Exhibit 10.5

 

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The Bond Market Association
New York ● Washington ● London
www.bondmarkets.com

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International Securities Market Association
Rigistrasse 60, P.O. Box, CH-8033, Zürich
www.isma.org

 

2000 VERSION

 

TBMA/ISMA

GLOBAL MASTER REPURCHASE AGREEMENT

 

Dated as of MAY 15, 2017

 

Between:       UBS AG (“Party A”)     and       MURRAY HILL FUNDING, LLC (“Party
B”)

 

1.Applicability

 

(a)From time to time the parties hereto may enter into transactions in which one
party, acting through a Designated Office, (“Seller”) agrees to sell to the
other, acting through a Designated Office, (“Buyer”) securities and financial
instruments (“Securities”) (subject to paragraph 1(c), other than equities and
Net Paying Securities) against the payment of the purchase price by Buyer to
Seller, with a simultaneous agreement by Buyer to sell to Seller Securities
equivalent to such Securities at a date certain or on demand against the payment
of the repurchase price by Seller to Buyer.

 

(b)Each such transaction (which may be a repurchase transaction (“Repurchase
Transaction”) or a buy and sell back transaction (“Buy/Sell Back Transaction”))
shall be referred to herein as a “Transaction” and shall be governed by this
Agreement, including any supplemental terms or conditions contained in Annex I
hereto, unless otherwise agreed in writing.

 

(c)If this Agreement may be applied to -

 

(i)Buy/Sell Back Transactions, this shall be specified in Annex I hereto, and
the provisions of the Buy/Sell Back Annex shall apply to such Buy/Sell Back
Transactions;

 

 

 

 

(ii)Net Paying Securities, this shall be specified in Annex I hereto and the
provisions of Annex I, paragraph 1(b) shall apply to Transactions involving Net
Paying Securities.

 

(d)If Transactions are to be effected under this Agreement by either party as an
agent, this shall be specified in Annex I hereto, and the provisions of the
Agency Annex shall apply to such Agency Transactions.

 

2.Definitions

 

(a)“Act of Insolvency” shall occur with respect to any party hereto upon -

 

(i)its making a general assignment for the benefit of, entering into a
reorganisation, arrangement, or composition with creditors; or

 

(ii)its admitting in writing that it is unable to pay its debts as they become
due; or

 

(iii)its seeking, consenting to or acquiescing in the appointment of any
trustee, administrator, receiver or liquidator or analogous officer of it or any
material part of its property; or

 

(iv)the presentation or filing of a petition in respect of it (other than by the
counterparty to this Agreement in respect of any obligation under this
Agreement) in any court or before any agency alleging or for the bankruptcy,
winding-up or insolvency of such party (or any analogous proceeding) or seeking
any reorganisation, arrangement, composition, re-adjustment, administration,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such petition (except in the case of a petition for
winding-up or any analogous proceeding, in respect of which no such 30 day
period shall apply) not having been stayed or dismissed within 30 days of its
filing; or

 

(v)the appointment of a receiver, administrator, liquidator or trustee or
analogous officer of such party or over all or any material part of such party’s
property; or

 

(vi)the convening of any meeting of its creditors for the purposes of
considering a voluntary arrangement as referred to in section 3 of the
Insolvency Act 1986 (or any analogous proceeding);

 

(b)“Agency Transaction”, the meaning specified in paragraph 1 of the Agency
Annex;

 

(c)“Appropriate Market”, the meaning specified in paragraph 10;

 

(d)“Base Currency”, the currency indicated in Annex I hereto;

 

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(e)“Business Day” -

 

(i)in relation to the settlement of any Transaction which is to be settled
through Clearstream or Euroclear, a day on which Clearstream or, as the case may
be, Euroclear is open to settle business in the currency in which the Purchase
Price and the Repurchase Price are denominated;

 

(ii)in relation to the settlement of any Transaction which is to be settled
through a settlement system other than Clearstream or Euroclear, a day on which
that settlement system is open to settle such Transaction;

 

(iii)in relation to any delivery of Securities not falling within (i) or (ii)
above, a day on which banks are open for business in the place where delivery of
the relevant Securities is to be effected; and

 

(iv)in relation to any obligation to make a payment not falling within (i) or
(ii) above, a day other than a Saturday or a Sunday on which banks are open for
business in the principal financial centre of the country of which the currency
in which the payment is denominated is the official currency and, if different,
in the place where any account designated by the parties for the making or
receipt of the payment is situated (or, in the case of a payment in euro, a day
on which TARGET operates);

 

(f)“Cash Margin”, a cash sum paid to Buyer or Seller in accordance with
paragraph 4;

 

(g)“Clearstream”, Clearstream Banking, société anonyme, (previously Cedelbank)
or any successor thereto;

 

(h)“Confirmation”, the meaning specified in paragraph 3(b);

 

(i)“Contractual Currency”, the meaning specified in paragraph 7(a);

 

(j)“Defaulting Party”, the meaning specified in paragraph 10;

 

(k)“Default Market Value”, the meaning specified in paragraph 10;

 

(l)“Default Notice”, a written notice served by the non-Defaulting Party on the
Defaulting Party under paragraph 10 stating that an event shall be treated as an
Event of Default for the purposes of this Agreement;

 

(m)“Default Valuation Notice”, the meaning specified in paragraph 10;

 

(n)“Default Valuation Time”, the meaning specified in paragraph 10;

 

(o)“Deliverable Securities”, the meaning specified in paragraph 10;

 

(p)“Designated Office”, with respect to a party, a branch or office of that
party which is specified as such in Annex I hereto or such other branch or
office as may be agreed to by the parties;

 

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(q)“Distributions”, the meaning specified in sub-paragraph (w) below;

 

(r)“Equivalent Margin Securities”, Securities equivalent to Securities
previously transferred as Margin Securities;

 

(s)“Equivalent Securities”, with respect to a Transaction, Securities equivalent
to Purchased Securities under that Transaction. If and to the extent that such
Purchased Securities have been redeemed, the expression shall mean a sum of
money equivalent to the proceeds of the redemption;

 

(t)Securities are “equivalent to” other Securities for the purposes of this
Agreement if they are: (i) of the same issuer; (ii) part of the same issue; and
(iii) of an identical type, nominal value, description and (except where
otherwise stated) amount as those other Securities, provided that -

 

(A)Securities will be equivalent to other Securities notwithstanding that those
Securities have been redenominated into euro or that the nominal value of those
Securities has changed in connection with such redenomination; and

 

(B)where Securities have been converted, subdivided or consolidated or have
become the subject of a takeover or the holders of Securities have become
entitled to receive or acquire other Securities or other property or the
Securities have become subject to any similar event, the expression “equivalent
to” shall mean Securities equivalent to (as defined in the provisions of this
definition preceding the proviso) the original Securities together with or
replaced by a sum of money or Securities or other property equivalent to (as so
defined) that receivable by holders of such original Securities resulting from
such event;

 

(u)“Euroclear”, Morgan Guaranty Trust Company of New York, Brussels office, as
operator of the Euroclear System or any successor thereto;

 

(v)“Event of Default”, the meaning specified in paragraph 10;

 

(w)“Income”, with respect to any Security at any time, all interest, dividends
or other distributions thereon, but excluding distributions which are a payment
or repayment of principal in respect of the relevant securities
(“Distributions”);

 

(x)“Income Payment Date”, with respect to any Securities, the date on which
Income is paid in respect of such Securities or, in the case of registered
Securities, the date by reference to which particular registered holders are
identified as being entitled to payment of Income;

 

(y)“LIBOR”, in relation to any sum in any currency, the one month London Inter
Bank Offered Rate in respect of that currency as quoted on page 3750 on the
Bridge Telerate Service (or such other page as may replace page 3750 on that
service) as of 11:00 a.m., London time, on the date on which it is to be
determined;

 

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(z)“Margin Ratio”, with respect to a Transaction, the Market Value of the
Purchased Securities at the time when the Transaction was entered into divided
by the Purchase Price (and so that, where a Transaction relates to Securities of
different descriptions and the Purchase Price is apportioned by the parties
among Purchased Securities of each such description, a separate Margin Ratio
shall apply in respect of Securities of each such description), or such other
proportion as the parties may agree with respect to that Transaction;

 

(aa)“Margin Securities”, in relation to a Margin Transfer, Securities reasonably
acceptable to the party calling for such Margin Transfer;

 

(bb)“Margin Transfer”, any, or any combination of, the payment or repayment of
Cash Margin and the transfer of Margin Securities or Equivalent Margin
Securities;

 

(cc)“Market Value”, with respect to any Securities as of any time on any date,
the price for such Securities at such time on such date obtained from a
generally recognised source agreed to by the parties (and where different prices
are obtained for different delivery dates, the price so obtainable for the
earliest available such delivery date) (provided that the price of Securities
that are suspended shall (for the purposes of paragraph 4) be nil unless the
parties otherwise agree and (for all other purposes) shall be the price of those
Securities as of close of business on the dealing day in the relevant market
last preceding the date of suspension) plus the aggregate amount of Income
which, as of such date, has accrued but not yet been paid in respect of the
Securities to the extent not included in such price as of such date, and for
these purposes any sum in a currency other than the Contractual Currency for the
Transaction in question shall be converted into such Contractual Currency at the
Spot Rate prevailing at the relevant time;

 

(dd)“Net Exposure”, the meaning specified in paragraph 4(c);

 

(ee)the “Net Margin” provided to a party at any time, the excess (if any) at
that time of (i) the sum of the amount of Cash Margin paid to that party
(including accrued interest on such Cash Margin which has not been paid to the
other party) and the Market Value of Margin Securities transferred to that party
under paragraph 4(a) (excluding any Cash Margin which has been repaid to the
other party and any Margin Securities in respect of which Equivalent Margin
Securities have been transferred to the other party) over (ii) the sum of the
amount of Cash Margin paid to the other party (including accrued interest on
such Cash Margin which has not been paid by the other party) and the Market
Value of Margin Securities transferred to the other party under paragraph 4(a)
(excluding any Cash Margin which has been repaid by the other party and any
Margin Securities in respect of which Equivalent Margin Securities have been
transferred by the other party) and for this purpose any amounts not denominated
in the Base Currency shall be converted into the Base Currency at the Spot Rate
prevailing at the relevant time;

 

 - 5 - 

 

 

(ff)“Net Paying Securities”, Securities which are of a kind such that, were they
to be the subject of a Transaction to which paragraph 5 applies, any payment
made by Buyer under paragraph 5 would be one in respect of which either Buyer
would or might be required to make a withholding or deduction for or on account
of taxes or duties or Seller might be required to make or account for a payment
for or on account of taxes or duties (in each case other than tax on overall net
income) by reference to such payment;

 

(gg)“Net Value”, the meaning specified in paragraph 10;

 

(hh)“New Purchased Securities”, the meaning specified in paragraph 8(a);

 

(ii)“Price Differential”, with respect to any Transaction as of any date, the
aggregate amount obtained by daily application of the Pricing Rate for such
Transaction to the Purchase Price for such Transaction (on a 360 day basis or
365 day basis in accordance with the applicable ISMA convention, unless
otherwise agreed between the parties for the Transaction), for the actual number
of days during the period commencing on (and including) the Purchase Date for
such Transaction and ending on (but excluding) the date of calculation or, if
earlier, the Repurchase Date;

 

(jj)“Pricing Rate”, with respect to any Transaction, the per annum percentage
rate for calculation of the Price Differential agreed to by Buyer and Seller in
relation to that Transaction;

 

(kk)“Purchase Date”, with respect to any Transaction, the date on which
Purchased Securities are to be sold by Seller to Buyer in relation to that
Transaction;

 

(ll)“Purchase Price”, on the Purchase Date, the price at which Purchased
Securities are sold or are to be sold by Seller to Buyer;

 

(mm)“Purchased Securities”, with respect to any Transaction, the Securities sold
or to be sold by Seller to Buyer under that Transaction, and any New Purchased
Securities transferred by Seller to Buyer under paragraph 8 in respect of that
Transaction;

 

(nn)“Receivable Securities”, the meaning specified in paragraph 10;

 

(oo)“Repurchase Date”, with respect to any Transaction, the date on which Buyer
is to sell Equivalent Securities to Seller in relation to that Transaction;

 

(pp)“Repurchase Price”, with respect to any Transaction and as of any date, the
sum of the Purchase Price and the Price Differential as of such date;

 

(qq)“Special Default Notice”, the meaning specified in paragraph 14;

 

(rr)“Spot Rate”, where an amount in one currency is to be converted into a
second currency on any date, unless the parties otherwise agree, the spot rate
of exchange quoted by Barclays Bank PLC in the London inter-bank market for the
sale by it of such second currency against a purchase by it of such first
currency;

 

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(ss)“TARGET”, the Trans-European Automated Real-time Gross Settlement Express
Transfer System;

 

(tt)“Term”, with respect to any Transaction, the interval of time commencing
with the Purchase Date and ending with the Repurchase Date;

 

(uu)“Termination”, with respect to any Transaction, refers to the requirement
with respect to such Transaction for Buyer to sell Equivalent Securities against
payment by Seller of the Repurchase Price in accordance with paragraph 3(f), and
reference to a Transaction having a “fixed term” or being “terminable upon
demand” shall be construed accordingly;

 

(vv)“Transaction Costs”, the meaning specified in paragraph 10;

 

(ww)“Transaction Exposure”, with respect to any Transaction at any time during
the period from the Purchase Date to the Repurchase Date (or, if later, the date
on which Equivalent Securities are delivered to Seller or the Transaction is
terminated under paragraph 10(g) or 10(h)), the difference between (i) the
Repurchase Price at such time multiplied by the applicable Margin Ratio (or,
where the Transaction relates to Securities of more than one description to
which different Margin Ratios apply, the amount produced by multiplying the
Repurchase Price attributable to Equivalent Securities of each such description
by the applicable Margin Ratio and aggregating the resulting amounts, the
Repurchase Price being for this purpose attributed to Equivalent Securities of
each such description in the same proportions as those in which the Purchase
Price was apportioned among the Purchased Securities) and (ii) the Market Value
of Equivalent Securities at such time. If (i) is greater than (ii), Buyer has a
Transaction Exposure for that Transaction equal to that excess. If (ii) is
greater than (i), Seller has a Transaction Exposure for that Transaction equal
to that excess; and

 

(xx)except in paragraphs 14(b)(i) and 18, references in this Agreement to
“written” communications and communications “in writing” include communications
made through any electronic system agreed between the parties which is capable
of reproducing such communication in hard copy form.

 

3.Initiation; Confirmation; Termination

 

(a)A Transaction may be entered into orally or in writing at the initiation of
either Buyer or Seller.

 

(b)Upon agreeing to enter into a Transaction hereunder Buyer or Seller (or
both), as shall have been agreed, shall promptly deliver to the other party
written confirmation of such Transaction (a “Confirmation”).

 

 - 7 - 

 

 

The Confirmation shall describe the Purchased Securities (including CUSIP or
ISIN or other identifying number or numbers, if any), identify Buyer and Seller
and set forth -

 

(i)the Purchase Date;

 

(ii)the Purchase Price;

 

(iii)the Repurchase Date, unless the Transaction is to be terminable on demand
(in which case the Confirmation shall state that it is terminable on demand);

 

(iv)the Pricing Rate applicable to the Transaction;

 

(v)in respect of each party the details of the bank account[s] to which payments
to be made hereunder are to be credited;

 

(vi)where the Buy/Sell Back Annex applies, whether the Transaction is a
Repurchase Transaction or a Buy/Sell Back Transaction;

 

(vii)where the Agency Annex applies, whether the Transaction is an Agency
Transaction and, if so, the identity of the party which is acting as agent and
the name, code or identifier of the Principal; and

 

(viii)any additional terms or conditions of the Transaction;

 

and may be in the form of Annex II hereto or may be in any other form to which
the parties agree.

 

The Confirmation relating to a Transaction shall, together with this Agreement,
constitute prima facie evidence of the terms agreed between Buyer and Seller for
that Transaction, unless objection is made with respect to the Confirmation
promptly after receipt thereof. In the event of any conflict between the terms
of such Confirmation and this Agreement, the Confirmation shall prevail in
respect of that Transaction and those terms only.

 

(c)On the Purchase Date for a Transaction, Seller shall transfer the Purchased
Securities to Buyer or its agent against the payment of the Purchase Price by
Buyer.

 

(d)Termination of a Transaction will be effected, in the case of on demand
Transactions, on the date specified for Termination in such demand, and, in the
case of fixed term Transactions, on the date fixed for Termination.

 

(e)In the case of on demand Transactions, demand for Termination shall be made
by Buyer or Seller, by telephone or otherwise, and shall provide for Termination
to occur after not less than the minimum period as is customarily required for
the settlement or delivery of money or Equivalent Securities of the relevant
kind.

 

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(f)On the Repurchase Date, Buyer shall transfer to Seller or its agent
Equivalent Securities against the payment of the Repurchase Price by Seller
(less any amount then payable and unpaid by Buyer to Seller pursuant to
paragraph 5).

 

4.Margin Maintenance

 

(a)If at any time either party has a Net Exposure in respect of the other party
it may by notice to the other party require the other party to make a Margin
Transfer to it of an aggregate amount or value at least equal to that Net
Exposure.

 

(b)A notice under sub-paragraph (a) above may be given orally or in writing.

 

(c)For the purposes of this Agreement a party has a Net Exposure in respect of
the other party if the aggregate of all the first party’s Transaction Exposures
plus any amount payable to the first party under paragraph 5 but unpaid less the
amount of any Net Margin provided to the first party exceeds the aggregate of
all the other party’s Transaction Exposures plus any amount payable to the other
party under paragraph 5 but unpaid less the amount of any Net Margin provided to
the other party; and the amount of the Net Exposure is the amount of the excess.
For this purpose any amounts not denominated in the Base Currency shall be
converted into the Base Currency at the Spot Rate prevailing at the relevant
time.

 

(d)To the extent that a party calling for a Margin Transfer has previously paid
Cash Margin which has not been repaid or delivered Margin Securities in respect
of which Equivalent Margin Securities have not been delivered to it, that party
shall be entitled to require that such Margin Transfer be satisfied first by the
repayment of such Cash Margin or the delivery of Equivalent Margin Securities
but, subject to this, the composition of a Margin Transfer shall be at the
option of the party making such Margin Transfer.

 

(e)Any Cash Margin transferred shall be in the Base Currency or such other
currency as the parties may agree.

 

(f)A payment of Cash Margin shall give rise to a debt owing from the party
receiving such payment to the party making such payment. Such debt shall bear
interest at such rate, payable at such times, as may be specified in Annex I
hereto in respect of the relevant currency or otherwise agreed between the
parties, and shall be repayable subject to the terms of this Agreement.

 

(g)Where Seller or Buyer becomes obliged under sub-paragraph (a) above to make a
Margin Transfer, it shall transfer Cash Margin or Margin Securities or
Equivalent Margin Securities within the minimum period specified in Annex I
hereto or, if no period is there specified, such minimum period as is
customarily required for the settlement or delivery of money, Margin Securities
or Equivalent Margin Securities of the relevant kind.

 

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(h)The parties may agree that, with respect to any Transaction, the provisions
of subparagraphs (a) to (g) above shall not apply but instead that margin may be
provided separately in respect of that Transaction in which case -

 

(i)that Transaction shall not be taken into account when calculating whether
either party has a Net Exposure;

 

(ii)margin shall be provided in respect of that Transaction in such manner as
the parties may agree; and

 

(iii)margin provided in respect of that Transaction shall not be taken into
account for the purposes of sub-paragraphs (a) to (g) above.

 

(i)The parties may agree that any Net Exposure which may arise shall be
eliminated not by Margin Transfers under the preceding provisions of this
paragraph but by the repricing of Transactions under sub-paragraph (j) below,
the adjustment of Transactions under sub-paragraph (k) below or a combination of
both these methods.

 

(j)Where the parties agree that a Transaction is to be repriced under this
sub-paragraph, such repricing shall be effected as follows -

 

(i)the Repurchase Date under the relevant Transaction (the “Original
Transaction”) shall be deemed to occur on the date on which the repricing is to
be effected (the “Repricing Date”);

 

(ii)the parties shall be deemed to have entered into a new Transaction (the
“Repriced Transaction”) on the terms set out in (iii) to (vi) below;

 

(iii)the Purchased Securities under the Repriced Transaction shall be Securities
equivalent to the Purchased Securities under the Original Transaction;

 

(iv)the Purchase Date under the Repriced Transaction shall be the Repricing
Date;

 

(v)the Purchase Price under the Repriced Transaction shall be such amount as
shall, when multiplied by the Margin Ratio applicable to the Original
Transaction, be equal to the Market Value of such Securities on the Repricing
Date;

 

(vi)the Repurchase Date, the Pricing Rate, the Margin Ratio and, subject as
aforesaid, the other terms of the Repriced Transaction shall be identical to
those of the Original Transaction;

 

(vii)the obligations of the parties with respect to the delivery of the
Purchased Securities and the payment of the Purchase Price under the Repriced
Transaction shall be set off against their obligations with respect to the
delivery of Equivalent Securities and payment of the Repurchase Price under the
Original Transaction and accordingly only a net cash sum shall be paid by one
party to the other. Such net cash sum shall be paid within the period specified
in sub-paragraph (g) above.

 

 - 10 - 

 

 

(k)The adjustment of a Transaction (the “Original Transaction”) under this
sub-paragraph shall be effected by the parties agreeing that on the date on
which the adjustment is to be made (the “Adjustment Date”) the Original
Transaction shall be terminated and they shall enter into a new Transaction (the
“Replacement Transaction”) in accordance with the following provisions -

 

(i)the Original Transaction shall be terminated on the Adjustment Date on such
terms as the parties shall agree on or before the Adjustment Date;

 

(ii)the Purchased Securities under the Replacement Transaction shall be such
Securities as the parties shall agree on or before the Adjustment Date (being
Securities the aggregate Market Value of which at the Adjustment Date is
substantially equal to the Repurchase Price under the Original Transaction at
the Adjustment Date multiplied by the Margin Ratio applicable to the Original
Transaction);

 

(iii)the Purchase Date under the Replacement Transaction shall be the Adjustment
Date;

 

(iv)the other terms of the Replacement Transaction shall be such as the parties
shall agree on or before the Adjustment Date; and

 

(v)the obligations of the parties with respect to payment and delivery of
Securities on the Adjustment Date under the Original Transaction and the
Replacement Transaction shall be settled in accordance with paragraph 6 within
the minimum period specified in sub-paragraph (g) above.

 

5.Income Payments

 

Unless otherwise agreed -

 

(i)where the Term of a particular Transaction extends over an Income Payment
Date in respect of any Securities subject to that Transaction, Buyer shall on
the date such Income is paid by the issuer transfer to or credit to the account
of Seller an amount equal to (and in the same currency as) the amount paid by
the issuer;

 

(ii)where Margin Securities are transferred from one party (“the first party”)
to the other party (“the second party”) and an Income Payment Date in respect of
such Securities occurs before Equivalent Margin Securities are transferred by
the second party to the first party, the second party shall on the date such
Income is paid by the issuer transfer to or credit to the account of the first
party an amount equal to (and in the same currency as) the amount paid by the
issuer;

 

 - 11 - 

 

 

and for the avoidance of doubt references in this paragraph to the amount of any
Income paid by the issuer of any Securities shall be to an amount paid without
any withholding or deduction for or on account of taxes or duties
notwithstanding that a payment of such Income made in certain circumstances may
be subject to such a withholding or deduction.

 

6.Payment and Transfer

 

(a)Unless otherwise agreed, all money paid hereunder shall be in immediately
available freely convertible funds of the relevant currency. All Securities to
be transferred hereunder (i) shall be in suitable form for transfer and shall be
accompanied by duly executed instruments of transfer or assignment in blank
(where required for transfer) and such other documentation as the transferee may
reasonably request, or (ii) shall be transferred through the book entry system
of Euroclear or Clearstream, or (iii) shall be transferred through any other
agreed securities clearance system or (iv) shall be transferred by any other
method mutually acceptable to Seller and Buyer.

 

(b)Unless otherwise agreed, all money payable by one party to the other in
respect of any Transaction shall be paid free and clear of, and without
withholding or deduction for, any taxes or duties of whatsoever nature imposed,
levied, collected, withheld or assessed by any authority having power to tax,
unless the withholding or deduction of such taxes or duties is required by law.
In that event, unless otherwise agreed, the paying party shall pay such
additional amounts as will result in the net amounts receivable by the other
party (after taking account of such withholding or deduction) being equal to
such amounts as would have been received by it had no such taxes or duties been
required to be withheld or deducted.

 

(c)Unless otherwise agreed in writing between the parties, under each
Transaction transfer of Purchased Securities by Seller and payment of Purchase
Price by Buyer against the transfer of such Purchased Securities shall be made
simultaneously and transfer of Equivalent Securities by Buyer and payment of
Repurchase Price payable by Seller against the transfer of such Equivalent
Securities shall be made simultaneously.

 

(d)Subject to and without prejudice to the provisions of sub-paragraph 6(c),
either party may from time to time in accordance with market practice and in
recognition of the practical difficulties in arranging simultaneous delivery of
Securities and money waive in relation to any Transaction its rights under this
Agreement to receive simultaneous transfer and/or payment provided that transfer
and/or payment shall, notwithstanding such waiver, be made on the same day and
provided also that no such waiver in respect of one Transaction shall affect or
bind it in respect of any other Transaction.

 

(e)The parties shall execute and deliver all necessary documents and take all
necessary steps to procure that all right, title and interest in any Purchased
Securities, any Equivalent Securities, any Margin Securities and any Equivalent
Margin Securities shall pass to the party to which transfer is being made upon
transfer of the same in accordance with this Agreement, free from all liens,
claims, charges and encumbrances.

 

 - 12 - 

 

 

(f)Notwithstanding the use of expressions such as “Repurchase Date”, “Repurchase
Price”, “margin”, “Net Margin”, “Margin Ratio” and “substitution”, which are
used to reflect terminology used in the market for transactions of the kind
provided for in this Agreement, all right, title and interest in and to
Securities and money transferred or paid under this Agreement shall pass to the
transferee upon transfer or payment, the obligation of the party receiving
Purchased Securities or Margin Securities being an obligation to transfer
Equivalent Securities or Equivalent Margin Securities.

 

(g)Time shall be of the essence in this Agreement.

 

(h)Subject to paragraph 10, all amounts in the same currency payable by each
party to the other under any Transaction or otherwise under this Agreement on
the same date shall be combined in a single calculation of a net sum payable by
one party to the other and the obligation to pay that sum shall be the only
obligation of either party in respect of those amounts.

 

(i)Subject to paragraph 10, all Securities of the same issue, denomination,
currency and series, transferable by each party to the other under any
Transaction or hereunder on the same date shall be combined in a single
calculation of a net quantity of Securities transferable by one party to the
other and the obligation to transfer the net quantity of Securities shall be the
only obligation of either party in respect of the Securities so transferable and
receivable.

 

(j)If the parties have specified in Annex I hereto that this paragraph 6(j)
shall apply, each obligation of a party under this Agreement (other than an
obligation arising under paragraph 10) is subject to the condition precedent
that none of those events specified in paragraph 10(a) which are identified in
Annex I hereto for the purposes of this paragraph 6(j) (being events which, upon
the serving of a Default Notice, would be an Event of Default with respect to
the other party) shall have occurred and be continuing with respect to the other
party.

 

7.Contractual Currency

 

(a)All the payments made in respect of the Purchase Price or the Repurchase
Price of any Transaction shall be made in the currency of the Purchase Price
(the “Contractual Currency”) save as provided in paragraph 10(c)(ii).
Notwithstanding the foregoing, the payee of any money may, at its option, accept
tender thereof in any other currency, provided, however, that, to the extent
permitted by applicable law, the obligation of the payer to pay such money will
be discharged only to the extent of the amount of the Contractual Currency that
such payee may, consistent with normal banking procedures, purchase with such
other currency (after deduction of any premium and costs of exchange) for
delivery within the customary delivery period for spot transactions in respect
of the relevant currency.

 

 - 13 - 

 

 

(b)If for any reason the amount in the Contractual Currency received by a party,
including amounts received after conversion of any recovery under any judgment
or order expressed in a currency other than the Contractual Currency, falls
short of the amount in the Contractual Currency due and payable, the party
required to make the payment will, as a separate and independent obligation, to
the extent permitted by applicable law, immediately transfer such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall.

 

(c)If for any reason the amount in the Contractual Currency received by a party
exceeds the amount of the Contractual Currency due and payable, the party
receiving the transfer will refund promptly the amount of such excess.

 

8.Substitution

 

(a)A Transaction may at any time between the Purchase Date and Repurchase Date,
if Seller so requests and Buyer so agrees, be varied by the transfer by Buyer to
Seller of Securities equivalent to the Purchased Securities, or to such of the
Purchased Securities as shall be agreed, in exchange for the transfer by Seller
to Buyer of other Securities of such amount and description as shall be agreed
(“New Purchased Securities”) (being Securities having a Market Value at the date
of the variation at least equal to the Market Value of the Equivalent Securities
transferred to Seller).

 

(b)Any variation under sub-paragraph (a) above shall be effected, subject to
paragraph 6(d), by the simultaneous transfer of the Equivalent Securities and
New Purchased Securities concerned.

 

(c)A Transaction which is varied under sub-paragraph (a) above shall thereafter
continue in effect as though the Purchased Securities under that Transaction
consisted of or included the New Purchased Securities instead of the Securities
in respect of which Equivalent Securities have been transferred to Seller.

 

(d)Where either party has transferred Margin Securities to the other party it
may at any time before Equivalent Margin Securities are transferred to it under
paragraph 4 request the other party to transfer Equivalent Margin Securities to
it in exchange for the transfer to the other party of new Margin Securities
having a Market Value at the time of transfer at least equal to that of such
Equivalent Margin Securities. If the other party agrees to the request, the
exchange shall be effected, subject to paragraph 6(d), by the simultaneous
transfer of the Equivalent Margin Securities and new Margin Securities
concerned. Where either or both of such transfers is or are effected through a
settlement system in circumstances which under the rules and procedures of that
settlement system give rise to a payment by or for the account of one party to
or for the account of the other party, the parties shall cause such payment or
payments to be made outside that settlement system, for value the same day as
the payments made through that settlement system, as shall ensure that the
exchange of Equivalent Margin Securities and new Margin Securities effected
under this sub-paragraph does not give rise to any net payment of cash by either
party to the other.

 

 - 14 - 

 

 

9.Representations

 

Each party represents and warrants to the other that -

 

(a)it is duly authorised to execute and deliver this Agreement, to enter into
the Transactions contemplated hereunder and to perform its obligations hereunder
and thereunder and has taken all necessary action to authorise such execution,
delivery and performance;

 

(b)it will engage in this Agreement and the Transactions contemplated hereunder
(other than Agency Transactions) as principal;

 

(c)the person signing this Agreement on its behalf is, and any person
representing it in entering into a Transaction will be, duly authorised to do so
on its behalf;

 

(d)it has obtained all authorisations of any governmental or regulatory body
required in connection with this Agreement and the Transactions contemplated
hereunder and such authorisations are in full force and effect;

 

(e)the execution, delivery and performance of this Agreement and the
Transactions contemplated hereunder will not violate any law, ordinance,
charter, by-law or rule applicable to it or any agreement by which it is bound
or by which any of its assets are affected;

 

(f)it has satisfied itself and will continue to satisfy itself as to the tax
implications of the Transactions contemplated hereunder;

 

(g)in connection with this Agreement and each Transaction -

 

(i)unless there is a written agreement with the other party to the contrary, it
is not relying on any advice (whether written or oral) of the other party, other
than the representations expressly set out in this Agreement;

 

(ii)it has made and will make its own decisions regarding the entering into of
any Transaction based upon its own judgment and upon advice from such
professional advisers as it has deemed it necessary to consult;

 

(iii)it understands the terms, conditions and risks of each Transaction and is
willing to assume (financially and otherwise) those risks; and

 

(h)at the time of transfer to the other party of any Securities it will have the
full and unqualified right to make such transfer and that upon such transfer of
Securities the other party will receive all right, title and interest in and to
those Securities free of any lien, claim, charge or encumbrance.

 

 - 15 - 

 

 

On the date on which any Transaction is entered into pursuant hereto, and on
each day on which Securities, Equivalent Securities, Margin Securities or
Equivalent Margin Securities are to be transferred under any Transaction, Buyer
and Seller shall each be deemed to repeat all the foregoing representations. For
the avoidance of doubt and notwithstanding any arrangements which Seller or
Buyer may have with any third party, each party will be liable as a principal
for its obligations under this Agreement and each Transaction.

 

10.Events of Default

 

(a)If any of the following events (each an “Event of Default”) occurs in
relation to either party (the “Defaulting Party”, the other party being the
“non-Defaulting Party”) whether acting as Seller or Buyer -

 

(i)Buyer fails to pay the Purchase Price upon the applicable Purchase Date or
Seller fails to pay the Repurchase Price upon the applicable Repurchase Date,
and the non-Defaulting Party serves a Default Notice on the Defaulting Party; or

 

(ii)if the parties have specified in Annex I hereto that this sub-paragraph
shall apply, Seller fails to deliver Purchased Securities on the Purchase Date
or Buyer fails to deliver Equivalent Securities on the Repurchase Date, and the
non-Defaulting Party serves a Default Notice on the Defaulting Party; or

 

(iii)Seller or Buyer fails to pay when due any sum payable under sub-paragraph
(g) or (h) below, and the non-Defaulting Party serves a Default Notice on the
Defaulting Party; or

 

(iv)Seller or Buyer fails to comply with paragraph 4 and the non-Defaulting
Party serves a Default Notice on the Defaulting Party; or

 

(v)Seller or Buyer fails to comply with paragraph 5 and the non-Defaulting Party
serves a Default Notice on the Defaulting Party; or

 

(vi)an Act of Insolvency occurs with respect to Seller or Buyer and (except in
the case of an Act of Insolvency which is the presentation of a petition for
winding-up or any analogous proceeding or the appointment of a liquidator or
analogous officer of the Defaulting Party in which case no such notice shall be
required) the non-Defaulting Party serves a Default Notice on the Defaulting
Party; or

 

(vii)any representations made by Seller or Buyer are incorrect or untrue in any
material respect when made or repeated or deemed to have been made or repeated,
and the non-Defaulting Party serves a Default Notice on the Defaulting Party; or

 

(viii)Seller or Buyer admits to the other that it is unable to, or intends not
to, perform any of its obligations hereunder and/or in respect of any
Transaction and the non-Defaulting Party serves a Default Notice on the
Defaulting Party; or

 

 - 16 - 

 

 

(ix)Seller or Buyer is suspended or expelled from membership of or participation
in any securities exchange or association or other self regulating organisation,
or suspended from dealing in securities by any government agency, or any of the
assets of either Seller or Buyer or the assets of investors held by, or to the
order of, Seller or Buyer are transferred or ordered to be transferred to a
trustee by a regulatory authority pursuant to any securities regulating
legislation and the non-Defaulting Party serves a Default Notice on the
Defaulting Party; or

 

(x)Seller or Buyer fails to perform any other of its obligations hereunder and
does not remedy such failure within 30 days after notice is given by the
non-Defaulting Party requiring it to do so, and the non-Defaulting Party serves
a Default Notice on the Defaulting Party;

 

then sub-paragraphs (b) to (f) below shall apply.

 

(b)The Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur and, subject to the following provisions, all Cash Margin
(including interest accrued) shall be immediately repayable and Equivalent
Margin Securities shall be immediately deliverable (and so that, where this
sub-paragraph applies, performance of the respective obligations of the parties
with respect to the delivery of Securities, the payment of the Repurchase Prices
for any Equivalent Securities and the repayment of any Cash Margin shall be
effected only in accordance with the provisions of sub-paragraph (c) below).

 

(c) (i)The Default Market Values of the Equivalent Securities and any Equivalent
Margin Securities to be transferred, the amount of any Cash Margin (including
the amount of interest accrued) to be transferred and the Repurchase Prices to
be paid by each party shall be established by the non-Defaulting Party for all
Transactions as at the Repurchase Date; and

 

(ii)on the basis of the sums so established, an account shall be taken (as at
the Repurchase Date) of what is due from each party to the other under this
Agreement (on the basis that each party’s claim against the other in respect of
the transfer to it of Equivalent Securities or Equivalent Margin Securities
under this Agreement equals the Default Market Value therefor) and the sums due
from one party shall be set off against the sums due from the other and only the
balance of the account shall be payable (by the party having the claim valued at
the lower amount pursuant to the foregoing) and such balance shall be due and
payable on the next following Business Day. For the purposes of this
calculation, all sums not denominated in the Base Currency shall be converted
into the Base Currency on the relevant date at the Spot Rate prevailing at the
relevant time.

 

 - 17 - 

 

 

(d)For the purposes of this Agreement, the “Default Market Value” of any
Equivalent Securities or Equivalent Margin Securities shall be determined in
accordance with sub-paragraph (e) below, and for this purpose -

 

(i)the “Appropriate Market” means, in relation to Securities of any description,
the market which is the most appropriate market for Securities of that
description, as determined by the non-Defaulting Party;

 

(ii)the “Default Valuation Time” means, in relation to an Event of Default, the
close of business in the Appropriate Market on the fifth dealing day after the
day on which that Event of Default occurs or, where that Event of Default is the
occurrence of an Act of Insolvency in respect of which under paragraph 10(a) no
notice is required from the non-Defaulting Party in order for such event to
constitute an Event of Default, the close of business on the fifth dealing day
after the day on which the non-Defaulting Party first became aware of the
occurrence of such Event of Default;

 

(iii)“Deliverable Securities” means Equivalent Securities or Equivalent Margin
Securities to be delivered by the Defaulting Party;

 

(iv)“Net Value” means at any time, in relation to any Deliverable Securities or
Receivable Securities, the amount which, in the reasonable opinion of the
non-Defaulting Party, represents their fair market value, having regard to such
pricing sources and methods (which may include, without limitation, available
prices for Securities with similar maturities, terms and credit characteristics
as the relevant Equivalent Securities or Equivalent Margin Securities) as the
non-Defaulting Party considers appropriate, less, in the case of Receivable
Securities, or plus, in the case of Deliverable Securities, all Transaction
Costs which would be incurred in connection with the purchase or sale of such
Securities;

 

(v)“Receivable Securities” means Equivalent Securities or Equivalent Margin
Securities to be delivered to the Defaulting Party; and

 

(vi)“Transaction Costs” in relation to any transaction contemplated in paragraph
10(d) or (e) means the reasonable costs, commission, fees and expenses
(including any mark-up or mark-down) that would be incurred in connection with
the purchase of Deliverable Securities or sale of Receivable Securities,
calculated on the assumption that the aggregate thereof is the least that could
reasonably be expected to be paid in order to carry out the transaction;

 

(e) (i)If between the occurrence of the relevant Event of Default and the
Default Valuation Time the non-Defaulting Party gives to the Defaulting Party a
written notice (a “Default Valuation Notice”) which -

 

(A)states that, since the occurrence of the relevant Event of Default, the
non-Defaulting Party has sold, in the case of Receivable Securities, or
purchased, in the case of Deliverable Securities, Securities which form part of
the same issue and are of an identical type and description as those Equivalent
Securities or Equivalent Margin Securities, and that the non-Defaulting Party
elects to treat as the Default Market Value -

 

 - 18 - 

 

 

(aa)in the case of Receivable Securities, the net proceeds of such sale after
deducting all reasonable costs, fees and expenses incurred in connection
therewith (provided that, where the Securities sold are not identical in amount
to the Equivalent Securities or Equivalent Margin Securities, the non-Defaulting
Party may either (x) elect to treat such net proceeds of sale divided by the
amount of Securities sold and multiplied by the amount of the Equivalent
Securities or Equivalent Margin Securities as the Default Market Value or (y)
elect to treat such net proceeds of sale of the Equivalent Securities or
Equivalent Margin Securities actually sold as the Default Market Value of that
proportion of the Equivalent Securities or Equivalent Margin Securities, and, in
the case of (y), the Default Market Value of the balance of the Equivalent
Securities or Equivalent Margin Securities shall be determined separately in
accordance with the provisions of this paragraph 10(e) and accordingly may be
the subject of a separate notice (or notices) under this paragraph 10(e)(i)); or

 

(bb)in the case of Deliverable Securities, the aggregate cost of such purchase,
including all reasonable costs, fees and expenses incurred in connection
therewith (provided that, where the Securities purchased are not identical in
amount to the Equivalent Securities or Equivalent Margin Securities, the
non-Defaulting Party may either (x) elect to treat such aggregate cost divided
by the amount of Securities sold and multiplied by the amount of the Equivalent
Securities or Equivalent Margin Securities as the Default Market Value or (y)
elect to treat the aggregate cost of purchasing the Equivalent Securities or
Equivalent Margin Securities actually purchased as the Default Market Value of
that proportion of the Equivalent Securities or Equivalent Margin Securities,
and, in the case of (y), the Default Market Value of the balance of the
Equivalent Securities or Equivalent Margin Securities shall be determined
separately in accordance with the provisions of this paragraph 10(e) and
accordingly may be the subject of a separate notice (or notices) under this
paragraph 10(e)(i));

 

 - 19 - 

 

 

(B)states that the non-Defaulting Party has received, in the case of Deliverable
Securities, offer quotations or, in the case of Receivable Securities, bid
quotations in respect of Securities of the relevant description from two or more
market makers or regular dealers in the Appropriate Market in a commercially
reasonable size (as determined by the non-Defaulting Party) and specifies -

 

(aa)the price or prices quoted by each of them for, in the case of Deliverable
Securities, the sale by the relevant market marker or dealer of such Securities
or, in the case of Receivable Securities, the purchase by the relevant market
maker or dealer of such Securities;

 

(bb)the Transaction Costs which would be incurred in connection with such a
transaction; and

 

(cc)that the non-Defaulting Party elects to treat the price so quoted (or, where
more than one price is so quoted, the arithmetic mean of the prices so quoted),
after deducting, in the case of Receivable Securities, or adding, in the case of
Deliverable Securities, such Transaction Costs, as the Default Market Value of
the relevant Equivalent Securities or Equivalent Margin Securities; or

 

(C)states -

 

(aa)that either (x) acting in good faith, the non-Defaulting Party has
endeavoured but been unable to sell or purchase Securities in accordance with
sub-paragraph (i)(A) above or to obtain quotations in accordance with
sub-paragraph (i)(B) above (or both) or (y) the non-Defaulting Party has
determined that it would not be commercially reasonable to obtain such
quotations, or that it would not be commercially reasonable to use any
quotations which it has obtained under sub-paragraph (i)(B) above; and

 

(bb)that the non-Defaulting Party has determined the Net Value of the relevant
Equivalent Securities or Equivalent Margin Securities (which shall be specified)
and that the non-Defaulting Party elects to treat such Net Value as the Default
Market Value of the relevant Equivalent Securities or Equivalent Margin
Securities,

 

then the Default Market Value of the relevant Equivalent Securities or
Equivalent Margin Securities shall be an amount equal to the Default Market
Value specified in accordance with (A), (B)(cc) or, as the case may be, (C)(bb)
above.

 

(ii)If by the Default Valuation Time the non-Defaulting Party has not given a
Default Valuation Notice, the Default Market Value of the relevant Equivalent
Securities or Equivalent Margin Securities shall be an amount equal to their Net
Value at the Default Valuation Time; provided that, if at the Default Valuation
Time the non-Defaulting Party reasonably determines that, owing to circumstances
affecting the market in the Equivalent Securities or Equivalent Margin
Securities in question, it is not possible for the non-Defaulting Party to
determine a Net Value of such Equivalent Securities or Equivalent Margin
Securities which is commercially reasonable, the Default Market Value of such
Equivalent Securities or Equivalent Margin Securities shall be an amount equal
to their Net Value as determined by the non-Defaulting Party as soon as
reasonably practicable after the Default Valuation Time.

 

 - 20 - 

 

 

(f)The Defaulting Party shall be liable to the non-Defaulting Party for the
amount of all reasonable legal and other professional expenses incurred by the
non-Defaulting Party in connection with or as a consequence of an Event of
Default, together with interest thereon at LIBOR or, in the case of an expense
attributable to a particular Transaction, the Pricing Rate for the relevant
Transaction if that Pricing Rate is greater than LIBOR.

 

(g)If Seller fails to deliver Purchased Securities to Buyer on the applicable
Purchase Date Buyer may -

 

(i)if it has paid the Purchase Price to Seller, require Seller immediately to
repay the sum so paid;

 

(ii)if Buyer has a Transaction Exposure to Seller in respect of the relevant
Transaction, require Seller from time to time to pay Cash Margin at least equal
to such Transaction Exposure;

 

(iii)at any time while such failure continues, terminate the Transaction by
giving written notice to Seller. On such termination the obligations of Seller
and Buyer with respect to delivery of Purchased Securities and Equivalent
Securities shall terminate and Seller shall pay to Buyer an amount equal to the
excess of the Repurchase Price at the date of Termination over the Purchase
Price.

 

(h)If Buyer fails to deliver Equivalent Securities to Seller on the applicable
Repurchase Date Seller may -

 

(i)if it has paid the Repurchase Price to Buyer, require Buyer immediately to
repay the sum so paid;

 

(ii)if Seller has a Transaction Exposure to Buyer in respect of the relevant
Transaction, require Buyer from time to time to pay Cash Margin at least equal
to such Transaction Exposure;

 

(iii)at any time while such failure continues, by written notice to Buyer
declare that that Transaction (but only that Transaction) shall be terminated
immediately in accordance with sub-paragraph (c) above (disregarding for this
purpose references in that sub-paragraph to transfer of Cash Margin and delivery
of Equivalent Margin Securities and as if references to the Repurchase Date were
to the date on which notice was given under this subparagraph).

 

 - 21 - 

 

 

(i)The provisions of this Agreement constitute a complete statement of the
remedies available to each party in respect of any Event of Default.

 

(j)Subject to paragraph 10(k), neither party may claim any sum by way of
consequential loss or damage in the event of a failure by the other party to
perform any of its obligations under this Agreement.

 

(k) (i)Subject to sub-paragraph (ii) below, if as a result of a Transaction
terminating before its agreed Repurchase Date under paragraphs 10(b), 10(g)(iii)
or 10(h)(iii), the non-Defaulting Party, in the case of paragraph 10(b), Buyer,
in the case of paragraph 10(g)(iii), or Seller, in the case of paragraph
10(h)(iii), (in each case the “first party”) incurs any loss or expense in
entering into replacement transactions, the other party shall be required to pay
to the first party the amount determined by the first party in good faith to be
equal to the loss or expense incurred in connection with such replacement
transactions (including all fees, costs and other expenses) less the amount of
any profit or gain made by that party in connection with such replacement
transactions; provided that if that calculation results in a negative number, an
amount equal to that number shall be payable by the first party to the other
party.

 

(ii)If the first party reasonably decides, instead of entering into such
replacement transactions, to replace or unwind any hedging transactions which
the first party entered into in connection with the Transaction so terminating,
or to enter into any replacement hedging transactions, the other party shall be
required to pay to the first party the amount determined by the first party in
good faith to be equal to the loss or expense incurred in connection with
entering into such replacement or unwinding (including all fees, costs and other
expenses) less the amount of any profit or gain made by that party in connection
with such replacement or unwinding; provided that if that calculation results in
a negative number, an amount equal to that number shall be payable by the first
party to the other party.

 

(l)Each party shall immediately notify the other if an Event of Default, or an
event which, upon the serving of a Default Notice, would be an Event of Default,
occurs in relation to it.

 

11.Tax Event

 

(a)This paragraph shall apply if either party notifies the other that -

 

(i)any action taken by a taxing authority or brought in a court of competent
jurisdiction (regardless of whether such action is taken or brought with respect
to a party to this Agreement); or

 

 - 22 - 

 

 

(ii)a change in the fiscal or regulatory regime (including, but not limited to,
a change in law or in the general interpretation of law but excluding any change
in any rate of tax),

 

has or will, in the notifying party’s reasonable opinion, have a material
adverse effect on that party in the context of a Transaction.

 

(b)If so requested by the other party, the notifying party will furnish the
other with an opinion of a suitably qualified adviser that an event referred to
in sub-paragraph (a)(i) or (ii) above has occurred and affects the notifying
party.

 

(c)Where this paragraph applies, the party giving the notice referred to in
sub-paragraph may, subject to sub-paragraph (d) below, terminate the Transaction
with effect from a date specified in the notice, not being earlier (unless so
agreed by the other party) than 30 days after the date of the notice, by
nominating that date as the Repurchase Date.

 

(d)If the party receiving the notice referred to in sub-paragraph (a) so elects,
it may override that notice by giving a counter-notice to the other party. If a
counter-notice is given, the party which gives the counter-notice will be deemed
to have agreed to indemnify the other party against the adverse effect referred
to in sub-paragraph (a) so far as relates to the relevant Transaction and the
original Repurchase Date will continue to apply.

 

(e)Where a Transaction is terminated as described in this paragraph, the party
which has given the notice to terminate shall indemnify the other party against
any reasonable legal and other professional expenses incurred by the other party
by reason of the termination, but the other party may not claim any sum by way
of consequential loss or damage in respect of a termination in accordance with
this paragraph.

 

(f)This paragraph is without prejudice to paragraph 6(b) (obligation to pay
additional amounts if withholding or deduction required); but an obligation to
pay such additional amounts may, where appropriate, be a circumstance which
causes this paragraph to apply.

 

12.Interest

 

To the extent permitted by applicable law, if any sum of money payable hereunder
or under any Transaction is not paid when due, interest shall accrue on the
unpaid sum as a separate debt at the greater of the Pricing Rate for the
Transaction to which such sum relates (where such sum is referable to a
Transaction) and LIBOR on a 360 day basis or 365 day basis in accordance with
the applicable ISMA convention, for the actual number of days during the period
from and including the date on which payment was due to, but excluding, the date
of payment.

 

 - 23 - 

 

 

13.Single Agreement

 

Each party acknowledges that, and has entered into this Agreement and will enter
into each Transaction hereunder in consideration of and in reliance upon the
fact that all Transactions hereunder constitute a single business and
contractual relationship and are made in consideration of each other.
Accordingly, each party agrees (i) to perform all of its obligations in respect
of each Transaction hereunder, and that a default in the performance of any such
obligations shall constitute a default by it in respect of all Transactions
hereunder, and (ii) that payments, deliveries and other transfers made by either
of them in respect of any Transaction shall be deemed to have been made in
consideration of payments, deliveries and other transfers in respect of any
other Transactions hereunder.

 

14.Notices and Other Communications

 

(a)Any notice or other communication to be given under this Agreement -

 

(i)shall be in the English language, and except where expressly otherwise
provided in this Agreement, shall be in writing;

 

(ii)may be given in any manner described in sub-paragraphs (b) and (c) below;

 

(iii)shall be sent to the party to whom it is to be given at the address or
number, or in accordance with the electronic messaging details, set out in Annex
I hereto.

 

(b)Subject to sub-paragraph (c) below, any such notice or other communication
shall be effective -

 

(i)if in writing and delivered in person or by courier, at the time when it is
delivered;

 

(ii)if sent by telex, at the time when the recipient’s answerback is received;

 

(iii)if sent by facsimile transmission, at the time when the transmission is
received by a responsible employee of the recipient in legible form (it being
agreed that the burden of proving receipt will be on the sender and will not be
met by a transmission report generated by the sender’s facsimile machine);

 

(iv)if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), at the time when that mail is delivered
or its delivery is attempted;

 

(v)if sent by electronic messaging system, at the time that electronic message
is received;

 

 - 24 - 

 

 

except that any notice or communication which is received, or delivery of which
is attempted, after close of business on the date of receipt or attempted
delivery or on a day which is not a day on which commercial banks are open for
business in the place where that notice or other communication is to be given
shall be treated as given at the opening of business on the next following day
which is such a day.

 

(c)lf-

 

(i)there occurs in relation to either party an event which, upon the service of
a Default Notice, would be an Event of Default; and

 

(ii)the non-Defaulting Party, having made all practicable efforts to do so,
including having attempted to use at least two of the methods specified in
sub-paragraph (b)(ii), (iii) or (v), has been unable to serve a Default Notice
by one of the methods specified in those sub-paragraphs (or such of those
methods as are normally used by the non-Defaulting Party when communicating with
the Defaulting Party),

 

the non-Defaulting Party may sign a written notice (a “Special Default Notice”)
which -

 

(aa)specifies the relevant event referred to in paragraph 10(a) which has
occurred in relation to the Defaulting Party;

 

(bb)states that the non-Defaulting Party, having made all practicable efforts to
do so, including having attempted to use at least two of the methods specified
in sub-paragraph (b)(ii), (iii) or (v), has been unable to serve a Default
Notice by one of the methods specified in those sub-paragraphs (or such of those
methods as are normally used by the non-Defaulting Party when communicating with
the Defaulting Party);

 

(cc)specifies the date on which, and the time at which, the Special Default
Notice is signed by the non-Defaulting Party; and

 

(dd)states that the event specified in accordance with sub-paragraph (aa) above
shall be treated as an Event of Default with effect from the date and time so
specified.

 

On the signature of a Special Default Notice the relevant event shall be treated
with effect from the date and time so specified as an Event of Default in
relation to the Defaulting Party, and accordingly references in paragraph 10 to
a Default Notice shall be treated as including a Special Default Notice. A
Special Default Notice shall be given to the Defaulting Party as soon as
practicable after it is signed.

 

 - 25 - 

 

 

(d)Either party may by notice to the other change the address, telex or
facsimile number or electronic messaging system details at which notices or
other communications are to be given to it.

 

15.Entire Agreement; Severability

 

This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for Transactions. Each provision and
agreement herein shall be treated as separate from any other provision or
agreement herein and shall be enforceable notwithstanding the unenforceability
of any such other provision or agreement.

 

16.Non-assignability; Termination

 

(a)Subject to sub-paragraph (b) below, neither party may assign, charge or
otherwise deal with (including without limitation any dealing with any interest
in or the creation of any interest in) its rights or obligations under this
Agreement or under any Transaction without the prior written consent of the
other party. Subject to the foregoing, this Agreement and any Transactions shall
be binding upon and shall inure to the benefit of the parties and their
respective successors and assigns.

 

(b)Sub-paragraph (a) above shall not preclude a party from assigning, charging
or otherwise dealing with all or any part of its interest in any sum payable to
it under paragraph 10(c) or (f) above.

 

(c)Either party may terminate this Agreement by giving written notice to the
other, except that this Agreement shall, notwithstanding such notice, remain
applicable to any Transactions then outstanding.

 

(d)All remedies hereunder shall survive Termination in respect of the relevant
Transaction and termination of this Agreement.

 

(e)The participation of any additional member State of the European Union in
economic and monetary union after 1 January 1999 shall not have the effect of
altering any term of the Agreement or any Transaction, nor give a party the
right unilaterally to alter or terminate the Agreement or any Transaction.

 

17.Governing Law

 

This Agreement shall be governed by and construed in accordance with the laws of
England. Buyer and Seller hereby irrevocably submit for all purposes of or in
connection with this Agreement and each Transaction to the jurisdiction of the
Courts of England.

 

Party A hereby appoints the person identified in Annex I hereto as its agent to
receive on its behalf service of process in such courts. If such agent ceases to
be its agent,

 

 - 26 - 

 

 

Party A shall promptly appoint, and notify Party B of the identity of, a new
agent in England.

 

Party B hereby appoints the person identified in Annex I hereto as its agent to
receive on its behalf service of process in such courts. If such agent ceases to
be its agent, Party B shall promptly appoint, and notify Party A of the identity
of, a new agent in England.

 

Each party shall deliver to the other, within 30 days of the date of this
Agreement in the case of the appointment of a person identified in Annex I or of
the date of the appointment of the relevant agent in any other case, evidence of
the acceptance by the agent appointed by it pursuant to this paragraph of such
appointment.

 

Nothing in this paragraph shall limit the right of any party to take proceedings
in the courts of any other country of competent jurisdiction.

 

18.No Waivers, etc.

 

No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any remedy
hereunder by any party shall constitute a waiver of its right to exercise any
other remedy hereunder. No modification or waiver of any provision of this
Agreement and no consent by any party to a departure herefrom shall be effective
unless and until such modification, waiver or consent shall be in writing and
duly executed by both of the parties hereto. Without limitation on any of the
foregoing, the failure to give a notice pursuant to paragraph 4(a) hereof will
not constitute a waiver of any right to do so at a later date.

 

19.Waiver of Immunity

 

Each party hereto hereby waives, to the fullest extent permitted by applicable
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, attachment (both before and after judgment) and execution to which
it might otherwise be entitled in any action or proceeding in the Courts of
England or of any other country or jurisdiction, relating in any way to this
Agreement or any Transaction, and agrees that it will not raise, claim or cause
to be pleaded any such immunity at or in respect of any such action or
proceeding.

 

20.Recording

 

The parties agree that each may electronically record all telephone
conversations between them.

 

21.Third Party Rights

 

No person shall have any right to enforce any provision of this Agreement under
the Contracts (Rights of Third Parties) Act 1999.

 

 - 27 - 

 

 

Party A   PARTY B       UBS AG   MURRAY HILL FUNDING, LLC           By: /s/ Lisa
Rosenthal   By: /s/ Michael A. Reisner Title: Executive Director & Counsel  
Title: Co-Chief Executive Officer Date: May 19, 2017   Date: May 19, 2017

 

By: /s/ Sergio Breton   By: /s/ Mark Gatto Title: Director   Title: Co-Chief
Executive Officer Date: May 19, 2017   Date: May 19, 2017

 

 - 28 - 

 

 

ANNEX I

 

Supplemental Terms or Conditions

 

The following terms and conditions supplement and are a part of the Global
Master Repurchase Agreement dated the date hereof (the “Agreement”) between UBS
AG (“Party A”), a banking corporation organized under the laws of Switzerland,
and MURRAY HILL FUNDING, LLC (“Party B”), a Delaware limited liability company.
In the event of a conflict between provisions of this Annex I and the Agreement,
the provisions of this Annex I shall govern. Capitalized terms used but not
defined shall have the meanings ascribed to them in the Agreement.

 

Paragraph references are to paragraphs in the Agreement.

 

1.The following elections shall apply:

 

(a)paragraph 1(c)(i). Buy/Sell Back Transactions may be effected under this
Agreement, and accordingly the Buy/Sell Back Annex shall apply.

 

(b)paragraph 1(c)(ii). Transactions in Net Paying Securities may be effected
under this Agreement, and accordingly the provisions of sub-paragraphs (i) to
(ii) below shall apply.

 

(i)The phrase "other than equities and Net Paying Securities" shall be replaced
by the phrase "other than equities".

(ii)In the Buy/Sell Back Annex the following words shall be added to the end of
the definition of the expression "IR": "and for the avoidance of doubt the
reference to the amount of Income for these purposes shall be to an amount paid
without withholding or deduction for or on account of taxes or duties
notwithstanding that a payment of such Income made in certain circumstances may
be subject to such a withholding or deduction".

 

(c)paragraph 1(d). Agency Transactions may not be effected under this Agreement,
and accordingly the Agency Annex shall not apply.

 

(d)paragraph 1. Transactions in gilt-edged securities may be effected under this
Agreement and accordingly the Gilt Annex shall apply.

 

(e)paragraph 1. Equity Transactions may not be effected under this Agreement and
accordingly the Equity Annex shall not apply.

 

(f)paragraph 1. Transactions in Italian Domestic Purchased Securities may not be
effected under this Agreement and accordingly the Italian Annex shall not apply.

 

(g)Transactions in Japanese Securities may not be effected under this Agreement
and accordingly the Japanese Annex shall not apply.

 

(h)paragraph 2(d). The Base Currency shall be: United States Dollars ("USD").

 

  (i) paragraph 2(p). Designated Office: Party A: London, Stamford and New York
      Party B: New York

 

(j)paragraph 2(cc). The pricing source for calculation of Market Value shall be:
failing agreement, any generally accepted pricing source for the relevant
Securities, which in the case of UK gilt-edged securities, shall include “GEMMA”
prices published by the UK Debt Management Office.

 

(k)paragraph 2(rr). Spot Rate to be the rate as provided in paragraph 2(rr).

 

(l)paragraph 3(b). Both Seller and Buyer to deliver Confirmation.

 

(m)paragraph 4(f). Interest rate on Cash Margin (including the payment intervals
and payment dates) shall be the rate per annum equal to the overnight Federal
Funds (Effective) Rate for each day on which cash is held as Margin hereunder,
as reported in Federal Reserve Publication H.15-519, unless specifically agreed
otherwise between the parties at the time that a margin call is made.

 

 - 29 - 

 

 

(n)paragraph 4(g). Delivery period for Margin Transfers shall be:

 

(1)in respect of Cash Margin, any Margin Securities or Equivalent Margin
Securities denominated in CAD or USD same day if the call is made before 10 am
(New York time) and if requested after such time on such Business Day, on the
next Business Day; and

 

(2)in respect of Cash Margin, any Margin Securities or Equivalent Margin
Securities denominated in any other currency, next Business Day if the call is
made before 10am (New York time), and if requested after such time on such
Business Date, on the second next Business Day.

 

(o)paragraph 6(j). Paragraph 6(j) shall apply and the events specified in
paragraph 10(a) identified for the purposes of paragraph 6(j) shall be those as
set out in sub-paragraphs (i) and (iii) to (xiii) of paragraph 10(a) of the
Agreement, provided, however, and without limiting the rights of a
non-Defaulting Party under paragraph 10, a party’s right to suspend payments due
to the condition precedent set forth in paragraph 6(j) with respect to an Event
of Default (other than an “Exempt Event of Default” as defined below) shall only
apply for a period not longer than 60 days after the non-Defaulting Party has
received a Termination Request (as defined below) from the Defaulting Party and
provided further that the Defaulting Party shall promptly provide the
non-Defaulting Party with such material information as it may reasonably request
during such period.

 

For the purposes herein, an Exempt Event of Default shall mean an Event of
Default referenced in paragraph 10(a), subparagraphs (i), (iii), (iv), (v),
(vi), (xi), (xii) and (xiii), unless the Defaulting Party has demonstrated to
the reasonable satisfaction of the non-Defaulting Party that such default under
Sections subparagraphs (xi), (xii) or (xiii) was caused solely by an event,
condition or circumstance other than a failure to pay money or deliver an asset.

 

For the purposes herein, a Termination Request shall mean a notice requesting
that the non-Defaulting Party suspend its payment or delivery obligations for no
longer than 60 days. A Termination Request may only be made and shall only be
applicable at a time when the non-Defaulting Party is otherwise entitled to send
a Default Notice under paragraph 10 of this Agreement, and nothing herein shall
limit the non-Defaulting Party's right to send such Default Notice. Such
Termination Request may only be delivered to the non-Defaulting Party after the
non-Defaulting Party does not make a payment or delivery when due under this
Agreement by reason of the condition precedent set forth in paragraph 6(j) not
being satisfied. The Termination Request shall not be effective unless delivered
in the manner set forth in paragraph 14 of the Agreement as if it was a notice
under paragraph 10.

 

(p)paragraph 10(a)(ii). paragraph 10(a)(ii) shall not apply.

 

(q)paragraph 14. For the purposes of paragraph 14 of this Agreement -

 

(i)Address for notices and other communications for Party A when acting through
its London Branch:

 

Address: 5 Broadgate, London EC2M 2QS Attention: Documentation Unit / Legal
Department Telephone: +44 20 7567 8000 Facsimile: +44 20 7567 4406 / +44 20 7568
9257

  

 - 30 - 

 

 

(ii)Address for notices and other communications for Party A when acting through
its Stamford or New York Branch:

 

Address: 1285 Avenue of the Americas, New York, NY Attention: Documentation Unit
/ Legal Department Email: SH-UBSLegalNotices-Amer@ubs.com

 

(iii)Address for notices and other communications for Party B:

 

Address: 3 Park Ave, 36th Floor, New York, NY 10016 Attention: Murray Hill
Funding, LLC – Keith Franz Telephone: 212 418 4710 Email:
kfranz@cioninvestments.com

 

(r)paragraph 17. For the purposes of paragraph 17 of this Agreement –

 

(i)In relation to Party A: Not Applicable;

 

(ii)In relation to Party B: Murray Hill Funding, LLC c/o Law Debenture Corporate
Services Limited, 100 Wood Street, Fifth Floor, London EC2V 7EX

 

2.The following Supplemental Terms and conditions shall apply. To the extent
that these supplemental terms and conditions conflict with the provisions
contained in the Agreement, the provisions contained in this Part 2 of Annex I
shall prevail.

 

(a)With effect from the date of this Agreement, the parties agree that:

 

(i)all repurchase agreements between the parties will be terminated.

 

(ii)Unless otherwise agreed:

 

(A)This Agreement will govern all Transactions between the parties;

 

(B)The confirmation for each such Transaction will supplement and form part of
this Agreement; and

 

(C)All such confirmations, together with this Agreement, will constitute a
single agreement.

 

(b)The parties agree that Forward Transactions (as defined in sub-paragraph
(i)(A) below) may be effected under this Agreement and accordingly the
provisions of sub-paragraphs (i) to (iv) below shall apply.

 

The following definitions shall apply –

 

(i)(A)  "Forward Transaction", a Transaction in respect of which the Purchase
Date is at least three Business Days after the date on which the Transaction was
entered into and has not yet occurred;

 

(B)  "Forward Repricing Date", with respect to any Forward Transaction the date
which is such number of Business Days before the Purchase Date as is equal to
the minimum period for the delivery of margin applicable under paragraph 4(g).

 

(ii)The Confirmation relating to any Forward Transaction may describe the
Purchased Securities by reference to a type or class of Securities, which,
without limitation, may be identified by issuer or class of issuers and a
maturity or range of maturities. Where this paragraph applies, the parties shall
agree the actual Purchased Securities not less than two Business Days before the
Purchase Date and Buyer or Seller (or both), as shall have been agreed, shall
promptly deliver to the other party a Confirmation which shall describe such
Purchased Securities.

 

 - 31 - 

 

 

(iii)At any time between the Forward Repricing Date and the Purchase Date for
any Forward Transaction the parties may agree either –

 

(A)  to adjust the Purchase Price under that Forward Transaction; or

 

(B)  to adjust the number of Purchased Securities to be sold by Seller to Buyer
under that Forward Transaction.

 

(iv)Where the parties agree to an adjustment under paragraph (iii) above, Buyer
or Seller (or both), as shall have been agreed, shall promptly deliver to the
other party a Confirmation of the Forward Transaction, as adjusted under
paragraph (iii) above.

 

(c)Paragraphs 2 and 4 of the Agreement are amended as follows.

 

(i)Paragraph 2(ww) is deleted and replaced by the following- 

 

"(ww)" Transaction Exposure" means -

 

(i) with respect to any Forward Transaction at any time between the Forward
Repricing Date and the Purchase Date, the difference between (A) the Market
Value of the Purchased Securities at the relevant time and (B) the Purchase
Price;

 

(ii) with respect to any Transaction at any time during the period (if any) from
the Purchase Date to the date on which the Purchased Securities are delivered to
Buyer or, if earlier, the date on which the Transaction is terminated under
paragraph 10(g), the difference between (A) the Market Value of the Purchased
Securities at the relevant time and (B) the Repurchase Price at the relevant
time;

 

(iii) with respect to any Transaction at any time during the period from the
Purchase Date (or, if later, the date on which the Purchased Securities are
delivered to Buyer or the Transaction is terminated under paragraph 10(g)) to
the Repurchase Date (or, if later, the date on which Equivalent Securities are
delivered to Seller or the Transaction is terminated under paragraph 10(h)), the
difference between (A) the Repurchase Price at the relevant time multiplied by
the applicable Margin Ratio (or, where the Transaction relates to Securities of
more than one description to which different Margin Ratios apply, the amount
produced by multiplying the Repurchase Price attributable to Equivalent
Securities of each such description by the applicable Margin Ratio and
aggregating the resulting amounts, the Repurchase Price being for this purpose
attributed to Equivalent Securities of each such description in the same
proportions as those in which the Purchase Price was apportioned among the
Purchased Securities) and (B) the Market Value of Equivalent Securities at the
relevant time.

 

In each case, if (A) is greater than (B), Buyer has a Transaction Exposure for
that Transaction equal to the excess, and if (B) is greater than (A), Seller has
a Transaction Exposure to Buyer equal to the excess."

 

(ii)In paragraph 4(c) -

 

(aa)  the words "any amount payable to the first party under paragraph 5 but
unpaid" are deleted and replaced by "any amount which will become payable to the
first party under paragraph 5 during the period after the time at which the
calculation is made which is equal to the minimum period for the delivery of
margin applicable under paragraph 4(g) or which is payable to the first party
under paragraph 5 but unpaid"; and

 

 - 32 - 

 

 

(bb)  the words "any amount payable to the other party under paragraph 5 but
unpaid" are deleted and replaced by "any amount which will become payable to the
other party under paragraph 5 during the period after the time at which the
calculation is made which is equal to the minimum period for the delivery of
margin applicable under paragraph 4(g) or which is payable to the other party
under paragraph 5 but unpaid".

 

(d)Upon execution of this Agreement, each party shall deliver to the other
evidence of signing authority and specimen signatures.

 

Additionally, with respect to the parties:

 

(i)Party B agrees to provide Party A with the following on the date of execution
of the Agreement: (A) a certified copy of its memorandum and articles of
association or equivalent constitutive documents; (B) a certified copy of the
board resolution authorizing its entry into this Agreement and the Transactions
hereunder (or limited liability company agreement, as applicable); (C) a
certified copy of its certificate of incorporation (or limited liability company
certificate, as applicable); (D) evidence of the authority and true signatures
of each official or representative signing this Agreement or, as the case may
be, a Confirmation, on its behalf; (E) a legal opinion satisfactory to Party A
regarding (among other things) the ability of Party B to enter into and perform
its obligations under this Agreement; and (F) such other similar documentation
as Party A may reasonably request.    

(ii)Party B agrees to provide Party A with the following tax document on or
before the date of execution of the Agreement: A duly completed and executed
U.S. Internal Revenue Service Form W-9.    

(iii)Party A agrees to provide the following applicable tax documents on the
date of execution of the Agreement: (A) With respect to each Transaction that is
entered into under this Agreement whereby Party A is acting as nominee on behalf
of UBS Securities LLC, a person that is a “US person” as that term is defined
under Section 7701(a)(30) of the US Internal Revenue Code, a duly completed and
executed U.S. Internal Revenue Service Form W-8IMY (or successor thereto) for
UBS AG, together with the required schedule and a duly executed and completed
U.S. Internal Revenue Service Form W-9 for UBS Securities LLC, (B) With respect
to each Transaction that is entered into under this Agreement through an Office
of Party B that is not located in the U.S., one duly executed and completed U.S.
Internal Revenue Service Form W-8BEN-E (or any successor of such form).    

(e)Margin Transfer may not be required by either party unless its Net Exposure
in respect of the other party is more than USD 100,000.    

(f)Additional Events of Default

 

The word "or" shall be added at the end of paragraph 10(a)(x) and the following
paragraphs shall be inserted in paragraph 10(a) immediately after paragraph
10(a)(x):

 

The following additional provisions shall be inserted into Paragraph 10(a) of
the Agreement:

 

“(xi)      the occurrence of a default, event of default or other similar
condition or event (howsoever described) (excluding any Additional Termination
Event as such term is defined in any ISDA Master Agreement) under any agreement
relating to Specified Indebtedness between Party A or any Specified Entity of
Party A and Party B or any Specified Entity of Party B and the acceleration of
all obligations and transactions under such agreement, and the non-Defaulting
Party serves a Default Notice on the Defaulting Party; or

 

 - 33 - 

 

 

"(xii) (1) a default, event of default or other similar condition or event
(howsoever described) in respect of (x) Party A or (y) Party B or any Specified
Entity of Party B under one or more agreements or instruments relating to
Specified Indebtedness of such entity in an aggregate amount of not less than
the applicable Threshold Amount, which has resulted in such Specified
Indebtedness becoming due and payable under such agreements or instruments
before it would otherwise have been due and payable;

 

(2) any failure by such entity to make one or more payments on their due dates
under such agreements or instruments (after giving effect to any applicable
grace period), in an aggregate amount not less than the applicable Threshold
Amount and the non-Defaulting Party serves a notice on the Defaulting Party;

 

provided, however, that notwithstanding the foregoing, an Event of Default shall
not occur under 10 (a)(xii) above if, as demonstrated to the reasonable
satisfaction of the non-Defaulting Party, (a) the event or condition referred to
in 10(a)(xii)(A)(1) or the failure to pay referred to in 10(a)(xii)(B(2) is a
failure to pay caused by an error or omission of an administrative or
operational nature; and (b) funds were available to such party to enable it to
make the relevant payment when due; and (c) such relevant payment is made within
three Business Days following receipt of written notice from an interested party
of such failure to pay. ”

 

“10(a)(xiii)   if Party A determines that this Agreement or the Transactions
contemplated hereby constitute or may constitute a "prohibited transaction"
under ERISA and/or the Code and that no exemption from the "prohibited
transaction" provisions of ERISA and the Code is available with respect to this
Agreement or such Transactions, in which case Party B shall be the Defaulting
Party.

 

(g)Paragraph 2. The following additional definitions shall be included in
Paragraph 2:

 

“Affiliate” means in relation to any person, any entity controlled, directly or
indirectly by the person, any entity that controls, directly or indirectly, the
person or any entity directly or indirectly under common control with the
person. For this purpose, “control” of any entity or person means ownership of a
majority of the voting power of the entity or person.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
or any successor statute.

“Specified Entity” means (I) in relation to Party A, UBS Limited and UBS
Securities LLC, and (ii) in relation to Party B, CĪON Investment Corporation.

 

“Specified Indebtedness” shall mean any obligation (whether present or future,
contingent or otherwise as principal or surety or otherwise) (a) in respect of
any borrowed money, and/or (b) in respect of any Specified Transaction.

 

"Specified Transaction" means (a) any transaction (including an agreement with
respect to any such transaction) now existing or hereafter entered into between
one party to this Agreement (or any applicable Specified Entity of such party)
and any third party entity, which is not a Transaction under this Agreement but
(i) which is a rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency
option, credit protection transaction, credit swap, credit default swap, credit
default option, total return swap, credit spread transaction, repurchase
transaction, reverse repurchase transaction, buy/sell-back transaction,
securities lending transaction, weather index transaction, precious metal
transaction, letters of credit reimbursement obligation, indebtedness for
borrowed money (whether or not evidenced by a note or similar instrument), any
transactions or obligations under any prime brokerage or centrally cleared
derivative agreements, or forward purchase or sale of a security, commodity or
other financial instrument or interest (including any option with respect to any
of these transactions) or (ii) which is a type of transaction that is similar to
any transaction referred to in clause (i) above that is currently, or in the
future becomes, recurrently entered into in the financial markets (including
terms and conditions incorporated by reference in such agreement) and which is a
forward, swap, future, option or other derivative on one or more rates,
currencies, commodities, equity securities or other equity instruments, debt
securities or other debt instruments, economic indices or measures of economic
risk or value, or other benchmarks against which payments or deliveries are to
be made, (b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.

 

 - 34 - 

 

 

“Threshold Amount” shall mean (i) in relation to Party A: an amount equal to 2%
of the shareholder equity of Party A (howsoever described) as shown in its most
recent annual audited financial statements; and (ii) in relation to Party B: 
USD 10,000,000 (or the equivalent in any other currency or currencies);

 

(h)The following shall be additional provisions to the Global Master Repurchase
Agreement:

 

“22. Set off

 

Without affecting the provisions of the Agreement requiring the calculation of
certain net payment amounts, all payments under this Agreement will be made
without set-off or counterclaim; provided, however, in addition to and not in
limitation of any other right or remedy (including any right to set off,
counterclaim, or otherwise withhold payment or any recourse to any credit
support document) under applicable law the non-Defaulting Party (“X”) may
without prior notice to any person set off any sum or obligation (whether or not
arising under this Agreement and whether matured or unmatured, whether or not
contingent and irrespective of the currency, place of payment or booking office
of the sum or obligation) owed by the Defaulting Party (“Y”) to X or any
Affiliate of X against any sum or obligation (whether or not arising under this
Agreement, whether matured or unmatured, whether or not contingent and
irrespective of the currency, place of payment or booking office of the sum or
obligation) owed by X or any Affiliate of X to Y and, for this purpose, may
convert one currency into another at a market rate determined by X. If any sum
or obligation is unascertained, X may in good faith estimate that sum or
obligation and set-off in respect of that estimate, subject to X or Y, as the
case may be, accounting to the other party when such sum or obligation is
ascertained. Nothing in this Agreement shall create or be deemed to create any
charge under English law."

 

(i)[Reserved]

 

(j)paragraph 9(g) is amended by deleting the word “and” at the end of sub-clause
(iii), and including the following as an additional paragraph:-

 

“References in this clause to a “party" shall, in the case of UBS AG and where
the context so allows, include reference to any affiliate of UBS AG, and”

 

(k)paragraph 4(c)(iv) and 4(e)(v) of the Italian Annex for Domestic Purchased
Securities shall be replaced with the following:

 

(l)“the Pricing Rate shall be the market rate, on the day, as quoted on
Telematico or as agreed between the parties on the day of the Replacement
Transaction.”

 

(m)The first paragraph of Paragraph 17 shall be deleted in its entirety and
replaced as follows:

 

 - 35 - 

 

 

“17. (a)  Governing Law. This Agreement and any non-contractual obligations
arising out of or in connection with it or with the subject matter of this
contract shall be governed by, and construed in accordance with, English law.

 

A new subparagraph (b) is inserted as follows:

 

(a)(b) The courts of England have exclusive jurisdiction to hear and decide any
suit, action or proceedings, and to settle any disputes, which may arise out of
or in connection with this Agreement, including without limitation disputes
arising out of or in connection with the existence, creation, validity, effect,
interpretation performance and/or termination of the legal relationships
established by this Agreement and to any disputes arising out of any
non-contractual obligations arising out of or in connection with this Agreement,
(respectively, "Proceedings" and "Disputes") and, for these purposes, each party
irrevocably submits to the jurisdiction of the courts of England.

 

(b)Each party irrevocably waives any objection which it might at any time have
to the courts of England being nominated as the forum to hear and decide any
Proceedings and to settle any Disputes and agrees not to claim that the courts
of England are not a convenient or appropriate forum.

 

Any Affiliate of Party A, performing obligations under or in connection with
this Agreement, shall be entitled to the benefits of and shall be subject to the
terms of this paragraph 17.”

 

(n)Paragraph 21 is hereby amended by inserting the words “subject to paragraph
17(b)” in the first line.

 

(o)New Paragraphs 23 and 24 shall be added as follows:

 

“23. INTENT.

 

(a)The parties recognize that each Transaction is a “repurchase agreement” as
that term is defined in Section 101 of Title 11 of the United States Code as
amended (the “Code”) (except insofar as the type of Securities subject to such
Transaction or the term of such Transaction would render such definition
inapplicable), and a “securities contract” as that term is defined in Section
741 of the Code.    

(b)It is understood that either party’s right to liquidate Securities delivered
to it in connection with Transactions hereunder or to exercise any other
remedies pursuant to Paragraph 10 hereof, is a contractual right to liquidate
such Transaction as described in Section 555 and 559 of the Code.

 

(c)The parties agree and acknowledge that if a party hereto is an “insured
depository institution”, as such terms is defined in the Federal Deposit
Insurance Act, as amended (“FDIA”), then each Transaction hereunder is a
“qualified financial contract”, as such term is defined in the FDIA and any
rules, orders or policy statements thereunder (except insofar as the type of
assets subject to such Transaction would render such definition inapplicable).

 

(d)It is understood that this Agreement constitutes a “netting contract” as
defined in and subject to Title IV of the Federal Deposit Insurance Corporation
Improvement Act of 1991 (“FDICIA”) and each payment entitlement and payment
obligation under any Transaction hereunder shall constitute a “covered
contractual payment entitlement” or “covered contractual payment obligation”,
respectively, as defined in and subject to FDICIA (except insofar as one or both
of the parties is not a “financial institution” as such term is defined in
FDICIA).

 

 - 36 - 

 

 

24.  ACKNOWLEDGEMENTS.

 

The parties acknowledge that they have been advised that:

 

(a)in the case of Transactions in which one of the parties is a broker or dealer
registered with the Securities and Exchange Commission (“SEC”) under Section 15
of the Securities Exchange Act of 1934 (“1934 Act”), the Securities Investor
Protection Corporation has taken the position that the provisions of the
Securities Investor Protection Act of 1970 (“SIPA”) do not protect the other
party with respect to Transactions hereunder;

 

(b)in the case of Transactions in which one of the parties is a government
securities broker or government securities dealer registered with the SEC under
Section 15C of the 1934 Act, SIPA will not provide protection to the other party
with respect to any Transaction hereunder; and

 

(c)in the case of Transactions in which one of the parties is a financial
institution, funds held by the financial institution pursuant to a Transaction
hereunder are not a deposit and therefore are not insured by the Federal Deposit
Insurance Corporation or the National Credit Union Share Insurance Fund, as
applicable.”

 

(p)Agency.

 

(i)As a broker-dealer registered with the U.S. Securities and Exchange
Commission (“SEC”), UBS Securities LLC (“UBSS”) as agent for each of Party A and
Party B, will be responsible for effecting Transactions, transmitting
confirmations and maintaining books and records of Transactions as required by
Rule 15a-6 under the Securities Exchange Act of 1934, as amended.

 

(ii)UBSS is acting in connection with Transactions hereunder solely in its
capacity as agent for Party A and Party B pursuant to instructions from Party A
and Party B. UBSS shall have no responsibility or personal liability to Party A
and Party B to pay or perform any obligation hereunder, except for gross
negligence or wilful misconduct by UBSS. Each of Party A and Party B agrees to
proceed solely against the other to collect or recover any amounts owing to it
to enforce any of its right in connection with, or as a result of Transactions
hereunder.

 

(iii)Any and all notices, demands or communications of any kind relating to
Transactions hereunder between Party A and Party B shall be transmitted
exclusively through UBSS.

 

(iv)The parties acknowledge that the Agreement shall not govern any repurchase
transaction between (i) UBSS, acting in its individual capacity, and Party B or
(ii) Party B and any entity other than Party A, regardless of whether UBSS is
acting as agent for such other entity.

 

(q)Counterparts. This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including by
facsimile transmission, by portable document file ("PDF") or other electronic
file contained in an email and by electronic messaging system), each of which
will be deemed an original.

 

(r)Foreign Account Tax Compliance Act Provisions (FATCA)

 

Paragraph 2(a) is amended by the insertion of the following new definitions and
amendments to existing definitions:

 

"Code", the United States of America Internal Revenue Code 1986, as amended; and

 

 - 37 - 

 

 

"FATCA", Sections 1471 through 1471 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.

 

The definition of "Equivalent Securities" is amended as follows:

 

"Equivalent Securities", with respect to a Transaction, Securities equivalent to
Purchased Securities under that Transaction. If and to the extent that such
Purchased Securities have been redeemed, the expression shall mean a sum of
money equivalent to the proceeds of the redemption, without taking into account
any deduction or withholding imposed or collected in connection with FATCA that
would not have been imposed but for Buyer's non-compliance with FATCA

 

Paragraph 5 is deleted in its entirety and replaced as follows:

 

"Unless otherwise agreed

 

(a)where the Term of a particular Transaction extends over an Income Payment
Date in respect of any Securities subject to that Transaction, Buyer shall on
the date such Income is paid by the issuer transfer to or credit to the account
of Seller an amount equal to (and in the same currency as) the amount paid by
the issuer;

 

(b)where Margin Securities are transferred from one party (the "First Party") to
the other party (the "Second Party") and an Income Payment Date in respect of
such Securities occurs before Equivalent Margin Securities are transferred by
the Second Party to the First Party, the Second Party shall on the date such
Income is paid by the issuer transfer to or credit to the account of the First
Party an amount equal to (and in the same currency as) the amount paid by the
issuer,

 

and for the avoidance of doubt references in this paragraph to the amount of
Income paid by the issuer of any Securities shall be to an amount paid without
any withholding or deduction for or on account of taxes or duties
notwithstanding that a payment of such Income made in certain circumstances may
be subject to withholding or deduction, except, where a withholding or deduction
for or on account of taxes or duties has been imposed under FATCA, to the extent
an equivalent or greater amount of withholding or deduction for or on account of
taxes or duties would have been imposed under FATCA in respect of Income paid by
the issuer on such Securities (or Margin Securities, as applicable) had the
Seller (or the First Party, as applicable) retained the Securities (or the
Margin Securities, as applicable)."

 

Paragraph 6(b) is deleted in its entirety and replaced as follows:

 

(i)       Unless otherwise agreed, all money payable by one party to the other
in respect of any Transaction shall be paid free and clear of, and without
withholding or deduction for, any taxes or duties of whatsoever nature imposed,
levied, collected, withheld or assessed by any authority having power to tax
unless the withholding or deduction of such taxes or duties is required by law.
In that event, unless otherwise agreed, the paying party shall pay such
additional amounts as will result in the net amounts receivable by the other
party (after taking account of such withholding or deduction including such
withholdings or deductions applicable to such additional sums payable under this
paragraph) being equal to such amounts as would have been received by it had no
such taxes or duties been required to be withheld or deducted. For the avoidance
of doubt, the reference to "law" in this paragraph includes FATCA. However, no
additional amounts shall be payable by the paying party to the other party under
this sub-paragraph (b)(i) to the extent that such tax is imposed or collected
under FATCA.

 

 - 38 - 

 

 

(ii)         If the paying party is required to make a withholding or deduction
under FATCA but does not so withhold or deduct, and a liability resulting from
such tax is assessed directly against the paying party, then, except to the
extent the other party has satisfied or then satisfies the liability resulting
from such tax, the other party will promptly pay to the paying party the amount
of such liability (including any related liability for interest, but including
any related liability for penalties only to the extent provided in sub-paragraph
b(iii)).  No payment under this sub-paragraph (b)(ii) is required to be made to
the extent that the relevant liability arises from any gross negligence or
willful misconduct of the paying party.

 

(iii)        The amount of related liability for penalties shall only be payable
to the paying party under sub-paragraph (b)(ii) where such penalties become due
because the other party has failed to provide appropriate tax forms as required
herein.

 

The following new paragraph 6(k) is inserted as follows:

 

(k) If at any time the First Party is required to remit an amount of tax to the
IRS with respect to a payment under a Transaction in connection with FATCA, then
without duplication of any amount the First Party has deducted on account of
such tax from any amount previously paid to the Second Party pursuant to the
Transaction, the Second Party shall be required to pay to the First Party an
amount equal to that amount of tax on the payment date on which a payment giving
rise to remittance required under FATCA occurs. Upon the reasonable request of
the Second Party with respect to any payment date, the First Party will supply
to the Second Party computations setting forth in reasonable detail the amount
payable on such payment date pursuant to the preceding sentence.

 

The following new paragraph 6(l) is inserted as follows:

 

(l) For the avoidance of doubt, the imposition of any withholding or deduction
pursuant to or on account of FATCA on any amounts paid or received under a
Transaction shall not be treated as an Event of Default under paragraph 10 or as
a material adverse effect that could cause a Tax Event under paragraph 11, even
if such imposition results in either party receiving amounts that differ
materially from the amount that the party would have otherwise received if no
such withholding or deduction were imposed

 

The following new sub-paragraph 10(e)(iii) is inserted as follows:

 

(iii)        The Default Market Value determined pursuant to sub-paragraphs (i)
or (ii) above shall not take into account any deduction or withholding imposed
or collected (or that would be imposed or collected) in connection with FATCA
that would not be imposed but for the non-Defaulting Party's non-compliance with
FATCA.

 

(s)The following additional paragraph 9(A), subsections (i) and (ii) shall be
inserted:

 

9(A). Additional Representations and Notice.

 

(i) Party B Representations. Party B represents and warrants on and as of the
date hereof and on and as of each date this Agreement or any Transaction remains
outstanding:

 

(A)No ERISA Funds. The assets of Party B do not include “plan assets” within the
meaning of Section 3(42) of ERISA, and Party B is not otherwise subject to Title
I of ERISA or Section 4975 of the Code.

 

 - 39 - 

 

 

(B)No Governmental Plan Funds. The assets of Party B do not include the assets
of any “governmental plan” within the meaning of Section 3(32) of ERISA, and
Party B is not otherwise subject to any law, rule, regulation, or restriction
governing the investment of the assets of such plans.

 

(ii)Notice of Increase of Constituent Plan Investment. Party B agrees to notify
Party A immediately if any time it learns or discovers facts at variance with
the foregoing representations and warranties.

 

[signature page follows]

 

 - 40 - 

 

 

22. PARTY A   23. PARTY B           25. UBS AG   24. MURRAY HILL FUNDING, LLC  
        By:  /s/ Lisa Rosenthal    By: /s/ Michael A. Reisner Title: Executive
Director & Counsel   Title: Co-Chief Executive Officer Date: May 19, 2017  
Date: May 19, 2017

 

By: /s/ Sergio Breton   By: /s/ Mark Gatto Title: Director   Title: Co-Chief
Executive Officer Date: May 19, 2017   Date: May 19, 2017

 

 - 41 - 

 

 

ANNEX II

 

Form of Confirmation

 

To: ____________________________

From: __________________________

Date: ___________________________

 

Subject: [Repurchase][Buy/Sell]* Transaction     (Reference Number:  )

 

Dear Sirs,

 

The purpose of this [letter]/[facsimile//[telex], a "Confirmation" for the
purposes of the Agreement, is to set forth the terms and conditions of the above
repurchase transaction entered into between us on the Contract Date referred to
below.

 

This Confirmation supplements and forms part of, and is subject to, the Global
Master Repurchase Agreement as entered into between us as of [ ] as the same may
be amended from time to time (the "Agreement"). All provisions contained in the
Agreement govern this Confirmation except as expressly modified below. Words and
phrases defined in the Agreement and used in this Confirmation shall have the
same meaning herein as in the Agreement.

 

1.Contract Date:

2.Purchased Securities [state type[s] and nominal value[s]]:

3.CUSIP, ISIN or other identifying number[s]:

4.Buyer:

5.Seller:

6.Purchase Date:

7.Purchase Price:

8.Contractual Currency:

[9.Repurchase Date]:*

[10.Terminable on demand]:*

11.Pricing Rate:

[12.Sell Back Price:]

13.Buyer's Bank Account[s] Details:

14.Seller's Bank Account[s] Details:

[15.The Transaction is an Agency Transaction. [Name of Agent] is acting as agent
for [name or identifier of Principal]]:*

[16.Additional Terms]]:*

 

 

 

* Delete as appropriate

 

 - 42 - 

 

  

Confirmation in respect of Repurchase Transaction

 

May 19, 2017

 

To: Murray Hill Funding, LLC     c/o CĪON Investment Corporation     Three Park
Avenue, 36th Floor     New York, NY 10016     Attention:  Keith Franz        
From: UBS AG, London Branch  

 

Dear Sirs,

 

The purpose of this confirmation (this “Confirmation”) is to set forth the terms
and conditions of the above-referenced repurchase transaction between Murray
Hill Funding, LLC (“Seller”) and UBS AG, London Branch (“Buyer”, and “Party”
shall mean either Seller or Buyer), on the Trade Date specified below (the
“Transaction”). This Confirmation evidences the Transaction (replacing the form
of Confirmation required by Annex II to the Agreement which shall not apply to
the Transaction) and forms a binding agreement between Seller and Buyer as to
the terms of the Transaction.

 

This Confirmation supplements, forms part of, and is subject to the TBMA/ISMA
Global Master Repurchase Agreement (2000 version), dated as of May 15, 2017,
between Seller and Buyer, together with the Annex(es) thereto (as supplemented,
amended or otherwise modified from time to time, the “Agreement”).

 

All provisions contained or incorporated by reference in the Agreement shall
govern this Confirmation except as expressly modified below. In the event of any
inconsistency between the provisions of the Agreement and this Confirmation,
this Confirmation will prevail. In this Confirmation, defined words and
expressions shall have the same meaning as in the Agreement unless otherwise
defined in this Confirmation, in which case terms used in this Confirmation
shall take precedence over terms used in the Agreement.

 

1       General Terms       Seller:   Murray Hill Funding, LLC       Buyer:  
UBS AG, London Branch

 

 

 

  

Calculation Agent:  

UBS AG, London Branch.

 

The Calculation Agent shall perform all determinations and calculations
hereunder in good faith and in a commercially reasonable manner. For the purpose
of making any determination or calculation hereunder, the Calculation Agent may
rely on any information or notice delivered by a third party.

      Trade Date:   May 19, 2017.       Purchase Date:  

May 19, 2017 (the “First Purchase Date”); and

 

June 19, 2017 (the “Second Purchase Date”)

 

provided, however, that if a Mandatory Prepayment occurs after the First
Purchase Date and on or prior to the Second Purchase Date, the Second Purchase
Date will not occur.

      Repurchase Date:   May 19, 2020, subject to adjustment in accordance with
the Business Day Convention, as such date may be accelerated as provided herein
and in the Agreement.       Purchased Securities:  

(a) On the First Purchase Date, Seller will transfer to Buyer Class A Notes
having a principal amount of USD 115,384,615 in exchange for the First Purchase
Date Purchase Price on the First Purchase Date; and

 

(b) on the Second Purchase Date, if any, Seller will transfer to Buyer
additional Class A Notes having a principal amount of USD 76,923,076 (”Second
Purchase Date Required Additional Amount”) in exchange for the Second Purchase
Date Purchase Price on the Second Purchase Date.

      Purchase Price:  

(a) with respect to the Purchased Securities transferred to Buyer on the First
Purchase Date, USD 75,000,000 (the “First Purchase Date Purchase Price”); and

 

(b) with respect to the Purchased Securities transferred to Buyer on the Second
Purchase Date, USD 50,000,000 (the “Second Purchase Date Purchase Price”).

      Repurchase Price:  

With respect to each Purchased Security, the Purchase Price for such Purchased
Security as of the relevant Repurchase Date, as such amount may from time to
time be reduced by a Voluntary Partial Prepayment pursuant to the operation of
the “Purchase Price Reduction” provisions herein; in which case, for the
avoidance of doubt, Purchase Price will be reduced by the Prepayment Amount in
respect of such Voluntary Partial Prepayment.

 

For the avoidance of doubt, there shall be no Price Differential incorporated
into the Repurchase Price and all references to Price Differential and Pricing
Rate are hereby deleted from the Agreement. In lieu of Price Differential,
Seller shall be obligated to pay the Transaction Fee Amounts to Buyer as set
forth herein. For the avoidance of doubt, paragraphs 2(ii), 2(jj) and 2(pp) of
the Agreement shall not apply to the Transaction.

 

 2 

 

  

Initial Fee:   On the Initial Fee Payment Date specified below, Seller shall pay
to Buyer the Initial Fee Amount specified below. The Initial Fee shall be fully
earned when paid and there shall be no rebate thereof, notwithstanding the
failure to occur of any Purchase Date or the occurrence of any early Repurchase
Date.       Initial Fee Payment Date:   The Trade Date.       Initial Fee
Amount:   USD 1,250,000.       Termination of Transaction:   Subject to
paragraphs 10 and 11 of the Agreement and Buyer’s rights with respect to a
Regulatory Event and as otherwise set forth in this Confirmation, unless the
parties otherwise agree, the Transaction shall not be terminable on demand by
either Party.       Purchase Price Reduction:  

(a)        At any time after the Second Purchase Date, Seller may elect to
prepay all or a portion of the Repurchase Price of the Purchased Securities upon
at least five Business Days’ prior written notice to Buyer, any prepayment under
this clause (a), a “Voluntary Prepayment,” any prepayment of all of the
then-outstanding Repurchase Price under this clause (a), a “Voluntary Full
Prepayment” and any prepayment of a portion of the then-outstanding Repurchase
Price under this clause (a), a “Voluntary Partial Prepayment”); provided that a
Voluntary Partial Prepayment may be elected if a portion of the Purchased
Securities have been redeemed by the Issuer for cash in the form of USD on or
prior to the related Prepayment Date (as defined below) and the portion of the
Purchased Securities to be repurchased shall be those which have been redeemed
and in an amount not in excess of the Current Redeemed Amount.

 

(b)        If a Mandatory Prepayment Event has occurred and is continuing with
respect to the Purchased Securities, Buyer may upon at least three Business
Days’ prior written notice to Seller require Seller to prepay the entire
Repurchase Price of the Purchased Securities (such prepayment, a “Mandatory
Prepayment”).

 

Each written notice delivered by Seller under clause (a) or Buyer under clause
(b) shall designate the date on which such prepayment is to be effective (each a
“Prepayment Date”). For purposes of any Prepayment Date relating to a Voluntary
Partial Prepayment, the “Prepayment Amount” shall be an amount equal to the
product of (a) the Advance Percentage applicable to Cash (as specified in the
Indenture) and (b) the Current Redeemed Amount and in the case of a Voluntary
Full Prepayment, the “Prepayment Amount” shall be an amount equal to the
Repurchase Price.

 

 3 

 

  

   

Subject to the Failure to Deliver Equivalent Securities and the timing therein,
on each Prepayment Date:

 

(i)        Buyer shall transfer to Seller or its agent Equivalent Securities,
which, in the case of a Voluntary Partial Prepayment or a Voluntary Full
Prepayment occurring after redemption in full of the Notes, shall be in the form
of USD cash in an amount equal to the Current Redeemed Amount;

 

(ii)        Seller shall pay the related Prepayment Amount to Buyer;

 

(iii)       Seller shall pay the related Breakage Amount (if any) to Buyer; and

 

(iv)       with respect to a Voluntary Partial Prepayment, for each Purchased
Security that is the subject of such prepayment, the Repurchase Price for such
Purchased Security immediately after giving effect to such prepayment shall be
equal to (x) the Repurchase Price thereof immediately prior to such prepayment
minus (y) the related Prepayment Amount for such Purchased Security.

 

For purposes of the foregoing, amounts payable by Buyer and Seller under (i),
(ii) and (iii) above shall be netted.

      Current Redeemed Amount:   With respect to any Prepayment Date relating to
a Voluntary Partial Prepayment or a Voluntary Full Prepayment occurring after
redemption in full of the Notes, an amount in USD determined by the Calculation
Agent equal to the aggregate amount actually received by the holder of the
Purchased Securities from the Issuer as a principal redemption payment in
respect of the Purchased Securities on or prior to such Prepayment Date that has
not previously been delivered by Buyer to Seller as Equivalent Securities.      
Mandatory Prepayment Event:   It shall constitute a Mandatory Prepayment Event
with respect to Seller if (after giving effect to all applicable notice
requirements and grace periods) an Indenture Event of Default occurs.      
Accelerated Termination
Event:   Buyer may, at any time following the occurrence of a Regulatory Event,
terminate the Transaction under this Confirmation by notifying Seller of an
early Repurchase Date for the Transaction, which Repurchase Date shall not be
earlier (unless so agreed by Buyer and Seller) than 10 calendar days after the
date of such notice (or such lesser period as may be necessary for Buyer to
comply with its obligations under applicable laws and regulations arising as a
result of such Regulatory Event). Upon knowledge of any Regulatory Event that
may occur, Buyer and Seller shall negotiate in good faith to enter into one or
more financing transactions with substantially the same terms as the effected
Transaction.

 

 4 

 

  

Regulatory Event:   An event which shall occur if, at any time, (a) Buyer
determines, in its good faith commercially reasonable discretion, that Buyer’s
involvement in the transactions contemplated in this Confirmation and the
Agreement violates any law, rule or regulation applicable to Buyer or (b) any
applicable Governmental Authority informs Buyer that Buyer’s involvement in such
transactions violates any law, rule or regulation applicable to Buyer.      
Paragraph 6(h):   Paragraph 6(h) shall be amended by deleting the words “Subject
to paragraph 10,” at the beginning thereof such that, for the avoidance of
doubt, such paragraph applies with respect to all payment obligations arising
out of the occurrence of an Accelerated Termination Event, Voluntary Partial
Prepayment, Voluntary Full Prepayment or an early Repurchase Date (including,
without limitation, payment obligations in respect of Income that have accrued
on or prior to the relevant date).       Failure to Deliver Equivalent
Securities:  

In respect of this Transaction, this provision (Failure to Deliver Equivalent
Securities) shall apply in relation to the Buyer’s obligations with respect to
the Class A Notes in lieu of paragraph 10(h) of the Agreement and any reference
in the Agreement to paragraph 10(h) in respect of Buyer’s obligations with
respect to the Class A Notes shall be deemed to be a reference to this provision
(Failure to Deliver Equivalent Securities).

 

It is acknowledged by each of the Parties hereto that the Class A Notes are
unique assets, and that accordingly no asset other than the Purchased Securities
will qualify as Equivalent Securities.

 

Notwithstanding anything to the contrary in paragraph 10 of the Agreement or
otherwise in the Agreement or this Confirmation and without duplication of the
Cure Period provisions below, if Buyer (the “Transferor”) fails to deliver to
Seller (the “Transferee”) any Purchased Security (an “Unavailable Asset”) by the
time (the “Due Date”) required under this Transaction or within such other
period as may be agreed in writing by the Transferor and the Transferee (such
failure, a “Transfer Failure”):

 

(a)       the Transferor, acting in good faith and a commercially reasonable
manner, shall try for a period of 10 calendar days from the day following the
Due Date in respect of the Unavailable Asset (the last day of such period, the
“Transfer Cut-Off Date”) to obtain such Unavailable Asset (and, where the
Transfer Failure is in respect of Buyer’s obligation to deliver the Purchased
Securities on the scheduled Repurchase Date for this Transaction, this
Transaction shall be deemed to continue until, and terminate upon, the Extended
Termination Date);

 

 5 

 

  

   

(b)       if the Transferor obtains any Unavailable Asset on or prior to the
Transfer Cut-Off Date, the Transferor shall promptly give notice to the
Transferee of its ability to deliver such Unavailable Asset and shall transfer
such Unavailable Asset to the Transferee on the third Business Day following the
day on which the Transferor delivers such notice in settlement of the relevant
Transfer Failure; and

 

(c)       if any Unavailable Asset is redeemed in full or in part by the
relevant issuer prior to the Transfer Cut-Off Date, then either Party may give
notice to the other Party of such redemption after becoming aware of the same,
and the Transferor shall transfer a sum of money equivalent to the proceeds of
such redemption to the Transferee no later than two Business Days following the
day on which the Transferor delivers or receives such notice, in exchange for
the payment by the Transferee of all or a ratable portion of any unpaid
Repurchase Price (as applicable).

 

For the avoidance of doubt, in relation to this Transaction, the Parties’ other
obligations under the Agreement shall continue, and if such Transfer Failure
occurred in connection with the relevant Repurchase Date for this Transaction,
the Transaction shall terminate on the day (the “Extended Termination Date”)
which is, with respect to the last Unavailable Asset, the earliest to occur of:

 

(i)       the Business Day on which the Transferor transfers such last
Unavailable Asset in accordance with sub-paragraph (c) above; or

 

(ii)       the day on which the Transferor transfers proceeds of such redemption
if such last Unavailable Asset is redeemed in full in accordance with
sub-paragraph (c) above.

 

If any such Transfer Failure continues to subsist after the Due Date for this
Transaction, the Transaction Fee Amounts in respect of such Unavailable Assets
shall cease to accrue on the Due Date for this Transaction and no further
Transaction Fee Amounts shall be payable in respect of this Transaction,
notwithstanding the continuance of the Parties’ obligations up to the Extended
Termination Date under this provision.

 

 6 

 

  

Determination of Default
Valuation Time:  

Notwithstanding anything to the contrary contained in the Agreement, the
“Default Valuation Time” means, in relation to an Event of Default, the close of
business in the applicable market on the 40th dealing day after the day on which
that Event of Default occurs or, where that Event of Default is the occurrence
of an Act of Insolvency in respect of which under paragraph 10(a) no notice is
required from the non-Defaulting Party in order for such event to constitute an
Event of Default, the close of business on the 40th dealing day after the day on
which the non-Defaulting Party first became aware of the occurrence of such
Event of Default.

 

For the avoidance of doubt, the amount payable pursuant to Paragraph 10(c) of
the Agreement cannot be calculated until the Default Market Values of all of the
Equivalent Securities and any Equivalent Margin Securities under each
Transaction can be calculated. As such, the payment under paragraph 10(c)(ii)
will be delayed until the latest date on which the Default Market Value has been
determined with respect to any such Equivalent Securities and any Equivalent
Margin Securities.

 

The parties acknowledge that (a) the Purchased Securities under this Transaction
are expected to be illiquid and unique and that there may be no other
commercially reasonable determinant of value with respect to such Purchased
Securities other than the price at which willing buyers agree to purchase such
Purchased Securities or the relevant Portfolio Assets, (b) if the Buyer were
forced to liquidate such Purchased Securities or the relevant Portfolio Assets
on the date an Event of Default occurs (or shortly thereafter), such liquidation
would likely result in a commercially unreasonable price, and (c) giving the
Buyer an extended period of time to liquidate such Purchased Securities or the
relevant Portfolio Assets is more likely to produce a commercially reasonable
result. For avoidance of doubt, Buyer may, at any time, use any commercially
reasonable determinant of value (whether the price at which willing buyers agree
to purchase such Purchased Securities or the relevant Portfolio Assets or
otherwise).

      Income:   Means any interest or dividend payment or any other payment or
distribution (other than any principal payment or repayment, which, for the
avoidance of doubt, includes any redemption payment)  paid with respect to any
Purchased Securities and not otherwise received by Seller.  Buyer shall transfer
to Seller an amount equal to (and in the same currency as) the amount of all
Income paid or distributed on or in respect of the Purchased Securities within
one Business Day after the date on which such Income is paid or distributed to
holders of the Purchased Securities, and paragraph 5(i) of the Agreement shall
be amended accordingly. For avoidance of doubt, (a) references to the amount of
any Income paid shall be to an amount paid net of any withholding or deduction
for or on account of taxes or duties and (b) Buyer shall not (except in
connection with a termination of this Transaction resulting from an Event of
Default) net or set-off against or otherwise apply the Income payment or
payments to reduce the amount, if any, to be transferred to Buyer by Seller upon
termination of this Transaction.

 

 7 

 

  

Clawback:   If (a) any distribution (whether as an Income payment or otherwise)
on a Purchased Security, an Equivalent Security or, if the Equivalent Security
is cash, such cash, is received by Buyer and subsequently paid by Buyer to
Seller hereunder, and (b) Buyer is subsequently required to transfer all or a
portion of such payment to the issuer of such Security (or trustee, paying agent
or similar party) (the amount transferred, the “Clawback Amount”), then promptly
after receiving notice of such Clawback Amount from Buyer, Seller shall transfer
an amount equal to the Clawback Amount to Buyer. Buyer agrees to pay over to
Seller within one Business Day after receipt any amounts subsequently recovered
(but only to the extent such amounts are actually received by Buyer and Buyer is
not otherwise obligated to pay such amounts to Seller pursuant to any other
provision hereunder such that payment would result in duplicative payments by
Buyer or any other party), and to make reasonable efforts to claim and collect
such recoveries.  No interest shall be payable by Buyer or Seller in relation to
Clawback Amounts or amounts recovered in respect thereof for the period prior to
such amounts becoming payable under this provision. This provision shall survive
the termination of the Transaction.       Cure Period:   Notwithstanding
paragraph 10(a) of the Agreement as amended by any Annex, the failure of a Party
(“X”) to make any payment or delivery referred to in such paragraph (other than
a payment or delivery referred to in paragraph 10(a)(iv) of the Agreement) in
respect of the Transaction will not give rise to the right of the other Party to
deliver a Default Notice to X unless such failure is not remedied on or before
the third Business Day after notice of such failure is given to X.       Events
of Default:  

In addition to the Events of Default set forth in the Agreement, if any of the
following events occurs, it shall constitute an Event of Default with respect to
the relevant Party specified below which shall be the Defaulting Party:

 

(a)        with respect to Seller, if Seller fails to pay the Initial Fee Amount
due on the Initial Fee Payment Date, and Buyer, as non-Defaulting Party, serves
a Default Notice on the Seller as Defaulting Party;

 

(b)       with respect to Seller, if Seller fails to pay any Transaction Fee
Amount due on a Transaction Fee Payment Date, and Buyer, as non-Defaulting
Party, serves a Default Notice on the Seller as Defaulting Party;

 

(c)        with respect to Seller, if Seller breaches any of the covenants set
forth in the section “Certain Covenants of Seller” below other than the CIC
Financials Requirement and Buyer, as non-Defaulting Party, serves a Default
Notice on the Seller as Defaulting Party;

 

 

 

 8 

 

  

   

(d)         with respect to Seller, if Seller breaches the CIC Financials
Requirement and such failure is not cured within three Business Days following
notice from Buyer to Seller of such failure, and Buyer, as non-Defaulting Party,
serves a Default Notice on the Seller as Defaulting Party;

  

(e)         with respect to Seller, if Seller fails to pay the applicable
Breakage Amount (if any) on any Prepayment Date or early Repurchase Date, and
Buyer, as non-Defaulting Party, serves a Default Notice on the Seller as
Defaulting Party;

 

(f)        with respect to Seller, Seller fails to pay any Clawback Amount in
accordance with the “Clawback” provisions herein and Buyer, as non-Defaulting
Party, serves a Default Notice on the Seller as Defaulting Party;

 

(g)       with respect to Seller, if Seller’s Investment Manager ceases to be
responsible for the asset management, loan servicing, special servicing or
underwriting services of Seller and its subsidiaries, and Buyer, as
non-Defaulting Party, serves a Default Notice on the Seller as Defaulting Party;

 

(h)       with respect to Seller, notwithstanding anything to the contrary in
the Agreement, if Seller fails to deliver Purchased Securities on any Purchase
Date (including without limitation, as a result of a failure by the Issuer to
issue the related Purchased Securities on or prior to such Purchase Date),
including, for the avoidance of doubt, the Second Purchase Date and Buyer, as
non-Defaulting Party, serves a Default Notice on Seller as Defaulting Party;

 

(i)        with respect to Seller, the occurrence of any of the events set forth
in Section 10(b) of the Collateral Management Agreement, and Buyer, as
non-Defaulting Party, serves a Default Notice on Seller as Defaulting Party;

 

(j)        with respect to Seller, the occurrence of any breach by Seller, as
Sole Member, of any of its obligations under the Equity Contribution Agreement,
and Buyer, as non-Defaulting Party, serves a Default Notice on Seller as
Defaulting Party;

 

(k)       with respect to Seller, a Zero-Value Portfolio Asset EoD (as defined
the “Zero-Value Portfolio Asset EoD” provisions below) has occurred, and Buyer,
as non-Defaulting Party, serves a Default Notice on Seller as Defaulting Party;

 

 9 

 

  

   

(l)        with respect to Seller, the shareholder’s equity of CĪON Investment
Corporation (“CIC”), determined in accordance with United States generally
accepted accounting principles consistently applied, falls below USD
540,000,000, and Buyer, as non-Defaulting Party, serves a Default Notice on
Seller as Defaulting Party; and

 

(m)        Seller incurs any Indebtedness, or incurs any other liability
(including, but not limited to, in respect of any option, swap, repurchase
agreement, securities forward transaction or securities lending agreement),
other than as contemplated by the terms hereof or any agreement or instrument
contemplated hereby, and Buyer, as non-Defaulting Party, serves a Default Notice
on Seller as Defaulting Party.

 

Each of the foregoing Events of Default shall be an “Exempt Event of Default”
for purposes of the Agreement.

      Breakage Amounts:  

If (a) the Repurchase Date for this Transaction occurs prior to the scheduled
Repurchase Date by reason of the occurrence of an Event of Default (where Seller
is the Defaulting Party), a Mandatory Prepayment, a Voluntary Full Prepayment or
an event described in paragraph 11(a) of the Agreement in respect of which
Seller is the notifying party or (b) a Prepayment Date occurs in connection with
a Voluntary Partial Prepayment, then, without limitation of any other payments
or deliveries that become due as a result of such event but without duplication,
on such Repurchase Date, Seller shall pay to Buyer an amount equal to the
Breakage Amount for this Transaction or the applicable portion thereof. If an
Event of Default occurs prior to the First Purchase Date (where Seller is the
Defaulting Party), Seller shall pay to Buyer an amount equal to the Breakage
Amount for this Transaction. For the avoidance of doubt, no Breakage Amount
shall be payable by Seller in respect of any Repurchase Date occurring as a
result of a Regulatory Event.

 

“Breakage Amount” shall mean, with respect to the Transaction evidenced hereby
(or, in the case of a Voluntary Partial Prepayment the applicable portion
thereof that is the subject of such Voluntary Partial Prepayment), the present
value of the Spread portion of the Transaction Fee Amounts (discounted using a
LIBOR discount curve constructed by the Calculation Agent) that would have been
payable to Buyer under such Transaction (or the applicable portion thereof) from
(and including) the early Repurchase Date or applicable Prepayment Date (as
applicable) to (but excluding) the scheduled Repurchase Date, as determined by
the Calculation Agent assuming, solely for purposes of determining such amount,
that (i) the Spread is equal to the Relevant Rate, (ii) the Repurchase Price
payable upon such termination were to remain outstanding until the originally
scheduled Repurchase Date and (iii) Seller has transferred to Buyer Securities
on each Purchase Date with an aggregate Purchase Price applicable to each
Purchase Date as set out in the “Purchase Price” provisions above.

 

 10 

 

  

    The “Relevant Rate” means 2.00%.       2       Purchased Securities,
Margining and Substitutions       Marking to Market:   The Parties agree that,
with respect to this Transaction, the provisions of paragraphs 4(a) to (h)
(inclusive), 4(j) and 4(k) of the Agreement shall not apply and instead margin
shall be provided separately in respect of this Transaction in accordance with
the terms of this Confirmation.  For the avoidance of doubt, the provisions of
paragraph 8(d) of the Agreement shall not apply to the Transaction.       Margin
Maintenance:  

Subject to the “Timing of Transfer of Eligible Margin” provision of this
Confirmation:

 

(a)         if at any time the Net Transaction Exposure for the Transaction is
greater than zero, Buyer may, by notice to Seller, require Seller to, and Seller
shall following such notice, transfer to Buyer an amount of Eligible Margin
equal to the Net Transaction Exposure;

 

(b)         if at any time the Net Transaction Exposure for the Transaction is
less than zero, Seller may, by notice to Buyer, require Buyer to, and Buyer
shall following such notice, transfer an amount of Eligible Margin to Seller
equal to the Net Transaction Exposure;

 

(c)         if at any time the Supplemental Margin Amount for the Transaction is
a positive number, Buyer may, by notice to Seller, require Seller to, and Seller
shall following such notice, transfer to Buyer an amount of Eligible Margin
equal to the Supplemental Margin Amount;

 

(d)         if at any time the Supplemental Margin Amount for the Transaction is
a negative number, Seller may, by notice to Buyer, require Buyer to, and Buyer
shall following such notice, transfer an amount of Eligible Margin to Seller
equal to the absolute value of the Supplemental Margin Amount;

 

provided that:

 

(i) Buyer shall only be obligated to transfer Eligible Margin to Seller pursuant
to sub-clause (d) above if (and only to the extent that) such transfer of
Eligible Margin by Buyer is a return of Eligible Margin that has previously been
transferred by Seller to Buyer pursuant to sub-clause (c) above in respect of
the Transaction and has not been previously returned by Buyer to Seller; and 

 

 11 

 

  

   

(ii) Buyer or Seller may not transfer Eligible Margin except to the extent that
it is requested by the other Party to do so in accordance with the applicable
sub-clause (a) through (d) above and accordingly, any Eligible Margin
transferred by either Party in breach of this sub-clause (iii) shall not qualify
as Eligible Margin and shall be assigned a zero value for all purposes hereof
unless, until and solely to the extent that Eligible Margin is subsequently
requested by the other Party in accordance with any of sub-clauses (a) through
(d) above.

 

Seller acknowledges that failure to timely Transfer Eligible Margin may have
ramifications under the Indenture, Collateral Management Agreement and Equity
Contribution Agreement, including, but not limited to, failure of conditions
necessary to purchase or sell Portfolio Assets thereunder and acceleration of
the Notes.

      Supplemental Margin Amount:   As of any date of determination by UBS, the
“Supplemental Margin Amount” shall equal:           [pg12img1_ex10-5.jpg]      

where:

 

“Repurchase Price” for purposes of calculating the Supplemental Margin Amount
means the sum of all Repurchase Prices in respect of all Purchased Securities
(which shall, for the avoidance of doubt, give effect to reductions in such
Repurchase Prices resulting from any Voluntary Partial Prepayment),

 

“Trigger” means 60%

 

“Prospective Inclusion MV” means the Portfolio Inclusion MV as of the date of
determination but determined as if the trade date or contribution date for any
proposed sale, disposition or acquisition of any Portfolio Asset that has been
identified in a Collateral Change Event Notice (as each such term is defined in
the Equity Contribution Agreement) or in connection with any issuance of Class A
Notes has already occurred

 

“Margin Held” means the aggregate Market Value of all Eligible Margin held by
UBS as Buyer in respect of the Supplemental Margin Amount but not yet returned
to Seller prior to such date of determination.

      Eligible Margin:   USD cash only.

 

 12 

 

 

Net Transaction Exposure:   As of any time, an amount equal to the aggregate
Purchased Securities Exposure Amount of the Purchased Securities under the
Transaction minus an amount equal to the amount of Net Margin provided to Buyer
by Seller excluding Supplemental Margin.       Purchased Securities
Exposure Amount:   In respect of a Purchased Security, an amount equal to:      
    [pg13img01_ex10-5.jpg]   Portfolio Margin Price  

As of any time,

 

(a)         If, at all times from and including the First Purchase Date to and
including such time, the Portfolio Market Price has exceeded 90%, 100%; or

 

(b)          otherwise, the lesser of (a) 100% and (b) the Current Trigger.

      Current Trigger:  

If on any date of determination of Portfolio Market Price,

 

(a)         (i) the Portfolio Market Price as of the prior date of determination
of Portfolio Market Price was at or above a Portfolio Price Trigger and (ii) the
current Portfolio Market Price is below that Portfolio Price Trigger, then the
Current Trigger will be the Portfolio Market Price rounded up to the next
highest Portfolio Price Trigger;

 

(b)          (i) the Portfolio Market Price as of the prior date of
determination of Portfolio Market Price was at or below a Portfolio Price
Trigger and (ii) the current Portfolio Market Price is above that Portfolio
Price Trigger, then the Current Trigger will be the Portfolio Market Price
rounded down to the next lowest Portfolio Price Trigger;

 

(c)         the current Portfolio Market Price is equal to a Portfolio Price
Trigger, then the Current Trigger will be such Portfolio Price Trigger; and

 

(d)         otherwise, the Current Trigger as of the prior date of determination
of Portfolio Market Price.

      Portfolio Market Price   As of any time and as to any Purchased Security,
expressed as a percentage,       [pg13img02_ex10-5.jpg]   Portfolio Price
Triggers   5% and each integer multiple of 5% up to and including 100% (i.e.,
100%, 95%, 90% and so on down to 5%)

 

 13 

 

  

Net Margin:  

The definition of Net Margin in paragraph 2(ee) of the Agreement shall be
deleted in its entirety and replaced with the following:

 

“The ‘Net Margin’ provided to a party at any time shall mean the excess (if any)
at that time of (i) the sum of the amount of Cash Margin paid to that party
(including accrued interest on such Cash Margin which has not been paid to the
other party) under the Margin Maintenance provisions in this Confirmation
(excluding any Cash Margin which has been repaid to the other party) over (ii)
the sum of the amount of Cash Margin paid to the other party (including accrued
interest on such Cash Margin which has not been paid by the other party) under
the Margin Maintenance provisions in this Confirmation (excluding any Cash
Margin which has been repaid by the other party) and for this purpose any
amounts not denominated in the Base Currency shall be converted into the Base
Currency at the Spot Rate prevailing at the relevant time.”

      Timing of Transfer of Eligible Margin:  

Where Eligible Margin is to be transferred under the Margin Maintenance
provisions hereof, unless otherwise agreed between the Parties, if the relevant
notification is received:

 

(i)          on a Business Day at or prior to the Margin Transfer Notification
Time, then the transfer shall be made not later than the close of business on
the same Business Day; and

 

(i)          on a Business Day after the Margin Transfer Notification Time or on
a day that is not a Business Day, then the relevant transfer shall be made not
later than the close of business on the next Business Day after the date such
notification is received.

 

“Margin Transfer Notification Time” means 10:00 am (New York time).

      Portfolio Inclusion MV:   With respect to the Class A Notes on any date of
determination by the Calculation Agent, an amount equal to the sum of (i) with
respect to each Portfolio Asset held by the Issuer on such date, including any
Zero-Value Portfolio Asset, the Initial Market Value of such Portfolio Asset (as
of the date of acquisition), plus (ii) the aggregate amount of all cash held by
the Issuer on such date in, or required to be deposited in, the Principal
Collection Subaccount and Delayed-Draw/Committed Proceeds/Revolver Account, plus
(iii) the aggregate market value of all Eligible Investments held by the Issuer
on such date which are credited, or required to be credited to, to the Principal
Collection Subaccount and Delayed-Draw/Committed Proceeds/Revolver Account.    
  Market Value:  

Notwithstanding paragraph 2(cc) of the Agreement, “Market Value” shall mean:

 

(a)        with respect to cash, the amount of cash;

 

 14 

 

  

   

(b)         with respect to the Class A Notes on any date of determination by
the Calculation Agent, an amount equal to the market value of all such Class A
Notes, calculated as the sum of (i) with respect to each Portfolio Asset, held
by the Issuer on such date other than any Zero-Value Portfolio Asset, the
product of (A) the Current Price with respect to such Portfolio Asset times (B)
the Principal Balance with respect to such Portfolio Asset, in each case on such
date of determination plus (ii) the aggregate amount of all cash held by the
Issuer on such date in, or required to be deposited in, the Principal Collection
Subaccount and Delayed-Draw/Committed Proceeds/Revolver Account, (iii) the
aggregate market value of all Eligible Investments held by the issuer of the
Class A Notes on such date which are credited to, or required to be credited to,
the Principal Collection Subaccount and Delayed-Draw/Committed Proceeds/Revolver
Account.

 

For the avoidance of doubt, Zero-Value Portfolio Assets are excluded from and
thus have a value of zero in the calculation of Market Value.

      Determination of When Assets are Held:  

For purposes of calculating Portfolio Inclusion MV, Market Value pursuant to
clause (b) thereof and the status of an asset (or a portion thereof) as a
Zero-Value Portfolio Asset, with respect to:

 

(a) the Inclusion of any asset which would not, on its Inclusion Date, be a
Zero-Value Portfolio Asset, the Portfolio Asset Trade Date shall be used to
determine whether and when a Portfolio Asset is held by the Issuer; and

 

(b) the Inclusion of any asset which would, on its Inclusion Date, be a
Zero-Value Portfolio Asset, the Business Day preceding the Portfolio Asset Trade
Date with respect to any Inclusion of a Portfolio Asset shall be used to
determine whether and when a Portfolio Asset is held by the Issuer (and, for the
avoidance of doubt, the amount of cash and Eligible Investments held by the
Issuer shall, in the case of an acquisition, be debited by any relevant purchase
price of such asset as of the same date as described below); and

 

(c) the disposition of any asset,

 

(i) where the asset is a Zero-Value Portfolio Asset which is a Defaulted
Obligation, the settlement date for any disposition shall be used to determine
whether and when a Portfolio Asset is held by the Issuer (and, correspondingly,
in the event that the Buyer holds margin, any margin held in respect of such
Defaulted Obligation shall not be released until after the sale proceeds in
respect of such disposition are received) and

 

 15 

 

  

   

(ii) otherwise, (A) where the disposition is to an Approved Dealer on Approved
Terms, the Portfolio Asset Trade Date of such disposition shall be used to
determine whether and when a Portfolio Asset is held by the Issuer and (B)
otherwise the settlement date of such disposition shall be used to determine
whether and when a Portfolio Asset is held by the Issuer.

 

For purposes of calculating Market Value pursuant to clause (a) thereof cash to
be paid or received in relation to acquisition or disposition of an asset shall
be debited or credited as of the date as of which the related asset becomes or
ceases to be held by the Issuer determined in accordance with the preceding
sections.

      Current Price:  

On any date of determination by the Calculation Agent with respect to any
Portfolio Asset, including as of the related Inclusion Date of such Portfolio
Asset, the net cash proceeds (expressed as a percentage of par) that would be
received from the sale of such Portfolio Asset on such date, exclusive of
accrued interest and capitalized interest and net of the related Costs of
Assignment (as defined below), as determined by the Calculation Agent.

 

In the event that the Issuer proposes to engage in a sale of a Portfolio Asset,
the Issuer will notify the Calculation Agent of the proposed buyer, the proposed
sale price and proposed settlement date in accordance with the Indenture. (If
such sale is entered into, it is a "Sale", and the agreed sale price is the
"Sale Price"). After the date on which such notice is received by the
Calculation Agent (the “Sale Notice Date”) and at all times until the settlement
of such transaction, the Current Price (“Sale Adjusted Price”) will be equal to:

 

(a) if such Sale is to an Approved Dealer on Approved Terms, the Sale Price,
exclusive of accrued interest and capitalized interest and net of the related
Costs of Assignment; and

 

(b) if such Sale is not to one of the Approved Dealers or is not on Approved
Terms, the lesser of (i) the Current Price determined as if there were no Sale
and (ii) the Sale Price exclusive of accrued interest and capitalized interest
and net of the related Costs of Assignment.

 

If the Issuer is to sell a Portfolio Asset for a clean price below the Current
Price of such asset (a “Low Sale”), the Seller will be obligated to transfer
additional Eligible Margin required to reflect the use of the Sale Adjusted
Price as the Current Price prior to, and as a condition of, consummation of the
relevant Low Sale. As more fully described in the Indenture, the Issuer may not
consummate such a Low Sale absent receipt by the Issuer and Liquidation Agent of
confirmation from UBS that the relevant additional Eligible Margin has been
received.

 

 16 

 

  

   

“Approved Terms” means terms evidenced in a binding confirmation in market
standard form between Issuer and the buyer under the Sale.

 

“Costs of Assignment” means, with respect to any Portfolio Asset, the sum
(without duplication) of (a) any costs of any exchange, sale, transfer or
assignment transaction with respect to such Portfolio Asset that would be paid
by a hypothetical seller in effecting such transaction under the terms of such
Portfolio Asset or otherwise actually imposed on such hypothetical seller by any
applicable trustee, administrative agent, registrar, borrower or Portfolio Asset
Obligor incurred in connection with any such transaction with respect to such
Portfolio Asset (including, without limitation, any amounts reimbursable by such
person in respect of any tax or other governmental charge incurred with respect
thereto), (b) any reasonable expenses that would be incurred by a hypothetical
seller in connection with any such transaction and (c) any reasonable
administrative, legal or accounting fees, costs and expenses (including, without
limitation, any fees and expenses of the trustee of or outside counsel to the
Portfolio Asset Obligor on such Portfolio Asset) that a would be incurred by a
hypothetical seller in connection with any such transaction.

      Zero-Value Portfolio Asset:  

(a)        Any Portfolio Asset (a) which (i) has a yield-to-maturity greater
than 12.0% (determined as of the Inclusion/Amendment Date) or (ii) is a Senior
Secured (Type III) Loan or (iii) is a Senior Secured (Type IV) Loan (for the
avoidance of doubt, the status for purposes of (ii) and (iii) is also determined
as of the Inclusion/Amendment Date) and (b) for which there does not exist a
written agreement (which may be evidenced by an exchange of emails by duly
authorized persons) between Buyer (acting in its sole discretion, the exercise
of which discretion shall not be affected by any prior exercise thereof by or
other actions or omissions of Buyer) and Seller, entered into prior to, and in
respect of, the related Inclusion/Amendment Date, to the effect that such
Portfolio Asset shall not be a “Zero-Value Portfolio Asset”; provided that any
such Portfolio Asset may subsequently become a Zero-Value Portfolio Asset
pursuant to (b), (c), (d) or (f) of this Section.

 

(b)        Any Portfolio Asset that, at any time after the Inclusion/Amendment
Date on any date of determination by the Calculation Agent, has (i) become, as
determined by the Calculation Agent, a Defaulted Obligation, or (ii) ceased to
comply with any of the Repo Asset Criteria (other than those criteria that, by
their express terms, are tested only at the Inclusion/Amendment Date) or the
Asset Eligibility Criteria;

 

 17 

 

  

   

(c)        Any Illiquid Loan that is deemed to be a Zero-Value Portfolio Asset
as a result of Seller’s failure to comply with the requirements described in the
“Third Party Valuations” provision below;

 

(d)        Any Portfolio Asset which (i) together with any other Portfolio
Assets, has resulted in a breach of any of the Repo Portfolio Criteria; provided
that (i) where a Repo Portfolio Criterion is expressed as a maximum, a Portfolio
Asset shall constitute a Zero-Value Portfolio Asset as a result of a violation
of the Repo Portfolio Criteria only with respect to the portion of such
Portfolio Asset that (together with the equivalent and equal portions of any
other Portfolio Assets which are members of the category subject to such
maximum) causes the failure by the Issuer to satisfy any of the Repo Portfolio
Criteria, allocated across Portfolio Assets by the Buyer (in the case where a
Portfolio Asset violates or causes the violation of more than one of the Repo
Portfolio Criteria) and (ii) where a Repo Portfolio Criterion is expressed as a
minimum, a Portfolio Asset shall constitute a Zero-Value Portfolio Asset as a
result of a violation of the Repo Portfolio Criteria only with respect to the
portion of such Portfolio Asset that (together with the equivalent and equal
portions of any other Portfolio Assets that are not members of the category
subject to such minimum) causes the failure by the Issuer to satisfy any of the
Repo Portfolio Criteria, allocated across Portfolio Assets by the Buyer (in the
case where a Portfolio Asset violates or causes a violation of more than one of
the Repo Portfolio Criteria);

 

(e)        Any Portfolio Asset that does not at the time of Inclusion satisfy
the conditions and requirements set forth in Section 12.2(a) and 12.3(b) of the
Indenture and that has not since such time satisfied such conditions and
requirements; and

 

(f)        Any Portfolio Asset with respect to which Seller took, agreed or
consented to any action under the Collateral Management Agreement, including,
but not limited to, actions relating to voting rights in respect of any
Portfolio Asset, without providing Buyer (acting in its capacity as Liquidation
Agent or otherwise) with any prior or subsequent notice in relation thereto
required by the Collateral Management Agreement within the timeframes set out
therein.

      Zero-Value Portfolio Asset EoD:  

With respect to any asset which would, as of its Inclusion Date, be a Zero-Value
Portfolio Asset due to failure to satisfy the Asset Eligibility Criteria, the
Repo Asset Criteria or Repo Portfolio Criteria, it shall be a “Zero-Value
Portfolio Asset EoD” if the Portfolio Asset Trade Date for the Zero-Value
Portfolio Asset occurs prior to the later of:

 

(a)       one Business Day after the date on which the Issuer notified UBS of
the intended Inclusion of such asset; and

 

 18 

 

  

    (b)      one Business Day after the date on which the Seller posted any
additional Margin required based on recalculation of Market Value in respect of
the asset which would, on Inclusion, be a Zero-Value Portfolio Asset (such
recalculation occurring as of the Business Day preceding the trade date as
described in the “Market Value” provision above).      

Repo Asset Criteria:

 

 

 

 

Criteria satisfied in respect of a Portfolio Asset if:

 

(a)         as of the Inclusion/Amendment Date, if the obligation is (i) not a
Second Lien Loan, the obligation has a legal final maturity not more than 7
years after the related Inclusion Date or (ii) a Second Lien Loan, the
obligation has a legal final maturity not more than 8 years after the related
Inclusion Date;

 

(b)         as of the Inclusion/Amendment Date, the obligation does not by its
terms permit the deferral and/or capitalization of payment of 25% or more
accrued, unpaid interest;

 

(c)         as of the Inclusion/Amendment Date, the United States or the
District of Columbia is the principal place of business for the related
Portfolio Asset Obligor for the obligation;

 

(d)         as of any date of determination by the Buyer, EBITDA for the most
recent consecutive four fiscal quarters (or last twelve months if available) of
the relevant Portfolio Asset Obligor for which financial reports are available
is at least USD 5,000,000 for Senior Secured (Type III) Loans;

 

(e)         as of any date of determination by the Buyer, EBITDA for the most
recent consecutive four fiscal quarters (or last twelve months if available) of
the relevant Portfolio Asset Obligor for which financial reports are available
is at least USD 10,000,000 for all Senior Secured (Type I) Loans, Senior Secured
(Type I Cov-Lite) Loans, Senior Secured (Type II) Loans, Senior Secured (Type
IV) Loans and Senior Secured Last Out (Type I) Loans;

 

(f)          as of any date of determination by the Buyer, EBITDA for the most
recent consecutive four fiscal quarters (or last twelve months if available) of
the relevant Portfolio Asset Obligor for which financial reports are available
is at least USD 15,000,000 for Second Lien Loans;

 

(g)         as of (i) the Inclusion Date and (ii) (A) if a rating is available
as of such Amendment Date, the most recent Amendment Date or (B) otherwise, the
last day of the Asset Valuation Report Period immediately preceding such most
recent Amendment Date, the obligation is rated (including any private rating) by
one of Moody’s, S&P, or has received a credit estimate from Lincoln
International (“Lincoln”), with a rating assigned to the obligation by Moody’s,
S&P, or Lincoln not less than “Caa2”, “CCC”, or “CCC”, respectively;

 

 19 

 

  

   

(h)         as of the Inclusion/Amendment Date, the Current Price of the
obligation is not less than the greater of (i) 70% and (ii) 80% of the value of
the S&P/LSTA US Leveraged Loan 100 Index;

 

(i)         as of any date of determination (including the Inclusion/Amendment
Date), the obligation is denominated and payable solely in USD and is neither
convertible by the related Portfolio Asset Obligor thereof into, nor payable in,
any other currency;

 

(j)          as of the Inclusion/Amendment Date, the obligation is not an ABL
Loan; and

 

(k)          as of the Inclusion/Amendment Date, the obligation is not a Second
Lien Loan which is also a Cov-Lite Loan.

      Repo Portfolio Criteria:  

Criteria that are satisfied on any date of determination by Buyer so long as:

 

(a)         the Aggregate Principal Balance of all Portfolio Assets consisting
of Illiquid Loans does not exceed 87.5% of the RPC Par Value;

 

(b)          the Aggregate Principal Balance of all Portfolio Assets consisting
of Senior Secured (Type I) Loans, Senior Secured (Type II) Loans and Cash
credited or required to be credited to the Principal Collection Subaccount and
Eligible Investments acquired with such Cash is at least 20% of the RPC Par
Value, and the Aggregate Principal Balance of all Portfolio Assets consisting of
Senior Secured (Type I) Loans, Senior Secured (Type II) Loans, Senior Secured
Last Out (Type I) Loans and Cash credited or required to be credited to the
Principal Collection Subaccount and Eligible Investments acquired with such Cash
is at least 40% of the RPC Par Value;

 

(c)         (i) subject to the limited exception in the following clause (ii) ,
the Aggregate Principal Balance of all Portfolio Assets relating to a single
Portfolio Asset Obligor is not more than 7.5% of the RPC Par Value; (ii)
notwithstanding the preceding clause (i), the Aggregate Principal Balance of all
Portfolio Assets relating to three (3) Portfolio Asset Obligors may be up to
10.0% of the RPC Par Value (for purposes of this clause (c), Portfolio Asset
Obligors which are co-borrowers or guarantors will be treated as a single
Portfolio Asset Obligor);

 

 20 

 

  

   

(d)          (i) subject to the limited exceptions in the following clauses (ii)
and (iii), the Aggregate Principal Balance of all Portfolio Assets in any single
S&P Industry Classification Group is not more than 12.0% of the RPC Par Value,
(ii) notwithstanding the preceding clause (i), the Aggregate Principal Balance
of all Portfolio Assets in up to each of three 3) separate S&P Industry
Classification Groups may each be up to 15.0% of the RPC Par Value and (iii)
notwithstanding the preceding clauses (i) and (ii), the Aggregate Principal
Balance of all Portfolio Assets in one (1) S&P Industry Classification Group may
be up to 20% of the RPC Par Value;

 

(e)          the Aggregate Principal Balance of Portfolio Assets that are Senior
Secured (Type III) Loans does not exceed 10% of the RPC Par Value;

 

(f)          the Aggregate Principal Balance of Portfolio Assets that are Middle
Market Illiquid Loans does not exceed 70% of the RPC Par Value;

 

(g)          the Aggregate Principal Balance of Portfolio Assets that are (i)
Delayed-Draw Loans and (ii) Revolver Loans does not exceed 5% of the RPC Par
Value; and

 

(h)          the Aggregate Principal Balance of all Portfolio Assets consisting
of Cov-Lite Loans does not exceed 50.0% of the RPC Par Value.

      S&P Industry Classification Groups:   Each of the categories set forth in
Schedule I hereto.       Third Party Valuations:  

Seller shall procure that the Initial Valuation Company or a Fallback Valuation
Company provide valuations in respect of each Portfolio Asset that was, as of
the related Inclusion Date an Illiquid Loan (an “Asset Valuation Report”) to
Buyer as follows:

 

(a)         with respect to each such Illiquid Loan acquired by the Issuer, on
or before the Inclusion Date of such Illiquid Loan; and

 

(b)         within 20 calendar days of the last day of each Asset Valuation
Report Period, an Asset Valuation Report in respect of each such Illiquid Loan
held by the Issuer as of such date which remains, as of the last day of such
Asset Valuation Report Period, an Illiquid Loan.

 

For purposes of the foregoing, “Asset Valuation Report Period” means each
calendar quarter ending on March 31, June 30, September 30 and December 31.

 

 21 

 

  

    If, on any date of determination by the Calculation Agent, Seller has failed
to procure an Asset Valuation Report in respect of one or more Illiquid Loans in
accordance with the requirements of clause (a) or (b), each such Illiquid Loan
omitted from such Asset Valuation Report shall be deemed to be a Zero-Value
Portfolio Asset until such time as such Illiquid Loan is included in a
subsequent Asset Valuation Report or an equivalent report from the Initial
Valuation Company or a Fallback Valuation Company delivered at any time after
such date of determination (which equivalent report may be requested by Seller
at any time).       Dispute Rights:  

Provided that no Event of Default has occurred and is continuing with respect to
Seller, if Seller in good faith has a commercially reasonable basis for
disagreement with the Calculation Agent’s determination of the Current Price of
any Portfolio Asset, then Seller may dispute such determination by giving notice
of such dispute (a “Dispute Notice”) to Buyer and the Calculation Agent no later
than (i) if Seller receives notice of the Calculation Agent’s determination of a
Current Price in dispute at or prior to noon (New York time) on any Business
Day, by the close of business on such Business Day and (ii) if Seller receives
notice of the Calculation Agent’s determination of a Current Price in dispute
after noon (New York time) on any Business Day, by noon (New York time) on the
following Business Day. Any such Dispute Notice shall specify, in reasonable
detail, the bid-side market price Seller believes should be attributed to any
such Portfolio Asset, along with reasonable evidence supporting such value.

 

Promptly following delivery of a Dispute Notice in relation to any Portfolio
Asset, the Calculation Agent and Seller shall negotiate in good faith to try to
agree to the disputed Current Price. If by 10:00 a.m. (New York time) on the
Business Day following the day on which the Dispute Notice is delivered, the
Calculation Agent and Seller are unable to agree, then:

 

(i)        Seller shall request that the Initial Valuation Company or one of the
Fallback Valuation Companies (in either case, the “Alternate Valuation
Company”), provide an Eligible Valuation to the Calculation Agent;

 

 22 

 

  

   

(A)        if (1) no such Eligible Valuation is received by the Calculation
Agent from the Alternate Valuation Company by 2:00 p.m. (New York time) on the
fifth Business Day following such request (a “Valuation Non-Delivery”) or (2)
the Buyer in good faith disagrees with the Alternate Valuation Company’s
Eligible Valuation (a “Valuation Disagreement”) and the Buyer notifies Seller
and the Calculation Agent of such disagreement on the day such Eligible
Valuation is received by the Seller (the earlier of such fifth Business Day and
the day of such notification, the “Notification Day”), then no later than 10:00
a.m. (New York time) on the Business Day next following the Notification Day,
the Calculation Agent shall deliver a request (a “Back-Up Request”) to one of
the Initial Valuation Company or Fallback Valuation Companies (in any case,
which was not the Alternate Valuation Company) (in any case, a “Back-Up
Valuation Company”) to provide an Eligible Valuation for such disputed Portfolio
Asset; and

 

(B)        the Current Price in relation to such disputed Portfolio Asset shall
be:

 

(1)        if the Alternate Valuation Company provides an Eligible Valuation and
the Calculation Agent does not provide a Back-Up Request, the Resolved Current
Price in relation to the Eligible Valuation provided by the Alternate Valuation
Company;

 

(2)        if the Calculation Agent provides a Back-Up Request and the Back-Up
Valuation Company provides an Eligible Valuation for such disputed Portfolio
Asset by no later than 2:00 p.m. (New York time) on the fifth Business Day
following such request, the Resolved Current Price in relation to the Eligible
Valuation provided by the Back-Up Valuation Company;

 

(3)        if the Calculation Agent provides a Back-Up Request as a result of a
Valuation Non-Delivery and the Back-Up Valuation Company fails to provide an
Eligible Valuation for such disputed Portfolio Asset by no later than 2:00 p.m.
(New York time) on the fifth Business Day following such request, the Current
Price originally determined by the Calculation Agent; and

 

(4)       if the Calculation Agent provides a Back-Up Request as a result of a
Valuation Disagreement and the Back-Up Valuation Company fails to provide an
Eligible Valuation for such disputed Portfolio Asset by no later than 2:00 p.m.
(New York time) on the fifth Business Day following such request, the Eligible
Valuation provided by the Alternate Valuation Company.

 

 23 

 

  

   

If Seller has delivered a Dispute Notice, during the pendency of such dispute,
the Parties shall be required to deliver or return (as applicable) margin based
on the Calculation Agent’s determination in accordance with this Confirmation;
provided that, following resolution of the dispute, the Parties shall be
required to deliver or return (as applicable) margin based on the Current Price
so determined. For the avoidance of doubt, with respect to the dispute of the
Current Price of any Portfolio Asset, upon the determination of such Current
Price in accordance with the foregoing, the Calculation Agent shall recalculate
the relevant Market Value of the related Purchased Securities using such Current
Price for such Portfolio Asset.

 

“Eligible Valuation” shall mean, with respect to any disputed Portfolio Asset, a
valuation (which may be quoted in a range of values) for the outstanding
principal amount of such Portfolio Asset (expressed as a percentage of par) that
would be received from the sale of such Portfolio Asset on the date such
valuation is provided, exclusive of accrued interest and capitalized interest;
and

 

“Resolved Current Price” shall be, with respect to any Eligible Valuation that
is:

 

(I)        quoted as a range of values where the difference between the lowest
and highest values in such range (each expressed as a percentage of par) is an
amount greater than 5% of par, as determined by the Calculation Agent, the
lowest value in such range;

 

(II)        quoted as a range of values where the difference between the lowest
and highest values in such range (each expressed as a percentage of par) is an
amount less than or equal to 5% of par, as determined by the Calculation Agent,
the mid-point between the lowest and highest value in such range, as determined
by the Calculation Agent; and

 

(III)       not quoted as a range of values, such Eligible Valuation.

      Interest on Cash Margin:   The interest rate applicable to Cash Margin
shall be a rate per annum equal to the overnight Federal Funds (Effective) Rate
for each day cash is held as Margin hereunder, as reported in Federal Reserve
Publication H.15-519.       Substitutions:   No substitutions of Purchased
Securities shall be permitted.      

 

 24 

 

  

3       Fees           Transaction Fees:   On each Transaction Fee Payment Date,
for each Purchased Security, Seller shall pay to Buyer an amount equal to the
Transaction Fee Amount for such Purchased Security for the related Transaction
Fee Period.       Transaction Fee Payment Dates:   For each Purchased
Security,  February 19,, May 19, August 19, and November 19, commencing on
August 19, 2017, and ending on (and including) the Repurchase Date for such
Purchased Security, subject to adjustment in accordance with the Business Day
Convention.       Transaction Fee Periods:   For each Purchased Security, each
period from (and including) one Transaction Fee Payment Date for such Purchased
Security to (but excluding) the next following Transaction Fee Payment Date for
such Purchased Security; provided that (a) the initial Transaction Fee Period
shall commence on (and include) the Purchase Date for such Purchased Security
and (b) the final Transaction Fee Period shall end on (and exclude) the
Repurchase Date for such Purchased Security.       Transaction Fee Amounts:  
For each Purchased Security, the Transaction Fee Amount payable by Seller on a
Transaction Fee Payment Date shall be equal to the aggregate amount obtained by
application of the Transaction Fee Rate for the related Transaction Fee Period,
on an actual/360 basis, on each day during the related Transaction Fee Period to
the Repurchase Price outstanding for such Purchased Security.       Transaction
Fee Rate:  

For each Transaction Fee Period, a rate per annum equal to the sum of (a) LIBOR
determined on the Reset Date for such Transaction Fee Period plus (b) the
Spread.

 

Where:

 

Notwithstanding paragraph 2(y) of the Agreement, “LIBOR”, for any Reset Date,
means the London Interbank Offered Rate for the Relevant Period in respect of
USD as quoted on the Bloomberg Screen BTMM Page (or such other page as may
replace the Bloomberg Screen BTMM Page) under the heading “LIBOR-FIX-BBAM<GO>“
(or any replacement heading) as of 11:00 a.m., London time, on the day (the
“Determination Date”) that is two London banking days preceding such date. If
such rate does not appear on the Bloomberg Screen BTMM Page (or any replacement
page) under such heading (or any replacement heading), as of 11:00 a.m., London
time, on such Determination Date, LIBOR will be determined by the Calculation
Agent. For any Transaction Fee Period that is less than the Relevant Period,
LIBOR shall be determined through the use of straight line interpolation by
reference to two rates based on LIBOR, one of which shall be determined as if
the Relevant Period were the period of time for which rates are available next
shorter than the length of the Transaction Fee Period and the other of which
shall be determined as if the Relevant Period were the period of time for which
rates are available next longer than the length of the Transaction Fee Period.

 

 25 

 

  

   

“Relevant Period” means three months.

 

“Reset Date” with respect to any Transaction Fee Period, means the first day of
such Transaction Fee Period.

 

“Spread” means 3.50%.

      4       Miscellaneous           Voting Rights:   Where any voting or
consent rights fail to be exercised in relation to any Purchased Securities,
Buyer shall be entitled to exercise such voting or consent rights in its sole
discretion and shall not have any obligation to arrange for voting or consent
rights to be exercised in accordance with the instructions of Seller.      
Business Day:   Notwithstanding paragraph 2(e) of the Agreement, “Business Day”
means any day on which commercial banks are open for general business (including
dealings in foreign exchange and foreign currency deposits) in New York.      
Business Day Convention:   The convention for adjusting any relevant date if it
would otherwise fall on a day that is not a Business Day so that such date will
be the first following day that is a Business Day.       Unpaid Amounts:   For
the avoidance of doubt, on the final Repurchase Date (whether occurring prior
to, on, or after, the scheduled Repurchase Date, and whether occurring as a
result of an Event of Default, a Prepayment Date, or otherwise), if there are
amounts that became payable by one Party to the other Party on or prior to such
Repurchase Date and which remain unpaid as at such Repurchase Date, such amounts
shall remain an outstanding obligation of such Party and shall be netted with
and set off against the amounts otherwise payable by the Parties on such
Repurchase Date.       Interest on Amounts Payable:   Any amount due from one
party to the other following the occurrence of an Event of Default shall be paid
together with (to the extent permitted under applicable law) interest thereon
(both before and after judgment) in USD, from (and including) the date on which
such amount was originally due to (but excluding) the date such amount is paid,
at a rate per annum equal to the overnight Federal Funds (Effective) Rate for
each day such amount remains outstanding (as reported in Federal Reserve
Publication H.15-519) plus 1% per annum.  Such interest will accrue daily
without compounding based on the actual number of days elapsed. The provisions
of this paragraph shall supersede any conflicting provisions in paragraph 12 of
the Agreement.

 

 26 

 

  

Tax Matters:  

(i) For (and only for) U.S. Federal income tax purposes, each Party agrees: (i)
to treat the purchase hereunder of Purchased Securities consisting of Class A
Notes as if Buyer had made a loan to Seller secured by such Purchased
Securities, (ii) to treat Seller as beneficial owner of such Purchased
Securities, and (iii) not to take any inconsistent position on any related tax
return.

 

(ii) Notwithstanding anything else in the Agreement, if the defaulting Party
exercises its right to assign rights to payment under Paragraph 16(b) of the
Agreement following an Event of Default, if any withholding or other taxes are
imposed on payments to any assignee, the payor’s obligation to gross-up any such
payment in respect of such tax to such assignee shall be limited to the amount
of any gross-up it would have been obligated to pay immediately before any such
assignment occurred.

 

(iii) If either Party exercises its right to assign rights to payment under
Paragraph 16(b) of the Agreement, prior to being entitled to receive any
gross-up payments in respect of any taxes withheld, any assignee will be
required to submit to the payor an executed, complete IRS Form W-8 or W-9 (as
applicable) establishing any available exemption or reduction from any US
withholding taxes that may be imposed on the payment assigned.

      Certain Covenants of Seller:  

(i)       Seller agrees that Seller will not permit any securities to be issued
under the Indenture to any person or entity other than Seller and that Seller
will not direct or permit the Issuer to issue any securities other than in
conjunction with a Purchase Date or otherwise as required under the Indenture or
other transaction documents.

 

(ii)       Seller agrees that Seller will not sell, transfer or otherwise
dispose of any securities issued under the Indenture (or any interest therein)
other than pursuant to the Transaction.

 

(iii)     Seller agrees that if CIC ceases to be a business development company
(within the meaning of the U.S. Investment Company Act of 1940) and to file
publicly-available financials as required of a public business development
company, Seller will provide, or cause to be provided, to Buyer quarterly
unaudited financial statements within 60 days of each quarter-end and annual
audited financial statements within 120 days of the year-end, prepared in
accordance with generally accepted accounting principles (as in effect in the
relevant jurisdiction) (such covenant, the “CIC Financials Requirement”).

 

 27 

 

  

Notification of Events of Default:

 

 

  Each Party shall notify the other Party as soon as reasonably practicable upon
becoming aware of the occurrence of any Event of Default with respect to such
notifying Party or event which with the giving of notice and/or lapse of time
could become an Event of Default with respect to such notifying Party.      
Representations and acknowledgements:  

Unless agreed to the contrary expressly and in writing in this Confirmation and
notwithstanding any communication that each Party (and/or its Affiliates) may
have had with the other Party or any of its Affiliates, in respect of the
Transaction subject to this Confirmation, each Party will be deemed to represent
to the other Party on the Trade Date and each Purchase Date of the Transaction
and on each date on which the Transaction is terminated (in whole or in part)
that:

 

(i)       it is entering into or terminating (in whole or in part) the
Transaction for its own account;

 

(ii)       none of the other Party or any of its Affiliates or agents are acting
as a fiduciary or financial adviser for it;

 

(iii)       it is a sophisticated investor that has made its own independent
decisions to enter into the Transaction, as to whether the Transaction is
appropriate or proper for it and as to any related investment, hedging and/or
trading based upon its own judgment and upon advice from such legal, regulatory,
tax, financial, accounting and other advisers as it has deemed necessary, and
not upon any view expressed by the other Party or any of its Affiliates or
agents;

 

(iv)       it is not relying on any communication (written or oral) of the other
Party or any Affiliate or agent thereof except those expressly set forth in the
Agreement, except that nothing in the Agreement will limit or exclude any
liability of a party for fraud;

 

(v)       it is capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and understands and accepts,
the terms, conditions and risks of the Transaction, and is also capable of
assuming, and assumes, the risks of the Transaction;

 

(vi)        having made all necessary enquiries with relevant authorities, its
entry into or termination (in whole or in part) of the Transaction will not
contravene any applicable law, decree, regulation, regulatory guidance,
regulatory request, regulatory briefing or order of any government or
governmental body (including any court or tribunal); and

 

 

 

 28 

 

  

   

(vii)        to the extent required to do so, it has notified relevant
authorities, in a manner acceptable to such authorities, of its entry into the
Transaction.

 

Unless agreed to the contrary expressly and in writing in this Confirmation and
notwithstanding any communication that each Party (and/or its Affiliates) may
have had with the other Party, in respect of the Transaction subject to this
Confirmation, each Party will be deemed to acknowledge on the date on which it
enters into the Transaction that:

 

(a)        none of the other Party or its Affiliates provides investment, tax,
accounting, legal or other advice in respect of the Transaction;

 

(b)        it has been given the opportunity to obtain information from the
other Party concerning the terms and conditions of the Transaction necessary in
order for it to evaluate the merits and risks of the Transaction; provided that,
notwithstanding the foregoing, (i) it and its advisors are not relying on any
communication (written or oral and including, without limitation, opinions of
third party advisors) of the other Party or its Affiliates as (A) legal,
regulatory, tax, business, investments, financial, accounting or other advice,
(B) a recommendation to enter into the Transaction or (C) an assurance or
guarantee as to the expected results of the Transaction; it being understood
that information and explanations related to the terms and conditions of the
Transaction are made incidental to the other Party’s business and shall not be
considered (x) legal, regulatory, tax, business, investments, financial,
accounting or other advice, (y) a recommendation to enter into the Transaction
or (z) an assurance or guarantee as to the expected results of the Transaction
and (ii) any such communication should not be the basis on which such Party has
entered into the Transaction, and should be independently confirmed by such
Party and its advisors prior to entering into the Transaction;

 

(c)        none of the Parties or any Affiliate thereof has any obligation to,
and it will not, select securities or transfers of currency, with regard to the
needs or interests of any person other than itself, and each Party and its
Affiliates may accept deposits from, make loans or otherwise extend credit to,
and generally engage in any kind of commercial or investment banking business
with the issuer of any Purchased Security or its affiliates or any other person
or entity having obligations relating to the Purchased Securities and may act
with respect to such business in the same manner as if the Transaction did not
exist, regardless of whether any such action may have an adverse effect on
either Party’s position under the Transaction;

 

 29 

 

  

   

(d)       each Party and its Affiliates may, whether by virtue of the types of
relationships described above or otherwise, at the date hereof or at times
hereafter be in possession of information in relation to the issuer of the Class
A Notes which is or may be material in the context of the Transaction and which
is or may not be known to the general public or to one or both of the Parties,
and the Transaction does not create any obligation on the part of any of the
Parties and their respective Affiliates to disclose to either Party any such
relationship or information (whether or not confidential);

 

(e)       neither Party makes any representations or warranties to the other in
connection with, and shall have no responsibility with respect to, the accuracy
of any statements, warranties or representations made in or in connection with
the Purchased Securities, any information contained in any document filed by the
issuer of the Purchased Securities (the “Issuer”) with any exchange or with any
governmental entity regulating the purchase and sale of securities, the solvency
or financial condition of the Issuer, or the legality, validity, binding effect
or enforceability of the obligations of the Issuer in respect of the Purchased
Securities. Each Party acknowledges that it has, independently and without
reliance on the other and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into the
Transaction and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Issuer; and

 

(f)       the Transaction does not create either a direct or indirect obligation
of the Issuer owing to Seller or a direct or indirect participation in any
obligation of the Issuer owing to Buyer. The Seller acknowledges that the Seller
shall not have any voting rights with respect to the Purchased Securities or any
other rights under or with respect to the Purchased Securities, other than as
expressly set forth herein.

 

Each Party acknowledges and agrees that (i) the Transaction to which this
Confirmation relates is (x) a “securities contract”, as defined in Section 741
of the federal Bankruptcy Code, Title 11 of the United States Code, as amended
(the “Bankruptcy Code”) and (y) a “repurchase agreement” as that term is defined
in Section 101 of Title 11 of the Bankruptcy Code (except insofar as the type of
Securities subject to the Transaction or the term of the Transaction would
render such definition inapplicable) and (ii) the exercise by either Party of
any right under the Agreement to cause the liquidation, termination or
acceleration of the Transaction, because of a condition of the kind specified in
Section 365(e)(1) of the Bankruptcy Code shall not be stayed, avoided, or
otherwise limited by operation of any provision of the Bankruptcy Code or by
order of a court or administrative agency in any proceeding under the Bankruptcy
Code.

 

 30 

 

  

Additional Seller Representations:  

The following additional paragraph 9(A), subsections (i) and (ii) shall be
inserted into the Agreement:

 

“9(A). Additional Representations and Notice.

 

(i) Seller Representations. Seller represents and warrants on and as of the date
hereof and on and as of each date this Agreement or any Transaction remains
outstanding:       

 

(A)       No Prohibited Transactions. Seller represents and warrants that Seller
is not an “employee benefit plan” subject to Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) or a “plan” within the meaning
of Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”),
and all investors in Seller acquire “publicly-offered securities” within the
meaning of 29 CFR § 2510.3-101. Any subsequent permitted assignee of Seller will
be deemed to have represented and warranted, that (i) no portion of the assets
used by such assignee to either (x) acquire and hold the Class A Notes or (y)
enter into or assume the obligations under the Transaction evidenced hereby
constitutes the assets of any employee benefit plan subject to Title I of ERISA,
a “governmental plan” within the meaning of Section 3(32) of ERISA, or a “plan”
within the meaning of Section 4975(e)(1) of the Code or (ii) both the purchase
and holding of such Class A Notes by such assignee and the assumption of the
obligations under the Transaction evidenced hereby will constitute neither (x) a
non-exempt “prohibited transaction” under (and as defined in) Section 406 of
ERISA or Section 4975 of the Code nor (y) a similar violation under any
applicable similar federal, state, local, non-U.S. or other law, rule or
regulation.

 

(B)         Notice Requirement. Seller agrees to notify Buyer immediately if any
time it learns or discovers facts at variance with the foregoing representations
and warranties.

 

(C)        Seller has not incurred any Indebtedness, or any other liability
(including, but not limited to, in respect of any option, swap, repurchase
agreement, securities forward transaction or securities lending agreement) other
than as contemplated by the terms of this Agreement or any agreement or
instrument contemplated hereby.”

 

 31 

 

  

   

(ii) Seller represents and warrants that its acquisition of the Class A Notes
complied with the terms of the Indenture and Class A Notes.

 

(iii) Seller represents and warrants that either (i) the Purchased Securities
are not required to be retained by the Collateral Manager (or a “majority owned
affiliate” of the Collateral Manager) pursuant to Section 15G of the Securities
Exchange Act of 1934 and the rules promulgated thereunder (the “Risk Retention
Rules”) or (ii) the Purchased Securities are required to be retained by the
Collateral Manager (or a “majority owned affiliate” of the Collateral Manager)
pursuant to the Risk Retention Rules and the entry by the Collateral Manager (or
a “majority owned affiliate” of the Collateral Manager) into the transactions
contemplated by the Collateral Management Agreement will not violate or conflict
with the Risk Retention Rules.

      Transfer; Assignment; Amendment;   Neither Buyer nor Seller will have the
right to transfer, assign, amend, modify or supplement the Agreement or this
Confirmation or any interest or obligation or right or benefit received in or
under the Agreement or this Confirmation without the prior written consent of
each party.       Disapplication and Modification of Provisions of the Annex I:
 

(a) The following provisions of Annex I to the Agreement shall not apply to the
Transaction evidenced by this Confirmation:

 

Parts 1(a), 1(b)(ii), 1(d), 1(f), 1(j), 1(m), 1(n), 2(b), 2(c), 2(i), 2(k), 2(r)
and 2(s)(ii) of Annex I.

      Counterparts Clause:   This Confirmation may be signed or executed in any
number of counterparts, and by each Party on separate counterparts. Each
counterpart is an original but shall not be effective until each Party has
executed and delivered at least one counterpart. All counterparts together shall
constitute one and the same instrument. This has the same effect as if the
signatures on the counterparts were on a single original of this Confirmation.
Delivery of an executed counterpart signature page of this Confirmation by email
(portable document format (“pdf”)) or facsimile copy shall be as effective as
delivery of a manually executed counterpart of this Confirmation.       No
effect, Inconsistency:   The terms set forth in the Confirmation for this trade
shall apply only to the Transaction.       Buyer’s Bank Account Details:  

Account Name:

SWIFT BIC Code:

For the benefit of:

 

SWIFT BIC Code:

 

Account No.:

 

 32 

 

  

Seller’s Bank Account Details:   As specified separately to Buyer from Seller.  
    Notices:  

If to Seller:

 

Address: Murray Hill Funding, LLC 

Three Park Avenue, 36th Floor
New York, NY 10016
Attention: Keith Franz
Telephone: 212 418 4710
Email: kfranz@cioninvestments.com

 

If to Buyer:

 

As specified in the Annex to the Agreement.

      Limited Recourse:   Buyer acknowledges that it shall have recourse solely
to the assets of the Seller and that nothing contained in this Confirmation
shall create any liability or obligation of any other person or entity. Buyer
further agrees that: (i) the Buyer shall have no recourse or claim against any
stockholder, partner, member or other holder of any interest in or security of
the Seller, or against any controlling person of the Seller or any of the
Seller’s officers, directors employees (collectively the “Related Persons”);
(ii) the Buyer shall have no claim against the Seller or any Related Person for
any failure to maintain capital except as expressly required in the
Confirmation; and (iii) the Buyer shall not seek the substantive consolidation
of the Seller with any other person or entity, including any of the Related
Persons.       Additional Defined Terms:  

The following terms shall have the respective meanings specified below:

 

“ABL Loan” means any Loan secured by a first priority perfected security
interest in or other lien on, and as to which the maximum aggregate principal
amount thereof that may be outstanding under the related Underlying Instrument
is limited by a formula computed (no less frequently than monthly) by reference
to, one or more of accounts receivable, inventory, machinery, equipment and
other fixed assets (other than real estate).

 

“Account” has the meaning given to such term in the Indenture.

 

“Aggregate Outstanding Amount”, on any date with respect to the Class A Notes,
has the meaning given to such term in the Indenture.

 

“Aggregate Portfolio Par Value” means, on any date of determination, the
Aggregate Principal Balance of (a) all Portfolio Assets plus (b) all Cash
credited or required to be credited to the Principal Collection Subaccount and
Eligible Investments acquired with such Cash.

 

 

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“Aggregate Principal Balance” means, when used with respect to all or a portion
of the Portfolio Assets or the Collateral, the sum of the Principal Balances of
all or of such portion of the Portfolio Assets or Collateral, as applicable.

 

“Amendment Date” means, with respect to any Portfolio Asset, the effective date
of any amendment or action described in Section 2(o) of the Collateral
Management Agreement.

 

“Approved Dealer” means each of Antares Capital, BMO Capital Markets Corp., Bank
of America, N.A., Barclays Bank plc, BNP Paribas, Cantor Fitzgerald & Co.,
Citigroup, Credit Agricole S.A., Credit Suisse, Deutsche Bank AG, Goldman Sachs
& Co., Guggenheim Securities, Jefferies & Company, Inc., JPMorgan Chase Bank,
N.A., Keybanc Capital Markets Inc., Macquarie Capital (USA) Inc., Morgan Stanley
& Co., Nomura Securities Inc., Royal Bank of Canada, SunTrust Bank, Scotia
Capital (USA) Inc., Societe Generale, and The Royal Bank of Scotland plc, UBS
AG, and Wells Fargo Bank, N.A. or any Affiliates; provided that (a) the
Calculation Agent may at any time, upon written notice to Seller, delete any
name from such list so long as such deletion is consistent with the general
application of its internal credit policies with respect to such Approved Dealer
and (b) the Calculation Agent and Seller may, at any time, agree in writing to
add or remove an Approved Dealer to or from such list.

 

“Asset Eligibility Criteria” has the meaning given to such term in the
Indenture.

 

“Cash” has the meaning given to such term in the Indenture.

 

“Class A Notes” means the Class A Notes issued under the Indenture.

 

“Collateral” has the meaning given to such term in the Indenture.

 

“Collateral Management Agreement” has the meaning given to such term in the
Indenture.

 

“Collateral Manager” has the meaning given to such term in the Indenture.

 

“Consolidated Leverage Ratio” means, as of any date of determination with
respect to any Portfolio Asset Obligor and a particular Portfolio Asset of such
Portfolio Asset Obligor, the ratio of:

 

(a)        the Principal Balances of such Portfolio Asset and the outstanding
principal amount of all other Indebtedness of such Portfolio Asset Obligor and
its Subsidiaries that is of equal or higher seniority with such Portfolio Asset
and is secured by a similar ranking lien or security interest in the same
collateral as of such date of calculation that would be stated on a consolidated
balance sheet (excluding any notes thereto); provided that, for purposes of this
definition only, the amount of Indebtedness shall be determined only to the
extent that it has been advanced such that any undrawn amount thereunder shall
not constitute Indebtedness for purposes of this clause (a); to

 

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(b)        EBITDA of such Portfolio Asset Obligor for the four fiscal quarters
(or last twelve months if available) for which financial reports are available
for such Portfolio Asset Obligor.

 

“Cov-Lite Loan” means a Loan (a) which is a Non-Markit Loan and (b) with respect
to which the Underlying Instrument does not include any financial covenants with
which compliance is determined on an ongoing maintenance basis.

 

“Daily Report” has the meaning given to such term in the Indenture.

 

“Defaulted Obligation” has the meaning given to such term in the Indenture.

 

“Delayed-Draw Loan” has the meaning given to such term in the Indenture.

 

“EBITDA” means with respect to any Portfolio Asset and any period, (a) the
meaning of the term “Adjusted EBITDA”, the term “EBITDA” or any comparable
definition in the related Underlying Instrument for such period and Portfolio
Asset Obligor, as reported for such period pursuant to the related Underlying
Instrument, and (b) in any case that the term “Adjusted EBITDA”, the term
“EBITDA” or such comparable definition is not defined in such Underlying
Instrument, the sum of (i) the consolidated net income for such period of the
relevant Portfolio Asset Obligor on such Portfolio Asset, plus (ii) to the
extent deducted in calculating such consolidated net income, the sum for such
period of all income tax expense, interest expense, depreciation and
amortization expense and all other non-cash charges, in the case of each of the
foregoing clauses, as reported for such period pursuant to (and in accordance
with the relevant definitions contained in) the related Underlying Instrument;
provided that (x) the relevant Portfolio Asset Obligor referred to above in this
definition shall be the Portfolio Asset Obligor for which consolidated financial
statements are required to be delivered under the related Underlying Instrument
(and, if there is more than one such Portfolio Asset Obligor, for the Portfolio
Asset Obligor with the greatest consolidated aggregate indebtedness for borrowed
money as of the last day of such period) and (y) if the Calculation Agent
determines on a commercially reasonable basis that “Adjusted EBITDA” or “EBITDA”
as reported for such period pursuant to the related Underlying Instrument is not
computed in accordance with generally accepted financial practice for similar
transactions, then “EBITDA” shall mean “Consolidated EBITDA” (determined on a
consolidated basis based upon the Calculation Agent’s selection in good faith of
a definition of “Consolidated EBITDA” that accords with generally accepted
financial practice) in relation to the relevant Portfolio Asset Obligor and its
consolidated subsidiaries for such period.

 

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“Eligible Investments” has the meaning given to such term in the Indenture.

 

“Equity Contribution Agreement” has the meaning given to such term in the
Indenture.

 

“Expense Account” has the meaning given to such term in the Indenture.

 

“Fallback Valuation Company” means any of Houlihan Lokey, Inc., Duff & Phelps
Corporation or Valuation Research Corporation.

 

“Governmental Authority” means the government of the United States of America or
any other nation, or of any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).

 

“Illiquid Loan” means a Loan which is not a Liquid Loan.

 

“Inclusion” means a substitution or contribution of Portfolio Assets to the
Issuer pursuant to the Equity Contribution Agreement or any other acquisition of
Portfolio Assets by the Issuer.

 

“Inclusion Date” means (a) in the case of a substitution or contribution of
Portfolio Assets to the Issuer pursuant to the Equity Contribution Agreement,
the settlement date of substitution or contribution or (b) in the case of any
other acquisition thereof by the Issuer, the Portfolio Asset Trade Date for the
acquisition thereof by the Issuer.

 

“Indebtedness” has the meaning given to such term in the Indenture.

 

“Indenture” means the Indenture dated as of March 22, 2017, between Murray Hill
Funding II, LLC and U.S. Bank National Association, as trustee, as amended,
supplemented or otherwise modified from time to time.

 

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“Indenture Event of Default” means an “Event of Default” (as defined in the
Indenture) occurs with respect to the Issuer under the Indenture.

 

“Initial Market Value” has the meaning given to such term in the Indenture.

 

“Initial Valuation Company” means Lincoln.

 

“Lien” has the meaning given to such term in the Indenture.

 

“Liquid Loan” means any Loan which is the subject of at least two bid quotations
as reported on Markit (or any successor nationally recognized loan pricing
service designated by the Buyer).

 

“Liquidation Agent” has the meaning given to such term in the Indenture.

 

“Loan” has the meaning given to such term in the Indenture.

 

“Markit” means Markit Ltd. and any of its subsidiaries, or any successor
thereto.

 

“Middle Market Illiquid Loan” means any obligation which (a) is an Illiquid Loan
and (b) with respect to which the relevant Obligor's EBITDA for the most recent
four fiscal quarters (or last twelve months if available) for which financial
reports are available is less than $40,000,000.

 

“Moody’s” has the meaning given to such term in the Indenture.

 

“Non-Markit Loan” means any Loan for which prices are not reported on Markit (or
any successor nationally recognized loan pricing service designated by the
Buyer).

 

“Portfolio Asset” has the meaning given to such term in the Indenture, provided
that when the relevant asset is held by the Issuer, this definition shall be
subject to “Determination of When Assets are Held” above.

 

“Portfolio Asset Obligor” has the meaning given to such term in the Indenture.

 

“Portfolio Asset Trade Date” means the date on which the Issuer enters into an
agreement to purchase or sell a Portfolio Asset pursuant to an Issuer Order, as
such term is defined in the Indenture, given by the Collateral Manager.

 

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“Principal Balance” has the meaning given to such term in the Indenture.

 

“Priority Loan Leverage Ratio” means of any date of determination with respect
to any Portfolio Asset Obligor and a particular Portfolio Asset of such
Portfolio Asset Obligor which is a Senior Secured Last Out Loan, the ratio of:

 

(a)        the outstanding principal amount of the Senior Secured First Out Loan
relating to such Senior Secured Last Out Loan, to

 

(b)        EBITDA for the four fiscal quarters (or last twelve months if
available) for which financial reports are available for such Portfolio Asset
Obligor

 

“Revolver Loan” has the meaning given to such term in the Indenture.

 

“Priority Revolving Loan” means, as of any date of determination with respect to
any Portfolio Asset Obligor and a particular Portfolio Asset of such Portfolio
Asset Obligor, the Indebtedness of such Portfolio Asset Obligor and its
Subsidiaries in the form of a Revolver Loan that when it is drawn (x) ranks
senior to such Portfolio Asset and (y) is secured by a senior ranking lien or
security interest in a portion of the same collateral as of such date of
calculation that would be stated on a consolidated balance sheet.

 

“Priority Revolving Loan Leverage Ratio” means, as of any date of determination
with respect to any Portfolio Asset Obligor and a particular Portfolio Asset of
such Portfolio Asset Obligor, the ratio of:

 

(a)        the outstanding principal amount of the Priority Revolving Loan(s)
relating to such Portfolio Asset determined on the assumption that the maximum
aggregate amount that can be borrowed under such Priority Revolving Loan(s) has
already been fully advanced such that any undrawn amount thereunder shall
constitute outstanding principal amount for purposes of this definition; to

 

(b)        EBITDA of such Portfolio Asset Obligor for the four fiscal quarters
(or last twelve months if available) for which financial reports are available
for such Portfolio Asset Obligor.

 

“RPC Par Value” means (a) prior to the Second Purchase Date, the Aggregate
Portfolio Par Value plus the Second Purchase Date Required Additional Amount and
(b) thereafter, the Aggregate Portfolio Par Value.

 

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“S&P” has the meaning given to such term in the Indenture.

 

“Second Lien Loan” means any Loan that:

 

(a)       would be a Senior Secured Loan but for the fact that it is
subordinated (in right of payment, liens or otherwise) to a Senior Secured Loan
of the Portfolio Asset Obligor(s) other than a Priority Revolving Loan; (ii) is
secured by a valid second-priority perfected security interest in or Lien on
(second only to a security interest or Lien securing a Senior Secured Loan)
collateral consisting of all or substantially all the assets of the Portfolio
Asset Obligor(s) (and in any event substantially all its assets securing any
other Indebtedness); and (iii) is not secured solely or primarily by common
stock or other equity interests; provided that the limitation set forth in this
clause (iii) shall not apply with respect to a Loan made to a parent entity that
is secured solely or primarily by the stock of one or more of the subsidiaries
of such parent entity to the extent that (x) the granting by any such subsidiary
of a Lien on its own property would violate law or regulations applicable to
such subsidiary (whether the obligation secured is such Loan or any other
similar type of Indebtedness owing to third parties) and (y) its own property is
not subject to a Lien securing any Indebtedness(any Second Lien Loan described
in this clause (a), a “Traditional Second Lien Loan”); or

 

(b)       is a Senior Secured Last Out (Type II) Loan.

 

“Seller’s Investment Manager” means any of (i) CĪON Investment Management, LLC
or its successors or Affiliates; (ii) Apollo Investment Management, L.P. or its
successors or Affiliates or (iii) another investment manager selected by Seller
and reasonably acceptable to Buyer.

 

“Senior Secured First Out Loan” has the meaning assigned to such term in the
definition of “Senior Secured Last Out Loan” herein.

 

“Senior Secured Last Out Loan” means any Loan that would be a Senior Secured
Loan but for the fact that its terms provide that the payment of principal
thereon, either prior to or after any default, event of default, financial
covenant test failure or other event, is to occur after the payment of principal
of any other term loan(s) (each such other term loan, a “Senior Secured First
Out Loan”) under the same credit facility.

 

“Senior Secured Last Out (Type I) Loan” means any Senior Secured Last Out Loan
for which (a) the Priority Loan Leverage Ratio with respect to such Senior
Secured Last Out Loan and the related Portfolio Obligor(s) is less than 1.25x
and (b) the Consolidated Leverage Ratio with respect to such Senior Secured Last
Out Loan and the related Portfolio Obligor(s) is less than 4.5x.

 

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    “Senior Secured Last Out (Type II) Loan” means any Senior Secured Last Out
Loan that is not a Senior Secured Last Out (Type I) Loan.          

“Senior Secured Loan” means any Loan that (i) is not (and by its terms is not
permitted to become) subordinated in right of payment, liens or otherwise to any
other obligation of the Portfolio Asset Obligor(s) of such Loan, including any
other obligation under the same credit facility, other than any Priority
Revolving Loan, and (ii) is secured by a valid first priority perfected security
interest in or Lien on collateral consisting of all or substantially all the
assets of the Portfolio Asset Obligor(s), other than those assets securing any
Priority Revolving Loan, as to which it is secured by a valid second priority
perfected security interest in or Lien on collateral consisting of all the
assets securing such Priority Revolving Loan.

 

“Senior Secured (Type I) Loan” means any Senior Secured Loan that (a) has an
applicable margin or other stated coupon less than (or equal to) 9.0%, including
for such purposes any non-cash portion thereof but excluding for such purposes
any portion thereof derived from the London interbank offered rate, base rate or
other applicable fixed or floating reference rate, (b) has Portfolio Asset
Obligor(s) with EBITDA for the most recent four fiscal quarters (or last twelve
months if available) for which financial reports are available greater than or
equal to $25,000,000, (c) has a Consolidated Leverage Ratio with respect to such
Senior Secured Loan and the related Portfolio Obligor(s) which is less than or
equal to 5.2x, and (d) if there is a Priority Revolving Loan with respect to
such Senior Secured Loan, has a Priority Revolving Loan Leverage Ratio with
respect to such Senior Secured Loan and the related Portfolio Asset Obligor(s)
which is less than or equal to 1.75x.

 

“Senior Secured (Type I Cov-Lite) Loan” means any Senior Secured (Type I) Loan
(a) which is a Cov-Lite Loan and (b) has a Consolidated Leverage Ratio with
respect to such Senior Secured Loan and the related Portfolio Obligor(s) which
is greater than or equal to 3.5x.

 

“Senior Secured (Type II) Loan” means any Senior Secured Loan that (a) has an
applicable margin or other stated coupon less than (or equal to) 9.0%, including
for such purposes any non-cash portion thereof but excluding for such purposes
any portion thereof derived from the London interbank offered rate, base rate or
other applicable fixed or floating reference rate portion thereof, (b) has
Portfolio Asset Obligor(s) with EBITDA for the most recent four fiscal quarters
(or last twelve months if available) for which financial reports are available
less than $25,000,000 and equal to or greater than $10,000,000, (c) has a
Consolidated Leverage Ratio with respect to such Senior Secured Loan and the
related Portfolio Obligor(s) which is less than or equal to 5.2x, (d) if there
is a Priority Revolving Loan with respect to such Senior Secured Loan, has a
Priority Revolving Loan Leverage Ratio with respect to such Senior Secured Loan
and the related Portfolio Asset Obligor(s) which is less than or equal to 1.75x
and (e) is not a Cov-Lite Loan.

 

 

 40 

 

  

   

“Senior Secured (Type III) Loan” means any Senior Secured Loan that has
Portfolio Asset Obligor(s) with EBITDA for the most recent four fiscal quarters
(or last twelve months if available) for which financial reports are available
of less than $10,000,000.

 

“Senior Secured (Type IV) Loan” means (i) any Senior Secured Loan that would
otherwise be a Senior Secured (Type I) Loan or Senior Secured (Type II) Loan but
for the fact that such Loan does not meet the requirements set forth in clause
(a), (c), (d) or, solely in the case of a Senior Secured Loan which would
otherwise be a Senior Secured (Type II) Loan, (e) of the applicable definition
or (ii) any Senior Secured Loan that would otherwise be a Senior Secured (Type I
Cov-Lite) Loan but for the fact that such Loan does not meet the requirements
set forth in clause (b) of the definition of Senior Secured (Type I Cov-Lite)
Loan.

 

“Subsidiary” has the meaning given to such term in the Indenture.

 

“Transaction Documents” has the meaning given to such term in the Indenture.

 

“Traditional Second Lien Loan” has the meaning assigned to such term in the
definition of “Second Lien Loan” herein.

 

“Underlying Instrument” has the meaning given to such term in the Indenture.

      Determination of Status of Certain Portfolio Assets:  

For purposes hereof, whether any Portfolio Asset meets the criteria of any of
the following definitions shall be determined by the Buyer as of the latest of
(a) the Inclusion Date for such Portfolio Asset and (b) the most recent
Amendment Date for such Portfolio Asset (such latest date, the
“Inclusion/Amendment Date”):

 

(1) ABL Loan;

 

(2) Cov-Lite Loan;

 

(3) Illiquid Loan;

 

(4) Liquid Loan;

 

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    (5) Middle Market Illiquid Loan;           (6) Second Lien Loan;          
(7) Senior Secured First Out Loan;           (8) Senior Secured Last Out Loan;  
        (9) Senior Secured Last Out (Type I) Loan;           (10) Senior Secured
Last Out (Type II) Loan;           (11) Senior Secured Loan;           (12)
Senior Secured (Type I) Loan;           (13) Senior Secured (Type I Cov-Lite)
Loan           (14) Senior Secured (Type II) Loan;           (15) Senior Secured
(Type III) Loan;           (16) Senior Secured (Type IV) Loan; and          
(17) Traditional Second Lien Loan.

 

[signatures follow on the next page]

 

 42 

 

  

By executing this Confirmation and returning it to us, Seller confirms that the
foregoing correctly sets out the terms of the agreement of the Parties.

 

Yours faithfully         UBS AG, London Branch,   In its individual capacity and
as Calculation Agent       By: /s/ Trevor Spencer   Name:  Trevor Spencer  
Title: Authorized Signatory         By:  /s/ Ben Stewart   Name:  Ben Stewart  
Title: Authorized Signatory         Confirmed as of the date first above
written:       MURRAY HILL FUNDING, LLC         By:  /s/ Michael A. Reisner  
Name: Michael A. Reisner   Title: Co-CEO  

 

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SCHEDULE I

 

S&P INDUSTRY CLASSIFICATION GROUPS

 

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