that, in any Due Period such payments shall not
exceed an amount equal on any Payment Date (when taken together with any
Administrative Expenses paid during the period since the preceding Payment Date
or, in the case of the First Payment Date, the Closing Date) to $325,000 per
annum; provided, further, that (1) such payments do not exceed the amounts
permitted to be paid on the related Payment Date pursuant to section
11.1(a)(A)(iii) and (2) sufficient Interest Proceeds have theretofore been
received to cover such payments.

 

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(e)

Notwithstanding any other provision of this Indenture, including the other
subsections of this Section 11.1, the Issuer, at the option of the Equity Owner,
shall have the right to direct the Trustee to make a cash distribution from the
Interest Proceeds to the Equity Owner on any Business Day but only if, and only
to the extent that, after giving effect to such cash distribution the Issuer
will be able to satisfy all payments requirements under this Section 11.1
required of it on the next Payment Date as evidenced by an Officer’s Certificate
of the Issuer or the Investment Manager on behalf of the Issuer, provided to the
Trustee upon which the Trustee shall be entitled to fully rely with no liability
therefore.

ARTICLE XII.

SALE OF COLLATERAL OBLIGATIONS; SUBSTITUTION

Section 12.1

Sales of Collateral Obligations.

(a)

For so long as no Event of Default has occurred and is continuing, the
Investment Manager may direct the Trustee, on behalf of the Issuer, in writing
to sell, and the Trustee shall sell, in the manner directed by the Investment
Manager any Collateral Obligation at any time, in accordance with, and subject
to, any applicable limitations on amounts and other requirements set forth
herein (it being understood that the foregoing limitation shall not apply to any
optional or mandatory substitutions or repurchases effected by FS Investment
Corporation II pursuant to clause (b) below and the Sale and Contribution
Agreement).

(b)

Notwithstanding the foregoing, the Aggregate Principal Amount of all Collateral
Obligations (other than Warranty Transferred Assets) sold pursuant hereto to the
Equity Owner or an Affiliate thereof or released to the Equity Owner pursuant to
a dividend by the Issuer shall not in aggregate exceed 20% of the Net Purchased
Loan Balance measured as of the date of such sale or dividend; provided, that
the Aggregate Principal Amount of all Defaulted Obligations (other than Warranty
Transferred Assets) sold pursuant to Section 12(b)(i) to the Equity Owner or an
Affiliate thereof or released to the Equity Owner pursuant to a dividend by the
Issuer shall not in any twelve-month period exceed 10% of the Net Purchased Loan
Balance measured as of the date of such sale or dividend.

 

(c)

Application of Sale Proceeds. During the Reinvestment Period, all Sale Proceeds
shall be applied to purchase additional Collateral Obligations in accordance
with Section 12.2 and Section 3.4(a), as applicable, or to purchase Eligible
Investments in accordance with Section 12.2, or shall be applied in accordance
with the Priority of Payments applicable thereto on the next succeeding Payment
Date. After the Reinvestment Period, no Principal Proceeds may be reinvested in
Collateral Obligations at any time.

 

(d)

Sales of Eligible Investments. Except as otherwise expressly provided herein,
none of the Issuer, the Investment Manager or the Trustee may at any time sell
or permit the sale of any Eligible Investment prior to its maturity date if the
Issuer or the Investment Manager, as the case may be, determines that such
Eligible Investment will sell at a price that is below the par value of such
Eligible Investment.

 

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(e)

Collateral Acquisition and Disposition Terms. Any transaction involving the
purchase or sale of Collateral effected under this Indenture shall be conducted
on terms no less favorable to the Issuer than terms prevailing in the market.
All sales of Collateral Obligations or any portion thereof pursuant to this
Section 12.1 shall be for Cash on a non-recourse basis to the Issuer.

 

(f)

Sales Prior to Stated Maturity. On or prior to the date that is two Business
Days prior to the Stated Maturity of the last Outstanding Note, but no earlier
than the date that is 90 Business Days prior to the Stated Maturity of the last
Outstanding Note, the Investment Manager shall direct the Trustee in writing to
sell, and the Trustee shall sell, all Collateral Obligations and other
securities to the extent necessary such that no Collateral Obligations or other
securities will be expected to be held by the Issuer on or after such date, and
the Trustee shall sell such Collateral Obligations and such other securities in
accordance with the direction of the Investment Manager. The settlement dates
for any such sales of Collateral Obligations and other securities shall be no
later than two Business Days prior to the Stated Maturity of the last
Outstanding Note.

 

(g)

Reinvestment in Collateral Obligations. Whenever the Investment Manager is
required to use commercially reasonable efforts to direct the reinvestment of
Sale Proceeds on behalf of the Issuer under this Section 12.1, such reinvestment
shall be subject to market conditions and the availability and suitability of
available investments.

 

(h)

Following the occurrence and continuation of an Event of Default or the
occurrence and continuation of Cause under the Investment Management Agreement
(and after the application of any cure or grace periods), the Investment Manager
shall obtain the written consent of a Majority of the Noteholders before acting
on behalf of, or otherwise directing, the Issuer, the Trustee or any other
person in connection with a sale of Collateral Obligations pursuant to any
provision of this Indenture.

 

Section 12.2

Trading Restrictions.

(a)

In connection with the purchase of a Collateral Obligation and prior to entering
into a commitment to purchase such Collateral Obligation, the Issuer, or the
Investment Manager on behalf of the Issuer, shall comply with the following
procedure:

(i)

each proposed purchase of a Collateral Obligation shall be submitted in writing
for approval to the Holders of the Notes;

(ii)

the Issuer and the Majority of the Noteholders shall, in good faith,
collectively designate each proposed Collateral Obligation as a “Private
Collateral Obligation” or a “Non-Private Collateral Obligation”;

 

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(iii)

the Majority of the Noteholders shall have the right to request (and upon
receipt of such request, the Investment Manager shall promptly provide) the
following information with respect to the Collateral Obligation identified for
purchase: (1) the Reference Instrument (including the collateral and security
documents) relating to such Collateral Obligation; (2) any appraisal or
valuation reports conducted by third parties; and (3) any other information
customary and typical in performing a detailed credit analysis and as reasonably
requested by the Majority of the Noteholders, including (without limitation)
corporate organization charts of the obligors (to the extent available to the
Investment Manager) and information concerning the relationship of such obligor
to the Issuer and the Investment Manager and their respective Affiliates
(collectively, the “Diligence Information”); and

(iv)

upon receipt of the request for approval and any requested Diligence
Information, as set forth in clauses (i) and (ii) above, the Majority of the
Noteholders shall, within 5 Business Days, either (x) approve the purchase of
such Collateral Obligation and, in connection with such approval, determine the
Market Value for such Collateral Obligation as of the approval date, or (y)
reject the purchase of such Collateral Obligation.

For the avoidance of doubt, no Collateral Obligations shall be purchased by the
Issuer unless consent of a Majority of the Noteholders has been obtained
therefor.

(b)

In connection with the Issuer’s holding of a Collateral Obligation and for as
long as such Collateral Obligation remains part of the Collateral Portfolio, the
Issuer, or the Investment Manager on behalf of the Issuer, shall use
commercially reasonable efforts to provide upon request, as soon as practically
available, the Holders of the Notes with the Diligence Information referenced to
in subclause (a)(ii) above.

(c)

Notwithstanding anything to the contrary herein, for the avoidance of doubt,
there shall be no reinvestment in any Collateral Obligations after the end of
the Reinvestment Period.

(d)

Notwithstanding anything to the contrary herein, the Issuer will not at any time
commit to purchase any Collateral Obligation unless at the time of such
commitment the Issuer, in its commercially reasonable judgment, believes there
is or will be an amount of funds on deposit in the Principal Collection Account
that is equal to or greater than the full amount required by the Issuer to
purchase such Collateral Obligation (and all other Collateral Obligations that
the Issuer has committed to purchase but that have not yet settled).

Section 12.3

Affiliate Transactions. The Issuer will not have the right or ability to sell to
an Affiliate any Collateral Obligation acquired from an Affiliate except for (a)
Defaulted Obligations, (b) required repurchase obligations or other permitted
transactions pursuant to Section 12.1(a) and the Sale and Contribution Agreement
(such repurchase, “Permitted Repurchases”), or (c) sales to Affiliates conducted
on terms and conditions consistent with those of an arm’s length transaction at
fair market value so long as the Investment Manager obtains bid prices from at
least two nationally recognized dealers (unaffiliated with the Investment
Manager or its affiliates) for such Collateral Obligation. The Issuer will not
have the right or ability to purchase Collateral Obligations from any Affiliate
except for purchases from Affiliates conducted on terms and conditions
consistent with those of an arm’s length transaction at fair market value.

 

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ARTICLE XIII.

NOTEHOLDERS’ RELATIONS

Section 13.1

Subordination and Non-Petition.

(a)

Anything in this Indenture or the Notes to the contrary notwithstanding, the
Issuer agrees for the benefit of the Holders of the Notes that the rights of the
Equity Owner to distribution by the Issuer and in and to the Collateral,
including any payment from Proceeds of Collateral, shall be subordinate and
junior to the Notes, to the extent and in the manner set forth in this Indenture
including, as set forth in Section 11.1 and hereinafter provided. If any Event
of Default has occurred and has not been cured or waived, and notwithstanding
anything contained in Section 11.1 to the contrary, interest on and principal of
the Notes shall be paid in full in Cash (in order of priority) before any
further payment or distribution is made on account of the Equity Owner.

(b)

In the event that notwithstanding the provisions of this Indenture, any Holder
of any Subordinate Interests shall have received any payment or distribution in
respect of such Subordinate Interests contrary to the provisions of this
Indenture, then, unless and until either the Notes shall have been paid in full
in Cash in accordance with this Indenture, such payment or distribution shall be
received and held in trust for the benefit of, and shall forthwith be paid over
and delivered to, the Trustee, which shall pay and deliver the same to the
Holders of the Notes, as the case may be, in accordance with this Indenture;
provided, however, that, if any such payment or distribution is made other than
in Cash, it shall be held by the Trustee as part of the Collateral and subject
in all respects to the provisions of this Indenture, including this Section
13.1.

(c)

The Issuer agrees with all Holders of the Notes that the Issuer shall not
demand, accept, or receive any payment or distribution in respect of such
Subordinate Interests in violation of the provisions of this Indenture,
including this Section 13.1. Nothing in this Section 13.1 shall affect the
obligation of the Issuer to pay Holders of Subordinate Interests.

(d)

The Noteholders shall not have a right to receive from the Trustee or the
Registrar a list of the Noteholders.

(e)

The Holders of the Notes agree not to cause the filing of a petition in
bankruptcy against the Issuer prior to the date which is one year and one day
(or, if longer, the applicable preference period) after the payment in full of
principal of and interest on all the Notes.

Section 13.2

Standard of Conduct.

In exercising any of its or their voting rights, rights to direct and consent or
any other rights as a Holder under this Indenture, subject to the terms and
conditions of this Indenture, including Section 5.9, a Holder or Holders shall
not have any obligation or duty to any Person or to consider or take into
account the interests of any Person and shall not be liable to any Person for
any action taken by it or them or at its or their direction or any failure by it
or them to act or to direct that an action be taken, without regard to whether
such action or inaction benefits or adversely affects any Holder, the Issuer, or
any other Person, except for any liability to which such Holder may be subject
to the extent the same results from such Holder’s taking or directing an action,
or failing to take or direct an action, in bad faith or in violation of the
express terms of this Indenture.

 

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ARTICLE XIV.

MISCELLANEOUS

Section 14.1

Form of Documents Delivered to Trustee.

In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

Any certificate of an Authorized Officer of the Issuer or the Investment Manager
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such Authorized Officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer of the Issuer or the Investment Manager or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate of,
or representations by, the Issuer, the Investment Manager or any other Person,
stating that the information with respect to such factual matters is in the
possession of the Issuer, the Investment Manager or such other Person, unless
such Authorized Officer of the Issuer or the Investment Manager or such counsel
knows that the certificate or representations with respect to such matters are
erroneous. Any Opinion of Counsel may also be based, insofar as it relates to
factual matters, upon a certificate of, or representations by, an Authorized
Officer of the Issuer or the Investment Manager, stating that the information
with respect to such matters is in the possession of the Issuer or the
Investment Manager, unless such counsel knows that the certificate or
representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

Whenever in this Indenture it is provided that the absence of the occurrence and
continuation of a Default or Event of Default is a condition precedent to the
taking of any action by the Trustee at the request or direction of the Issuer,
then notwithstanding that the satisfaction of such condition is a condition
precedent to the Issuer’s rights to make such request or direction, the Trustee
shall be protected in acting in accordance with such request or direction if it
does not have knowledge of the occurrence and continuation of such Default or
Event of Default as provided in Section 6.1(d).

 

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Section 14.2

Acts of the Noteholders.

(a)

Any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders of the Notes
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Holders in Person or by an agent duly appointed in
writing, and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action or actions embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the Holders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the Issuer,
if made in the manner provided in this Section 14.2.

(b)

The fact and date of the execution by any Person of any such instrument or
writing may be proved in any manner which the Trustee deems sufficient.

(c)

The principal amount, notional amount and registered numbers of the Notes held
by any Person, and the date of his holding the same, shall be proved by the
Register.

(d)

Any request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Notes shall bind the Holder (and any transferee
thereof) of such Note and of every Note issued upon the registration thereof or
in exchange therefor or in lieu thereof, in respect of anything done, omitted or
suffered to be done by the Trustee, or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.

Section 14.3

Notices.

Except as otherwise expressly provided herein, any request, demand,
authorization, direction, instruction, notice, consent, waiver or Act of the
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with any of the parties indicated
below shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to and mailed, by first class mail, hand delivered, sent by
overnight courier service guaranteeing next day delivery or by telecopy in
legible form at the following addresses:

(a)

to the Trustee at, the Corporate Trust Office, facsimile number: (212) 816-5527,
Attention: Citibank Agency & Trust – Green Creek LLC, or at any other address
previously furnished in writing by the Trustee;

(b)

to the Issuer in care of FS Investment Corporation II, Cira Centre, 2929 Arch
Street, Suite 675, Philadelphia, Pennsylvania 19104, facsimile number: (215)
222-4649, Attention: Gerald F. Stahlecker, or at any other address previously
furnished in writing by the Issuer;

 

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(c)

to the Investment Manager, Cira Centre, 2929 Arch Street, Suite 675,
Philadelphia, Pennsylvania 19104, facsimile number: (215) 222-4649, Attention:
Gerald F. Stahlecker, or at any other address previously furnished in writing by
the Investment Manager; and

(d)

to the Collateral Administrator, 5400 Westheimer Court, Suite 760, Houston, TX
77056, facsimile number: (866) 816-3203, Attention: Green Creek LLC; and

(e)

in the case of notices to the Specified Noteholder, to the address provided by
the Specified Noteholder to the Issuer and the Trustee on the Closing Date;

Section 14.4

Notices to Noteholders; Waiver.

Except as otherwise expressly provided herein, where this Indenture provides for
notice to Holders of the Notes of any event,

(a)

such notice shall be sufficiently given to Holders of the Notes if in writing
and (i) mailed, first-class postage prepaid, to each Noteholder affected by such
event, at the address of such Holder as it appears in the Register or (ii) if a
Holder is located overseas and so requests, faxed to such Holder, at the
facsimile number of such Person as it appears in the Register, not earlier than
the earliest date and not later than the latest date, prescribed for the giving
of such notice; and

(b)

such notice shall be in the English language.

Such notices will be deemed to have been given on the date of such mailing or
possible electronic transmission.

The Trustee will deliver to the Holders of the Notes any notice requested to be
so delivered by such Holder (at the expense of such requesting Holder);
provided, that the Trustee may decline to deliver any such notice that it
reasonably determines is contrary to any terms of this Indenture or any duty or
obligation it may have, or that may expose it to liability or that may be
contrary to law.

Neither the failure to mail (or otherwise furnish electronically) any notice,
nor any defect in any notice so mailed, to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Holders of the
Notes. In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impractical to give such notice by mail or
facsimile, as the case may be, then such notification to Holders of the Notes as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.

Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

 

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Section 14.5

Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

Section 14.6

Successors and Assigns.

All covenants and agreements in this Indenture by the Issuer shall bind its
successors and assigns, whether so expressed or not.

Section 14.7

Severability.

In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

Section 14.8

Benefits of Indenture.

Nothing in this Indenture or in the Notes, expressed or implied, shall give to
any Person (other than the Investment Manager and the Collateral Administrator,
who each shall be an express third party beneficiary of Section 8.5 and the
Granting Clause of this Indenture, the parties hereto and their successors
hereunder and the Holders of the Notes) any benefit or any legal or equitable
right, remedy or claim under this Indenture.

Section 14.9

Governing Law.

THIS INDENTURE AND EACH SECURITY SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED THEREIN WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
THEREOF.

Section 14.10

Submission to Jurisdiction.

THE ISSUER AND THE TRUSTEE HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THE SECURITIES OR THIS INDENTURE, AND THE ISSUER AND THE TRUSTEE
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH FEDERAL OR NEW YORK STATE COURT. THE ISSUER
AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THAT THEY MAY
LEGALLY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING. THE ISSUER AND THE TRUSTEE IRREVOCABLY CONSENT TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OR
DELIVERY OF COPIES OF SUCH PROCESS TO IT AT THE OFFICE OF THE ISSUER’S AGENT SET
FORTH IN SECTION 7.4. THE ISSUER AND THE TRUSTEE AGREE 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.

 

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Section 14.11

Counterparts.

This instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

Section 14.12

Waiver Of Jury Trial.

THE TRUSTEE, THE NOTEHOLDERS AND THE ISSUER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO. EACH OF THE ISSUER, THE
TRUSTEE, AND THE NOTEHOLDERS ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL
AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR SUCH PARTIES ENTERING INTO THIS AGREEMENT.

Section 14.13

Legal Holiday.

In the event that the date of any Payment Date or Special Payment Date shall not
be a Business Day, then notwithstanding any other provision of the Notes or this
Indenture, payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal
date of any such Payment Date or Special Payment Date, as the case may be;
provided that, in the case of the Notes only, interest shall accrue from and
including the immediately preceding Payment Date to but excluding the next
Business Day following the nominal Payment Date.

ARTICLE XV.

ASSIGNMENT OF INVESTMENT MANAGEMENT AGREEMENT

Section 15.1

Assignment of Investment Management Agreement.

(a)

The Issuer, in furtherance of the covenants of this Indenture and as security
for the Secured Obligations and the performance and observance of the provisions
hereof, hereby assigns, transfers, conveys and sets over to the Trustee, for the
benefit of the Secured Parties, all of the Issuer’s estate, right, title and
interest in, to and under the Investment Management Agreement (except as set
forth in the second proviso of this Section 15.1(a)), including (i) the right to
give all notices, consents and releases thereunder, (ii) the right to take any
legal action upon the breach of an obligation of the Investment Manager
thereunder, including the commencement, conduct and consummation of proceedings
at law or in equity, (iii) the right to receive all notices, accountings,
consents, releases and statements thereunder and (iv) the right to do any and
all other things whatsoever that the Issuer is or may be entitled to do
thereunder; provided, however, that notwithstanding anything herein to the
contrary, the Trustee shall not have the authority to execute any of the rights
set forth in subclauses (i) through (iv) above or may otherwise arise as a
result of the Grant until the occurrence of an Event of Default hereunder and
such authority shall terminate at such time, if any, as such Event of Default is
cured or waived; provided, however, further, that the assignment made hereby
does not include an assignment of the Issuer’s right to terminate the Investment
Manager pursuant to Section 13 of the Investment Management Agreement or any
other provision contained therein.

 

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(b)

The assignment made hereby is executed as collateral security, and the execution
and delivery hereby shall not in any way impair or diminish the obligations of
the Issuer under the provisions of the Investment Management Agreement, nor
shall any of the obligations contained in the Investment Management Agreement be
imposed on the Trustee.

(c)

Upon the retirement of the Notes and the release of the Collateral from the lien
of this Indenture, this assignment and all rights herein assigned to the Trustee
for the benefit of the Secured Parties shall cease and terminate and all the
estate, right, title and interest of the Trustee in, to and under the Investment
Management Agreement shall revert to the Issuer and no further instrument or act
shall be necessary to evidence such termination and reversion.

(d)

The Issuer represents that the Issuer has not executed any other assignment of
the Investment Management Agreement.

(e)

The Issuer agrees that this assignment is irrevocable, and that it will not take
any action which is inconsistent with this assignment or make any other
assignment inconsistent herewith. The Issuer will, from time to time, execute
all instruments of further assurance and all such supplemental instruments with
respect to this assignment as the Trustee may specify or as may be required to
maintain the perfection of the lien of this Indenture.

(f)

The Issuer hereby agrees, and hereby undertakes to obtain the agreement and
consent of the Investment Manager in the Investment Management Agreement, to the
following:

(i)

The Investment Manager consents to the provisions of this assignment and agrees
to perform any provisions of this Indenture applicable to the Investment Manager
subject to the terms of the Investment Management Agreement.

(ii)

The Investment Manager acknowledges that, except as otherwise set forth in
Section 15.1(a), the Issuer is assigning all of its right, title and interest
in, to and under the Investment Management Agreement to the Trustee for the
benefit of the Secured Parties.

(iii)

The Investment Manager shall deliver to the Trustee and the Collateral
Administrator duplicate original copies of all notices, statements,
communications and instruments delivered or required to be delivered to the
Issuer pursuant to the Investment Management Agreement.

 

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(iv)

Neither the Issuer nor the Investment Manager will enter into any agreement
amending, modifying or terminating the Investment Management Agreement without
(1) complying with the applicable provisions of the Investment Management
Agreement, and (2) the consent of the Majority of the Noteholders.

(v)

Except as otherwise set forth herein and therein, the Investment Manager shall
continue to serve as Investment Manager under the Investment Management
Agreement notwithstanding that the Investment Manager shall not have received
amounts due it under the Investment Management Agreement because sufficient
funds were not then available hereunder to pay such amounts in accordance with
the Priority of Payments. The Investment Manager agrees not to cause the filing
of a petition in bankruptcy against the Issuer for the non-payment of the
Investment Management Fees, or other amounts payable by the Issuer to the
Investment Manager under the Investment Management Agreement prior to the date
which is one year and one day (or, if longer, the applicable preference period)
after the payment in full of all the Notes issued under this Indenture;
provided, however, nothing in this Section 15.1 shall preclude, or be deemed to
stop, the Investment Manager (i) from taking any action prior to the expiration
of the aforementioned one year and one day (or longer) period in (A) any case or
proceeding voluntarily filed or commenced by the Issuer or (B) any involuntary
insolvency proceeding filed or commenced by a Person other than the Investment
Manager or its Affiliates or (ii) from commencing against the Issuer or any of
its properties any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceeding.

(vi)

The Investment Manager irrevocably submits to the non-exclusive jurisdiction of
any federal or New York state court sitting in the Borough of Manhattan in The
City of New York in any action or Proceeding arising out of or relating to the
Notes or this Indenture, and the Investment Manager irrevocably agrees that all
claims in respect of such action or Proceeding may be heard and determined in
such federal or New York state court. The Investment Manager irrevocably waives,
to the fullest extent it may legally do so, the defense of an inconvenient forum
to the maintenance of such action or Proceeding. The Investment Manager
irrevocably consents to the service of any and all process in any action or
Proceeding by the mailing or delivery of copies of such process to it at the
office of the Investment Manager set forth in Section 14.3. The Investment
Manager 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.

 

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IN WITNESS WHEREOF, we have set our hands as of the date first written above.

 

  GREEN CREEK LLC,   as Issuer           By: /s/ Gerald F. Stahlecker   Name:
Gerald F. Stahlecker   Title: Executive Vice President               CITIBANK,
N.A.,   as Trustee           By: /s/ Thomas Varcados   Name: Thomas Varcados  
Title: Vice President

 

 

 

 

 

 

[Indenture Signature Page]