FS KKR Capital Corp 8-K [fsk-8k_062519.htm]

 

Exhibit 10.1

 

EXECUTION VERSION

 

FS KKR MM CLO 1 LLC
Issuer

 

U.S. BANK NATIONAL ASSOCIATION
Trustee

 

INDENTURE

 

Dated as of June 25, 2019

 

 

 

 

TABLE OF CONTENTS

 

        Page           PRELIMINARY STATEMENT   1       GRANTING CLAUSES   1    
  ARTICLE I DEFINITIONS   2       Section 1.1.   Definitions   2 Section 1.2.  
Assumptions as to Assets   73           ARTICLE II THE NOTES   77       Section
2.1.   Forms Generally   77 Section 2.2.   Forms of Notes   77 Section 2.3.  
Authorized Amount; Stated Maturity; Denominations   79 Section 2.4.   Execution,
Authentication, Delivery and Dating   80 Section 2.5.   Registration,
Registration of Transfer and Exchange   81 Section 2.6.   Mutilated, Defaced,
Destroyed, Lost or Stolen Note   94 Section 2.7.   Payment of Principal and
Interest and Other Amounts; Principal and Interest Rights Preserved   94 Section
2.8.   Persons Deemed Owners   98 Section 2.9.   Cancellation   98 Section 2.10.
  DTC Ceases to be Depository   98 Section 2.11.   Notes Beneficially Owned by
Persons Not QIB/QPs or IAI/QPs or in Violation of ERISA Representations or
Holder Reporting Obligations   99 Section 2.12.   Deduction or Withholding from
Payments on Notes; No Gross Up.   100 Section 2.13.   Additional Issuance   101
Section 2.14.   Issuer Purchases of Notes   104           ARTICLE III CONDITIONS
PRECEDENT   106       Section 3.1.   Conditions to Issuance of Notes on Closing
Date   106 Section 3.2.   Conditions to Additional Issuance   110 Section 3.3.  
Delivery of Collateral Obligations and Eligible Investments   111          
ARTICLE IV SATISFACTION AND DISCHARGE; ILLIQUID ASSETS; LIMITATION ON
ADMINISTRATIVE EXPENSES   112       Section 4.1.   Satisfaction and Discharge of
Indenture   112 Section 4.2.   Application of Trust Money   114 Section 4.3.  
Repayment of Monies Held by Paying Agent   114 Section 4.4.   Disposition of
Illiquid Assets   114 Section 4.5.   Limitation on Obligation to Incur
Administrative Expenses   115           ARTICLE V REMEDIES   116       Section
5.1.   Events of Default   116 Section 5.2.   Acceleration of Maturity;
Rescission and Annulment   118 Section 5.3.   Collection of Indebtedness and
Suits for Enforcement by Trustee   119

 

 -i-

 

 

TABLE OF CONTENTS

(continued)

 

        Page           Section 5.4.   Remedies   121 Section 5.5.   Optional
Preservation of Assets   123 Section 5.6.   Trustee May Enforce Claims Without
Possession of Notes   125 Section 5.7.   Application of Money Collected   125
Section 5.8.   Limitation on Suits   125 Section 5.9.   Unconditional Rights of
Holders to Receive Principal and Interest   126 Section 5.10.   Restoration of
Rights and Remedies   127 Section 5.11.   Rights and Remedies Cumulative   127
Section 5.12.   Delay or Omission Not Waiver   127 Section 5.13.   Control by
Supermajority of Controlling Class   127 Section 5.14.   Waiver of Past Defaults
  128 Section 5.15.   Undertaking for Costs   128 Section 5.16.   Waiver of Stay
or Extension Laws   129 Section 5.17.   Sale of Assets   129 Section 5.18.  
Action on the Notes   130           ARTICLE VI THE TRUSTEE   130       Section
6.1.   Certain Duties and Responsibilities   130 Section 6.2.   Notice of
Default   133 Section 6.3.   Certain Rights of Trustee   133 Section 6.4.   Not
Responsible for Recitals or Issuance of Notes   137 Section 6.5.   May Hold
Notes   137 Section 6.6.   Money Held in Trust   137 Section 6.7.   Compensation
and Reimbursement   137 Section 6.8.   Corporate Trustee Required; Eligibility  
139 Section 6.9.   Resignation and Removal; Appointment of Successor   140
Section 6.10.   Acceptance of Appointment by Successor   141 Section 6.11.  
Merger, Conversion, Consolidation or Succession to Business of Trustee   142
Section 6.12.   Co-Trustees   142 Section 6.13.   Certain Duties of Trustee
Related to Delayed Payment of Proceeds   143 Section 6.14.   Authenticating
Agents   144 Section 6.15.   Withholding   144 Section 6.16.   Representative
for Holders Only; Agent for each other Secured Party   145 Section 6.17.  
Representations and Warranties of the Bank   145           ARTICLE VII COVENANTS
  146       Section 7.1.   Payment of Principal and Interest   146 Section 7.2.
  Maintenance of Office or Agency   146 Section 7.3.   Money for Note Payments
to be Held in Trust   146 Section 7.4.   Existence of Issuer   148 Section 7.5.
  Protection of Assets   149

 

 -ii-

 

 

TABLE OF CONTENTS

(continued)

 

        Page           Section 7.6.   Opinions as to Assets   150 Section 7.7.  
Performance of Obligations   150 Section 7.8.   Negative Covenants   151 Section
7.9.   Statement as to Compliance   153 Section 7.10.   Issuer May Consolidate,
Etc., Only on Certain Terms   153 Section 7.11.   Successor Substituted   155
Section 7.12.   No Other Business   155 Section 7.13.   Acknowledgment of
Portfolio Manager Standard of Care   156 Section 7.14.   Ratings; Review of
Credit Estimates   156 Section 7.15.   Reporting   156 Section 7.16.  
Calculation Agent   157 Section 7.17.   Certain Tax Matters   158 Section 7.18.
  Effective Date; Purchase of Additional Collateral Obligations   158 Section
7.19.   Representations Relating to Security Interests in the Assets   161
Section 7.20.   Rule 17g-5 Compliance   163 Section 7.21.   Contesting
Insolvency Filings   164 Section 7.22.   Use of Name   165           ARTICLE
VIII SUPPLEMENTAL INDENTURES   165       Section 8.1.   Supplemental Indentures
Without Consent of Holders   165 Section 8.2.   Supplemental Indentures With
Consent of Holders   170 Section 8.3.   Execution of Supplemental Indentures  
172 Section 8.4.   Effect of Supplemental Indentures   174 Section 8.5.  
Reference in Notes to Supplemental Indentures   174 Section 8.6.   Re-Pricing
Amendment   174           ARTICLE IX REDEMPTION OF NOTES   174       Section
9.1.   Mandatory Redemption   174 Section 9.2.   Optional Redemption   174
Section 9.3.   Tax Redemption   178 Section 9.4.   Redemption Procedures   179
Section 9.5.   Notes Payable on Redemption Date   181 Section 9.6.   Special
Redemption   182 Section 9.7.   Clean-Up Call Redemption   182 Section 9.8.  
Re-Pricing of the Notes   184           ARTICLE X ACCOUNTS, ACCOUNTING AND
RELEASES   187       Section 10.1.   Collection of Money   187 Section 10.2.  
Collection Account   188 Section 10.3.   Transaction Accounts   191 Section
10.4.   The Revolver Funding Account   194 Section 10.5.   [Reserved]   195
Section 10.6.   Reinvestment of Funds in Accounts; Reports by Trustee   195

 

 -iii-

 

 

TABLE OF CONTENTS

(continued)

 

        Page           Section 10.7.   Accountings   197 Section 10.8.   Release
of Assets   206 Section 10.9.   Reports by Independent Accountants   208 Section
10.10.   Reports to Rating Agencies and Additional Recipients   209 Section
10.11.   Procedures Relating to the Establishment of Accounts Controlled by the
Trustee   210 Section 10.12.   Section 3(c)(7) Procedures   210          
ARTICLE XI APPLICATION OF MONIES   211       Section 11.1.   Disbursements of
Monies from Payment Account   211           ARTICLE XII SALE OF COLLATERAL
OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS    218       Section
12.1.   Sales of Collateral Obligations   218 Section 12.2.   Purchase of
Additional Collateral Obligations   221 Section 12.3.   Conditions Applicable to
All Sale and Purchase Transactions   224 Section 12.4.   Exchange Transactions  
225 Section 12.5.   Optional Repurchase or Substitution of Collateral
Obligations.   226           ARTICLE XIII HOLDERS’ RELATIONS   229       Section
13.1.   Subordination   229 Section 13.2.   Standard of Conduct   230          
ARTICLE XIV MISCELLANEOUS   230       Section 14.1.   Form of Documents
Delivered to Trustee   230 Section 14.2.   Acts of Holders   231 Section 14.3.  
Notices, etc., to Certain Parties   232 Section 14.4.   Notices to Holders;
Waiver   234 Section 14.5.   Effect of Headings and Table of Contents   235
Section 14.6.   Successors and Assigns   235 Section 14.7.   Severability   236
Section 14.8.   Benefits of Indenture   236 Section 14.9.   Legal Holidays   236
Section 14.10.   Governing Law   236 Section 14.11.   Submission to Jurisdiction
  236 Section 14.12.   Waiver of Jury Trial   237 Section 14.13.   Counterparts
  237 Section 14.14.   Acts of Issuer   237 Section 14.15.   Confidential
Information   238           ARTICLE XV ASSIGNMENT OF PORTFOLIO MANAGEMENT
AGREEMENT   239       Section 15.1.   Assignment of Portfolio Management
Agreement   239 Section 15.2.   Standard of Care Applicable to the Portfolio
Manager   241

 

 -iv-

 

 

Schedules and Exhibits   Schedule 1 – Schedule of Collateral Obligations
Schedule 2 – S&P Industry Classifications Schedule 3 – S&P CDO Monitor Test
Definitions Schedule 4 – Moody’s Rating Definitions Schedule 5 – Fitch Rating
Definitions Schedule 6 – Approved Index List Schedule 7 – S&P Recovery Rate
Tables Schedule 8 – Fitch Industry Classifications       Exhibit A – Forms of
Notes           A-1 – Form of Class A-1 Note     A-2 – Form of Class A-2 Note  
  A-3 – Form of Class B Note       Exhibit B – Forms of Transfer and Exchange
Certificates           B-1 – Form of Transferor and Transferee Certificate for
Transfer to Rule 144A Global Note     B-2 – Form of Transferor and Transferee
Certificate for Transfer to Regulation S Global Note     B-3 – Form of
Transferor and Transferee Certificate for Transfer to Certificated Note    
Exhibit C – Calculation of LIBOR Exhibit D – Form of Security Owner Certificate
Exhibit E – Issuer Payment Account Information Exhibit F – Form of Contribution
Notice Exhibit G – Form of Notice of Substitution

 

 -v-

 

 

INDENTURE, dated as of June 25, 2019, between FS KKR MM CLO 1 LLC, a Delaware
limited liability company (the “Issuer”) and U.S. Bank National Association, as
trustee (herein, together with its permitted successors and assigns in the
trusts hereunder, the “Trustee”).

 

PRELIMINARY STATEMENT

 

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

 

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

 

GRANTING CLAUSES

 

I.       Subject to the priorities and the exclusions, if any, specified below
in this Granting Clause, the Issuer hereby Grants to the Trustee, for the
benefit and security of Holders of the Notes, the Trustee, the Portfolio Manager
and the Collateral Administrator (collectively, the “Secured Parties”) to the
extent of such Secured Party’s interest hereunder, including under the Priority
of Payments, all of its right, title and interest in, to and under, in each
case, whether now owned or existing, or hereafter acquired or arising, all
securities, loans and investments and, in each case as defined in the UCC,
accounts, chattel paper, deposit accounts, instruments, financial assets,
investment property, general intangibles, letter of credit rights, and other
supporting obligations, and other property of any type or nature in which the
Issuer has an interest, including all proceeds (as defined in the UCC) with
respect to the foregoing (subject to the exclusions noted below, the “Assets”).
Such Grants include, but are not limited to:

 

(a)the Collateral Obligations, Closing Date Participation Interests and Equity
Securities that the Issuer causes to be delivered to the Trustee (directly or
through an intermediary or bailee) pursuant to this Indenture and all payments
thereon or with respect thereto, and all Collateral Obligations which are
delivered to the Trustee in the future pursuant to the terms of this Indenture
and all payments thereon or with respect thereto,

 

(b)the Issuer’s interest in each Account and all Eligible Investments purchased
with funds on deposit therein, and all income from the investment of funds
therein,

 

(c)the Issuer’s rights under the EU Retention Undertaking Letter, the Account
Agreement, the Portfolio Management Agreement and the Collateral Administration
Agreement,

 

(d)all Cash or money delivered to the Trustee (directly or through an
intermediary or its bailee) for the benefit of the Secured Parties,

 

 

 

 

(e)any Selling Institution Collateral, subject to the prior lien of the relevant
Selling Institution,

 

(f)all accounts, chattel paper, deposit accounts, financial assets, general
intangibles, instruments, investment property, letter-of-credit rights and other
supporting obligations relating to the foregoing,

 

(g)any other property otherwise delivered to the Trustee by or on behalf of the
Issuer (whether or not constituting Collateral Obligations, Closing Date
Participation Interests or Eligible Investments), and

 

(h)all proceeds (as defined in the UCC) with respect to the foregoing.

 

Such Grants exclude Margin Stock or the Dollar amount of any liquidation
thereof, whether or not such Dollar amount has been reinvested in another asset.

 

Such Grants are made in trust to secure the Notes equally and ratably without
prejudice, priority or distinction between any Note and any other Note by reason
of difference of time of issuance or otherwise, except as expressly provided in
this Indenture, and to secure, in accordance with the priorities set forth in
the Priority of Payments, (A) the payment of all amounts due on the Notes in
accordance with their terms, (B) the payment of all other sums payable under
this Indenture to any Secured Party and (C) compliance with the provisions of
this Indenture, all as provided in this Indenture (collectively, the “Secured
Obligations”).

 

II.       The Trustee acknowledges such Grant, accepts its appointment as
Trustee and the trusts hereunder in accordance with the provisions hereof, and
agrees to perform the duties herein in accordance with the terms hereof.

 

ARTICLE I
DEFINITIONS

 

Section 1.1.     Definitions

 

Except as otherwise specified herein or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms and to the
masculine, feminine and neuter genders of such terms. Except as otherwise
specified herein or as the context may otherwise require: (i) references to an
agreement or other document are to it as amended, supplemented, restated and
otherwise modified from time to time and to any successor document (whether or
not already so stated); (ii) references to a statute, regulation or other
government rule are to it as amended from time to time and, as applicable, are
to corresponding provisions of successor governmental rules (whether or not
already so stated); (iii) the word “including” and correlative words shall be
deemed to be followed by the phrase “without limitation” unless actually
followed by such phrase or a phrase of like import; (iv) the word “or” is always
used inclusively herein (for example, the phrase “A or B” means “A or B or
both,” not “either A or B but not both”), unless used in an “either ... or”
construction; (v) references to a Person are references to such Person’s
successors and assigns (whether or not already so stated); (vi) all references
in this Indenture to designated “Articles”, “Sections”, “subsections” and other
subdivisions are to the designated articles, sections, subsections and other
subdivisions of this Indenture; and (vii) the words “herein”, “hereof”,
“hereunder” and other words of similar import refer to this Indenture as a whole
and not to any particular article, section, subsection or other subdivision.

 

2

 

 

“17g-5 Website”: The Issuer’s website, which shall initially be located at
https://www.structuredfn.com, or such other address as the Issuer may provide to
the Trustee, the Collateral Administrator, the Portfolio Manager and the Rating
Agencies.

 

“Accepted Purchase Request”: The meaning specified in Section 9.8(c).

 

“Account Agreement”: The securities account control agreement dated as of the
Closing Date among the Issuer, the Trustee and the Bank, as Custodian.

 

“Accountants’ Report”: An agreed upon procedures report from the firm or firms
appointed by the Issuer pursuant to Section 10.9(a).

 

“Accounts”: (i) the Payment Account, (ii) the Collection Account, (iii) the
Ramp-Up Account, (iv) the Revolver Funding Account, (v) the Expense Reserve
Account, (vi) the Custodial Account, (vii) the Contribution Account and (viii)
the Interest Reserve Account.

 

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

 

“Adjusted Collateral Principal Amount”: As of any date of determination:

 

(a)the Aggregate Principal Balance of the Collateral Obligations (other than
Defaulted Obligations, Discount Obligations and Closing Date Participation
Interests); plus

 

(b)without duplication, the amounts on deposit in the Collection Account and the
Ramp-Up Account (including Eligible Investments therein) representing Principal
Proceeds; plus

 

(c)for each Defaulted Obligation, (i) if such Defaulted Obligation has been a
Defaulted Obligation for 30 days or less, the lesser of the S&P Recovery Amount
and the Fitch Recovery Amount for such Defaulted Obligation and (ii) if such
Defaulted Obligation has been a Defaulted Obligation for more than 30 days, the
lesser of the S&P Collateral Value and the Fitch Collateral Value for such
Defaulted Obligation; plus

 

(d)the aggregate, for each Discount Obligation, of the product of (i) the ratio
of the purchase price, excluding accrued interest but including, at the
discretion of the Portfolio Manager, the amount of any related transaction costs
(including assignment fees) paid by the Issuer to the seller of such Collateral
Obligation or its agent, expressed as a Dollar amount, over the Principal
Balance of the Discount Obligation as of the date of acquisition and (ii) the
current Principal Balance of such Discount Obligation; plus

 

3

 

 

(e)if such date of determination is on or after the Effective Date, the
aggregate, for each Closing Date Participation Interest, of the S&P Recovery
Amount thereof; minus

 

(f)the Excess CCC Adjustment Amount;

 

provided, that with respect to any Collateral Obligation that satisfies more
than one of the definitions of Defaulted Obligation, Discount Obligation or
Closing Date Participation Interest, or any Collateral Obligation that falls
into the Excess CCC Adjustment Amount, such Collateral Obligation shall, for
purposes of this definition, be treated as belonging to the category of
Collateral Obligations to which it otherwise belongs and which results in the
lowest Adjusted Collateral Principal Amount on any date of determination;
provided, further, that any Deferring Obligation that has not paid interest in
Cash for the lesser of six consecutive months and one accrual period shall be
treated as a Defaulted Obligation that has been a Defaulted Obligation for more
than 30 days for the purpose of determining the Adjusted Collateral Principal
Amount.

 

“Administrative Expense Cap”: An amount equal on any Payment Date (when taken
together with any Administrative Expenses paid in the order of priority
contained in the definition thereof during the period since the preceding
Payment Date or in the case of the first Payment Date, the period since the
Closing Date), to the sum of (a) 0.02% per annum (prorated for the related
Interest Accrual Period on the basis of a 360-day year and the actual number of
days elapsed) of the Fee Basis Amount on the related Determination Date and (b)
U.S.$200,000 per annum (prorated for the related Interest Accrual Period on the
basis of a 360-day year and the actual number of days elapsed); provided that,
(1) in respect of any Payment Date after the third Payment Date following the
Closing Date, if the aggregate amount of Administrative Expenses paid pursuant
to Sections 11.1(a)(i)(A), 11.1(a)(ii)(A) and 11.1(a)(iii)(A) (including any
excess applied in accordance with this proviso) on the three immediately
preceding Payment Dates and during the related Collection Periods is less than
the stated Administrative Expense Cap (without regard to any excess applied in
accordance with this proviso) in the aggregate for such three preceding Payment
Dates, then the excess may be applied to the Administrative Expense Cap with
respect to the then-current Payment Date; and (2) in respect of the third
Payment Date following the Closing Date, such excess amount shall be calculated
based on the Payment Dates preceding such Payment Date and may be applied to the
Administrative Expense Cap with respect to the then current Payment Date.

 

“Administrative Expenses”: The fees, expenses (including indemnities) and other
amounts due or accrued with respect to any Payment Date (including, with respect
to any Payment Date, any such amounts that were due and not paid on any prior
Payment Date) and payable in the following order by the Issuer: first, to the
Trustee pursuant to Section 6.7 and the other provisions of this Indenture,
second, to the Bank (in each of its capacities) including as Collateral
Administrator pursuant to the Collateral Administration Agreement, third, on a
pro rata basis, the following amounts (excluding indemnities) to the following
parties:

 

(i)the Independent accountants, agents (other than the Portfolio Manager) and
counsel of the Issuer for fees and expenses;

 

4

 

 

(ii)the Rating Agencies for fees and expenses (including any annual fee,
amendment fees and surveillance fees) in connection with any rating of the Notes
or in connection with the rating of (or provision of credit estimates in respect
of) any Collateral Obligations;

 

(iii)the Portfolio Manager under this Indenture and the Portfolio Management
Agreement, including without limitation reasonable expenses of the Portfolio
Manager (including, without limitation, (x) actual fees incurred and paid by the
Portfolio Manager for its accountants, agents, counsel and administration of the
Issuer and (y) reasonable costs and expenses incurred in connection with the
Portfolio Manager’s management of the Collateral Obligations, Eligible
Investments and other assets of the Issuer) actually incurred and paid in
connection with the Portfolio Manager’s management of the Collateral Obligations
and any other amounts payable pursuant to Section 26 of the Portfolio Management
Agreement, but excluding the Management Fees;

 

(iv)the Independent Manager of the Issuer for any fees or expenses due under the
engagement letter between Lord Securities Corporation and the Issuer;

 

(v)any other Person in respect of any other fees or expenses permitted under
this Indenture and the documents delivered pursuant to or in connection with
this Indenture (including expenses incurred in connection with complying with
tax laws, fees and expenses incurred in connection with a Refinancing or
Re-Pricing, the payment of facility rating fees and all legal and other fees and
expenses incurred in connection with the purchase or sale of any Collateral
Obligations and any other expenses incurred in connection with the Collateral
Obligations, including Excepted Advances) and the Notes, including but not
limited to, if applicable, any amounts due in respect of the listing of the
Notes on any stock exchange or trading system; and

 

(vi)any other Person in connection with satisfying the U.S. Risk Retention Rules
or the EU Securitization Laws, as applicable, including any costs or fees
related to additional due diligence or reporting requirements;

 

and fourth, on a pro rata basis, indemnities payable to any Person pursuant to
any Transaction Document or the Purchase Agreement or any purchase agreement,
placement agreement or similar agreement signed in connection with a
refinancing; provided that, (x) for the avoidance of doubt, amounts that are
expressly payable to any Person under the Priority of Payments in respect of an
amount that is stated to be payable as an amount other than as Administrative
Expenses (including, without limitation, interest and principal in respect of
the Notes and distributions made to the Issuer) shall not constitute
Administrative Expenses, (y) no amount shall be payable to the Portfolio Manager
as Administrative Expenses in reimbursement of fees or expenses of any third
party unless the Portfolio Manager shall have first paid the fees or expenses
that are the subject of such reimbursement and (z) the Portfolio Manager may
direct the payment of Rating Agency fees (only out of amounts available pursuant
to clause (b) of the definition of “Administrative Expense Cap”) other than in
the order required pursuant to items third and fourth above if, in the Portfolio
Manager’s commercially reasonable judgment, such payments are necessary to avoid
the withdrawal of any currently assigned rating on any Class of Notes that is
Outstanding and rated by a Rating Agency.

 

5

 

 

“Advisers Act”: The Investment Advisers Act of 1940, as amended from time to
time.

 

“Advisor”: FS/KKR Advisor, LLC.

 

“Affected Class”: Any Class of Notes that, as a result of the occurrence of a
Tax Event, has not received 100% of the aggregate amount of principal and
interest that would otherwise be due and payable to such Class on any Quarterly
Payment Date.

 

“Affiliate” or “Affiliated”: With respect to a Person, any other Person who,
directly or indirectly, is in control of, or controlled by, or is under common
control with, such Person. For the purposes of this definition, “control” of a
Person shall mean the power, direct or indirect, (x) to vote more than 50% of
the securities having ordinary voting power for the election of directors of any
such Person or (y) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise; provided that, no
special purpose company to which the Portfolio Manager provides investment
advisory services shall be considered an Affiliate of the Portfolio Manager. For
the avoidance of doubt, (A) for the purposes of calculating compliance with
clause (iii) of the Concentration Limitations, an Obligor will not be considered
an “Affiliate” of any other Obligor solely due to the fact that each such
Obligor is under the control of the same financial sponsor and (B) Obligors in
respect of Collateral Obligations shall be deemed not to be Affiliates if they
have distinct corporate family ratings and/or distinct issuer credit ratings.

 

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

 

“Aggregate Coupon”: As of any date of determination, the sum of the products
obtained by multiplying, in the case of each Fixed Rate Obligation, (a) the
stated coupon on such Collateral Obligation (excluding the unfunded portion of
any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation
and, in the case of any security that in accordance with its terms is making
payments due thereon “in kind” in lieu of Cash, any interest to the extent not
paid in Cash) expressed as a percentage; and (b) the Principal Balance
(including for this purpose any capitalized interest) of such Collateral
Obligation.

 

“Aggregate Excess Funded Spread”: As of any date of determination, the amount
obtained by multiplying: (a) the amount equal to LIBOR applicable to the Notes
during the Interest Accrual Period in which such date of determination occurs;
by (b) the amount (not less than zero) equal to (i) the Aggregate Principal
Balance (including for this purpose any capitalized interest) of the Collateral
Obligations as of such date of determination minus (ii) the Reinvestment Target
Par Balance; by (c) the Aggregate Principal Balance of Floating Rate Obligations
divided by the Aggregate Principal Balance of Collateral Obligations.

 

“Aggregate Funded Spread”: As of any date of determination, the sum of:

 

(a)(i) in the case of each Floating Rate Obligation that bears interest at a
spread over a London interbank offered rate based index, the stated interest
rate spread (excluding the unfunded portion of any Delayed Drawdown Collateral
Obligation and Revolving Collateral Obligation and, in the case of any security
that in accordance with its terms is making payments due thereon “in kind” in
lieu of Cash, any interest to the extent not paid in Cash) on such Collateral
Obligation above such index, multiplied by (ii) the Principal Balance (including
for this purpose any capitalized interest but excluding the unfunded portion of
any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation)
of such Collateral Obligation; and

 

6

 

 

(b)(i) in the case of each Floating Rate Obligation that bears interest at a
spread over an index other than a London interbank offered rate based index, the
excess of the sum of such spread and such index (excluding the unfunded portion
of any Delayed Drawdown Collateral Obligation and Revolving Collateral
Obligation and, in the case of any security that in accordance with its terms is
making payments due thereon “in kind” in lieu of Cash, any interest to the
extent not paid in Cash) over LIBOR as of the immediately preceding Interest
Determination Date (which spread or excess may be expressed as a negative
percentage), multiplied by (ii) the Principal Balance (including for this
purpose any capitalized interest but excluding the unfunded portion of any
Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation) of
each such Collateral Obligation;

 

provided, that for purposes of this definition, the interest rate spread will be
deemed to be, with respect to any Floating Rate Obligation that has a LIBOR
floor, the stated interest rate spread plus, if positive, (x) the LIBOR floor
value minus (y) LIBOR as in effect for the current Interest Accrual Period.

 

“Aggregate Outstanding Amount”: With respect to any of the Notes as of any date,
the aggregate unpaid principal amount of such Notes Outstanding on such date.

 

“Aggregate Principal Balance”: When used with respect to all or a portion of the
Collateral Obligations or the Assets, the sum of the Principal Balances of all
or of such portion of the Collateral Obligations or Assets, respectively.

 

“Aggregate Unfunded Spread”: As of any date of determination, the sum of the
products obtained by multiplying (i) for each Delayed Drawdown Collateral
Obligation and Revolving Collateral Obligation (other than Defaulted
Obligations), the related commitment fee then in effect as of such date and (ii)
the undrawn commitments of each such Delayed Drawdown Collateral Obligation and
Revolving Collateral Obligation as of such date.

 

“Alternative Rate”: The meaning specified in Exhibit C hereto.

 

“Anti-Money Laundering Laws”: The meaning specified in Section 2.5(h)(xvi).

 

“Applicable Qualified Valuation”: The meaning specified in Section 12.3(a).

 

“Approved Index List”: The nationally recognized indices specified in Schedule 6
hereto as amended from time to time by the Portfolio Manager with prior notice
of any amendment to S&P and Fitch in respect of such amendment and a copy of any
such amended Approved Index List to the Collateral Administrator.

 

7

 

 

“Assets”: The meaning assigned in the Granting Clauses hereof.

 

“Assumed Reinvestment Rate”: LIBOR (as determined on the most recent Interest
Determination Date relating to an Interest Accrual Period beginning on a Payment
Date or the Closing Date, as applicable) minus 0.20% per annum; provided that,
the Assumed Reinvestment Rate shall not be less than 0.00%.

 

“Authenticating Agent”: With respect to the Notes or a Class of the Notes, the
Person designated by the Trustee to authenticate such Notes on behalf of the
Trustee pursuant to Section 6.14.

 

“Authorized Officer”: With respect to the Issuer, any Officer or any other
Person who is authorized to act for the Issuer, as applicable, in matters
relating to, and binding upon, the Issuer and, for the avoidance of doubt, shall
include any duly appointed attorney-in-fact of the Issuer. With respect to the
Portfolio Manager, any Officer, employee, member or agent of the Portfolio
Manager who is authorized to act for the Portfolio Manager in matters relating
to, and binding upon, the Portfolio Manager with respect to the subject matter
of the request, certificate or order in question. With respect to the Collateral
Administrator, any Officer, employee, partner or agent of the Collateral
Administrator who is authorized to act for the Collateral Administrator in
matters relating to, and binding upon, the Collateral Administrator with respect
to the subject matter of the request, certificate or order in question. With
respect to the Trustee or any other bank or trust company acting as trustee of
an express trust or as custodian, a Bank Officer. With respect to any
Authenticating Agent, any Officer of such Authenticating Agent who is authorized
to authenticate the Notes. Each party may receive and accept a certification of
the authority of any other party as conclusive evidence of the authority of any
person to act, and such certification may be considered as in full force and
effect until receipt by such other party of written notice to the contrary.

 

“Average Life”: The meaning specified in the definition of “Weighted Average
Life.”

 

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

 

“Bank”: U.S. Bank National Association, in its individual capacity and not as
Trustee, or any successor thereto.

 

“Bank Officer”: When used with respect to the Trustee, any Officer within the
Corporate Trust Office (or any successor group of the Trustee) including any
Officer to whom any corporate trust matter is referred at the Corporate Trust
Office because of such person’s knowledge of and familiarity with the particular
subject and, in each case, having direct responsibility for the administration
of this transaction.

 

“Bankruptcy Code”: The federal Bankruptcy Code, Title 11 of the United States
Code, as amended from time to time.

 

8

 

 

“Bankruptcy Exchange”: The exchange of a Defaulted Obligation (without the
payment of any additional funds other than reasonable and customary transfer
costs) for another debt obligation issued by another Obligor which, but for the
fact that such debt obligation is a Defaulted Obligation or a Credit Risk
Obligation, would otherwise qualify as a Collateral Obligation and (i) in the
Portfolio Manager’s reasonable business judgment, at the time of the exchange,
such debt obligation received in exchange has a better likelihood of recovery
than the Defaulted Obligation to be so exchanged, (ii) as determined by the
Portfolio Manager, at the time of the exchange, the debt obligation received in
exchange is no less senior in right of payment vis-à-vis such Obligor’s other
outstanding indebtedness than the Defaulted Obligation to be exchanged vis-à-vis
its Obligor’s other outstanding indebtedness, (iii) as determined by the
Portfolio Manager, if such debt obligation received in exchange is a Defaulted
Obligation, both prior to and after giving effect to such exchange, each of the
Coverage Tests is satisfied or, if any of the Coverage Tests was not satisfied
prior to such exchange, such Coverage Test will be maintained or improved after
giving effect to such exchange, (iv) as determined by the Portfolio Manager, if
such debt obligation received in exchange is a Credit Risk Obligation, both
prior to and after giving effect to such exchange, each of the Coverage Tests,
the Collateral Quality Test and the Concentration Limitations is satisfied or,
if any of the Coverage Tests, the Collateral Quality Test or the Concentration
Limitations was not satisfied prior to such exchange, such Coverage Test,
Collateral Quality Test or Concentration Limitation will be maintained or
improved after giving effect to such exchange, (v) as determined by the
Portfolio Manager, both prior to and after giving effect to such exchange, not
more than 5.0% of the Collateral Principal Amount consists of obligations
received in a Bankruptcy Exchange, (vi) the period for which the Issuer held the
Defaulted Obligation to be exchanged will be included for all purposes in this
Indenture when determining the period for which the Issuer holds the debt
obligation received in exchange, (vii) as determined by the Portfolio Manager,
such exchanged Defaulted Obligation was not acquired in a Bankruptcy Exchange,
(viii) the exchange does not take place during the Restricted Trading Period,
(ix) the Bankruptcy Exchange Test is satisfied and (x) not more than 15% of the
Collateral Principal Amount consists of obligations received in Bankruptcy
Exchanges in the aggregate since the Closing Date.

 

“Bankruptcy Exchange Test”: The test that will be satisfied if, in the Portfolio
Manager’s reasonable business judgment, the projected internal rate of return of
the obligation obtained as a result of a Bankruptcy Exchange is greater than the
projected internal rate of return of the Defaulted Obligation exchanged in a
Bankruptcy Exchange, calculated by the Portfolio Manager by aggregating all Cash
and the Market Value of any Collateral Obligation subject to a Bankruptcy
Exchange at the time of each Bankruptcy Exchange; provided that, the foregoing
calculation will not be required for any Bankruptcy Exchange prior to and
including the occurrence of the third Bankruptcy Exchange.

 

“Bankruptcy Filing”: The institution against, or joining any other Person in
instituting against, the Issuer, any bankruptcy, reorganization, arrangement,
insolvency, winding up, moratorium or liquidation Proceedings, or other
Proceedings under U.S. federal or state bankruptcy or similar laws.

 

“Base Management Fee”: The fee payable to the Portfolio Manager in arrears on
each Payment Date pursuant to Section 8 of the Portfolio Management Agreement
and the Priority of Payments in an amount equal to the product of 0.20% per
annum (calculated on the basis of a 360-day year and the actual number of days
elapsed during the related Interest Accrual Period) of the Fee Basis Amount
measured as of the first day of the Collection Period relating to each Payment
Date.

 

9

 

 

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

 

“Bond”: Any debt security not in the form of a loan or an interest therein.

 

“Bridge Loan”: Any loan or other obligation or debt security that (x) is
incurred or issued in connection with a merger, acquisition, consolidation, or
sale of all or substantially all of the assets of a Person or similar
transaction and (y) by its terms, is required to be repaid within one year of
the incurrence thereof with proceeds from additional borrowings or other
refinancings (other than any additional borrowing or refinancing if one or more
financial institutions shall have provided the issuer of such obligation or
security with a binding written commitment to provide the same, so long as (i)
such commitment is equal to the outstanding principal amount of the Bridge Loan
and (ii) such committed replacement facility has a maturity of at least one year
and cannot be extended beyond such maturity pursuant to the terms thereof).

 

“Business Day”: Any day other than (i) a Saturday or a Sunday or (ii) a day on
which commercial banks are authorized or required by applicable law, regulation
or executive order to close in New York, New York or in the city in which the
Corporate Trust Office of the Trustee is located or, for any final payment of
principal, in the relevant place of presentation.

 

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

 

“Cash”: Such money (as defined in Article 1 of the UCC) or funds denominated in
currency of the United States of America as at the time shall be legal tender
for payment of all public and private debts, including funds standing to the
credit of any Account.

 

“CCC Collateral Obligation”: A CCC S&P Collateral Obligation or a CCC Fitch
Collateral Obligation, as the context requires.

 

“CCC Excess”: An amount equal to the greater of (i) the excess of the Principal
Balance of all CCC S&P Collateral Obligations over an amount equal to 17.5% of
the Collateral Principal Amount as of such date of determination; and (ii) the
excess of the Principal Balance of all CCC Fitch Collateral Obligations over an
amount equal to 17.5% of the Collateral Principal Amount as of such date of
determination; provided that, in determining which of the CCC Collateral
Obligations will be included in the CCC Excess, the CCC Collateral Obligations
with the lowest Market Value (assuming that such Market Value is expressed as a
percentage of the Aggregate Principal Balance of such Collateral Obligations as
of such date of determination) shall be deemed to constitute such CCC Excess.

 

“CCC Fitch Collateral Obligation”: A Collateral Obligation (other than a
Defaulted Obligation or a Deferring Obligation) with a Fitch Rating of “CCC+” or
lower.

 

“CCC S&P Collateral Obligation”: A Collateral Obligation (other than a Defaulted
Obligation or a Deferring Obligation) with an S&P Rating of “CCC+” or lower.

 

10

 

 

“Certificate of Authentication”: The meaning specified in Section 2.1.

 

“Certificated Note”: Any Note issued in the form of a definitive, fully
registered note without coupons registered in the name of the owner or nominee
thereof, duly executed by the Issuer and authenticated by the Trustee as herein
provided.

 

“Certificated Security”: The meaning specified in Article 8 of the UCC.

 

“Certifying Person”: Any Person that certifies that it is the owner of a
beneficial interest in a Global Note substantially in the form of Exhibit D.

 

“CFR”: The meaning specified on Schedule 4 hereto.

 

“Class”: In the case of (x) the Notes, all of the Notes having the same Interest
Rate (except for additional notes issued after the Closing Date having the same
designation but issued at a different Interest Rate), Stated Maturity and
designation and (y) in the case of the Interests, all of the Interests. For
purposes of exercising any rights to consent, give direction or otherwise vote,
any Pari Passu Classes will be treated as a single Class in each case except as
expressly provided herein.

 

“Class A Notes”: The Class A-1 Notes and the Class A-2 Notes, collectively.

 

“Class A-1 Notes”: The Class A-1 Senior Secured Floating Rate Notes issued
pursuant to this Indenture and having the characteristics specified in Section
2.3(b).

 

“Class A-2 Notes”: The Class A-2 Senior Secured Floating Rate Notes issued
pursuant to this Indenture and having the characteristics specified in Section
2.3(b).

 

“Class A Coverage Tests”: The Class A Overcollateralization Ratio Test and the
Class A Interest Coverage Test.

 

“Class A Interest Coverage Test”: The Interest Coverage Test as applied to the
Class A Notes.

 

“Class A Overcollateralization Ratio Test”: The Overcollateralization Ratio Test
as applied to the Class A Notes.

 

“Class B Coverage Tests”: The Class B Overcollateralization Ratio Test and the
Class B Interest Coverage Test.

 

“Class B Interest Coverage Test”: The Interest Coverage Test as applied to the
Class B Notes.

 

“Class B Notes”: The Class B Secured Deferrable Floating Rate Notes issued
pursuant to this Indenture and having the characteristics specified in Section
2.3(b).

 

“Class B Overcollateralization Ratio Test”: The Overcollateralization Ratio Test
as applied to the Class B Notes.

 

11

 

 

“Class Default Differential”: With respect to the Highest Ranking S&P Class, at
any time, the rate calculated by subtracting the S&P CDO Monitor SDR at such
time for such Class of Notes from the S&P CDO Monitor Adjusted BDR for such
Class of Notes at such time.

 

“Clean-Up Call Redemption”: The meaning specified in Section 9.7(a).

 

“Clean-Up Call Redemption Price”: The meaning specified in Section 9.7(b).

 

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

 

“Clearing Corporation”: (i) Clearstream, (ii) DTC, (iii) Euroclear and (iv) any
entity included within the meaning of “clearing corporation” under Article 8 of
the UCC.

 

“Clearing Corporation Note”: Notes that are in the custody of or maintained on
the books of a Clearing Corporation or a nominee subject to the control of a
Clearing Corporation and, if they are Certificated Securities in registered
form, properly endorsed to or registered in the name of the Clearing Corporation
or such nominee.

 

“Clearstream”: Clearstream Banking, société anonyme, a corporation organized
under the laws of the Duchy of Luxembourg.

 

“CLO Information Service”: Initially, Intex, and thereafter any third-party
vendor that compiles and provides access to information regarding collateralized
loan obligation transactions and is selected by the Portfolio Manager to receive
copies of the Monthly Report and Distribution Report.

 

“Closing Date”: June 25, 2019.

 

“Closing Date Participation Interests”: Any Participation Interest in an asset
conveyed to the Issuer on the Closing Date pursuant to the Loan Sale Agreement
until elevated by assignment; provided that, for purposes of this Indenture, any
such Participation Interest shall be deemed to be a Closing Date Participation
Interest until the 120th day following the Closing Date, unless such
Participation Interest has been elevated to an assignment on or before such day.
If any such Closing Date Participation Interest is not elevated to an assignment
on or before the 120th day following the Closing Date, such Closing Date
Participation Interest shall be deemed to be a Participation Interest for all
purposes hereunder until otherwise assigned. For the avoidance of doubt, the
failure to elevate any Closing Date Participation Interest shall not result or
be deemed to result in a default or Event of Default under this Indenture or any
other Transaction Document.

 

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

 

“Collateral Administration Agreement”: An agreement dated as of the Closing Date
among the Issuer, the Portfolio Manager and the Collateral Administrator, as
amended from time to time in accordance with its terms.

 

“Collateral Administrator”: The Bank, in its capacity as collateral
administrator under the Collateral Administration Agreement, and any successor
thereto.

 

12

 

 

“Collateral Interest Amount”: As of any date of determination, without
duplication, the aggregate amount of Interest Proceeds that has been received or
that is expected to be received (other than Interest Proceeds expected to be
received from Defaulted Obligations and Deferring Obligations, but including
Interest Proceeds actually received from Defaulted Obligations and Deferring
Obligations), in each case during the Collection Period (and, if such Collection
Period does not end on a Business Day, the next succeeding Business Day) in
which such date of determination occurs (or after such Collection Period but on
or prior to the related Payment Date if such Interest Proceeds would be treated
as Interest Proceeds with respect to such Collection Period).

 

“Collateral Obligation”: A Senior Secured Loan, Second Lien Loan or an Unsecured
Loan (including, but not limited to, interests in bank loans acquired by way of
a purchase or assignment) or Participation Interest therein that, as of the date
of acquisition or commitment to acquire by the Issuer:

 

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

 

(ii)is not a Defaulted Obligation or a Credit Risk Obligation, unless in either
case such obligation is a Purchased Defaulted Obligation or is being acquired in
connection with a Bankruptcy Exchange;

 

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

 

(iv)is not an Interest Only Obligation;

 

(v)provides (in the case of a Delayed Drawdown Collateral Obligation or
Revolving Collateral Obligation, with respect to amounts drawn thereunder) for a
fixed amount of principal payable in Cash on scheduled payment dates and/or at
maturity and does not by its terms provide for earlier amortization or
prepayment at a price of less than par;

 

(vi)does not constitute Margin Stock;

 

(vii)provides for payments that do not, at the time the obligation is acquired,
subject the Issuer to withholding tax or other tax, other than withholding tax
as to which the Obligor or issuer is required to make “gross-up” payments that
ensure that the net amount actually received by the Issuer (after payment of all
taxes, whether imposed on such Obligor or the Issuer) will equal the full amount
that the Issuer would have received had no such taxes been imposed;

 

(viii)has an S&P Rating of “CCC-” or higher and a Fitch Rating of “CCC-” or
higher (in each case, unless such obligation is a Purchased Defaulted Obligation
or is being acquired in a Bankruptcy Exchange);

 

(ix)is not a debt obligation whose repayment is subject to substantial
non-credit related risk as determined by the Portfolio Manager in its reasonable
judgment;

 

13

 

 

(x)except for Delayed Drawdown Collateral Obligations and Revolving Collateral
Obligations, is not an obligation pursuant to which any future advances or
payments (other than Excepted Advances) to the borrower or the Obligor thereof
may be required to be made by the Issuer;

 

(xi)is not a Zero Coupon Bond or a Structured Finance Obligation;

 

(xii)will not require the Issuer or the pool of Assets to be registered as an
investment company under the Investment Company Act;

 

(xiii)if it is a Participation Interest (other than a Closing Date Participation
Interest), the Third Party Credit Exposure Limits are satisfied with respect to
the acquisition thereof;

 

(xiv)is not the subject of an Offer other than (A) a Permitted Offer or (B) an
exchange offer in which an obligation that is not registered under the
Securities Act is exchanged for an obligation that has substantially identical
terms (except for transfer restrictions) but is registered under the Securities
Act or an obligation that would otherwise qualify for purchase under the
Investment Criteria;

 

(xv)if a Floating Rate Obligation, accrues interest at a floating rate
determined by reference to (a) the Dollar prime rate, federal funds rate or
LIBOR or (b) a similar interbank offered rate or commercial deposit rate or (c)
any other then-customary index;

 

(xvi)is Registered;

 

(xvii)is not a Synthetic Obligation;

 

(xviii)does not pay interest less frequently than semi-annually;

 

 

(xix)is not a Senior Secured Bond, Senior Unsecured Bond, other Bond, Senior
Secured Floating Rate Note or Letter of Credit Reimbursement Obligation;

 

(xx)does not include or support a letter of credit;

 

(xxi)is not an interest in a grantor trust;

 

(xxii)is not a Loan secured by real property;

 

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

 

(xxiv)is not issued by an Obligor with a most recently calculated EBITDA
(calculated in accordance with the related Underlying Instruments) of less than
$5,000,000;

 

14

 

 

(xxv)is not, by its terms, convertible into or exchangeable for an Equity
Security at any time over its life or attached with a warrant to purchase Equity
Securities;

 

(xxvi)does not mature after the Stated Maturity of the Notes;

 

(xxvii)is issued by a Non-Emerging Market Obligor;

 

(xxviii)does not have an “f”, “p”, “pi”, “sf” or “t” subscript assigned by S&P
or an “sf” subscript assigned by Moody’s;

 

(xxix)is purchased at a purchase price (expressed as a percentage of the par
amount of such Collateral Obligation) not less than 60.0%;

 

(xxx)if (x) a Deferrable Obligation, is not, at the time of purchase (or
commitment to purchase) deferring payment of any accrued and unpaid interest
which would have otherwise been due and continues to remain unpaid, or (y) a
Partial Deferring Obligation, is not, at the time of purchase (or commitment to
purchase) in default with respect to the portion of the interest due thereon to
be paid in Cash on each payment date with respect thereto (in each case, unless
such obligation is a Purchased Defaulted Obligation or is being acquired in
connection with a Bankruptcy Exchange); provided that, nothing in this clause
(xxx) shall be construed to prohibit the acquisition of a Purchased Defaulted
Obligation pursuant to Section 12.4;

 

(xxxi)is not a Step-Up Obligation or a Step-Down Obligation; and

 

(xxxii)is not an obligation of a Portfolio Company.

 

“Collateral Principal Amount”: As of any date of determination, the sum of (a)
the Aggregate Principal Balance of the Collateral Obligations (other than
Defaulted Obligations), including, without duplication, the funded and unfunded
balance of any Revolving Collateral Obligation or Delayed Drawdown Collateral
Obligation plus (b) without duplication, the amounts on deposit in the
Collection Account and the Ramp-Up Account (including Eligible Investments
therein) representing Principal Proceeds.

 

“Collateral Quality Test”: A test satisfied on any date of determination on and
after the Effective Date and during the Reinvestment Period if, in the
aggregate, the Collateral Obligations owned (or in relation to a proposed
purchase of a Collateral Obligation, proposed to be owned) by the Issuer satisfy
each of the tests set forth below (or, after the Effective Date, if a test is
not satisfied on such date of determination, the degree of compliance with such
test is maintained or improved after giving effect to any purchase effected on
such date of determination or any applicable Trading Plan), calculated in each
case as required by Section 1.2 herein:

 

(i)the Minimum Floating Spread Test;

 

(ii)the Minimum Weighted Average Coupon Test;

 

(iii)the S&P CDO Monitor Test;

 

15

 

 

(iv)the Minimum Weighted Average Fitch Recovery Rate Test;

 

(v)the Maximum Fitch Rating Factor Test; and

 

(vi)the Weighted Average Life Test.

 

“Collection Account”: The meaning specified in Section 10.2(a).

 

“Collection Period”: (i) With respect to the first Payment Date, the period
commencing on the Closing Date and ending at the close of business on the last
Business Day of the month prior to the first Payment Date; and (ii) with respect
to any other Payment Date, the period commencing on the day immediately
following the prior Collection Period and ending (a) in the case of the final
Collection Period preceding the latest Stated Maturity of any Class of Notes, on
the day preceding such Stated Maturity, (b) in the case of the final Collection
Period preceding an Optional Redemption (other than a Refinancing) or a Tax
Redemption in whole of the Notes or a Clean-Up Call Redemption of the Notes, on
the day preceding the Redemption Date and (c) in any other case, at the close of
business on the last Business Day of each month prior to such Payment Date.

 

“Concentration Limitations”: Limitations satisfied on any date of determination
on or after the Effective Date and during the Reinvestment Period if, in the
aggregate, the Collateral Obligations owned (or in relation to a proposed
purchase of a Collateral Obligation, proposed to be owned) by the Issuer comply
with all of the requirements set forth below (or in relation to a proposed
purchase after the Effective Date, except to the extent that compliance is
otherwise expressly required, if not in compliance, the relevant requirements
must be maintained or improved after giving effect to the purchase), calculated
in each case as required by Section 1.2 herein:

 

(i)not less than 92.5% of the Collateral Principal Amount may consist of Senior
Secured Loans, Cash and Eligible Investments;

 

(ii)not more than 7.5% of the Collateral Principal Amount may consist, in the
aggregate, of Second Lien Loans and Unsecured Loans;

 

(iii)not more than 2.5% of the Collateral Principal Amount may consist of
Collateral Obligations issued by a single Obligor and its Affiliates, except
that Collateral Obligations (other than DIP Collateral Obligations) issued by up
to five Obligors and their respective Affiliates may each constitute up to 3.0%
of the Collateral Principal Amount; provided that, not more than 1.5% of the
Collateral Principal Amount may consist of Collateral Obligations that are not
Senior Secured Loans issued by a single Obligor and its Affiliates;

 

(iv)not more than 17.5% of the Collateral Principal Amount may consist of CCC
S&P Collateral Obligations;

 

(v)not more than 17.5% of the Collateral Principal Amount may consist of CCC
Fitch Collateral Obligations;

 

(vi)not more than 5.0% of the Collateral Principal Amount may consist of
Collateral Obligations that pay interest less frequently than quarterly;

 

16

 

 

(vii)not more than 5.0% of the Collateral Principal Amount may consist of Fixed
Rate Obligations;

 

(viii)not more than 5.0% of the Collateral Principal Amount may consist of
Current Pay Obligations;

 

(ix)not more than 5.0% of the Collateral Principal Amount may consist of DIP
Collateral Obligations;

 

(x)not more than 10.0% of the Collateral Principal Amount may consist, in the
aggregate, of unfunded commitments under Delayed Drawdown Collateral Obligations
and unfunded and funded commitments under Revolving Collateral Obligations;

 

(xi)not more than 5.0% of the Collateral Principal Amount may consist of
Deferrable Obligations and Partial Deferring Obligations;

 

(xii)not more than 10.0% of the Collateral Principal Amount may consist of
Participation Interests and the Third Party Credit Exposure Limits may not be
exceeded with respect thereto; provided that, Closing Date Participation
Interests shall be excluded for purposes of this clause (xii) for the first 120
days following the Closing Date;

 

(xiii)[reserved];

 

(xiv)not more than 10.0% of the Collateral Principal Amount may consist of
Collateral Obligations with an S&P Rating derived from a Moody’s Rating as set
forth in clause (iii)(a) of the definition of the term “S&P Rating”;

 

(xv)no more than the percentage listed below of the Collateral Principal Amount
may be issued by Obligors Domiciled in the country or countries set forth
opposite such percentage:

 

% Limit Country or Countries 10.0% all countries (in the aggregate) other than
the United States; 10.0% all countries (in the aggregate) other than the United
States and Canada; 10.0% Canada; 10.0% all countries (in the aggregate) other
than the United States, Canada and the United Kingdom; 10.0% any individual
Group I Country other than Australia or New Zealand; 7.5% all Group II Countries
in the aggregate; 5.0% any individual Group II Country; 7.5% all Group III
Countries in the aggregate; 10.0% all Group II Countries and Group III Countries
in the aggregate; 5.0% all Tax Jurisdictions in the aggregate; 0.0% Greece,
Italy, Portugal and Spain in the aggregate; and 3.0% any individual country
other than the United States, the United Kingdom, Canada, the Netherlands, any
Group II Country or any Group III Country;

 

17

 

 

(xvi)not more than 12.0% of the Collateral Principal Amount may consist of
Collateral Obligations that are issued by Obligors that belong to any single S&P
Industry Classification, except that (x) the largest S&P Industry Classification
may represent up to 20.0% of the Collateral Principal Amount and (y) Collateral
Obligations in up to two S&P Industry Classification groups may each represent
up to 17.0% of the Collateral Principal Amount and (z) Collateral Obligations in
one S&P Industry Classification group may represent up to 15.0% of the
Collateral Principal Amount; and

 

(xvii)not more than 10.0% of the Collateral Principal Amount may consist of
Cov-Lite Loans.

 

For the avoidance of doubt, no portion of the Collateral Principal Amount may
consist of Senior Secured Bonds, Senior Unsecured Bonds, other Bonds, Senior
Secured Floating Rate Notes or Letter of Credit Reimbursement Obligations.

 

“Confidential Information”: The meaning specified in Section 14.15(b).

 

“Contribution”: The meaning specified in Section 10.3(f).

 

“Contribution Account”: The contribution account established pursuant to Section
10.3(f).

 

“Contribution Notice”: The meaning specified in Section 10.3(f).

 

“Contributor”: The meaning specified in Section 10.3(f).

 

“Controlling Class”: The Class A-1 Notes so long as any Class A-1 Notes are
Outstanding; then the Class A-2 Notes so long as any Class A-2 Notes are
Outstanding; and then the Class B Notes so long as any Class B Notes are
Outstanding.

 

“Controlling Person”: A Person (other than a Benefit Plan Investor) that has
discretionary authority or control with respect to the assets of the Issuer or
any Person who provides investment advice for a fee (direct or indirect) with
respect to such assets or an affiliate of any such Person. For this purpose, an
“affiliate” of a Person includes any Person, directly or indirectly, through one
or more intermediaries, controlling, controlled by, or under common control with
the Person. “Control,” with respect to a Person other than an individual, means
the power to exercise a controlling influence over the management or policies of
such Person.

 

18

 

 

“Co-Placement Agents”: KKR Capital Markets, LLC and GreensLedge Capital Markets
LLC, in their respective capacities as co-placement agents with respect to the
Notes.

 

“Corporate Trust Office”: The designated corporate trust office of the Trustee,
currently located at U.S. Bank National Association, (i) for purposes of Note
transfer issues: 111 Fillmore Avenue East, St. Paul, Minnesota 55107-1042,
Attention: Bondholder Services – EP – MN – WS2N— FS KKR MM CLO 1 LLC, (ii) for
all other purposes: 8 Greenway Plaza, Suite 1100, Houston, Texas 77046,
Attention: Global Corporate Trust–FS KKR MM CLO 1 LLC, Email:
kkr.team@usbank.com, Facsimile No.: 713-212-3722, or such other address as the
Trustee may designate from time to time by notice to the Holders, the Portfolio
Manager and the Issuer, or the principal corporate trust office of any successor
Trustee.

 

“Cov-Lite Loan”: A Collateral Obligation that is an interest in a loan, the
Underlying Instruments for which do not (i) contain any financial covenants or
(ii) require the borrower thereunder to comply with any Maintenance Covenants
(regardless of whether compliance with one or more Incurrence Covenants is
otherwise required by such Underlying Instruments); provided that, except for
purposes of determining the S&P Recovery Rate of the applicable loan, a loan
which either contains a cross-default or cross-acceleration provision to, or is
pari passu with, another loan of the underlying Obligor that requires such
underlying Obligor to comply with both an Incurrence Covenant and a Maintenance
Covenant will be deemed not to be a Cov-Lite Loan.

 

“Coverage Tests”: The Overcollateralization Ratio Test and the Interest Coverage
Test, each as applied each specified Class of Notes.

 

“Credit Amendment”: Any Maturity Amendment that is consummated (a) in connection
with the workout or restructuring of a Collateral Obligation as a result of the
financial distress, or actual or imminent bankruptcy or insolvency, of the
related Obligor or (b) (i) to prevent the related Collateral Obligation from
becoming a Defaulted Obligation, (ii) due to the materially adverse financial
condition of the Obligor, to minimize material losses on the related Collateral
Obligation or (iii) because the related Collateral Obligation will have a
greater market value after giving effect to such Maturity Amendment.

 

“Credit Improved Criteria”: The criteria that will be met with respect to any
Collateral Obligation upon the occurrence of any of the following:

 

(i)the Obligor of such Collateral Obligation has shown improved financial
results since the published financial reports first produced after it was
purchased by the Issuer;

 

(ii)the Obligor of such Collateral Obligation since the date on which such
Collateral Obligation was purchased by the Issuer has raised significant equity
capital or has raised other capital that has improved the liquidity or credit
standing of such Obligor;

 

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(iii)such Collateral Obligation has a market price that is greater than the
price that is warranted by its terms and credit characteristics, or improved in
credit quality since its acquisition by the Issuer;

 

(iv)such Collateral Obligation has been upgraded or put on a watch list for
possible upgrade by a Rating Agency since the date on which such Collateral
Obligation was acquired by the Issuer;

 

(v)the proceeds received with respect to its disposition (excluding such
proceeds that constitute Interest Proceeds) of such Collateral Obligation would
be at least 101.00% of its purchase price;

 

(vi)the price of such Collateral Obligation has changed during the period from
the date on which it was acquired by the Issuer to the proposed sale date by a
percentage either at least 0.25% more positive, or 0.25% less negative, as the
case may be, than the percentage change in the average price of any index
specified on the Approved Index List selected by the Portfolio Manager over the
same period;

 

(vii)the spread over the applicable reference rate for such Collateral
Obligation has been decreased in accordance with the underlying Collateral
Obligation since the date of acquisition;

 

(viii)the spread over the applicable reference rate for such Collateral
Obligation has been decreased in accordance with the underlying Collateral
Obligation since the date of acquisition by (1) 0.25% or more (in the case of a
loan with a spread (prior to such decrease) less than or equal to 2.00%), (2)
0.375% or more (in the case of a loan with a spread (prior to such decrease)
greater than 2.00% but less than or equal to 4.00%) or (3) 0.50% or more (in the
case of a loan with a spread (prior to such decrease) greater than 4.00%) due,
in each case, to an improvement in the related borrower’s financial ratios or
financial results; or

 

(ix)with respect to Fixed Rate Obligations, there has been a decrease in the
difference between its yield compared to the yield on the relevant United States
Treasury security of more than 7.5% since the date of purchase, or it has a
projected cash flow interest coverage ratio (earnings before interest and taxes
divided by cash interest expense as estimated by the Portfolio Manager) of the
underlying borrower or other Obligor of such Collateral Obligation that is
expected to be more than 1.15 times the current year’s projected cash flow
interest coverage ratio.

 

“Credit Improved Obligation”: Any Collateral Obligation which, in the Portfolio
Manager’s reasonable commercial judgment (which judgment will not be called into
question as a result of subsequent events), has significantly improved in credit
quality after it was acquired by the Issuer; provided that, during a Restricted
Trading Period, a Collateral Obligation will qualify as a Credit Improved
Obligation only if (i) one or more of the Credit Improved Criteria referred to
in clauses (iv) through (ix) of the definition thereof are satisfied with
respect to such Collateral Obligation or (ii) a Majority of the Controlling
Class votes to treat such Collateral Obligation as a Credit Improved Obligation.

 

20

 

 

“Credit Risk Criteria”: The criteria that will be met with respect to any
Collateral Obligation upon the occurrence of any of the following:

 

(i)such Collateral Obligation has been downgraded or put on a watch list for
possible downgrade or on negative outlook by either of the Rating Agencies since
the date on which such Collateral Obligation was acquired by the Issuer;

 

(ii)the price of such Collateral Obligation has changed during the period from
the date on which it was acquired by the Issuer to the proposed sale date by a
percentage either at least 0.25% more negative, or at least 0.25% less positive,
as the case may be, than the percentage change in the average price of any index
specified on the Approved Index List selected by the Portfolio Manager over the
same period;

 

(iii)the price of such Collateral Obligation has decreased or is at risk of
decreasing by at least 1.00% of the price paid by the Issuer for such Collateral
Obligation;

 

(iv)the spread over the applicable reference rate for such Collateral Obligation
has been increased in accordance with the underlying Collateral Obligation since
the date of acquisition;

 

(v)such Collateral Obligation has a projected cash flow interest coverage ratio
(earnings before interest and taxes divided by cash interest expense as
estimated by the Portfolio Manager) of the underlying borrower or other Obligor
of such Collateral Obligation of less than 1.00 or that is expected to be less
than 0.85 times the current year’s projected cash flow interest coverage ratio;
or

 

(vi)with respect to Fixed Rate Obligations, an increase since the date of
purchase of more than 7.5% in the difference between the yield on such
Collateral Obligation and the yield on the relevant United States Treasury
security.

 

“Credit Risk Obligation”: Any Collateral Obligation that, in the Portfolio
Manager’s reasonable commercial judgment (which judgment shall not be called
into question as a result of subsequent events), has a significant risk of
declining in credit quality or price and with the lapse of time, becoming a
Defaulted Obligation; provided, that during a Restricted Trading Period, a
Collateral Obligation will qualify as a Credit Risk Obligation for purposes of
sales of Collateral Obligations only if, in addition to the foregoing, (i) such
Collateral Obligation has been downgraded by any Rating Agency at least one
rating subcategory or has been placed and remains on a credit watch with
negative implication by Moody’s, Fitch or S&P since it was acquired by the
Issuer, (ii) the Credit Risk Criteria are satisfied with respect to such
Collateral Obligation or (iii) a Majority of the Controlling Class votes to
treat such Collateral Obligation as a Credit Risk Obligation.

 

“Cure Contribution”: A Contribution (or portion thereof), in an amount as
directed and set forth in the associated notice of such Contribution by the
applicable Contributor, that shall be used as Principal Proceeds or Interest
Proceeds (i) to cause a failing Coverage Test to be satisfied and/or (ii) with
respect to any Coverage Test that, as of the next Payment Date, is expected to
fail to be satisfied as reasonably determined by the applicable Contributor (or
the Portfolio Manager, as applicable), to cause such Coverage Test to continue
to be satisfied.

 

21

 

 

“Current Pay Obligation”: Any Collateral Obligation (other than a DIP Collateral
Obligation) that would otherwise be treated as a Defaulted Obligation but as to
which no payments are due and payable that are unpaid and with respect to which
the Portfolio Manager has certified to the Trustee (with a copy to the
Collateral Administrator) in writing that it believes, in its reasonable
business judgment, that the issuer or Obligor of such Collateral Obligation (a)
will continue to make scheduled payments of interest (and/or fees, as
applicable, in the case of a Delayed Drawdown Collateral Obligation or Revolving
Collateral Obligation) thereon and will pay the principal thereof by maturity or
as otherwise contractually due, (b) if the issuer or Obligor is subject to a
bankruptcy proceeding, it has been the subject of an order of a bankruptcy court
that permits it to make the scheduled payments on such Collateral Obligation and
all payments authorized by the bankruptcy court have been paid in Cash when due
and (c) either (i) has a Market Value of at least 80% of its par value or (ii)
if the Obligor of such Collateral Obligation has made a Distressed Exchange
Offer and such Collateral Obligation is already held by the Issuer and subject
to the Distressed Exchange Offer and ranks equal to or higher in priority than
the obligation subject to the Distressed Exchange Offer.

 

“Current Portfolio”: At any time, the portfolio of Collateral Obligations and
Eligible Investments representing Principal Proceeds (determined in accordance
with Section 1.2 to the extent applicable), then held by the Issuer.

 

“Custodial Account”: The custodial account established pursuant to Section
10.3(b).

 

“Custodian”: The meaning specified in the first sentence of Section 3.3(a) with
respect to items of collateral referred to therein, and each entity with which
an Account is maintained, as the context may require, each of which shall be a
Securities Intermediary.

 

“Cut-Off Date”: The meaning specified in the Loan Sale Agreement.

 

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

 

“Defaulted Obligation”: Any Collateral Obligation included in the Assets as to
which:

 

(a)a default as to the payment of principal and/or interest has occurred and is
continuing with respect to such debt obligation (without regard to any grace
period applicable thereto, or waiver or forbearance thereof), after the passage
(in the case of a default that in the Portfolio Manager’s judgment, as certified
to the Trustee in writing, is not due to credit-related causes) of five Business
Days or seven calendar days, whichever is greater, but in no case beyond the
passage of any grace period applicable thereto;

 

(b)a default known to a Responsible Officer of the Portfolio Manager as to the
payment of principal and/or interest has occurred and is continuing on another
debt obligation of the same issuer which is senior or pari passu in right of
payment to such Collateral Obligation (without regard to any grace period
applicable thereto, or waiver or forbearance thereof), after the passage (in the
case of a default that in the Portfolio Manager’s judgment, is not due to
credit-related causes) of five Business Days or seven calendar days, whichever
is greater (but in no case beyond the passage of any grace period applicable
thereto); provided that, both the debt obligation and such other debt obligation
are full recourse obligations of the applicable issuer or secured by the same
collateral; provided, further, that such debt obligation shall constitute a
Defaulted Obligation under this clause (b) only until such acceleration has been
rescinded;

 

22

 

 

(c)the issuer or others have instituted proceedings to have the issuer of such
debt obligation adjudicated as bankrupt or insolvent or placed into receivership
and such proceedings have not been stayed or dismissed within 60 days of filing
or such issuer has filed for protection under the Bankruptcy Code;

 

(d)(i) such Collateral Obligation has a Fitch Rating of “D” or “RD” or lower or
had such rating prior to any downward adjustment pursuant to the definition of
“Fitch Rating” or (ii) such Collateral Obligation has an S&P Rating of “CC” or
below or “SD” or had such rating immediately before such rating was withdrawn,
or is junior to an obligation of the same issuer that has an S&P Rating of “CC”
or below or “SD” or had such rating immediately before such rating was
withdrawn;

 

(e)such Collateral Obligation is pari passu in right of payment as to the
payment of principal and/or interest to another debt obligation of the same
Obligor which has (x) a Fitch Rating of “D” or “RD” or lower or had such rating
prior to any downward adjustment pursuant to the definition of “Fitch Rating” or
(y) an S&P Rating of “CC” or below or “SD” or had such rating immediately before
such rating was withdrawn; provided that, both the debt obligation and such
other debt obligation are full recourse obligations of the applicable issuer or
secured by the same collateral;

 

(f)a default with respect to which a Responsible Officer of the Portfolio
Manager has received written notice or has knowledge that a default has occurred
under the Underlying Instruments and any applicable grace period has expired and
the holders of such debt obligation have accelerated the repayment of the debt
obligation (but only until such default is cured or waived or such acceleration
has been rescinded) in the manner provided in the Underlying Instrument;

 

(g)the Portfolio Manager has in its reasonable commercial judgment otherwise
declared such debt obligation to be a Defaulted Obligation;

 

(h)such Collateral Obligation is a Participation Interest with respect to which
the Selling Institution has defaulted in any respect in the performance of any
of its payment obligations under the Participation Interest (except to the
extent such defaults were cured within the applicable grace period under the
Underlying Instruments of the Obligor thereof); or

 

23

 

 

(i)such Collateral Obligation is a Participation Interest in a loan that would,
if such loan were a Collateral Obligation, constitute a Defaulted Obligation or
with respect to which the Selling Institution has (x) a Fitch Rating of “D,”
“RD” or lower or had such rating prior to any downward adjustment pursuant to
the definition of “Fitch Rating” or (y) an S&P Rating of “CC” or below or “SD”
or had such rating before such rating was withdrawn

 

provided that, (x) a Collateral Obligation shall not constitute a Defaulted
Obligation pursuant to any of clauses (b) through (e) and (i) above if such
Collateral Obligation (or, in the case of a Participation Interest, the
underlying Senior Secured Loan, Second Lien Loan or Unsecured Loan) is a Current
Pay Obligation (provided that, the Aggregate Principal Balance of Current Pay
Obligations exceeding 5.0% of the Collateral Principal Amount will be treated as
Defaulted Obligations) and (y) a Collateral Obligation shall not constitute a
Defaulted Obligation pursuant to any of clauses (b), (c), (d), (e) and (i) if
such Collateral Obligation (or, in the case of a Participation Interest, the
underlying Senior Secured Loan, Second Lien Loan or Unsecured Loan) is a DIP
Collateral Obligation.

 

“Deferrable Obligation”: A Collateral Obligation (not including any Partial
Deferring Obligation) which by its terms permits the deferral or capitalization
of payment of accrued, unpaid interest.

 

“Deferred Base Management Fee”: The meaning specified in the Portfolio
Management Agreement.

 

“Deferred Base Management Fee Cap”: The meaning specified in the Portfolio
Management Agreement.

 

“Deferred Interest”: With respect to any specified Class of Deferred Interest
Notes, the meaning specified in Section 2.7(a)(i).

 

“Deferred Interest Notes”: The Notes specified as “Deferred Interest Notes” in
Section 2.3(b), which as of the Closing Date shall include the Class B Notes.

 

“Deferred Management Fees”: Collectively the Deferred Base Management Fee and
the Deferred Subordinated Management Fee.

 

“Deferred Subordinated Management Fee”: The meaning specified in the Portfolio
Management Agreement.

 

“Deferring Obligation”: A Deferrable Obligation that is deferring the payment of
Cash interest due thereon such that (a) in the case of any Floating Rate
Obligation, the spread paid in Cash for a given accrual period is less than the
spread in Cash payable on such security when it was acquired by the Issuer and
has been so deferring the payment of interest due thereon but does not include
the deferral of LIBOR or the applicable floating rate index or (b) in the case
of any Fixed Rate Obligation, the total coupon paid in Cash for a given accrual
period is less than the total coupon payable in Cash on such security when it
was acquired by the Issuer and has been so deferring the payment of interest due
thereon, in each case, (i) with respect to Collateral Obligations that have an
S&P Rating of at least “BBB-” for the shorter of two consecutive accrual periods
or one year, and (ii) with respect to Collateral Obligations that have an S&P
Rating of at least “BB+” or below, for the shorter of one accrual period or six
consecutive months, which deferred capitalized interest has not, as of the date
of determination, been paid in Cash; provided that, such Deferring Obligation
will cease to be a Deferring Obligation at such time as it (a) ceases to defer
or capitalize the payment of interest, (b) pays in Cash all accrued and unpaid
interest and (c) commences payment of all current interest in Cash.

 

24

 

 

“Delayed Drawdown Collateral Obligation”: A Collateral Obligation that (a)
requires the Issuer to make one or more future advances to the borrower under
the Underlying Instruments relating thereto, (b) specifies a maximum amount that
can be borrowed on one or more fixed borrowing dates, and (c) does not permit
the re-borrowing of any amount previously repaid by the borrower thereunder;
provided that, any such Collateral Obligation will be a Delayed Drawdown
Collateral Obligation only until all commitments by the Issuer to make advances
to the borrower expire or are terminated or are reduced to zero.

 

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

 

(a)in the case of each Certificated Security or Instrument (other than a
Clearing Corporation Note or an Instrument evidencing debt underlying a
Participation Interest), (i) causing the delivery of such Certificated Security
or Instrument to the Custodian registered in the name of the Custodian or its
affiliated nominee or endorsed to the Custodian or in blank, (ii) causing the
Custodian to continuously identify on its books and records that such
Certificated Security or Instrument is credited to the relevant Account and
(iii) causing the Custodian to maintain continuous possession of such
Certificated Security or Instrument;

 

(b)in the case of each Uncertificated Security (other than a Clearing
Corporation Note), (i) causing such Uncertificated Security to be continuously
registered on the books of the Obligor thereof to the Custodian and (ii) causing
the Custodian to continuously identify on its books and records that such
Uncertificated Security is credited to the relevant Account;

 

(c)in the case of each Clearing Corporation Note, causing (i) the relevant
Clearing Corporation to continuously credit such Clearing Corporation Note to
the securities account of the Custodian at such Clearing Corporation and (ii)
the Custodian to continuously identify on its books and records that such
Clearing Corporation Note is credited to the relevant Account;

 

(d)in the case of any Financial Asset that is maintained in book-entry form on
the records of an FRB, causing (i) the continuous crediting of such Financial
Asset to a securities account of the Custodian at any FRB and (ii) the Custodian
to continuously identify on its books and records that such Financial Asset is
credited to the relevant Account;

 

(e)in the case of Cash, (i) causing the delivery of such Cash to the Custodian,
(ii) causing the Custodian to agree to treat such Cash as a Financial Asset and
(iii) causing the Custodian to continuously credit such Cash to the relevant
Account;

 

25

 

 

(f)in the case of each Financial Asset not covered by the foregoing clauses (a)
through (d), causing the transfer of such Financial Asset to the Custodian in
accordance with applicable law and regulation and causing the Custodian to
continuously credit such Financial Asset to the relevant Account;

 

(g)in the case of each general intangible (including any participation interest)
that is not, or the debt underlying which is not, evidenced by an Instrument or
a Certificated Security, notifying the Obligor thereunder of the Grant to the
Trustee (unless no applicable law requires such notice);

 

(h)in the case of each participation interest in a loan as to which the
underlying debt is represented by an Instrument or a Certificated Security,
obtaining the acknowledgment of the Person in possession of such Instrument or
Certificated Security (which may not be the Issuer) that it holds the Issuer’s
interest in such Instrument or Certificated Security solely on behalf and for
the benefit of the Trustee; and

 

(i)in all cases, the filing of an appropriate Financing Statement in the
appropriate filing office in accordance with the Uniform Commercial Code as in
effect in any relevant jurisdiction.

 

“Depository Event”: An event that will occur if DTC (1) notifies the Issuer that
it is unwilling or unable to continue as depositary for Global Notes of any
Class or Classes or (2) ceases to be a Clearing Agency registered under the
Exchange Act and, in each case, a successor depositary is not appointed by the
Issuer within 90 days after such event.

 

“Designated Principal Proceeds”: The meaning specified in Section 10.2(g).

 

“Designated Unused Proceeds”: The meaning specified in Section 10.3(c).

 

“Determination Date”: The last day of each Collection Period.

 

“DIP Collateral Obligation”: A loan made to a debtor-in-possession pursuant to
Section 364 of the Bankruptcy Code having the priority allowed by either Section
364(c) or 364(d) of the Bankruptcy Code and fully secured by senior liens.

 

“Discount Obligation”: Any Loan or Participation Interest therein (other than a
Defaulted Obligation) which, at the time of acquisition or commitment to acquire
by the Issuer, (a) in the case of a Senior Secured Loan, was acquired for less
than (i) 85.0% of its Principal Balance, if such Collateral Obligation has an
S&P Rating lower than “B-” or (ii) 80.0% of its Principal Balance, if such
Collateral Obligation has an S&P Rating of “B-” or higher or (b) in the case of
a Loan that is not a Senior Secured Loan, was acquired for less than (i) 80.0%
of its Principal Balance, if such Collateral Obligation has an S&P Rating lower
than “B-” or (ii) 75.0% of its Principal Balance, if such Collateral Obligation
has an S&P Rating of “B-” or higher; provided that, in the case clause (a) or
(b) above:

 

(x)such Collateral Obligation shall cease to be a Discount Obligation at such
time as (1) if such Collateral Obligation is a Senior Secured Loan, the Market
Value (expressed as a percentage of the par amount of such Collateral
Obligation) determined for such Collateral Obligation on each day during any
period of 22 consecutive Business Days since the acquisition (or commitment to
acquire) by the Issuer of such Collateral Obligation, equals or exceeds 90.0% on
each such day or (2) if such Collateral Obligation is not a Senior Secured Loan,
the Market Value (expressed as a percentage of the par amount of such Collateral
Obligation) determined for such Collateral Obligation on each day during any
period of 22 consecutive Business Days since the acquisition (or commitment to
acquire) by the Issuer of such Collateral Obligation, equals or exceeds 85.0% on
each such day; and

 

26

 

 

(y)any Collateral Obligation that would otherwise be considered a Discount
Obligation, but that is purchased in accordance with the Investment Criteria
with the proceeds of sale of a Collateral Obligation that was not a Discount
Obligation at the time of its purchase so long as such purchased Collateral
Obligation (A) is purchased or committed to be purchased within 10 Business Days
of such sale, (B) is purchased at a purchase price (expressed as a percentage of
the par amount of such Collateral Obligation) equal to or greater than the sale
price (expressed as a percentage of the par amount) of the sold Collateral
Obligation, (C) is purchased at a purchase price (expressed as a percentage of
the par amount of such Collateral Obligation) not less than 65% and (D) has an
S&P Rating equal to or greater than the S&P Rating of the sold Collateral
Obligation, will not be considered to be a Discount Obligation; provided that,
this paragraph shall not apply to any such Collateral Obligation or portion
thereof at any time on or after the acquisition by the Issuer of such Collateral
Obligation if, as determined at the time of such acquisition, such application
would result in (i) more than 7.5% of the Collateral Principal Amount consisting
of Collateral Obligations or portions thereof to which this paragraph applies or
(ii) the Aggregate Principal Balance of all Collateral Obligations to which this
paragraph has been applied since the Closing Date being more than 12.5% of the
Target Initial Par Amount.

 

“Dissolution Expenses”: The sum of (i) an amount not to exceed the greater of
(a) 0.006% of the Target Initial Par Amount and (b) the amount (if any)
reasonably determined by the Portfolio Manager or the Issuer, including but not
limited to fees and expenses incurred by the Trustee and reported to the
Portfolio Manager, as the sum of expenses reasonably likely to be incurred in
connection with the discharge of this Indenture, the liquidation of the Assets
and the dissolution of the Issuer and (ii) any accrued and unpaid Administrative
Expenses.

 

“Distressed Exchange”: In connection with any Collateral Obligation, a
distressed exchange or other debt restructuring has occurred, as reasonably
determined by the Portfolio Manager, pursuant to which the issuer or Obligor of
such Collateral Obligation has issued to the holders of such Collateral
Obligation a new security or obligation or package of securities or obligations
that, in the sole judgment of the Portfolio Manager, amounts to a diminished
financial obligation or has the purpose of helping the issuer of such Collateral
Obligation avoid default; provided that, no Distressed Exchange shall be deemed
to have occurred if the securities or obligations received by the Issuer in
connection with such exchange or restructuring satisfy the definition of
Collateral Obligation (provided that the Aggregate Principal Balance of all
securities and obligations to which this proviso applies or has applied,
measured cumulatively from the Closing Date onward, may not exceed 25.0% of the
Target Initial Par Amount).

 

27

 

 

“Distressed Exchange Offer”: An offer by the issuer of a Collateral Obligation
to exchange one or more of its outstanding debt obligations for a different debt
obligation or to repurchase one or more of its outstanding debt obligations for
Cash, or any combination thereof; provided that, an offer by such issuer to
exchange unregistered debt obligations for registered debt obligations shall not
be considered a Distressed Exchange Offer.

 

“Distribution Report”: The meaning specified in Section 10.7(b).

 

“Dodd-Frank Act”: The Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, as amended.

 

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

 

“Domicile” or “Domiciled”: With respect to any issuer of, or Obligor with
respect to, a Collateral Obligation:

 

(a)except as provided in clause (b) below, its country of organization;

 

(b)if it is organized in a Tax Jurisdiction, each of such jurisdiction and the
country in which, in the Portfolio Manager’s good faith estimate, a substantial
portion of its operations are located or from which a substantial portion of its
revenue is derived, in each case directly or through subsidiaries (which shall
be any jurisdiction and country known at the time of designation by the
Portfolio Manager to be the source of the majority of revenues, if any, of such
issuer or Obligor); or

 

(c)if its payment obligations of such Collateral Obligation are guaranteed by a
Person that is organized in the United States or Canada, then the United States
or Canada, as applicable.

 

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

 

“Due Date”: Each date on which any payment is due on an Asset in accordance with
its terms.

 

“EBITDA”: With respect to any date of determination and any Collateral
Obligation, the meaning of “EBITDA”, “Adjusted EBITDA” or any comparable
definition set forth in the applicable Underlying Instrument for such Collateral
Obligation (together with all add-backs and exclusions as designated in such
Underlying Instrument, which add-backs and exclusions have been reviewed and
determined on a commercially reasonable best efforts basis by the Portfolio
Manager to be consistent with its customary practices and in accordance with the
Portfolio Manager Standard) and, in the event that “EBITDA”, “Adjusted EBITDA”
or such comparable definition is not defined in such Underlying Instrument, an
amount, with respect to the Obligor on such Collateral Obligation equal to
earnings from continuing operations for such period plus interest expense,
income taxes, unallocated depreciation and amortization for such period (to the
extent deducted in determining earnings from continuing operations for such
period).

 

28

 

 

“Effective Date”: The earlier to occur of (a) September 15, 2019 and (b) the
first date on which the Portfolio Manager certifies to the Trustee and the
Collateral Administrator that the Target Initial Par Condition has been
satisfied.

 

“Effective Date Accountants’ AUP Reports”: The meaning specified in Section
7.18(c).

 

“Effective Date Accountants’ Comparison AUP Report”: The meaning specified in
Section 7.18(c).

 

“Effective Date Accountants’ Recalculation AUP Report”: The meaning specified in
Section 7.18(c).

 

“Effective Date Rating Failure”: The meaning specified in Section 7.18(d).

 

“Effective Date Ratings Confirmation”: The Issuer has (x) provided, or caused
the Collateral Administrator to provide, to each Rating Agency the reports
required to be delivered pursuant to Section 7.18 in connection with the
Effective Date and (y) received confirmation (deemed or otherwise) from S&P of
its Initial Ratings of each Class of Notes.

 

“Effective Date Report”: The meaning specified in Section 7.18(c).

 

“Eligible Custodian”: A custodian that (i) is a state or national bank or trust
company that has (A) capital and surplus of at least U.S.$200,000,000 and (B)(x)
is rated at least “A” and “A-1” by S&P (or at least “A+” by S&P if such
institution has no short-term rating) and (y) satisfies the Fitch Eligible
Counterparty Ratings and (ii) is a Securities Intermediary.

 

“Eligible Investment Required Ratings”: (a) “A-1” or higher (or, in the absence
of a short-term credit rating, “A+” or higher) from S&P and (b) for securities
with maturities up to 365 days, a long-term credit rating not less than “AA-”
from Fitch and a short-term rating not less than “F1+” from Fitch.

 

“Eligible Investments”: (i) Cash or (ii) any Dollar investment that, at the time
it is Delivered to the Trustee (directly or through an intermediary or bailee),
is one or more of the following obligations or securities:

 

(a)direct Registered obligations of, and Registered obligations the timely
payment of principal and interest on which is fully and expressly guaranteed by,
the United States of America or any agency or instrumentality of the United
States of America the obligations of which are expressly backed by the full
faith and credit of the United States of America and which satisfy the Eligible
Investment Required Ratings;

 

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

 

29

 

 

(c)commercial paper or other short-term obligations (excluding extendible
commercial paper or asset backed commercial paper) which satisfy the Eligible
Investment Required Ratings and that either bear interest or are sold at a
discount from the face amount thereof and have a maturity of not more than 183
days from their date of issuance; and

 

(d)registered money market funds which funds have, at all times, credit ratings
of (a) “AAAm” by S&P and (b) either the highest credit rating assigned by Fitch
(“AAAmmf”) to the extent rated by Fitch or otherwise the highest credit rating
assigned by another NRSRO (excluding S&P);

 

provided, however, that (A) Eligible Investments purchased with funds in the
Collection Account shall be held until maturity except as otherwise specifically
provided herein and shall include only such obligations or securities, other
than those referred to in clause (d) above, as mature (or are putable at par to
the issuer or Obligor thereof) no later than the earlier of 60 days from the
date of purchase and the Business Day prior to the next Payment Date unless such
Eligible Investments are issued by the Trustee in its capacity as a banking
institution, in which event such Eligible Investments may mature on such Payment
Date, and (B) Eligible Investments shall exclude any investments not treated as
“cash equivalents” for purposes of Section 75.10(c)(8)(iii)(A) of the
regulations implementing the Volcker Rule in accordance with any applicable
interpretive guidance thereunder (provided that, any direction given by the
Portfolio Manager to the Trustee to invest in an Eligible Investment shall be
deemed to be a confirmation from the Portfolio Manager to the Trustee that such
Eligible Investment complies with the requirements of this clause (B));
provided, further, that none of the foregoing obligations or securities shall
constitute Eligible Investments if (1) all, or substantially all, of the
remaining amounts payable thereunder consist of interest and not principal
payments, (2) payments with respect to such obligations or securities or
proceeds of disposition are subject to withholding taxes by any jurisdiction
unless the payor is required to make “gross-up” payments that cover the full
amount of any such withholding tax on an after-tax basis, (3) such obligation or
security is secured by real property, (4) such obligation or security is
purchased at a price greater than 100% of the principal or face amount thereof,
(5) such obligation or security is the subject of a tender offer, voluntary
redemption, exchange offer, conversion or other similar action, (6) in the
Portfolio Manager’s judgment, such obligation or security is subject to material
non-credit related risks, (7) such obligation invests in or constitutes a
Structured Finance Obligation or (8) such obligation or security is represented
by a certificate of interest in a grantor trust. Eligible Investments may
include, without limitation, those investments (x) issued by or made with the
Bank or an Affiliate of the Bank or for which the Bank or an Affiliate of the
Bank acts as offeror or provides services and receives compensation or (y) for
which the Portfolio Manager or an Affiliate of the Portfolio Manager provides
services and receives compensation.

 

30

 

 

“Enforcement Event”: The meaning specified in Section 5.4(a).

 

“Entitlement Order”: The meaning specified in Article 8 of the UCC.

 

“Equity Security”: Any security or debt obligation (other than any security
received in connection with an insolvency, bankruptcy, reorganization, debt
restructuring or workout of the Obligor thereof (other than common stock)) which
at the time of acquisition, conversion or exchange, does not satisfy the
requirements of a Collateral Obligation and is not an Eligible Investment; it
being understood that the Issuer may only acquire Equity Securities and
securities received in connection with an insolvency, bankruptcy,
reorganization, debt restructuring or workout of the issuer or Obligor thereof
that would be considered “received in lieu of debts previously contracted with
respect to the Collateral Obligation” under the Volcker Rule.

 

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

 

“EU Retention Holder”: As of the Closing Date, FS KKR Capital Corp., in its
capacity as an originator, and thereafter any successor, assignee or transferee
of the Retention Interest permitted under the EU Securitization Laws.

 

“EU Retention Undertaking Letter”: The letter from the EU Retention Holder,
dated as of the Closing Date, and addressed to the Issuer, the Initial
Purchaser, the Placement Agents and the Trustee pursuant to which the EU
Retention Holder will make certain undertakings and agreements in respect of the
EU Securitization Laws.

 

“Euroclear”: Euroclear Bank S.A./N.V.

 

“EU Securitization Laws”: Regulation (EU) 2017/2402, together with any
supplementary regulatory technical standards, implementing technical standards
and any official guidance published in relation thereto by the European
supervisory authorities, and any implementing laws or regulations in force on
the Closing Date.

 

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

 

“Excel Default Model Input File”: A Microsoft Excel file that provides all of
the inputs required to determine whether the S&P CDO Monitor Test has been
satisfied and, if applicable, the Collateral Administrator shall provide a
Microsoft Excel file including, at a minimum, (i) the then-current balance of
each Account and (ii) the following data with respect to each Collateral
Obligation: CUSIP number (if any), name of Obligor, coupon, spread (if
applicable), legal final maturity date, average life, principal balance,
identification as a Cov-Lite Loan or otherwise, settlement date (or anticipated
settlement date), with respect to any Collateral Obligation the Issuer’s
acquisition of which has not yet settled, the purchase price of such Collateral
Obligation, S&P Industry Classification, S&P Rating, S&P Recovery Rate, LoanX
identification number (if applicable), in the case of a Floating Rate Obligation
with a LIBOR floor, the applicable specified “floor” rate per annum and an
indication as to whether each such Collateral Obligation is (1) a Senior Secured
Loan, (2) a Second Lien Loan or (3) an Unsecured Loan.

 

“Excepted Advances”: Customary advances made to protect or preserve rights
against the borrower of or Obligor under a Collateral Obligation or to indemnify
an agent or representative for lenders (for which the Issuer may receive a
participation interest or other right of repayment) pursuant to the Underlying
Instrument.

 

31

 

 

“Excess CCC Adjustment Amount”: As of any date of determination, an amount equal
to the excess, if any, of (i) the Aggregate Principal Balance of all Collateral
Obligations included in the CCC Excess, over (ii) the sum of the Market Values
of all Collateral Obligations included in the CCC Excess.

 

“Excess Par Amount”: An amount, as of any Determination Date, equal to the
greater of (a) zero and (b)(i) the Collateral Principal Amount less (ii) the
Reinvestment Target Par Balance.

 

“Excess Weighted Average Coupon”: A percentage equal as of any date of
determination to a number obtained by multiplying (a) the excess, if any, of the
Weighted Average Coupon over the Minimum Weighted Average Coupon by (b) the
number obtained, including for this purpose any capitalized interest, by
dividing the Aggregate Principal Balance of all Fixed Rate Obligations by the
Aggregate Principal Balance of all Floating Rate Obligations.

 

“Excess Weighted Average Floating Spread”: A percentage equal as of any date of
determination to a number obtained by multiplying (a) the excess, if any, of the
Weighted Average Floating Spread over the Minimum Floating Spread by (b) the
number obtained, including for this purpose any capitalized interest, by
dividing the Aggregate Principal Balance of all Floating Rate Obligations by the
Aggregate Principal Balance of all Fixed Rate Obligations.

 

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

 

“Exchanged Defaulted Obligation”: The meaning specified in Section 12.4(a).

 

“Exchange Transaction”: The meaning specified in Section 12.4(a).

 

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

 

“FATCA”: Sections 1471 through 1474 of the Code and any related provisions of
law, court decisions or administrative guidance, treaty or intergovernmental
agreement between the United States and another taxing jurisdiction, any
implementing legislation, regulations, guidance notes or rules in respect of any
intergovernmental agreement, or any agreement entered into with a taxing
authority under or with respect to any of the foregoing, including the Issuer
entering into and complying with an agreement with the IRS contemplated by
Section 1471(b).

 

“Fee Basis Amount”: As of any date of determination, the sum of (a) the
Aggregate Principal Balance of the Collateral Obligations, (b) without
duplication, the Aggregate Principal Balance of the Defaulted Obligations, (c)
without duplication, the amounts on deposit in the Collection Account and the
Ramp-Up Account (including Eligible Investments therein) representing Principal
Proceeds and (d) the aggregate amount of all Principal Financed Accrued
Interest.

 

“Fiduciary”: The meaning specified in Section 2.5(o).

 

“Filing Holder”: The meaning specified in Section 13.1(d).

 

32

 

 

“Financial Asset”: The meaning specified in Article 8 of the UCC.

 

“Financing Statements”: The meaning specified in Article 9 of the UCC.

 

“First Interest Determination End Date”: July 15, 2019.

 

“First Lien Last Out Loan”: Any assignment of or Participation Interest in a
Loan that: (a) may by its terms become subordinate in right of payment to any
other obligation of the Obligor of the Loan solely upon the occurrence of a
default or event of default by the Obligor of the Loan and (b) is secured by a
valid perfected first priority security interest or lien in, to or on specified
collateral securing the Obligor’s obligations under the Loan.

 

“Fitch”: Fitch Ratings, Inc. and any successor in interest.

 

“Fitch Collateral Value”: With respect to any Defaulted Obligation, the lesser
of (i) the Fitch Recovery Amount of such Defaulted Obligation as of the relevant
Measurement Date and (ii) the Market Value of such Defaulted Obligation as of
the relevant Measurement Date.

 

“Fitch Eligible Counterparty Ratings”: With respect to an institution,
investment or counterparty, a short-term credit rating of at least “F1” or a
long-term credit rating of at least “A” by Fitch.

 

“Fitch Industry Classifications”: The industry classifications set forth in
Schedule 8 hereto, as such industry classification shall be updated at the
option of the Portfolio Manager from time to time if Fitch publishes revised
industry classifications.

 

“Fitch Rating”: With respect to any Collateral Obligation, the rating determined
pursuant to the methodology set forth under the heading “Fitch Rating” on
Schedule 5 hereto (or such other schedule provided by Fitch to the Issuer, the
Trustee, the Collateral Administrator and the Portfolio Manager).

 

“Fitch Rating Factor”: In respect of any Collateral Obligation, the number set
forth in the table below opposite the Fitch Rating in respect of such Collateral
Obligation:

 

Fitch Rating

Fitch Rating
Factor

AAA 0.19 AA+ 0.35 AA 0.64 AA- 0.86 A+ 1.17 A 1.58 A- 2.25 BBB+ 3.19 BBB 4.54
BBB- 7.13 BB+ 12.19 BB 17.43

  

33

 

 

Fitch Rating

Fitch Rating Factor

BB- 22.80 B+ 27.80 B 32.18 B- 40.60 CCC+ 62.80 CCC 62.80 CCC- 62.80 CC 100.00 C
100.00 D 100.00

 

“Fitch Recovery Amount”: With respect to any Collateral Obligation, an amount
equal to:

 

(a)the applicable Fitch Recovery Rate; multiplied by

 

(b)the Principal Balance of such Collateral Obligation.

 

“Fitch Recovery Rate”: The meaning specified in Schedule 5 hereto.

 

“Fitch Test Matrix”: The meaning specified in Schedule 5 hereto.

 

“Fitch Weighted Average Rating Factor”: The number determined by (a) summing the
products of (i) the Principal Balance of each Collateral Obligation multiplied
by (ii) its Fitch Rating Factor, (b) dividing such sum by the Aggregate
Principal Balance of all such Collateral Obligations and (c) rounding the result
down to the nearest two decimal places. For the purposes of determining the
Principal Balance and Aggregate Principal Balance of Collateral Obligations in
this definition, the Principal Balance of each Defaulted Obligation shall be
excluded.

 

“Fixed Rate Obligation”: Any Collateral Obligation that bears a fixed rate of
interest.

 

“Floating Rate Obligation”: Any Collateral Obligation that bears a floating rate
of interest.

 

“FRB”: Any Federal Reserve Bank.

 

“GAAP”: The meaning specified in Section 6.3(i).

 

“Global Note”: Any Rule 144A Global Note, Temporary Global Note or Regulation S
Global Note.

 

“Global Rating Agency Condition”: With respect to any action taken or to be
taken by or on behalf of the Issuer, satisfaction of the S&P Rating Condition
together with notice to Fitch of such action at least five Business Days (or, if
Fitch agrees to less than five Business Days’ notice, such lesser period) prior
to taking such action; provided that, Fitch may waive such applicable notice
requirement and S&P may waive the requirement to satisfy the S&P Rating
Condition and to the extent Fitch or S&P waives its respective requirements, the
Global Rating Agency Condition will be deemed satisfied with respect to such
Rating Agency.

 

34 

 

“Governmental Authority”: Whether U.S. or non-U.S., (i) any national, state,
county, municipal or regional government or quasi-governmental authority or
political subdivision thereof; (ii) any agency, regulator, arbitrator, board,
body, branch, bureau, commission, corporation, department, master, mediator,
panel, referee, system or instrumentality of any such government or
quasi-government entity, or political subdivision thereof; and (iii) any court.

 

“Grant” or “Granted”: To grant, bargain, sell, alienate, convey, assign,
transfer, mortgage, pledge, create and grant a security interest in and right of
set off against. A Grant of property shall include all rights, powers and
options (but none of the obligations) of the granting party thereunder,
including without limitation the immediate and continuing right to claim for,
collect, receive and receipt for principal and interest payments in respect
thereof, and all other amounts payable thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring legal or other proceedings in the name of the
granting party or otherwise, and generally to do and receive anything that the
granting party is or may be entitled to do or receive thereunder or with respect
thereto.

 

“Group I Country”: The Netherlands, Australia, New Zealand, Canada and the
United Kingdom (or such other countries as may be specified in publicly
available published criteria from Moody’s from time to time and/or identified by
Moody’s to the Portfolio Manager from time to time).

 

“Group II Country”: Germany, Ireland, Sweden and Switzerland (or such other
countries as may be specified in publicly available published criteria from
Moody’s from time to time and/or identified by Moody’s to the Portfolio Manager
from time to time).

 

“Group III Country”: Austria, Belgium, Denmark, Finland, France, Hong Kong,
Iceland, Liechtenstein, Luxembourg, Singapore and Norway (or such other
countries as may be specified in publicly available published criteria from
Moody’s from time to time and/or identified by Moody’s to the Portfolio Manager
from time to time).

 

“hedge agreement”: The meaning specified in Section 8.2(f).

 

“Highest Ranking S&P Class”: As of any date of determination, the Outstanding
Class of Notes that is rated by S&P on such date and ranks higher in right of
payment than each other Class of Notes in the Note Payment Sequence.

 

“Holder”: With respect to any Note, the Person(s) whose name(s) appear on the
Register as the registered holder(s) of such Note or the holder of a beneficial
interest in (i.e., a beneficial owner of) such Note except as otherwise provided
herein or, with respect to any Interest, the Person whose name appears on the
books and records of the Issuer as the owner of such Interest.

 

“IAI/QP”: Any Person that, at the time of its acquisition, purported acquisition
or proposed acquisition of Notes is both an Institutional Accredited Investor
and a Qualified Purchaser.

 

“Illiquid Asset”: (a) A Defaulted Obligation, an Equity Security, an obligation
received in connection with an Offer or other exchange or any other security or
debt obligation that is part of the Assets, in respect of which (i) the Issuer
has not received a payment in Cash during the preceding twelve calendar months
and (ii) the Portfolio Manager certifies that it is not aware, after reasonable
inquiry, that the issuer or Obligor of such asset has publicly announced or
informed the holders of such asset that it intends to make a payment in Cash in
respect of such asset within the next twelve calendar months or (b) any asset,
claim or other property identified in a certificate of the Portfolio Manager as
having a Market Value of less than U.S.$1,000.

 

35 

 

“Incurrence Covenant”: A covenant by any borrower to comply with one or more
financial covenants only upon the occurrence of certain actions of the borrower,
including a debt issuance, dividend payment, share purchase, merger, acquisition
or divestiture, unless, as of any date of determination, such action was taken
or such event has occurred, in each case the effect of which causes such
covenant to meet the criteria of a Maintenance Covenant.

 

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

 

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

 

Whenever any Independent Person’s opinion or certificate is to be furnished to
the Trustee, such opinion or certificate shall state that the signer has read
this definition and that the signer is Independent within the meaning hereof.

 

Any pricing service, certified public accountant or legal counsel that is
required to be Independent of another Person under this Indenture must satisfy
the criteria above with respect to the Issuer, the Portfolio Manager and their
respective Affiliates; provided, however, that Dechert LLP shall be deemed for
all purposes of this Indenture to be “Independent” with respect to the Issuer
and the Portfolio Manager.

 

“Independent Manager”: A natural person who, (A) for the five-year period prior
to his or her appointment as Independent Manager, has not been, and during the
continuation of his or her service as Independent Manager is not: (i) an
employee, director, member, manager, or officer or direct or indirect legal or
beneficial owner (or a person who controls, whether directly, indirectly, or
otherwise any of the foregoing) of the Issuer or any of its Affiliates (other
than his or her service as an independent special member or an independent
manager of the Issuer or other Affiliates that are structured to be “bankruptcy
remote”); (ii) a substantial customer, consultant, creditor, contractor or
supplier (or a person who controls, whether directly, indirectly, or otherwise
any of the foregoing) of the Issuer, the member of the Issuer or any of their
respective Affiliates (other than an Independent Manager provided by a
nationally recognized company that provides independent special members,
independent managers and other corporate services in the ordinary course of its
business); or (iii) any member of the immediate family of a person described in
(i) or (ii) (other than with respect to clause (i), or (ii) relating to his or
her service as (y) an Independent Manager of the Issuer or (z) an independent
special member or independent manager of any Affiliate of the Issuer which is a
bankruptcy remote limited purpose entity), and (B) has, (i) prior experience as
an independent special member, independent director or independent manager for a
trust, corporation or limited liability company whose charter documents required
the unanimous consent of all independent special members, independent directors
or independent managers thereof before such trust, corporation or limited
liability company could consent to the institution of bankruptcy or insolvency
proceedings against it or could file a petition seeking relief under any
applicable federal or state law relating to bankruptcy and (ii) at least three
years of employment experience with one or more entities that provide, in the
ordinary course of their respective businesses, advisory, management or
placement services to issuers of securitization or structured finance
instruments, agreements or securities.

 

36 

 

“Index Maturity”: With respect to any Class of Notes (other than any Class that
bears interest at a fixed rate), three months; provided, that for the portion of
the first Interest Accrual Period preceding the First Interest Determination End
Date, LIBOR will be determined by interpolating linearly (and rounding to five
decimal places) between the rate appearing on the Reuters Screen for deposits
with a term of the next shorter period of time (relative to the length of such
portion of the first Interest Accrual Period) for which rates are available and
the rate appearing on the Reuters Screen for deposits with a term of the next
longer period of time (relative to the length of such portion of the first
Interest Accrual Period) for which rates are available; provided further that
for the portion of the first Interest Accrual Period following the First
Interest Determination End Date, the Index Maturity will be three months;
provided further that for the first Interest Accrual Period with respect to any
additional notes issued after the Closing Date in connection with a Refinancing,
LIBOR will be determined by interpolating linearly (and rounding to five decimal
places) between the rate appearing on the Reuters Screen for deposits with a
term of the next shorter period of time (relative to the length of such Interest
Accrual Period) for which rates are available and the rate appearing on the
Reuters Screen for deposits with a term of the next longer period of time
(relative to the length of such Interest Accrual Period) for which rates are
available.

 

“Information” means S&P’s “Credit Estimate Information Requirements” dated April
2011 and any other available information S&P reasonably requests in order to
produce a credit estimate for a particular asset.

 

“Information Agent”: The meaning specified in Section 7.20(b).

 

“Initial Principal Amount”: With respect to any Class of Notes, the Dollar
amount specified with respect to such Class in Section 2.3(b).

 

“Initial Purchaser”: Citigroup Global Markets Inc., in its capacity as initial
purchaser of the Notes.

 

“Initial Rating”: With respect to the Notes, the rating or ratings, if any,
indicated in Section 2.3(b).

 

37 

 

“Institutional Accredited Investor”: The meaning set forth in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act.

 

“Instrument”: The meaning specified in Article 9 of the UCC.

 

“Interest Accrual Period”: (i) With respect to the initial Payment Date, the
period from and including the Closing Date to but excluding such Payment Date;
and (ii) with respect to each succeeding Payment Date, the period from and
including the immediately preceding Payment Date to but excluding the following
Payment Date until the principal of the Notes is paid or made available for
payment; provided that, any interest-bearing notes issued after the Closing Date
in accordance with the terms of this Indenture shall accrue interest during the
Interest Accrual Period in which such additional notes are issued from and
including the applicable date of issuance of such additional notes to but
excluding the last day of such Interest Accrual Period at the applicable
Interest Rate.

 

“Interest Collection Account”: The meaning specified in Section 10.2(a).

 

“Interest Coverage Ratio”: For any designated Class or Classes of Notes, as of
any date of determination on or after the Determination Date immediately
preceding the second Payment Date, the percentage derived from the following
equation: (A – B) / C, where:

 

A = The Collateral Interest Amount as of such date of determination;

 

B = Amounts payable (or expected as of the date of determination to be payable)
on the following Payment Date as set forth in clauses (A) and (B) in Section
11.1(a)(i); and

 

C = Interest due and payable on the Notes of such Class or Classes and each
Class of Notes that ranks senior to or pari passu with such Class or Classes
(excluding Deferred Interest, but including any interest on Deferred Interest
with respect to the Deferred Interest Notes) on such Payment Date.

 

For the avoidance of doubt, any Base Management Fees that would otherwise be
payable on the following Payment Date, but that as of such date of determination
have been designated by the Portfolio Manager as Waived Management Fees in
accordance with Section 11.1(e) shall be excluded from the calculation set forth
in item (B) above.

 

“Interest Coverage Test”: A test that is satisfied with respect to any Class or
Classes of Notes as of any date of determination on, or subsequent to, the
Determination Date occurring immediately prior to the second Payment Date, if
(i) the Interest Coverage Ratio for such Class or Classes on such date is at
least equal to the Required Interest Coverage Ratio for such Class or Classes or
(ii) such Class or Classes of Notes is/are no longer Outstanding.

 

“Interest Determination Date”: With respect to (a) the first Interest Accrual
Period, (x) for the period from the Closing Date to but excluding the First
Interest Determination End Date, the second London Banking Day preceding the
Closing Date and (y) for the remainder of the first Interest Accrual Period, the
second London Banking Day preceding the First Interest Determination End Date
and (b) each Interest Accrual Period thereafter, the second London Banking Day
preceding the first day of such Interest Accrual Period; provided that, for the
first Interest Accrual Period with respect to any additional notes issued after
the Closing Date in connection with a Refinancing, the Interest Determination
Date shall be the second London Banking Day preceding the date of such
Refinancing.

 

38 

 

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

 

“Interest Proceeds”: With respect to any Collection Period or Determination
Date, without duplication, the sum of:

 

(i)all payments of interest and delayed compensation (representing compensation
for delayed settlement) received in Cash by the Issuer during the related
Collection Period on the Collateral Obligations and Eligible Investments,
including the accrued interest received in connection with a sale thereof during
the related Collection Period, less any such amount that represents Principal
Financed Accrued Interest;

 

(ii)all principal and interest payments received by the Issuer during the
related Collection Period on Eligible Investments purchased with Interest
Proceeds;

 

(iii)commitment fees and other similar fees received by the Issuer during such
Collection Period in respect of Revolving Collateral Obligations and Delayed
Drawdown Collateral Obligations;

 

(iv)any amounts deposited in the Collection Account from the Expense Reserve
Account, the Contribution Account and/or the Interest Reserve Account that are
designated as Interest Proceeds pursuant to this Indenture in respect of the
related Determination Date;

 

(v)any Designated Principal Proceeds and any Designated Unused Proceeds;

 

(vi)all amendment and waiver fees (other than those in connection with a
Maturity Amendment), all late payment fees, prepayment fees, call premiums,
commitment fees and all other fees and commissions (other than (x) fees and
commissions received in connection with the purchase, sale, restructuring or
default of Collateral Obligations and (y) except with respect to call premiums
or prepayment fees, the reduction of the par amount of the related Collateral
Obligation, in each case, as determined by the Portfolio Manager with notice to
the Trustee and the Collateral Administrator) received during such Collection
Period in connection with the Collateral Obligations (unless otherwise
designated as Principal Proceeds by the Portfolio Manager in writing to the
Trustee);

 

(vii)any Principal Proceeds designated by the Portfolio Manager as Interest
Proceeds in connection with a Refinancing pursuant to which all Notes are being
refinanced, up to the Excess Par Amount for payment on the Redemption Date of a
Refinancing; and

 

39 

 

(viii)any payments received as repayment for Excepted Advances;

 

provided that, (1) any amounts received in respect of any Defaulted Obligation
will constitute Principal Proceeds (and not Interest Proceeds) until the
aggregate of all collections in respect of such Defaulted Obligation since it
became a Defaulted Obligation equals the Principal Balance of such Collateral
Obligation at the time it became a Defaulted Obligation and (2) any amounts
received in respect of any Defaulted Obligation that was exchanged for an Equity
Security will constitute Principal Proceeds (and not Interest Proceeds) until
the aggregate of all collections (including proceeds received upon the
disposition of the Equity Security received in the exchange) in respect of such
Defaulted Obligation since the time it became a Defaulted Obligation equals the
Principal Balance of the Collateral Obligation at the time it became a Defaulted
Obligation and any amounts received in excess thereof (such amounts, “Exchanged
Equity Security Excess Proceeds”) shall be calculated by the Issuer and will be
deposited in the Collection Account and distributed as Interest Proceeds on the
following Payment Date; provided that, if any additional amounts are received
after the initial distribution of Exchanged Equity Security Excess Proceeds such
additional amounts will be distributed as Interest Proceeds on the next
succeeding Payment Date following the Payment Date relating to the period in
which such additional amounts were received.

 

“Interest Rate”: With respect to any Class of Notes, (i) unless a Re-Pricing has
occurred with respect to such Class of Notes, the per annum stated interest rate
payable on such Class with respect to each Interest Accrual Period as specified
in Section 2.3(b) and (ii) upon the occurrence of a Re-Pricing with respect to
such Class of Notes, a per annum stated interest rate equal to (x) the
applicable Re-Pricing Rate plus (h) in the case of a floating rate of interest,
LIBOR.

 

“Interest Reserve Account”: The meaning specified in Section 10.3(e).

 

“Interest Reserve Amount”: The meaning specified in Section 3.1(a)(xii).

 

“Interests”: The Interests issued by the Issuer on or prior to the Closing Date
and any additional Interests issued pursuant to the Issuer LLCA subject to
compliance with the terms of this Indenture.

 

“Intex”: Intex Solutions, Inc.

 

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

 

“Investment Criteria”: The criteria specified in Section 12.2(a).

 

“Investment Criteria Adjusted Balance”: With respect to each Collateral
Obligation (other than a Defaulted Obligation), the Principal Balance of such
Collateral Obligation; provided that, the Investment Criteria Adjusted Balance
of any:

 

(a)Deferring Obligation will be the S&P Collateral Value of such Deferring
Obligation;

 

40 

 

(b)Discount Obligation will be the product of the (i) purchase price (expressed
as a percentage of par and, for the avoidance of doubt, without averaging) and
(ii) Principal Balance of such Discount Obligation;

 

(c)Collateral Obligation included in the CCC Excess will be the Market Value of
such Collateral Obligation; and

 

(d)Closing Date Participation Interest will be its S&P Recovery Amount if such
date of determination is on or after the Effective Date;

 

provided further that the Investment Criteria Adjusted Balance for any
Collateral Obligation that satisfies more than one of the definitions of
Deferring Obligation, Discount Obligation or Closing Date Participation
Interest, or is included in the CCC Excess, as applicable, will be the lowest
amount determined pursuant to any of clauses (a), (b) and (c) above that are
applicable for such Collateral Obligation.

 

“Issuer”: As defined in the first sentence of this Indenture, until a successor
Person shall have become the Issuer pursuant to the applicable provisions of
this Indenture, and thereafter “Issuer” shall mean such successor Person.

 

“Issuer LLCA”: The Amended and Restated Limited Liability Company Agreement of
the Issuer, dated as of the Closing Date.

 

“Issuer Order” and “Issuer Request”: A written order or request (which may be a
standing order or request) dated and signed in the name of the Issuer by an
Authorized Officer of the Issuer, or by the Portfolio Manager by an Authorized
Officer thereof, on behalf of the Issuer. An order or request provided in an
email or other electronic communication by an Authorized Officer of the Issuer
or by an Authorized Officer of the Portfolio Manager on behalf of the Issuer
shall constitute an Issuer Order, except in each case to the extent the Trustee
requests otherwise in writing.

 

“Junior Class”: With respect to a particular Class of Notes, each Class of Notes
that is subordinated to such Class, as indicated in Section 2.3(b).

 

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

 

“Lead Placement Agent”: Citigroup Global Markets Inc., in its capacity as lead
placement agent with respect to the Notes.

 

“Letter of Credit Reimbursement Obligation”: A facility whereby (i) a fronting
bank (the “LOC Agent Bank”) issues or will issue a letter of credit for or on
behalf of a borrower pursuant to an Underlying Instrument, (ii) in the event
that the letter of credit is drawn upon, and the borrower does not reimburse the
LOC Agent Bank, the lender/participant is obligated to fund its portion of the
facility and (iii) the LOC Agent Bank passes on (in whole or in part) the fees
and any other amounts it receives for providing the letter of credit to the
lender/participant.

 

“LIBOR”: The meaning set forth in Exhibit C hereto.

 

41 

 

“Loan”: Any obligation for the payment or repayment of borrowed money that is
documented by a term loan agreement, revolving loan agreement or other similar
credit agreement.

 

“Loan Sale Agreement”: The master loan sale agreement, dated as of the Closing
Date, by and between the Transferor and the Issuer, as amended from time to time
in accordance with its terms.

 

“LOC Agent Bank”: The meaning specified in the definition of the term Letter of
Credit Reimbursement Obligation.

 

“London Banking Day”: A day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits) in
London, England.

 

“Maintenance Covenant”: A covenant by a borrower that requires such borrower to
comply with one or more financial covenants during the periods or as of a
specified day in each reporting period, as the case may be, as specified in the
underlying loan agreement, regardless of any action taken by such borrower;
provided that, a covenant that otherwise satisfies this definition and only
applies to a related loan when specified amounts are outstanding under such loan
shall be a Maintenance Covenant.

 

“Majority”: With respect to any Class or Classes of Notes, the Holders of more
than 50% of the Aggregate Outstanding Amount of the Notes of such Class or
Classes. With respect to any Interests, the Majority Members (as defined in the
Issuer LLCA) of the Issuer.

 

“Management Fees”: The Base Management Fee and the Subordinated Management Fee.

 

“Manager Notes”: As of any date of determination, all Notes held on such date by
(i) the Portfolio Manager, (ii) any Affiliate of the Portfolio Manager, or (iii)
any account, fund, client or portfolio managed or advised on a discretionary
basis by the Portfolio Manager or any of its Affiliates; provided that, no such
Notes shall constitute Manager Notes hereunder for any period of time during
which the right to control the voting of such Notes has been assigned to (i)
another Person not controlled by the Portfolio Manager or any Affiliate of the
Portfolio Manager or (ii) an advisory board or other independent committee of
the governing body of the Portfolio Manager or such Affiliate.

 

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

 

“Market Value”: With respect to any Loans or other Assets, the amount
(determined by the Portfolio Manager) equal to the product of the principal
amount thereof and the price determined in the following manner:

 

(i)the bid price determined by the Loan Pricing Corporation, Markit Group
Limited, LoanX Mark-It Partners, FT Interactive, Bridge Information Systems,
KDP, IDC, Bank of America High Yield Index, Interactive Data Pricing and
Reference Data, Inc., Pricing Direct Inc., S&P Security Evaluations Service,
Thompson Reuters Pricing Service, TradeWeb Markets LLC or any other nationally
recognized loan pricing service selected by the Portfolio Manager (with notice
to the Rating Agencies); or

 

42 

 

(ii)if a price described in clause (i) is not available or the Portfolio Manager
determines in accordance with the Portfolio Manager Standard that such price
does not reflect the value of such asset,

 

  (A) the average of the bid prices determined by three broker-dealers active in
the trading of such asset that are Independent from each other and the Issuer
and the Portfolio Manager;       (B) if only two such bids can be obtained, the
lower of the bid prices of such two bids; or       (C) if only one such bid can
be obtained, such bid; provided that this subclause (C) shall not apply at any
time at which neither the Portfolio Manager nor FS/KKR Advisor, LLC is a
registered investment adviser (or relying adviser) under the Advisers Act; or

 

(iii)if a price described in clause (i) or (ii) cannot be determined by the
Portfolio Manager exercising reasonable efforts, then the value determined as
the bid side market value of such asset as reasonably determined by the
Portfolio Manager consistent with the Portfolio Manager Standard, as certified
by the Portfolio Manager to the Trustee; provided, however, that if neither the
Portfolio Manager nor FS/KKR Advisor, LLC is a registered investment adviser (or
relying adviser) under the Advisers Act, the Market Value of any such asset may
not be determined in accordance with this clause (iii) for more than 30 days; or

 

(iv)if the Market Value of an asset is not determined in accordance with clause
(i), (ii) or (iii) above, then such Market Value shall be deemed to be zero
until such determination is made in accordance with clause (i), (ii) or (iii)
above.

 

“Master Participation Agreement”: Each master participation and assignment
agreement, dated as of the Closing Date, between the Transferor, as parent, and
the applicable wholly-owned financing subsidiary of the Transferor.

 

“Material Covenant Default”: A default by an Obligor with respect to any
Collateral Obligation, and subject to any grace periods contained in the related
Underlying Instruments, that gives rise to the right of the lender(s) thereunder
to accelerate the principal of such Collateral Obligation.

 

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

 

“Maturity Amendment”: With respect to any Collateral Obligation, any waiver,
modification, amendment or variance (other than in connection with an
insolvency, bankruptcy, reorganization, debt restructuring or workout of the
Obligor thereof if the Portfolio Manager determines (i) in the case of a
Collateral Obligation that in the Portfolio Manager’s determination is likely to
become a Defaulted Obligation, that such amendment in connection therewith would
reduce the likelihood that such Collateral Obligation will become a Defaulted
Obligation or (ii) if such Collateral Obligation is already a Defaulted
Obligation, would in the Portfolio Manager’s determination be advisable to
increase recovery) that would extend the stated maturity date of such Collateral
Obligation. For the avoidance of doubt, a waiver, modification, amendment or
variance that would extend the stated maturity date of any tranche of the credit
facility of which a Collateral Obligation is part, but would not extend the
stated maturity date of the Collateral Obligation held by the Issuer, does not
constitute a Maturity Amendment.

 

43 

 

“Maximum Fitch Rating Factor Test”: A test that will be satisfied on any date of
determination on or after the Effective Date if the Fitch Weighted Average
Rating Factor as of such date is less than or equal to the applicable level in
the Fitch Test Matrix.

 

“Measurement Date”: (i) Any day on which the Issuer purchases, or enters into a
commitment to purchase, a Collateral Obligation, (ii) any Determination Date,
(iii) the date as of which the information in any Monthly Report is calculated,
(iv) with five Business Days’ prior written notice to the Issuer and the Trustee
(with a copy to the Portfolio Manager), any Business Day requested by any Rating
Agency and (v) the Effective Date.

 

“Merging Entity”: The meaning specified in Section 7.10.

 

“Minimum Denominations”: With respect to the Notes, U.S.$250,000 and integral
multiples of U.S.$1.00 in excess thereof, or such other authorized minimum
denominations as may be permitted from time to time pursuant to a supplemental
indenture entered into in accordance with Article VIII.

 

“Minimum Floating Spread”: As of any date of determination, the weighted average
spread (expressed as a percentage) applicable to the current Fitch Test Matrix
selected by the Portfolio Manager.

 

“Minimum Floating Spread Test”: A test that will be satisfied on any date of
determination if the Weighted Average Floating Spread plus the Excess Weighted
Average Coupon equals or exceeds the Minimum Floating Spread.

 

“Minimum Weighted Average Coupon”: 7.50%.

 

“Minimum Weighted Average Coupon Test”: The test that will be satisfied on any
date of determination if the Weighted Average Coupon plus the Excess Weighted
Average Floating Spread equals or exceeds the Minimum Weighted Average Coupon.

 

“Minimum Weighted Average Fitch Recovery Rate Test”: A test that will be
satisfied on any date of determination if the Weighted Average Fitch Recovery
Rate is greater than or equal to the applicable level in the Fitch Test Matrix.

 

“Money”: The meaning specified in Article 1 of the UCC.

 

“Monthly Report”: The meaning specified in Section 10.7(a).

 

44 

 

“Monthly Report Determination Date”: The meaning specified in Section 10.7(a).

 

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

 

“Moody’s Default Probability Rating”: With respect to any Collateral Obligation,
the rating determined pursuant to Schedule 4 hereto (or such other schedule
provided by Moody’s to the Issuer, the Trustee, the Collateral Administrator and
the Portfolio Manager).

 

“Moody’s Derived Rating”: With respect to any Collateral Obligation whose
Moody’s Rating or Moody’s Default Probability Rating cannot otherwise be
determined pursuant to the definitions thereof, the rating determined for such
Collateral Obligation as set forth in Schedule 4 hereto (or such other schedule
provided by Moody’s to the Issuer, the Trustee, the Collateral Administrator and
the Portfolio Manager).

 

“Moody’s Rating”: With respect to any Collateral Obligation, the rating
determined pursuant to the methodology set forth under the heading “Moody’s
Rating” on Schedule 4 hereto (or such other schedule provided by Moody’s to the
Issuer, the Trustee, the Collateral Administrator and the Portfolio Manager).

 

“Net Exposure Amount”: As of the applicable Cut-Off Date, with respect to any
Collateral Obligation which is a Revolving Collateral Obligation or Delayed
Drawdown Collateral Obligation, the lesser of (i) the aggregate amount of the
then unfunded funding obligations thereunder and (ii) the amount necessary to
cause, on the applicable Cut-Off Date with respect to such Collateral
Obligation, the amount of funds on deposit in the Revolver Funding Account to be
at least equal to the sum of the unfunded funding obligations under all Delayed
Drawdown Collateral Obligations and Revolving Collateral Obligations then
included in the Assets.

 

“Net Purchased Loan Balance”: As of any date of determination, an amount equal
to the sum of (i) the Aggregate Principal Balance of all Collateral Obligations
conveyed, directly or indirectly, by the Portfolio Manager to the Issuer under
the Loan Sale Agreement prior to such date, calculated as of the respective
Cut-Off Dates of such Collateral Obligations, and (ii) the Aggregate Principal
Balance of all Collateral Obligations acquired by the Issuer other than directly
or indirectly from the Portfolio Manager prior to such date.

 

“Non-Call Period”: The period from the Closing Date to but excluding the
Quarterly Payment Date in July 2020.

 

“Non-Consenting Holder”: The meaning specified in Section 9.8(b).

 

“Non-Emerging Market Obligor”: An Obligor that is Domiciled in (i) the United
States, (ii) any country that has a country ceiling for foreign currency bonds
of at least “Aa3” by Moody’s, (ii) any country that has a foreign currency
issuer credit rating of at least “AA-” by S&P or (iii) a Tax Jurisdiction;
provided that, an Obligor that is Domiciled in any country that has (x) a
foreign currency issuer credit rating of at least “AA-” by S&P and (y) to the
extent such country is rated by Fitch, a sovereign rating of at least “AA-” by
Fitch shall be deemed a Non-Emerging Market Obligor on the date of acquisition
of the related Collateral Obligation by the Issuer so long as the Aggregate
Principal Balance of all Collateral Obligations falling under this proviso does
not exceed 10.0% of the Collateral Principal Amount on such date.

 

45 

 

“Non-Permitted ERISA Holder”: Any Person is or becomes the beneficial owner of
an interest in any Note who has made or is deemed to have made a prohibited
transaction representation or a Benefit Plan Investor, Controlling Person or
Similar Laws representation, as applicable, required by this Indenture that is
subsequently shown to be false or misleading, or whose beneficial ownership
otherwise causes a violation of the 25% limitation set out in the Plan Asset
Regulation, as applicable.

 

“Non-Permitted Holder”: The meaning specified in Section 2.11(b).

 

“Note Interest Amount”: With respect to any Class of Notes and any Payment Date,
the amount of interest for the related Interest Accrual Period payable in
respect of each U.S.$100,000 Aggregate Outstanding Amount of such Class of
Notes.

 

“Note Payment Sequence”: The application, in accordance with the Priority of
Payments, of Interest Proceeds or Principal Proceeds, as applicable, in the
following order:

 

(i)to the payment of accrued and unpaid interest on the Class A-1 Notes, until
such amount has been paid in full;

 

(ii)to the payment of principal of the Class A-1 Notes, until the Class A-1
Notes have been paid in full;

 

(iii)to the payment of accrued and unpaid interest on the Class A-2 Notes, until
such amount has been paid in full;

 

(iv)to the payment of principal of the Class A-2 Notes, until the Class A-2
Notes have been paid in full;

 

(v)to the payment of, first, accrued and unpaid interest (including interest on
Deferred Interest) and then, any Deferred Interest on the Class B Notes, until
such amounts have been paid in full; and

 

(vi)to the payment of principal of the Class B Notes, until the Class B Notes
have been paid in full.

 

“Note Purchase Offer”: The meaning specified in Section 2.14(b).

 

“Notes”: The Class A-1 Notes, the Class A-2 Notes and the Class B Notes.

 

“NRSRO”: The meaning specified in Section 7.20(f).

 

“Notice of Substitution”: The meaning specified in Section 12.5(a)(ii).

 

“Obligor”: The Obligor or guarantor under a loan, as the case may be.

 

“OFAC”: The U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“Offer”: The meaning specified in Section 10.8(c).

 

46 

 

“Offering”: The offering of the Notes pursuant to the Offering Circular.

 

“Offering Circular”: The final offering circular, dated June 21, 2019, relating
to the offer and sale of the Notes, and any supplements thereto.

 

“Officer”: (a) With respect to the Issuer and any limited liability company, any
managing member or manager thereof or any Person to whom the rights and powers
of management thereof are delegated in accordance with the limited liability
company agreement of such limited liability company; (b) with respect to any
corporation, any director, the chairman of the board of directors, the
president, any vice president, the secretary, an assistant secretary, the
treasurer or an assistant treasurer of such entity or any Person authorized by
such entity; and (c) with respect to the Trustee and any bank or trust company
acting as trustee of an express trust or as custodian or agent, any vice
president or assistant vice president of such entity or any officer customarily
performing functions similar to those performed by a vice president or assistant
vice president of such entity.

 

“offshore transaction”: The meaning specified in Regulation S.

 

“Opinion of Counsel”: A written opinion addressed to the Trustee (or upon which
the Trustee is permitted to rely) and, if required by the terms hereof, a Rating
Agency, in form and substance reasonably satisfactory to the Trustee of a
nationally or internationally recognized and reputable law firm one or more of
the partners of which are admitted to practice before the highest court of any
State of the United States or the District of Columbia, which law firm may,
except as otherwise expressly provided in this Indenture, be counsel for the
Issuer or the Portfolio Manager, as the case may be, but must be Independent of
the Portfolio Manager. Whenever an Opinion of Counsel is required hereunder,
such Opinion of Counsel may rely on opinions of other counsel who are so
admitted and so satisfactory, which opinions of other counsel shall accompany
such Opinion of Counsel, and certificates and opinions of accountants,
investment banks, and any other Person as to relevant factual matters, all of
which such certificates and opinions shall either be addressed to the same
addressees or state that the addressees of the Opinion of Counsel shall be
entitled to rely thereon.

 

“Optional Redemption”: The meaning specified in Section 9.2(a).

 

“Other Accounts”: An investment vehicle managed by the Portfolio Manager or an
Affiliate.

 

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

 

(i)Notes theretofore canceled by the Registrar or delivered to the Registrar for
cancellation in accordance with the terms of Section 2.9 or registered in the
Register on the date the Trustee provides notice to Holders that this Indenture
has been discharged in accordance with Article IV;

 

(ii)Notes or portions thereof for whose payment or redemption funds in the
necessary amount have been theretofore irrevocably deposited with the Trustee or
any Paying Agent in trust for the Holders of such Notes pursuant to Section
4.1(a)(x)(ii); provided that, if such Notes or portions thereof are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;

 

47 

 

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

 

(iv)Notes alleged to have been mutilated, destroyed, lost or stolen for which
replacement Notes have been issued as provided in Section 2.6;

 

provided that, in determining whether the Holders of the requisite Aggregate
Outstanding Amount have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, the following Notes shall be disregarded
and deemed not to be Outstanding:

 

(i)Notes owned by the Issuer or any other obligor upon the Notes; and

 

(ii)only in the case of a vote to (i) terminate the Portfolio Management
Agreement, (ii) remove the Portfolio Manager or (iii) waive an event
constituting “cause” under the Portfolio Management Agreement as a basis for
termination of the Portfolio Management Agreement or removal of the Portfolio
Manager, any Manager Notes;

 

except that (1) in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Notes that a Bank Officer of the Trustee actually knows to be so
owned or to be Manager Notes shall be so disregarded; and (2) Notes so owned
that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to
act with respect to such Notes and that the pledgee is not one of the Persons
specified above.

 

“Overcollateralization Ratio”: With respect to any specified Class or Classes of
Notes as of any date of determination, the percentage derived from: (i) the
Adjusted Collateral Principal Amount on such date; divided by (ii) the Aggregate
Outstanding Amount on such date of the Notes of such Class or Classes
(including, in the case of Deferred Interest Notes, any accrued Deferred
Interest that remains unpaid), each Priority Class of Notes and each Pari Passu
Class or Classes of Notes; provided that, for the purposes of this definition,
the Class A-1 Notes and the Class A-2 Notes shall be treated as a single Class.

 

“Overcollateralization Ratio Test”: A test that is satisfied with respect to any
Class or Classes of Notes as of any date of determination on which such test is
applicable if (i) the Overcollateralization Ratio for such Class or Classes on
such date is at least equal to the Required Overcollateralization Ratio for such
Class or Classes or (ii) such Class or Classes of Notes is no longer
Outstanding.

 

48 

 

“Pari Passu Class”: With respect to any specified Class of Notes, each Class of
Notes that ranks pari passu to such Class, as indicated in Section 2.3(b).

 

“Partial Deferring Obligations”: A Collateral Obligation on which the interest,
in accordance with its related underlying instrument, is currently being (i)
partly paid in Cash (with a minimum Cash payment of LIBOR plus 1.00% required
under its Underlying Instruments) and (ii) partly deferred, or paid by the
issuance of additional debt securities identical to such debt security or
through additions to the principal amount thereof.

 

“Partial Redemption Date”: Any Redemption Date on which one or more but not
every Class of Notes is being refinanced with Refinancing Proceeds.

 

“Partial Redemption Interest Proceeds”: In connection with a redemption of the
Notes in part by Class, Interest Proceeds in an amount equal to the sum of (a)
the lesser of (i) the amount of accrued interest on the Classes being refinanced
(after giving effect to payments pursuant to Section 11.1(a)(i) if the Partial
Redemption Date would have been a Quarterly Payment Date without regard to the
redemption of the Notes in part by Class) and (ii) if the Partial Redemption
Date is not a Quarterly Payment Date, the amount the Portfolio Manager
reasonably determines would have been available for distribution under the
Priority of Payments for the payment of accrued interest on the Classes being
refinanced on the next subsequent Quarterly Payment Date if such Notes had not
been refinanced plus (b) if the Partial Redemption Date is not a Quarterly
Payment Date, the amount (i) the Portfolio Manager reasonably determines would
have been available for distribution under the Priority of Payments for the
payment of Administrative Expenses on the next subsequent Payment Date and (ii)
any reserve established by the Issuer with respect to such redemption of the
Notes in part by Class.

 

“Participation Interest”: A participation interest in a loan originated by a
bank or financial institution that, at the time of acquisition, or the Issuer’s
commitment to acquire the same, satisfies each of the following criteria: (i)
such participation would constitute a Collateral Obligation were it acquired
directly, (ii) the Selling Institution is a lender on the loan, (iii) the
aggregate participation in the loan granted by such Selling Institution to any
one or more participants does not exceed the principal amount or commitment with
respect to which the Selling Institution is a lender under such loan, (iv) such
participation does not grant, in the aggregate, to the participant in such
participation a greater interest than the Selling Institution holds in the loan
or commitment that is the subject of the participation, (v) the entire purchase
price for such participation is paid in full (without the benefit of financing
from the Selling Institution or its affiliates) at the time of the Issuer’s
acquisition (or, to the extent of a participation in the unfunded commitment
under a Revolving Collateral Obligation or Delayed Drawdown Collateral
Obligation, at the time of the funding of such loan), (vi) the participation
provides the participant all of the economic benefit and risk of the whole or
part of the loan or commitment that is the subject of the loan participation and
(vii) such participation is documented under a Loan Syndications and Trading
Association, Loan Market Association or similar agreement standard for loan
participation transactions among institutional market participants. For the
avoidance of doubt, a Participation Interest shall not include a
sub-participation interest in any loan.

 

“Paying Agent”: Any Person authorized by the Issuer to pay the principal of or
interest on any Notes on behalf of the Issuer as specified in Section 7.2.

 

49 

 

“Payment Account”: The payment account of the Trustee established pursuant to
Section 10.3(a).

 

“Payment Date”: Each Quarterly Payment Date and any other date or dates on which
payments are made in accordance with the Special Priority of Payments.

 

“PBGC”: The United States Pension Benefit Guaranty Corporation.

 

“Pending Transfer Deposit Amount Collection Account”: The meaning specified in
Section 10.2(a).

 

“Percentage Interests”: The meaning specified in the Issuer LLCA.

 

“Permitted Liens”: (i) Security interests, liens and other encumbrances created
pursuant to the Transaction Documents, (ii) with respect to agented Collateral
Obligations, security interests, liens and other encumbrances in favor of the
lead agent, the collateral agent or the paying agent on behalf of all holders of
indebtedness of such Obligor under the related facility, (iii) solely with
respect to any Equity Security, any security interests, liens and other
encumbrances granted on such Equity Security to secure indebtedness of the
related Obligor and/or any security interests, liens and other rights or
encumbrances granted under any governing documents or other agreement between or
among or binding upon the Issuer as the holder of equity in such Obligor and
(iv) security interests, liens and other encumbrances, if any, which have
priority over first priority perfected security interests in the Collateral
Obligations or any portion thereof under the UCC or any other applicable law.

 

“Permitted Offer”: An Offer (i) pursuant to the terms of which the offeror
offers to acquire a debt obligation (including a Collateral Obligation) in
exchange for consideration consisting of (x) cash in an amount equal to or
greater than the full face amount of the debt obligation being exchanged plus
any accrued and unpaid interest or (y) other debt obligations that rank pari
passu or senior to the debt obligation being exchanged which have a face amount
equal to or greater than the full face amount of the debt obligation being
exchanged and are eligible to be Collateral Obligations plus any accrued and
unpaid interest in cash and (ii) as to which the Portfolio Manager has
determined in its reasonable commercial judgment that the offeror has sufficient
access to financing to consummate the Offer.

 

“Permitted Use”: With respect to any Contribution received into the Contribution
Account or any proceeds received from the issuance of Junior Mezzanine Notes in
accordance with Section 2.13, any of the following uses: (i) the transfer of the
applicable portion of such amount to the Collection Account for application as
Interest Proceeds; (ii) the transfer of the applicable portion of such amount to
the Collection Account for application as Principal Proceeds; (iii) the
repurchase of Notes by the Issuer; (iv) for application to pay fees and expenses
in connection with a Refinancing, Re-Pricing or an issuance of additional notes
(including, as applicable, any supplemental indenture or other modification to
the indenture to be effected in connection therewith), in each case as
determined by the Portfolio Manager; (v) subject to the limitations in this
Indenture, to make a payment in connection with (x) the exercise of a warrant,
option, right of conversion, pre-emptive right, rights offering, credit bid or
similar right or (y) a workout or restructuring of a Collateral Obligation or an
equity security or interest received in connection with the workout or
restructuring of a Collateral Obligation; it being understood that clauses
(v)(x) and (y) can only be applied if the related exercise or acquisition of an
equity security or interest received in connection with the workout or
restructuring of a Collateral Obligation would be considered “received in lieu
of debts previously contracted with respect to the Collateral Obligation” under
the Volcker Rule; and (vi) any other use not otherwise prohibited by this
Indenture.

 

50 

 

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

 

“Placement Agents”: The Lead Placement Agent and the Co-Placement Agents.

 

“Plan Asset Regulation”: U.S. Department of Labor regulation 29 C.F.R. Section
2510.3-101 (as modified by Section 3(42) of ERISA).

 

“Portfolio Company”: Any company that is controlled by the Portfolio Manager, an
Affiliate thereof, or any account, fund, client or portfolio established and
controlled by the Portfolio Manager or an Affiliate thereof.

 

“Portfolio Management Agreement”: The agreement dated as of the Closing Date
entered into between the Issuer and the Portfolio Manager relating to the
management of the Collateral Obligations and the other Assets by the Portfolio
Manager on behalf of the Issuer, as amended from time to time in accordance with
the terms hereof and thereof.

 

“Portfolio Manager”: FS KKR Capital Corp., a Maryland corporation with its
principal offices in Philadelphia, Pennsylvania, until a successor Person shall
have become the Portfolio Manager pursuant to the provisions of the Portfolio
Management Agreement, and thereafter Portfolio Manager shall mean such successor
Person.

 

“Portfolio Manager Standard”: The meaning specified in the Portfolio Management
Agreement.

 

“Post-Reinvestment Period Settlement Obligation”: The meaning specified in
Section 12.2(a)(y).

 

“Prepaid Obligation”: A Collateral Obligation as to which Unscheduled Principal
Payments are received after the Reinvestment Period.

 

“Principal Balance”: Subject to Section 1.2, with respect to (a) any Asset other
than a Revolving Collateral Obligation or Delayed Drawdown Collateral
Obligation, as of any date of determination, the outstanding principal amount of
such Asset (excluding any capitalized interest) and (b) any Revolving Collateral
Obligation or Delayed Drawdown Collateral Obligation, as of any date of
determination, the outstanding principal amount of such Revolving Collateral
Obligation or Delayed Drawdown Collateral Obligation (excluding any capitalized
interest), plus (except as expressly set forth in this Indenture) any undrawn
commitments that have not been irrevocably reduced or withdrawn with respect to
such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation;
provided that, for all purposes the Principal Balance of (1) any Equity Security
or interest only strip shall be deemed to be zero and (2) any Defaulted
Obligation that is not sold or terminated within three years after becoming a
Defaulted Obligation shall be deemed to be zero.

 

51 

 

“Principal Collection Account”: The meaning specified in Section 10.2(a).

 

“Principal Financed Accrued Interest”: With respect to: (i) any Collateral
Obligation owned or purchased by the Issuer on the Closing Date, an amount equal
to the unpaid interest on such Collateral Obligation that accrued prior to the
Closing Date that is owing to the Issuer and remains unpaid as of the Closing
Date and (ii) any Collateral Obligation purchased after the Closing Date, the
amount of Principal Proceeds, if any, applied towards the purchase of accrued
interest on such Collateral Obligation; provided, however, in the case of this
clause (ii), Principal Financed Accrued Interest shall not include any accrued
interest purchased with Interest Proceeds deemed to be Principal Proceeds as set
forth in the definition of “Interest Proceeds”.

 

“Principal Proceeds”: With respect to any Collection Period or Determination
Date, all amounts received by the Issuer during the related Collection Period
that do not constitute Interest Proceeds, other than Refinancing Proceeds (other
than Refinancing Proceeds received in a redemption in part by Class which are
not applied to redeem the Notes being refinanced or to pay expenses in
connection with such Refinancing, which will be Principal Proceeds) and any
amounts that have been designated as Principal Proceeds pursuant to the terms of
this Indenture.

 

“Priority Class”: With respect to any specified Class of Notes, each Class of
Notes that ranks senior to such Class, as indicated in Section 2.3(b).

 

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

 

“Proceedings”: The meaning specified in Section 14.11.

 

“Proposed Portfolio”: The portfolio of Collateral Obligations and Eligible
Investments resulting from the proposed purchase, sale, maturity or other
disposition of a Collateral Obligation or a proposed reinvestment in an
additional Collateral Obligation, as the case may be.

 

“Protected Purchaser”: The meaning specified in Article 8 of the UCC.

 

“Purchase Agreement”: The purchase and placement agreement dated as of the
Closing Date by and among the Issuer, the Initial Purchaser and the Placement
Agents, as amended from time to time.

 

“Purchased Defaulted Obligation”: The meaning specified in Section 12.4.

 

“QIB/IAI/non-U.S. person”: The meaning specified in Section 10.7(e).

 

“QIB/QP”: Any Person that, at the time of its acquisition, purported acquisition
or proposed acquisition of Notes is both a Qualified Institutional Buyer and a
Qualified Purchaser.

 

“Qualified Institutional Buyer”: Any Person that, at the time of its
acquisition, purported acquisition or proposed acquisition of Notes, is a
qualified institutional buyer within the meaning of Rule 144A.

 

“Qualified Purchaser”: Any Person that, at the time of its acquisition,
purported acquisition or proposed acquisition of Notes, is a qualified purchaser
within the meaning of Section 2(a)(51) of the Investment Company Act and Rule
2a51-1, 2a51-2 or 2a51-3 under the Investment Company Act, or any corporation,
partnership, limited liability company or other entity (other than a trust) each
shareholder, partner, member or other equity owner of which is a Qualified
Purchaser.

 

52 

 

“Quarterly Payment Date” The 15th day of January, April, July and October of
each year (or, if such day is not a Business Day, the next succeeding Business
Day), commencing in October 2019.

 

“Ramp-Up Account”: The account established pursuant to Section 10.3(c).

 

“Rating Agency”: Each of S&P and Fitch, in each case for so long as it assigns a
rating at the request of the Issuer to the Class or Classes to which it assigned
a rating on the Closing Date.

 

“Record Date”: With respect to the Global Notes, the date one day prior to the
applicable Payment Date and, with respect to any Certificated Notes, the date 15
days prior to the applicable Payment Date.

 

“Redemption Date”: Any Business Day specified for a redemption of Notes pursuant
to Article IX.

 

“Redemption Price”: For each Class of Notes to be redeemed (x) 100% of the
Aggregate Outstanding Amount of such Class, plus (y) accrued and unpaid interest
thereon (including interest on any accrued and unpaid Deferred Interest, in the
case of the Deferred Interest Notes) to the Redemption Date; provided that, the
Holders of 100% of the Aggregate Outstanding Amount of a Class of Notes may in
their sole discretion, by written notice to the Issuer, the Trustee, the Paying
Agent and the Portfolio Manager, elect to receive less than 100% of the
Redemption Price that would otherwise be payable to the Holders of such Class of
Notes in any Optional Redemption (including a Refinancing), Tax Redemption or
Clean-Up Call Redemption, which lesser amount shall be deemed to be the
“Redemption Price” of such Class of Note.

 

“Refinancing”: A loan or an issuance of replacement notes, whose terms in each
case will be negotiated by the Portfolio Manager on behalf of the Issuer, from
one or more financial institutions or purchasers to refinance the Notes in
connection with an Optional Redemption, it being understood that any rating of
such loans or replacement notes by a Rating Agency will be based on a credit
analysis specific to such loans or replacement notes and independent of the
rating of the Notes being refinanced.

 

“Refinancing Proceeds”: The Cash proceeds from the Refinancing.

 

“Register” and “Registrar”: The respective meanings specified in Section
2.5(a)(i).

 

“Registered”: In registered form for U.S. federal income tax purposes.

 

“Regulation S”: Regulation S under the Securities Act.

 

“Regulation S Global Note”: Any Note sold outside the United States to non-”U.S.
persons” in reliance on Regulation S and issued in the form of a permanent
global note as specified in Section 2.2(c) in definitive, fully registered form
without interest coupons or a Temporary Global Note, in each case, substantially
in the form set forth in the applicable Exhibit A hereto.

 

53 

 

“Reinvestment Period”: The period from and including the Closing Date to and
including the earliest of (i) the Quarterly Payment Date in July 2021, (ii) any
date on which the Maturity of any Class of Notes is accelerated following an
Event of Default pursuant to this Indenture and (iii) any date on which the
Portfolio Manager reasonably determines that it can no longer reinvest in
additional Collateral Obligations in accordance with this Indenture or the
Portfolio Management Agreement; provided, in the case of this clause (iii), the
Portfolio Manager notifies the Issuer, the Trustee (who shall notify the
Holders), the Rating Agencies and the Collateral Administrator thereof at least
five Business Days prior to the applicable Special Redemption Date.

 

“Reinvestment Target Par Balance”: As of any date of determination, the Target
Initial Par Amount minus (i) the amount of any reduction in the Aggregate
Outstanding Amount (excluding, for purposes of this calculation, any reduction
of Deferred Interest) of the Notes through the payment of Principal Proceeds or
Interest Proceeds plus (ii) the aggregate amount of Principal Proceeds that
result from the issuance of any additional notes pursuant to Sections 2.13
(after giving effect to such issuance of any additional notes).

 

“Re-Priced Class”: The meaning specified in Section 9.8(a).

 

“Re-Pricing”: The meaning specified in Section 9.8(a).

 

“Re-Pricing Amendment”: The meaning specified in Section 8.6.

 

“Re-Pricing Date”: The meaning specified in Section 9.8(b).

 

“Re-Pricing Eligible Notes”: With respect to any Class of Notes, the Notes
specified as such in Section 2.3.

 

“Re-Pricing Intermediary”: The meaning specified in Section 9.8(a).

 

“Re-Pricing Rate”: The meaning specified in Section 9.8(b).

 

“Re-Pricing Replacement Notes”: Notes issued in connection with a Re-Pricing
that have terms identical to the Re-Priced Class (after giving effect to the
Re-Pricing) and are issued in an aggregate principal amount such that the
Re-Priced Class will have the same aggregate principal amount after giving
effect to the Re-Pricing as it did before the Re-Pricing.

 

“Repurchase and Substitution Limit”: The meaning specified in Section 12.5(c).

 

“Required Interest Coverage Ratio”: (a) For the Class A Notes, 120.0% and (b)
for the Class B Notes, 115.0%.

 

“Required Overcollateralization Ratio”: (a) For the Class A Notes, 135.5% and
(b) for the Class B Notes, 127.1%.

 

“Required Redemption Amount”: The meaning specified in Section 9.2(b).

 

“Resolution”: The minutes of a meeting of the board of directors of the
designated manager of the Issuer.

 

54 

 

“Responsible Officer”: Any officer, authorized person or employee of the
Portfolio Manager or the Advisor set forth on the list provided by the Portfolio
Manager to the Issuer and the Trustee, which list shall include any portfolio
manager having day-to-day responsibility for the performance of the Portfolio
Manager under the Portfolio Management Agreement, as such list may be amended
from time to time.

 

“Restricted Trading Period”: The period (i) while any Class A-1 Notes are
Outstanding during which either the S&P rating or the Fitch rating of the Class
A-1 Notes is one or more subcategories below its Initial Rating on the Closing
Date or has been withdrawn and not reinstated and (ii) while any Class A-2 Notes
or Class B Notes are Outstanding, as applicable during which the S&P rating of
the Class A-2 Notes or the Class B Notes, as applicable, is two or more
subcategories below its respective Initial Rating on the Closing Date or has
been withdrawn and not reinstated; provided that, (1) such period will not be a
Restricted Trading Period if (A) after giving effect to any sale of the relevant
Collateral Obligations, the Aggregate Principal Balance of the Collateral
Obligations (excluding the Collateral Obligations being sold) and Eligible
Investments constituting Principal Proceeds (including, without duplication, the
anticipated net proceeds of such sale) will be at least equal to the
Reinvestment Target Par Balance, (B) each test specified in the definition of
Collateral Quality Test is satisfied and (C) each Overcollateralization Ratio
Test is satisfied; (2) such period will not be a Restricted Trading Period (so
long as such S&P rating or Fitch rating has not been further downgraded,
withdrawn or put on watch for potential downgrade) upon the direction of the
Majority of the Controlling Class, which direction shall remain in effect until
the earlier of (i) a further downgrade or withdrawal of such S&P rating or Fitch
rating that, disregarding such direction, would cause the conditions set forth
above to be true and (ii) a subsequent direction to the Issuer (with a copy to
the Trustee and the Collateral Administrator) by a Majority of the Controlling
Class declaring the beginning of a Restricted Trading Period and (3) no
Restricted Trading Period will restrict any sale of a Collateral Obligation
entered into by the Issuer at a time when a Restricted Trading Period was not in
effect, regardless of whether such sale has settled.

 

“Retention Deficiency”: A failure by the EU Retention Holder to hold the
Retention Interest as required by the EU Retention Undertaking Letter.

 

“Retention Holder”: As of the Closing Date, FS KKR Capital Corp., in its
respective capacities as EU Retention Holder and U.S. Retention Holder, as
applicable, together with its successors and assigns.

 

“Retention Interest”: With respect to the Issuer, an interest in the first loss
tranche within the meaning of the EU Securitization Laws, by way of holding,
subject to the provisions of the EU Retention Undertaking Letter, at least the
minimum amount of Interests currently required by the applicable the EU
Securitization Laws, being an amount equal to 5% (or such lower amount,
including 0%, if such lower amount is required or allowed under the
then-applicable the EU Securitization Laws as a result of amendment, repeal or
otherwise and in no event an amount in excess of 5%) of the nominal value of the
Collateral Obligations and Eligible Investments representing Principal Proceeds.

 

“Reuters Screen”: The meaning set forth in Exhibit C hereto.

 

55 

 

“Revolver Funding Account”: The account established pursuant to Section 10.4.

 

“Revolving Collateral Obligation”: Any Collateral Obligation (other than a
Delayed Drawdown Collateral Obligation) that is a loan (including, without
limitation, revolving loans, including funded and unfunded portions of revolving
credit lines, unfunded commitments under specific facilities and other similar
loans and investments) that by its terms may require one or more future advances
to be made to the borrower by the Issuer; provided that, any such Collateral
Obligation will be a Revolving Collateral Obligation only until all commitments
to make advances to the borrower expire or are terminated or irrevocably reduced
to zero.

 

“Risk Retention Issuance”: An additional issuance of Notes solely for the
purpose of enabling the Portfolio Manager or the U.S. Retention Holder to comply
with the U.S. Risk Retention Rules or otherwise to cure any Retention
Deficiency.

 

“Rule 144A”: Rule 144A, as amended, under the Securities Act.

 

“Rule 144A Global Note”: Any Note sold in reliance on Rule 144A and issued in
the form of a permanent global security as specified in Section 2.2(d) in
definitive, fully registered form without interest coupons substantially in the
form set forth in the applicable Exhibit A hereto.

 

“Rule 144A Information”: The meaning specified in Section 7.15.

 

“Rule 17g-5”: Rule 17g-5 under the Exchange Act.

 

“S&P”: S&P Global Ratings, an S&P Global business, and any successor or
successors thereto.

 

“S&P Asset Specific Recovery Rating”: With respect to any Collateral Obligation,
the corporate recovery rating assigned by S&P (i.e., the S&P Recovery Rate) to
such Collateral Obligation.

 

“S&P CDO Monitor Test”: A test that will be satisfied on any date of
determination on or after the Effective Date and during the Reinvestment Period
if, after giving effect to the purchase of a Collateral Obligation, the S&P CDO
Monitor Adjusted BDR is equal to or greater than the S&P CDO Monitor SDR. On any
date of determination, the S&P CDO Monitor Test will be considered to be
improved if the Class Default Differential of the Proposed Portfolio is greater
than the Class Default Differential of the Current Portfolio. The S&P CDO
Monitor Test shall be calculated in accordance with the definitions set forth in
Schedule 3 hereto and, in connection with the Effective Date, the S&P Effective
Date Adjustments set forth in Schedule 3 hereto will apply.

 

“S&P Collateral Value”: With respect to any Defaulted Obligation, the lesser of
(i) the S&P Recovery Amount of such Defaulted Obligation as of the relevant
Measurement Date and (ii) the Market Value of such Defaulted Obligation as of
the relevant Measurement Date.

 

“S&P Effective Date Condition”: The meaning specified in Section 7.18(c).

 

“S&P Industry Classification”: The S&P Industry Classifications set forth in
Schedule 2 hereto, and such industry classifications shall be updated at the
option of the Portfolio Manager if S&P publishes revised industry
classifications.

 

56 

 

“S&P Rating”: With respect to any Collateral Obligation (excluding Current Pay
Obligations whose issuer has made a Distressed Exchange Offer), as of any date
of determination, the rating determined in accordance with the following
methodology:

 

(i)(a) if there is an issuer credit rating of the issuer of such Collateral
Obligation by S&P as published by S&P, or the guarantor which unconditionally
and irrevocably guarantees such Collateral Obligation pursuant to a form of
guaranty that complies with the then-current S&P criteria, then the S&P Rating
shall be such rating (regardless of whether there is a published rating by S&P
on the Collateral Obligations of such issuer held by the Issuer; provided that,
private ratings (that is, ratings provided at the request of the Obligor) may be
used for purposes of this definition if the related Obligor has consented to the
disclosure thereof and a copy of such consent has been provided to S&P) or (b)
if there is no issuer credit rating of the issuer by S&P but (1) there is a
senior secured rating on any obligation or security of the issuer, then the S&P
Rating of such Collateral Obligation shall be one subcategory below such rating;
(2) if clause (1) above does not apply, but there is a senior unsecured rating
on any obligation or security of the issuer, the S&P Rating of such Collateral
Obligation shall equal such rating; and (3) if neither clause (1) nor clause (2)
above applies, but there is a subordinated rating on any obligation or security
of the issuer, then the S&P Rating of such Collateral Obligation shall be one
subcategory above such rating;

 

(ii)with respect to any Collateral Obligation that is a DIP Collateral
Obligation, (a) the S&P Rating thereof shall be the credit rating assigned to
such issue by S&P, or if such DIP Collateral Obligation was assigned a
point-in-time rating by S&P that was withdrawn, such withdrawn rating may be
used for 12 months after the assignment of such rating, and (b) the Portfolio
Manager (on behalf of the Issuer) will notify S&P if the Portfolio Manager has
actual knowledge of the occurrence of any material amendment or event with
respect to such Collateral Obligation that would, in the reasonable business
judgment of the Portfolio Manager, have a material adverse impact on the credit
quality of such Collateral Obligation, including any amortization modifications,
extensions of maturity, reductions of principal amount owed, or non-payment of
timely interest or principal due; or

 

(iii)if there is not a rating by S&P on the issuer or on an obligation of the
issuer, then the S&P Rating may be determined pursuant to clauses (a) through
(c) below:

 

(a)if an obligation of the issuer is publicly rated by Moody’s, then the S&P
Rating will be determined in accordance with the methodologies for establishing
the Moody’s Rating set forth above except that the S&P Rating of such obligation
will be (1) one sub-category below the S&P equivalent of the Moody’s Rating if
such Moody’s Rating is “Baa3” or higher and (2) two sub-categories below the S&P
equivalent of the Moody’s Rating if such Moody’s Rating is “Ba1” or lower;

 

57 

 

(b)the S&P Rating may be based on a credit estimate provided by S&P, and in
connection therewith, the Issuer, the Portfolio Manager (on behalf of the
Issuer) or the issuer or Obligor of such Collateral Obligation shall, prior to
or within 30 days after the acquisition of such Collateral Obligation, apply
(and concurrently submit all available Information in respect of such
application) to S&P for a credit estimate which shall be its S&P Rating;
provided that, until the receipt from S&P of such estimate, such Collateral
Obligation shall have an S&P Rating as determined by the Portfolio Manager in
its sole discretion if the Portfolio Manager certifies to the Trustee that it
believes that such S&P Rating determined by the Portfolio Manager is
commercially reasonable and will be at least equal to such rating; provided
further, that if such Information is not submitted within such 30-day period,
then, pending receipt from S&P of such estimate, the Collateral Obligation shall
have (1) the S&P Rating as determined by the Portfolio Manager for a period of
up to 90 days after the acquisition of such Collateral Obligation and (2) an S&P
Rating of “CCC-” following such 90-day period; unless, during such 90-day
period, the Portfolio Manager has requested the extension of such period and
S&P, in its sole discretion, has granted such request; provided further, that if
the Collateral Obligation has had a public rating by S&P that S&P has withdrawn
or suspended within six months prior to the date of such application for a
credit estimate in respect of such Collateral Obligation, the S&P Rating in
respect thereof shall be “CCC-” pending receipt from S&P of such estimate, and
S&P may elect not to provide such estimate until a period of six months (or such
other period as provided in S&P’s then-current criteria) have elapsed after the
withdrawal or suspension of the public rating; provided further that with
respect to any Collateral Obligation for which S&P has provided a credit
estimate, the Portfolio Manager (on behalf of the Issuer) will request that S&P
confirm or update such estimate annually (and pending receipt of such
confirmation or new estimate, the Collateral Obligation will have the prior
estimate); provided further that such credit estimate shall expire 12 months
after the acquisition of such Collateral Obligation, following which such
Collateral Obligation shall have an S&P Rating of “CCC-” unless, during such
12-month period, the Issuer applies for renewal thereof in accordance with
Section 7.14(b) (and concurrently submits all available Information in respect
of such renewal), in which case such credit estimate shall continue to be the
S&P Rating of such Collateral Obligation until S&P has confirmed or revised such
credit estimate, upon which such confirmed or revised credit estimate shall be
the S&P Rating of such Collateral Obligation; provided further that such
confirmed or revised credit estimate shall expire on the next succeeding
12-month anniversary of the date of the acquisition of such Collateral
Obligation and (when renewed annually in accordance with Section 7.14(b)) on
each 12-month anniversary thereafter; provided further that the Issuer will
submit all available Information in respect of such Collateral Obligation to S&P
notwithstanding that the Issuer is not applying to S&P for a confirmed or
updated credit estimate; provided further that the Issuer will promptly notify
S&P of any material events affecting any such Collateral Obligation if the
Portfolio Manager reasonably determines that such notice is required in
accordance with S&P’s publication on credit estimates titled “What Are Credit
Estimates And How Do They Differ From Ratings?” dated April 2011 (as the same
may be amended or updated from time to time); or

 

58 

 

(c)with respect to a Collateral Obligation that is not a Defaulted Obligation,
the S&P Rating of such Collateral Obligation will at the election of the Issuer
(at the direction of the Portfolio Manager) be “CCC-”; provided that, (i)
neither the issuer of such Collateral Obligation nor any of its Affiliates are
subject to any bankruptcy or reorganization proceedings and (ii) the issuer has
not defaulted on any payment obligation in respect of any debt security or other
obligation of the issuer at any time within the two year period ending on such
date of determination, all such debt securities and other obligations of the
issuer that are pari passu with or senior to the Collateral Obligation are
current and the Portfolio Manager reasonably expects them to remain current;
provided that, the Issuer will submit all available Information in respect of
such Collateral Obligation to S&P as if the Issuer were applying to S&P for a
credit estimate; provided further that the Issuer will promptly notify S&P of
any material events affecting any such Collateral Obligation if the Portfolio
Manager reasonably determines that such notice is required in accordance with
S&P’s publication on credit estimates titled “What Are Credit Estimates And How
Do They Differ From Ratings?” dated April 2011 (as the same may be amended or
updated from time to time); or

 

(iv)with respect to a DIP Collateral Obligation that has no issue rating by S&P
or a Current Pay Obligation that is rated “D” or “SD” by S&P, the S&P Rating of
such DIP Collateral Obligation or Current Pay Obligation, as applicable, will
be, at the election of the Issuer (at the direction of the Portfolio Manager),
“CCC-” or the S&P Rating determined pursuant to clause (iii)(b) above; provided
that, the Portfolio Manager may not determine such S&P Rating pursuant to clause
(iii)(b)(1) above; provided, further, that the Portfolio Manager will provide
Information with respect to such DIP Collateral Obligation to S&P, if available;

 

59 

 

provided that, for purposes of the determination of the S&P Rating, (x) if the
applicable rating assigned by S&P to an Obligor or its obligations is on “credit
watch positive” by S&P, such rating will be treated as being one sub-category
above such assigned rating and (y) if the applicable rating assigned by S&P to
an Obligor or its obligations is on “credit watch negative” by S&P, such rating
will be treated as being one sub-category below such assigned rating; provided
further that, for purposes of the determination of the S&P Rating, if (x) the
issuer or Obligor of any Collateral Obligation was a debtor under the Bankruptcy
Code, during which time such issuer, Obligor or Selling Institution, as
applicable, or any of its obligations (including any Collateral Obligation)
either had an S&P rating of “SD” or “CC” or lower from S&P or had an S&P rating
that was withdrawn by S&P and (y) such issuer, Obligor or Selling Institution,
as applicable, is no longer a debtor under the Bankruptcy Code, then,
notwithstanding the fact that such issuer, Obligor or Selling Institution, as
applicable, or any of its obligations (including any Collateral Obligation)
continues to have an S&P rating of “SD” or “CC” or lower from S&P (or, in the
case of any withdrawal, continues to have no S&P rating), the S&P Rating for any
such obligation (including any Collateral Obligation), issuer, Obligor or
Selling Institution, as applicable, shall be deemed to be “CCC-”, so long as S&P
has not taken any rating action with respect thereto since the date on which the
issuer, Obligor or Selling Institution, as applicable, ceased to be a debtor
under the Bankruptcy Code; provided, hower, that, (i) if any issuer, Obligor or
Selling Institution, as applicable, has not exited the applicable bankruptcy
proceeding and (ii) the applicable rating assigned by S&P to such issuer,
Obligor or Selling Institution, as applicable, or any of its obligations
(including any Collateral Obligation) has been withdrawn, then the S&P Rating
for such issuer, Obligor or Selling Institution, as applicable, or any of its
obligations (including any Collateral Obligation) shall be deemed to be such
withdrawn S&P rating, so long as S&P has not taken any rating action with
respect thereto since the date on which such S&P rating was withdrawn.

 

The S&P Rating of any Collateral Obligation that is a Current Pay Obligation
whose issuer has made a Distressed Exchange Offer will be determined as follows:

 

(a)subject to clause (d) below, if applicable, if the Collateral Obligation is
and will remain senior to the debt obligations on which the related Distressed
Exchange Offer has been made and the issuer is not subject to a bankruptcy
proceeding, the issuer credit rating of the issuer published by S&P of the
Collateral Obligation is below “CCC-” as a result of the Distressed Exchange
Offer and S&P has not published revised ratings following the completion or
withdrawal of the Distressed Exchange Offer and:

 

(i)there is an issue credit rating published by S&P for the Collateral
Obligation; and

 

(A)the Collateral Obligation has an S&P Asset Specific Recovery Rating of 1+,
then the S&P Rating of such Collateral Obligation shall be the higher of (x)
three subcategories below such issue credit rating and (y) “CCC-”;

 

60 

 

(B)the Collateral Obligation has an S&P Asset Specific Recovery
Rating of 1, then the S&P Rating of such Collateral Obligation shall be the
higher of (x) two subcategories below such issue credit rating and (y) “CCC-”;

 

(C)the Collateral Obligation has an S&P Asset Specific Recovery Rating of 2,
then the S&P Rating of such Collateral Obligation shall be the higher of (x) one
subcategory below such issue credit rating and (y) “CCC-”;

 

(D)the Collateral Obligation has an S&P Asset Specific Recovery Rating of 3 or
4, then the S&P Rating of such Collateral Obligation shall be the higher of (x)
such issue credit rating and (y) “CCC-”;

 

(E)the Collateral Obligation has an S&P Asset Specific Recovery Rating of 5,
then the S&P Rating of such Collateral Obligation shall be the higher of (x) one
subcategory above such issue credit rating and (y) “CCC-”; or

 

(F)the Collateral Obligation has an S&P Asset Specific Recovery Rating of 6,
then the S&P Rating of such Collateral Obligation shall be the higher of (x) two
subcategories above such issue credit rating and (y) “CCC-”; or

 

(ii)there is either no issue credit rating or no S&P Asset Specific Recovery
Rating for the Collateral Obligation, then the S&P Rating of such Collateral
Obligations shall be “CCC-”.

 

(b)Subject to clause (d) below, if applicable, if the Collateral Obligation is
the debt obligation on which the related Distressed Exchange Offer has been
made, until S&P publishes revised ratings following the completion or withdrawal
of the offer, the S&P Rating of such Collateral Obligation shall be “CCC-”.

 

(c)Subject to clause (d) below, if the Collateral Obligation is subordinate to
the debt obligation on which the related Distressed Exchange Offer has been
made, until S&P publishes revised ratings following the completion or withdrawal
of the offer the S&P Rating of such Collateral Obligation shall be “CCC-”.

 

(d)If multiple Collateral Obligations have the same issuer and such issuer made
a Distressed Exchange Offer, the S&P Rating for each such Collateral Obligation
shall be determined as follows:

 

(i)first, an S&P Rating for each such Collateral Obligation shall be determined
in accordance with clause (a), (b) and (c) immediately above in this definition;

 

61 

 

(ii)second, the S&P Rating for each such Collateral Obligation determined in
accordance with sub-clause (d)(i) above shall be converted into “Rating Points”
equivalent pursuant to the table set forth below:

 

S&P Rating

“Rating Points”

“Weighted Average
Rating Points”

AAA 1 1 AA+ 2 2 AA 3 3 AA- 4 4 A+ 5 5 A 6 6 A- 7 7 BBB+ 8 8 BBB 9 9 BBB- 10 10
BB+ 11 11 BB 12 12 BB- 13 13 B+ 14 14 B 15 15 B- 16 16 CCC+ 17 17 CCC 18 18 CCC-
19 19

 

(iii)third, “Weighted Average Rating Points” for each such Collateral Obligation
will be calculated by dividing “X” by “Y” where:

 

(A)“X” shall equal the sum of each of the products obtained by multiplying the
Rating Points of each such Collateral Obligation by the Collateral Principal
Amount of such Collateral Obligation, and

 

(B)“Y” shall equal the Aggregate Principal Balance of all the Collateral
Obligations subject to the same Distressed Exchange Offer; and

 

(iv)fourth, the “Weighted Average Rating Points” determined in accordance with
sub-clause (d)(iii) above shall be rounded to the nearest whole number and
converted into an S&P Rating by matching the “Weighted Average Rating Points” of
such Collateral Obligation with the S&P Rating set forth in the table in
sub-clause (d)(ii) above. The S&P Rating that matches the “Weighted Average
Rating Points” for such Collateral Obligations will be the S&P Rating for each
Collateral Obligation for which an S&P Rating is required to be determined
pursuant to this clause (iv).

 

62 

 

“S&P Rating Condition”: With respect to any action taken or to be taken by or on
behalf of the Issuer, a condition that is satisfied if S&P has, upon request of
the Portfolio Manager or the Issuer, confirmed in writing (including by means of
electronic message, facsimile transmission, press release, posting to its
internet website, or any other means implemented by S&P), or has waived the
review of such action by such means, to the Issuer, the Trustee, the Collateral
Administrator and the Portfolio Manager that no immediate withdrawal or
reduction with respect to S&P’s then-current rating of any Class of Notes will
occur as a result of such action; provided that, the S&P Rating Condition will
(i) be satisfied if any Class of Notes that receives a solicited rating from S&P
are not Outstanding or rated by S&P or (ii) not be required if (a) S&P makes a
public statement to the effect that it will no longer review events or
circumstances of the type requiring satisfaction of the S&P Rating Condition in
this Indenture for purposes of evaluating whether to confirm the then-current
ratings (or Initial Ratings) of obligations rated by it; (b) S&P communicates to
the Issuer, the Portfolio Manager or the Trustee (or their respective counsel)
that it will not review such event or circumstance for purposes of evaluating
whether to confirm the then-current ratings (or Initial Ratings) of the Notes;
or (c) with respect to amendments requiring unanimous consent of all Holders of
Notes, such Holders have been advised prior to consenting that the current
ratings of the Notes may be reduced or withdrawn as a result of such amendment.

 

“S&P Recovery Amount”: With respect to any Collateral Obligation, an amount
equal to:

 

(a)the applicable S&P Recovery Rate; multiplied by

 

(b)the Principal Balance of such Collateral Obligation.

 

“S&P Recovery Rate”: With respect to a Collateral Obligation, the recovery rate
set forth in Schedule 7 using the Initial Rating of the Highest Ranking Class at
the time of determination.

 

“S&P Recovery Rating”: With respect to a Collateral Obligation for which an S&P
Recovery Rate is being determined, the “Recovery Rating” assigned by S&P to such
Collateral Obligation based upon the tables set forth in Schedule 7.

 

“S&P Weighted Average Recovery Rate”: As of any date of determination, the
number, expressed as a percentage and determined separately for each Class of
Notes, obtained by summing the product of the S&P Recovery Rate on such date of
determination of each Collateral Obligation (excluding any Defaulted Obligation)
and the Principal Balance of such Collateral Obligation, dividing such sum by
the Aggregate Principal Balance of all such Collateral Obligations and rounding
to the nearest tenth of a percent.

 

“Sale”: The meaning specified in Section 5.17(a).

 

“Sale Proceeds”: All proceeds (excluding accrued interest, if any) received with
respect to Assets as a result of sales or other dispositions of such Assets in
accordance with Article XII (or Section 4.4 or Article V, as applicable) less
any reasonable expenses incurred by the Portfolio Manager, the Collateral
Administrator or the Trustee (other than amounts payable as Administrative
Expenses) in connection with such sales or other dispositions.

 

“Schedule of Collateral Obligations”: The schedule of Collateral Obligations
attached as Schedule 1 hereto, which schedule shall include the Obligor and
Principal Balance of each Collateral Obligation included therein, as amended
from time to time (without the consent of or any action on the part of any
Person) to reflect the release of Collateral Obligations pursuant to Article X
hereof and the inclusion of additional Collateral Obligations as provided in
Section 12.2 hereof.

 

63 

 

“Scheduled Distribution”: With respect to any Asset, for each Due Date, the
scheduled payment of principal and/or interest due on such Due Date with respect
to such Asset, determined in accordance with the assumptions specified in
Section 1.2 or, in the case of Collateral Obligations acquired after the Closing
Date, the related Cut-Off Date, as adjusted pursuant to the terms of the
Underlying Instruments.

 

“Second Lien Loan”: Any assignment of or Participation Interest in a (1) First
Lien Last Out Loan or (2) a Loan that: (a) is not (and cannot by its terms
become) subordinate in right of payment to any other obligation of the Obligor
of the Loan (other than with respect to trade claims, capitalized leases or
similar obligations) but which is subordinated (with respect to liquidation
preferences with respect to pledged collateral) to a Senior Secured Loan of the
Obligor; (b) is secured by a valid second-priority perfected security interest
or lien in, to or on specified collateral securing the Obligor’s obligations
under the Second Lien Loan the value of which is adequate (in the commercially
reasonable judgment of the Portfolio Manager) to repay the Loan in accordance
with its terms and to repay all other Loans of equal or higher seniority secured
by a lien or security interest in the same collateral and (c) is not secured
solely or primarily by common stock or other equity interests; provided that,
the limitation set forth in this clause (c) 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 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).

 

“Secured Obligations”: The meaning specified in the Granting Clauses.

 

“Secured Parties”: The meaning specified in the Granting Clauses.

 

“Securities Act”: The United States Securities Act of 1933, as amended.

 

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

 

“Selling Institution”: The entity obligated to make payments to the Issuer under
the terms of a Participation Interest (other than a Closing Date Participation
Interest).

 

“Selling Institution Collateral”: The meaning specified in Section 10.4.

 

“Senior Net Leverage Ratio”: With respect any Senior Secured Loan, as of the
date of acquisition (or commitment to acquire) by the Issuer, (x) the “Senior
Net Leverage Ratio” or comparable term set forth in the Underlying Instruments
for such Senior Secured Loan, or (y) in the case of any Senior Secured Loan with
respect to which the related Underlying Instruments do not include a definition
of “Senior Net Leverage Ratio” or comparable term, the ratio obtained by
dividing (1) the funded first lien senior secured indebtedness which is senior
to, or pari passu with, such Loan (less cash and cash equivalents) over (2) the
EBITDA of the related Obligor on such Senior Secured Loan as calculated by the
Portfolio Manager in accordance with the Portfolio Manager Standard using
information from and calculations consistent with the relevant compliance
statements and financial reporting packages provided by the related Obligor as
per the requirements of the Underlying Instruments.

 

64 

 

“Senior Secured Bond”: Any obligation that: (a) constitutes borrowed money, (b)
is in the form of, or represented by, a bond, note, certificated debt security
or other debt security (other than any of the foregoing that evidences a Loan, a
Senior Secured Floating Rate Note or a Participation Interest), (c) is not
secured solely by common stock or other equity interests, (d) if it is
subordinated by its terms, is subordinated only to indebtedness for borrowed
money, trade claims, capitalized leases or other similar obligations and (e) is
secured by a valid first priority perfected security interest or lien in, to or
on specified collateral securing the Obligor’s obligations under such
obligation.

 

“Senior Secured Floating Rate Note”: Any obligation that: (a) constitutes
borrowed money, (b) is in the form of, or represented by, a bond, note (other
than any note evidencing a Loan), certificated debt security or other debt
security, (c) is expressly stated to bear interest based upon a London interbank
offered rate for Dollar deposits in Europe or a relevant reference bank’s
published base rate or prime rate for Dollar-denominated obligations in the
United States or the United Kingdom, (d) does not constitute, and is not secured
by, Margin Stock, (e) if it is subordinated by its terms, is subordinated only
to indebtedness for borrowed money, trade claims, capitalized leases or other
similar obligations and (f) is secured by a valid first priority perfected
security interest or lien in, to or on specified collateral securing the
Obligor’s obligations under such obligation.

 

“Senior Secured Loan”: Any assignment of or Participation Interest in a Loan
that: (a) is not (and cannot by its terms become) subordinate in right of
payment to any other obligation of the Obligor of the Loan (other than with
respect to liquidation, trade claims, capitalized leases or similar
obligations); (b) is secured by a valid first-priority perfected security
interest or lien in, to or on specified collateral securing the Obligor’s
obligations under the Loan; and (c) the value of the collateral securing the
Loan at the time of purchase together with other attributes of the Obligor
(including, without limitation, its general financial condition, ability to
generate cash flow available for debt service and other demands for that cash
flow) is adequate (in the commercially reasonable judgment of the Portfolio
Manager) to repay the Loan in accordance with its terms and to repay all other
Loans of equal seniority secured by a first lien or security interest in the
same collateral.

 

“Senior Unsecured Bond”: Any unsecured obligation that: (a) constitutes borrowed
money, (b) is in the form of, or represented by, a bond, note, certificated debt
security or other debt security (other than any of the foregoing that evidences
a Loan or Participation Interest) and (c) if it is subordinated by its terms, is
subordinated only to indebtedness for borrowed money, trade claims, capitalized
leases or other similar obligations.

 

“Similar Laws”: Local, state, federal, non-U.S. laws or other applicable laws
that are substantially similar to the prohibited transaction provisions of ERISA
or Section 4975 of the Code.

 

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

 

“Special Redemption”: The meaning specified in Section 9.6.

 

“Special Redemption Date”: The meaning specified in Section 9.6.

 

65 

 

“Specified Amendment”: With respect to any Collateral Obligation, any amendment,
waiver or modification which would:

 

(i)modify the amortization schedule with respect to such Collateral Obligation
in a manner that (A) reduces the dollar amount of any Scheduled Distribution by
more than the greater of (x) 25% and (y) U.S.$250,000, (B) postpones any
Scheduled Distribution by more than two payment periods or (C) causes the
Weighted Average Life of the applicable Collateral Obligation to increase by
more than 25%;

 

(ii)reduce or increase the cash interest rate payable by the Obligor thereunder
by more than 100 basis points (excluding any increase in an interest rate
arising by operation of a default or penalty interest clause under a Collateral
Obligation or as a result of an increase in the interest rate index for any
reason other than such amendment, waiver or modification);

 

(iii)extend the stated maturity date of such Collateral Obligation by more than
24 months or beyond the Stated Maturity;

 

(iv)contractually or structurally subordinate such Collateral Obligation by
operation of a priority of payments, turnover provisions, the transfer of assets
in order to limit recourse to the related Obligor or the granting of Liens
(other than Permitted Liens) on any of the underlying collateral securing such
Collateral Obligation;

 

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

 

(vi)reduce the principal amount of the applicable Collateral Obligation.

 

“Specified Test Items”: The meaning specified in Section 7.18(c).

 

“Standby Direct Investment”: U.S. Bank Money Market Deposit Account (which for
the avoidance of doubt is an Eligible Investment) or such other Eligible
Investment designated by the Issuer, or the Portfolio Manager on behalf of the
Issuer, by written notice to the Trustee.

 

“Stated Maturity”: With respect to the Notes of any Class, the date specified as
such in Section 2.3(b).

 

“Step-Down Obligation”: An obligation or security which by the terms of the
related Underlying Instruments provides for a decrease in the per annum interest
rate on such obligation or security (other than by reason of any change in the
applicable index or benchmark rate used to determine such interest rate) or in
the spread over the applicable index or benchmark rate, solely as a function of
the passage of time; provided that, an obligation or security providing for
payment of a constant rate of interest at all times after the date of
acquisition by the Issuer shall not constitute a Step-Down Obligation.

 

66 

 

“Step-Up Obligation”: An obligation or security which by the terms of the
related Underlying Instruments provides for an increase in the per annum
interest rate on such obligation or security, or in the spread over the
applicable index or benchmark rate, solely as a function of the passage of time;
provided that, an obligation or security providing for payment of a constant
rate of interest at all times after the date of acquisition by the Issuer shall
not constitute a Step-Up Obligation.

 

“Structured Finance Obligation”: Any debt obligation which is secured directly,
or represents the ownership of, a pool of consumer receivables, auto loans, auto
leases, equipment leases, home or commercial mortgages, corporate debt or
sovereign debt obligations or similar assets, including, without limitation,
collateralized bond obligations, collateralized loan obligations or any similar
asset backed security.

 

“Subordinated Management Fee”: The fee payable to the Portfolio Manager in
arrears on each Payment Date, pursuant to Section 8 of the Portfolio Management
Agreement and the Priority of Payments, equal to 0.0% per annum (calculated on
the basis of a 360-day year and the actual number of days elapsed during the
related Interest Accrual Period) of the Fee Basis Amount measured as of the
first day of the Collection Period relating to each Payment Date.

 

“Substitute Collateral Obligations”: Collateral Obligations conveyed by the
Transferor to the Issuer as substitute Collateral Obligations pursuant to
Section 12.5(a).

 

“Substitute Collateral Obligations Qualification Conditions”: The following
conditions:

 

(i)each Coverage Test, Collateral Quality Test and Concentration Limitation
remains satisfied or, if not in compliance at the time of substitution, any such
Coverage Test, Collateral Quality Test or Concentration Limitation is maintained
or improved;

 

(ii)the Principal Balance of such Substitute Collateral Obligation (or, if more
than one Substitute Collateral Obligation will be added in replacement of a
Collateral Obligation or Collateral Obligations, the Aggregate Principal Balance
of such Substitute Collateral Obligations) equals or exceeds the Principal
Balance of the Collateral Obligation being substituted for and the Net Exposure
Amount, if any, with respect thereto shall have been deposited in the Revolver
Funding Account;

 

(iii)the Market Value of such Substitute Collateral Obligation (or, if more than
one Substitute Collateral Obligation will be added in replacement of a
Collateral Obligation or Collateral Obligations, the aggregate Market Value of
such Substitute Collateral Obligations) equals or exceeds the Market Value of
the Collateral Obligation being substituted;

 

(iv)(a) if any of the Collateral Obligations being substituted for are Second
Lien Loans, the Aggregate Principal Balance of all Substitute Collateral
Obligations that are Second Lien Loans equals or is less than the Principal
Balance of the Collateral Obligations being substituted that are Second Lien
Loans and (b) if none of the Collateral Obligations being substituted are Second
Lien Loans, no Substitute Collateral Obligation is a Second Lien Loan;

 

67 

 

(v)(a) the Fitch Rating of each Substitute Collateral Obligation is equal to or
higher than the Fitch Rating of the Collateral Obligation being substituted for
and (b) the S&P Rating of each Substitute Collateral Obligation is equal to or
higher than the S&P Rating of the Collateral Obligation being substituted for;
and

 

(vi)solely after the Reinvestment Period, the stated maturity date of each
Substitute Collateral Obligation is the same or earlier than the stated maturity
date of the Collateral Obligation being substituted for.

 

“Substitution Event”: An event which shall have occurred with respect to any
Collateral Obligation that:

 

(i)becomes a Defaulted Obligation;

 

(ii)has a Material Covenant Default;

 

(iii)becomes subject to a proposed Specified Amendment; or

 

(iv)becomes a Credit Risk Obligation.

 

“Substitution Period”: The meaning specified in Section 12.5(a)(ii).

 

“Successor Entity”: The meaning specified in Section 7.10(a).

 

“Supermajority”: With respect to any (x) Class of Notes, the Holders of at least
66-2/3% of the Aggregate Outstanding Amount of the Notes of such Class and (y)
Interests, the members of the Issuer having Percentage Interests aggregating at
least 66-2/3% Percentage Interests in the Issuer.

 

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

 

“Target Initial Par Amount”: U.S.$511,700,000.

 

“Target Initial Par Balance”: As of any date of determination, an amount equal
to the Aggregate Principal Balance of Collateral Obligations that are held by
the Issuer and that the Issuer has committed to purchase on such date, together
with any Principal Financed Accrued Interests and the amount of any Principal
Proceeds (on a trade date basis and without duplication on the settlement date)
received in respect of Collateral Obligations purchased by the Issuer prior to
such date (other than any such proceeds that have been reinvested in Collateral
Obligations held by the Issuer on such date).

 

“Target Initial Par Condition”: A condition satisfied as of the Effective Date
if the Target Initial Par Balance exceeds the Target Initial Par Amount.

 

68 

 

“Tax”: Any tax, levy, impost, duty, charge or assessment of any nature
(including interest, penalties and additions thereto) imposed by any
governmental taxing authority.

 

“Tax Advice”: Written advice from Dechert LLP, or an opinion from tax counsel of
nationally recognized standing in the United States experienced in transactions
of the type being addressed that (i) is based on knowledge by the Person giving
the advice of all relevant facts and circumstances of the Issuer and proposed
action (which are described in the advice or in a written description referred
to in the advice which may be provided by the Issuer or Portfolio Manager) and
(ii) is intended by the Person rendering the advice to be relied upon by the
Issuer in determining whether to take such action.

 

“Tax Event”: An event that occurs if (i) any Obligor under any Collateral
Obligation is required to deduct or withhold from any payment under such
Collateral Obligation to the Issuer for or on account of any Tax for whatever
reason and such Obligor is not required to pay to the Issuer such additional
amount as is necessary to ensure that the net amount actually received by the
Issuer (free and clear of Taxes, whether assessed against such Obligor or the
Issuer) will equal the full amount that the Issuer would have received had no
such deduction or withholding occurred or (ii) any jurisdiction imposes net
income, profits or similar Tax on the Issuer.

 

“Tax Jurisdiction”: A sovereign jurisdiction that is commonly used as the place
of organization of special purpose vehicles (including, without limitation, the
Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel
Islands, Curaçao, St. Maarten).

 

“Tax Redemption”: The meaning specified in Section 9.3(a).

 

“Temporary Global Note”: Any Note sold outside the United States to Qualified
Purchasers that are non-”U.S. persons” in reliance on Regulation S and issued in
the form of a temporary global note as specified in Section 2.2(c) in
definitive, fully registered form without interest coupons.

 

“Third Party Credit Exposure”: As of any date of determination, the Principal
Balance of each Collateral Obligation that consists of a Participation Interest.

 

“Third Party Credit Exposure Limits”: Limits that shall be satisfied if the
Third Party Credit Exposure with counterparties having the ratings below from
S&P do not exceed the percentage of the Collateral Principal Amount specified
below:

 

S&P’s credit
rating of Selling
Institution Aggregate
Percentage
Limit Individual
Percentage
Limit AAA 20% 20% AA+ 10% 10% AA 10% 10% AA- 10% 10% A+ 5% 5% A 5% 5% A- and
below 0% 0%

 

69

 

 

provided that, a Selling Institution having an S&P credit rating of “A” must
also have a short-term S&P rating of “A-1” otherwise its “Aggregate Percentage
Limit” and “Individual Percentage Limit” shall be 0%.

 

“Trading Plan”: The meaning specified in Section 1.2(i).

 

“Trading Plan Period”: The meaning specified in Section 1.2(i).

 

“Transaction Documents”: This Indenture, the Portfolio Management Agreement, the
Collateral Administration Agreement, the Purchase Agreement, the Account
Agreement, the Loan Sale Agreement, the EU Retention Undertaking Letter and the
Master Participation Agreements.

 

“Transaction Parties”: The Issuer, the Portfolio Manager, the Initial Purchaser,
the Placement Agents, the Retention Holder, the Transferor, the Trustee and the
Collateral Administrator.

 

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

 

“Transfer Certificate”: A duly executed certificate substantially in the form of
the applicable Exhibit B.

 

“Transfer Deposit Amount”: On any date of determination with respect to any
Collateral Obligation, an amount equal to the sum of the outstanding principal
balance of such Collateral Obligation, together with accrued interest thereon
through such date of determination, and in connection with any Collateral
Obligation which is a Revolving Collateral Obligation or a Delayed Drawdown
Collateral Obligation, an amount equal to the Net Exposure Amount thereof as of
the applicable Cut-Off Date.

 

“Transferor”: FS KKR Capital Corp., in its capacity as transferor under the Loan
Sale Agreement.

 

“Treasury Regulation”: The regulations promulgated under the Code.

 

“Trustee”: As defined in the first sentence of this Indenture.

 

“Trustee’s Website”: The Trustee’s internet website, which shall initially be
located at https://pivot.usbank.com, or such other address as the Trustee may
provide to the Issuer, the Portfolio Manager and the Rating Agencies.

 

“U.S. person”: The meaning specified in Regulation S.

 

“U.S. Retention Holder”: On the Closing Date, FS KKR Capital Corp., and
thereafter any successor, assignee or transferee thereof permitted under the
U.S. Risk Retention Rules.

 

“U.S. Risk Retention Rules”: (i) The federal interagency credit risk retention
rules, codified at 17 C.F.R. Part 246 and (ii) any other future law, rules or
regulations relating to credit risk retention that may apply to the issuance of
Notes pursuant to this Indenture.

 

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

 

“UCC”: The Uniform Commercial Code, as in effect from time to time in the State
of New York.

 

“Uncertificated Security”: The meaning specified in Article 8 of the UCC.

 

“Underlying Instrument”: The indenture or other agreement pursuant to which an
Asset has been issued or created and each other agreement that governs the terms
of or secures the obligations represented by such Asset or of which the holders
of such Asset are the beneficiaries.

 

“Unregistered Securities”: The meaning specified in Section 5.17(c).

 

“Unscheduled Principal Payments”: All Principal Proceeds received in respect of
Collateral Obligations from optional or nonscheduled mandatory redemptions or
amortizations, exchange offers, tender offers or other payments made at the
option of the issuer thereof or that are otherwise not scheduled to be made.

 

“Unsecured Loan”: A senior unsecured Loan which is not (and by its terms is not
permitted to become) subordinate in right of payment to any other debt for
borrowed money incurred by the Obligor under such Loan.

 

“Unused Proceeds”: The meaning specified in Section 10.3(c).

 

“Valuation”: With respect to any Collateral Obligation, a recent (as determined
by the Portfolio Manager in accordance with the Portfolio Manager Standard)
valuation of the fair market value of such Collateral Obligation established by
(a) reference to the “bid side” price listed on a third-party pricing service
such as LoanX or LPC or other service selected by the Portfolio Manager in
accordance with the Portfolio Manager Standard; provided that, if a fair market
value is available from more than one pricing service, the highest such “bid
side” value so obtained shall be used, or (b) if data for such Collateral
Obligation is not available from such a pricing service, an analysis performed
by a nationally recognized valuation firm to establish a fair market value of
such Collateral Obligation which reflects the “bid side” price that would be
paid by a willing buyer to a willing seller of such Collateral Obligation in an
expedited sale on an arm’s-length basis.

 

“Volcker Rule”: Section 13 of the Bank Holding Company Act of 1956, as amended,
and the rules and regulations promulgated thereunder.

 

“Waived Management Fee”: The meaning specified in Section 11.1(e).

 

“Weighted Average Coupon”: As of any date of determination, the number obtained
by dividing:

 

(a)the amount equal to the Aggregate Coupon; by

 

(b)an amount equal to the Aggregate Principal Balance of all Fixed Rate
Obligations as of such date of determination (excluding (1) any Deferrable
Obligation or Partial Deferring Obligation to the extent of any non-cash
interest and (2) the unfunded portion of any Delayed Drawdown Collateral
Obligation or Revolving Collateral Obligation that are Fixed Rate Obligations).

 

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“Weighted Average Fitch Recovery Rate”: As of any date of determination, the
rate (expressed as a percentage) determined by summing the products obtained by
multiplying the Principal Balance of each Collateral Obligation by the Fitch
Recovery Rate in relation thereto and dividing such sum by the Aggregate
Principal Balance of all Collateral Obligations and rounding up to the nearest
0.1 percent. For the purposes of determining the Principal Balance and Aggregate
Principal Balance of Collateral Obligations in this definition, the Principal
Balance of each Defaulted Obligation shall be excluded.

 

“Weighted Average Floating Spread”: As of any date of determination, the number
obtained by dividing: (a) the amount equal to (i) the Aggregate Funded Spread
plus (ii) the Aggregate Unfunded Spread plus (iii) the Aggregate Excess Funded
Spread; by (b) an amount equal to the Aggregate Principal Balance (including for
this purpose any capitalized interest) of all Floating Rate Obligations as of
such date of determination; provided that, solely for purposes of the S&P CDO
Monitor Test, the Weighted Average Floating Spread shall be determined using an
Aggregate Excess Funded Spread deemed to equal zero.

 

“Weighted Average Leverage Ratio”: As of any date of determination, the number
obtained by (i) summing the products obtained by multiplying, with respect to
each Senior Secured Loan included in the Assets (but, for the avoidance of
doubt, excluding any Second Lien Loan), (x) the Senior Net Leverage Ratio of the
related Obligor on such Senior Secured Loan, by (y) the Principal Balance of
such Senior Secured Loan and (ii) dividing such sum by the Aggregate Principal
Balance of all Senior Secured Loans owned by the Issuer as of such date of
determination.

 

“Weighted Average Leverage Ratio Test”: A test that will be satisfied as of any
date of determination if the Weighted Average Leverage Ratio is less than or
equal to 4.25.

 

“Weighted Average Life”: As of any date of determination with respect to all
Collateral Obligations other than Defaulted Obligations, the number of years
following such date obtained by:

 

(I) summing the products obtained by multiplying:

 

(a)the Average Life at such time of each such Collateral Obligation, by

 

(b)the Principal Balance of such Collateral Obligation,

 

and

 

(II) dividing such sum by: the Aggregate Principal Balance at such time of all
Collateral Obligations other than Defaulted Obligations.

 

For the purposes of the foregoing, the “Average Life” is, on any date of
determination with respect to any Collateral Obligation, the quotient obtained
by dividing (i) the sum of the products of (a) the number of years (rounded to
the nearest one hundredth thereof) from such date of determination to the
respective dates of each successive Scheduled Distribution of principal of such
Collateral Obligation and (b) the respective amounts of principal of such
Scheduled Distributions by (ii) the sum of all successive Scheduled
Distributions of principal on such Collateral Obligation.

 

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“Weighted Average Life Test”: A test satisfied on any date of determination if
the Weighted Average Life of all Collateral Obligations as of such date is less
than or equal to (a) 6.0 minus (b) the product of (i) 0.25 and (ii) the number
of Quarterly Payment Dates that have then occurred since the Closing Date (and
such difference between clause (a) and (b) shall have a floor of zero).

 

“Zero Coupon Bond”: Any debt security that by its terms (a) does not bear
interest for all or part of the remaining period that it is outstanding, (b)
provides for periodic payments of interest in Cash less frequently than
semi-annually or (c) pays interest only at its stated maturity.

 

Section 1.2.Assumptions as to Assets

 

In connection with all calculations required to be made pursuant to this
Indenture with respect to Scheduled Distributions on any Asset, or any payments
on any other assets included in the Assets, with respect to the sale of and
reinvestment in Collateral Obligations, and with respect to the income that can
be earned on Scheduled Distributions on such Assets and on any other amounts
that may be received for deposit in the Collection Account, the provisions set
forth in this Section 1.2 shall be applied. The provisions of this Section 1.2
shall be applicable to any determination or calculation that is covered by this
Section 1.2, whether or not reference is specifically made to this Section 1.2,
unless some other method of calculation or determination is expressly specified
in the particular provision.

 

(a)All calculations with respect to Scheduled Distributions on the Assets shall
be made on the basis of information as to the terms of each such Asset and upon
reports of payments, if any, received on such Asset that are furnished by or on
behalf of the issuer of such Asset and, to the extent they are not manifestly in
error, such information or reports may be conclusively relied upon in making
such calculations.

 

(b)For purposes of calculating the Coverage Tests, except as otherwise specified
in such tests, such calculations will not include scheduled interest and
principal payments on Defaulted Obligations, unless such payments have actually
been received in Cash.

 

(c)For each Collection Period and as of any date of determination, the Scheduled
Distribution on any Asset (other than a Defaulted Obligation, which, except as
otherwise provided herein, shall be assumed to have a Scheduled Distribution of
zero) shall be the sum of (i) the total amount of payments and collections to be
received during such Collection Period in respect of such Asset (including the
proceeds of the sale of such Asset received and, in the case of sales which have
not yet settled, to be received during the Collection Period and not reinvested
in additional Collateral Obligations or Eligible Investments or retained in the
Collection Account for subsequent reinvestment pursuant to Section 12.2) that,
if received as scheduled, will be available in the Collection Account at the end
of the Collection Period and (ii) any such amounts received in prior Collection
Periods that were not disbursed on or prior to such date of determination.

 

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(d)Each Scheduled Distribution receivable with respect to an Asset shall be
assumed to be received on the applicable Due Date, and each such Scheduled
Distribution shall be assumed to be immediately deposited in the Collection
Account to earn interest at the Assumed Reinvestment Rate. All such funds shall
be assumed to continue to earn interest until the date on which they are
required to be available in the Collection Account for application, in
accordance with the terms hereof, to payments on the Notes or other amounts
payable pursuant to this Indenture. For purposes of the applicable
determinations required by Section 10.7(b)(iv), Article XII and the definition
of Interest Coverage Ratio, the expected interest on the Notes and Floating Rate
Obligations will be calculated using the then current interest rates applicable
thereto.

 

(e)References in Section 11.1(a) to calculations made on a “pro forma basis”
shall mean such calculations after giving effect to all payments, in accordance
with the Priority of Payments described herein, that precede (in priority of
payment) or include the clause in which such calculation is made.

 

(f)For purposes of calculating all Concentration Limitations, in both the
numerator and the denominator of any component of the Concentration Limitations,
Defaulted Obligations will be treated as having a Principal Balance equal to
zero.

 

(g)If a Collateral Obligation included in the Assets would be deemed a Current
Pay Obligation but for the applicable percentage limitation in the proviso to
clause (x) of the proviso to the definition of Defaulted Obligation, then the
Current Pay Obligations with the lowest Market Value (assuming that such Market
Value is expressed as a percentage of the Principal Balance of such Current Pay
Obligations as of the date of determination) shall be deemed Defaulted
Obligations. Each such Defaulted Obligation will be treated as a Defaulted
Obligation for all purposes until such time as the Aggregate Principal Balance
of Current Pay Obligations would not exceed, on a pro forma basis including such
Defaulted Obligation, the applicable percentage of the Collateral Principal
Amount.

 

(h)Except where expressly referenced herein for inclusion in such calculations,
Defaulted Obligations will not be included in the calculation of the Collateral
Quality Test.

 

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(i)For purposes of calculating compliance with the Investment Criteria, at the
election of the Portfolio Manager in its sole discretion, any proposed
investment (whether a single Collateral Obligation or a group of Collateral
Obligations) identified by the Portfolio Manager as such at the time when
compliance with the Investment Criteria is required to be calculated (a “Trading
Plan”) may be evaluated after giving effect to all sales and reinvestments
proposed to be entered into within a specified period of no longer than 10
Business Days (which period does not extend over a Determination Date) following
the date of determination of such compliance (such period, the “Trading Plan
Period”); provided that, (i) with respect to Discount Obligations, no
calculation or evaluation may be made using the weighted average price of any
Collateral Obligation or any group of Collateral Obligations, (ii) the Portfolio
Manager, on behalf of the Issuer, notifies the Trustee and the Rating Agencies
promptly upon the commencement of a Trading Plan, (iii) no Trading Plan may
result in the purchase of Collateral Obligations having an Aggregate Principal
Balance that exceeds 7.5% of the Collateral Principal Amount as of the first day
of the Trading Plan Period, (iv) no Trading Plan Period may include a Payment
Date, (v) no more than one Trading Plan may be in effect at any time during a
Trading Plan Period and (vi) if the Investment Criteria are not satisfied with
respect to any such identified reinvestment, notice will be provided to the
Trustee, the Collateral Administrator and each Rating Agency; provided, further,
that in connection with calculating compliance with the Investment Criteria in
connection with any Trading Plan, the Portfolio Manager, at its discretion, may
exclude from such calculations any Credit Risk Obligations sold during the
applicable Trading Plan Period; provided, however, that, (x) subject to the
restrictions set forth above, the Portfolio Manager may modify any Trading Plan
during the related Trading Plan Period, and such modification will not be deemed
to constitute a failure of such Trading Plan and (y) so long as the Investment
Criteria are satisfied upon the expiry of the applicable Trading Plan Period (as
it may be amended), the failure to satisfy any of the terms and assumptions
specified in such Trading Plan will not be deemed to constitute a failure of
such Trading Plan.

  

(j)For purposes of calculating compliance with the Collateral Quality Test, the
Concentration Limitations and other Investment Criteria, upon the direction of
the Portfolio Manager by notice to the Trustee and the Collateral Administrator,
any Eligible Investment representing Principal Proceeds received as part of a
scheduled distribution or an unscheduled distribution with respect to a
Collateral Obligation or received upon the sale or other disposition of a
Collateral Obligation may be deemed to have the characteristics of such
Collateral Obligation until reinvested in an additional Collateral Obligation.
Such calculations shall be based upon the principal amount of such Collateral
Obligation, except in the case of Defaulted Obligations and Credit Risk
Obligations, in which case the calculations will be based upon the Principal
Proceeds received on the sale or other disposition of such Defaulted Obligation
or Credit Risk Obligation.

 

(k)For purposes of calculating the Sale Proceeds of a Collateral Obligation in
sale transactions, Sale Proceeds will include any Principal Financed Accrued
Interest received in respect of such sale.

 

(l)For purposes of calculating clause (i) of the Concentration Limitations, the
amounts on deposit in the Collection Account and the Ramp-Up Account (including
Eligible Investments therein) representing Principal Proceeds shall each be
deemed to be a Floating Rate Obligation that is a Senior Secured Loan.

 

(m)For purposes of calculating compliance with each of the Concentration
Limitations, all calculations will be rounded to the nearest 0.1%. All other
calculations, unless otherwise set forth herein or the context otherwise
requires, shall be rounded to the nearest ten-thousandth if expressed as a
percentage, and to the nearest one-hundredth if expressed otherwise.

 

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(n)Notwithstanding any other provision of this Indenture to the contrary, all
monetary calculations under this Indenture shall be in Dollars.

 

(o)[Reserved].

 

(p)Any reference in this Indenture to an amount of the Trustee’s or the
Collateral Administrator’s fees calculated with respect to a period at a per
annum rate shall be computed on the basis of a 360-day year and the actual
number of days elapsed during the related Interest Accrual Period and shall be
based on the Fee Basis Amount.

 

(q)To the extent there is, in the reasonable determination of the Collateral
Administrator or the Trustee, any ambiguity in the interpretation of any
definition or term contained in this Indenture or to the extent the Collateral
Administrator or the Trustee reasonably determines that more than one
methodology can be used to make any of the determinations or calculations set
forth herein, the Collateral Administrator and/or the Trustee, as the case may
be, shall be entitled to request direction from the Portfolio Manager as to the
interpretation and/or methodology to be used, and the Collateral Administrator
and the Trustee, as applicable, shall be entitled to follow such direction and
conclusively rely thereon without any responsibility or liability therefor.

 

(r)For purposes of calculating compliance with any tests hereunder (including
the Target Initial Par Condition, Collateral Quality Test and Concentration
Limitations), the trade date with respect to any acquisition or disposition of a
Collateral Obligation or Eligible Investment shall be used to determine whether
and when such acquisition or disposition has occurred.

 

(s)For purposes of the definition of Collateral Obligation, the reference to the
“purchase” of a Collateral Obligation shall include the purchase of an
obligation with cash, the receipt of an obligation by the Issuer in connection
with a Contribution and the receipt of a new obligation in connection with the
redemption and re-issuance of an obligation in a cashless roll where the
redemption proceeds with respect to the Collateral Obligation being redeemed are
“rolled” into the new obligation.

 

(t)For all purposes (including calculation of the Coverage Tests) except in
connection with calculations for the Weighted Average Floating Spread, the
Principal Balance of a Revolving Collateral Obligation or a Delayed Drawdown
Collateral Obligation will include all unfunded commitments that have not been
irrevocably reduced or withdrawn.

 

(u)All calculations related to Maturity Amendments, sales of Collateral
Obligations, the Investment Criteria (and definitions related to sales of
Collateral Obligations and the Investment Criteria), and other tests that would
be calculated cumulatively beginning on the Closing Date will be reset at zero
on the date of any Optional Redemption or Refinancing of the Notes other than on
any Partial Redemption Date unless the S&P Rating Condition has been satisfied
with respect to the Notes that are not subject to the refinancing on such
Partial Redemption Date.

 

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(v)Measurement of the degree of compliance with the Coverage Tests shall be
required as of each date of determination occurring (i) in the case of each
Overcollateralization Ratio Test, on or after the Effective Date and (ii) in the
case of the Interest Coverage Test, on or after the Determination Date
immediately preceding the second Payment Date.

 

(w)Any direction or Issuer Order required hereunder relating to the purchase,
acquisition, sale, disposition or other transfer of a Collateral Obligation may
be in the form of a trade ticket, confirmation of trade, instruction to post or
to commit to the trade or similar instrument or document or other written
instruction (including by e-mail or other electronic communication or file
transfer protocol) from an Authorized Officer of the Portfolio Manager on which
the Trustee may rely.

 

(x)If any Collateral Obligation included in a Closing Date Participation
Interest is not elevated by an assignment agreement prior to the Effective Date,
for purposes of determining the Adjusted Collateral Principal Amount, such
Collateral Obligation will be deemed to have a principal balance equal to its
S&P Recovery Amount until the date on which such Collateral Obligation is
assigned to the Issuer.

 

(y)For purposes of calculating the Collateral Quality Test, DIP Collateral
Obligations will be treated as having an S&P Recovery Rate (as applicable) equal
to the S&P Recovery Rate for Senior Secured Loans.

 

ARTICLE II
THE NOTES

 

Section 2.1.Forms Generally

 

The Notes and the Trustee’s or Authenticating Agent’s certificate of
authentication thereon (the “Certificate of Authentication”) shall be in
substantially the forms required by this Article II, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon, as may be
consistent herewith, determined by an Authorized Officer of the Issuer executing
such Notes as evidenced by their execution of such Notes. Any portion of the
text of any such Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of such Note.

 

Section 2.2.Forms of Notes

 

(a)The forms of the Notes will be as set forth in the applicable Exhibit A
hereto.

 

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(b)Notes of each Class will be duly executed by the Issuer and authenticated by
the Trustee or the Authenticating Agent as hereinafter provided.

 

(c)Except for Notes issued in the form of Certificated Notes, the Notes of each
Class offered to Qualified Purchasers that are non-”U.S. persons” in offshore
transactions in reliance on Regulation S will be issued initially in the form of
Temporary Global Notes and with the applicable legend set forth in the
applicable Exhibit A added thereto, which will be deposited on behalf of the
subscribers for such Notes represented thereby with the Trustee as custodian for
DTC and registered in the name of a nominee of DTC for the respective accounts
of Euroclear and Clearstream. On or after the 40th day following the later of
the Closing Date and the commencement of the offering of the Notes (the
“Restricted Period”), beneficial interests in a Temporary Global Note of any
Class of Notes may be exchanged for interests in a Regulation S Global Note of
the same Class upon certification that the beneficial owner(s) of such Temporary
Global Note are Qualified Purchasers that are not “U.S. persons” (as defined
under Regulation S). Upon the exchange of a Temporary Global Note for a
Regulation S Global Note after the Restricted Trading Period, the Regulation S
Global Note will be deposited with the Trustee as custodian for DTC and
registered in the name of a nominee of DTC for the account of Euroclear and
Clearstream. During the Restricted Period, interests in a Temporary Global Note
will not be transferable to a person that takes delivery in the form of any
interest in a Rule 144A Global Note or a Certificated Note.

 

(d)Except for Notes issued in the form of Certificated Notes, the Notes of each
Class sold to Persons that are QIB/QPs will be issued initially in the form of
one Rule 144A Global Note per Class and will be deposited on behalf of the
subscribers for such Notes represented thereby with the Trustee as custodian for
DTC and registered in the name of a nominee of DTC. Notes issued to an Other
Account on the Closing Date that is both an Institutional Accredited Investor
and a Qualified Purchaser will be issued in the form of Certificated Notes.

 

(e)All of the Notes issued on the Closing Date, other than Certificated Notes
issued to an Other Account, will be issued in the form of Global Notes and will
be deposited, in the case of the Rule 144A Global Notes, with the Trustee as
custodian for DTC and registered in the name of a nominee of DTC, and, in the
case of Regulation S Global Notes, registered in the name of a nominee of DTC
for the account of Euroclear and Clearstream. After the Closing Date, all of the
Notes shall be in the form of Global Notes except (x) Certificated Notes held by
an Other Account and (y) Certificated Notes issued following a Depository Event
or upon the request of a Holder during the continuance of an Event of Default.
Certificated Notes held by an Other Account may not be exchanged at any time
except in connection with a transfer of such Certificated Notes in accordance
with Section 2.5(f) of this Indenture.

 

(f)Book Entry Provisions. This Section 2.2(f) shall apply only to Global Notes
deposited with or on behalf of DTC.

 

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(i)The Aggregate Outstanding Amount of Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee or DTC
or its nominee, as the case may be, as hereinafter provided.

 

(ii)The provisions of the “Operating Procedures of the Euroclear System” of
Euroclear and the “Terms and Conditions Governing Use of Participants” of
Clearstream, respectively, will be applicable to the Global Notes insofar as
interests in such Global Notes are held by the Agent Members of Euroclear or
Clearstream, as the case may be.

 

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

 

Section 2.3.Authorized Amount; Stated Maturity; Denominations

 

(a)The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is limited to U.S.$378,700,000 aggregate
principal amount of Notes (except for (i) Deferred Interest with respect to the
Deferred Interest Notes, (ii) Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Section 2.5, Section 2.6 or Section 8.5 or (iii) additional notes
issued in accordance with Sections 2.13 and 3.2).

 

(b)Such Notes shall be divided into the Classes, having the designations,
original principal amounts and other characteristics as follows:

 

Designation Class A-1
Notes Class A-2
Notes Class B Notes Type Senior Secured Floating Rate Senior Secured Floating
Rate

Secured Deferrable

Floating Rate 

Initial
Principal
Amount
(U.S.$) $299,400,000 $52,300,000 $27,000,000 Expected S&P Initial Rating “AAA
(sf)” “AA (sf)” “A (sf)” Expected Fitch Initial Rating “AAAsf” N/A N/A Index
Maturity 3 month 3 month 3 month Interest Rate1

LIBOR +

1.70%

LIBOR +

2.50%

LIBOR +

4.10%

Deferred Interest Notes No No Yes Re-Pricing Eligible2 No Yes Yes

Stated
Maturity

(Quarterly Payment Date in)

July 2030 July 2030 July 2030 Minimum Denominations (U.S.$) (Integral Multiples)
$250,000
($1) $250,000
($1) $250,000
($1) Priority Class(es) None A-1 A-1, A-2 Pari Passu Class(es) None None None
Junior Class(es) A-2, B, Interests B, Interests Interests

 

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1

LIBOR shall be calculated in accordance with the definition set forth in Exhibit
C hereto; provided, that LIBOR for the first Interest Accrual Period will be set
on two different Interest Determination Dates and, therefore, two different
rates may apply during that period.

 

2The spread over LIBOR applicable to any Class of Re-Pricing Eligible Notes may
be reduced in connection with a Re-Pricing of such Class of Re-Pricing Eligible
Notes, subject to the conditions set forth in Section 9.8.

 

(c)The Notes will be issued in Minimum Denominations. Notes shall only be
transferred or resold in compliance with the terms of this Indenture.

 

Section 2.4.Execution, Authentication, Delivery and Dating

 

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

 

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

 

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

 

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

 

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

 

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

  

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Section 2.5.Registration, Registration of Transfer and Exchange

 

(a)(i) The Issuer shall cause the Notes to be registered and shall cause to be
kept a register (the “Register”) at the Corporate Trust Office in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Trustee is hereby initially appointed “registrar” (the “Registrar”) for the
purpose of maintain the Register and registering Notes and transfers of such
Notes in the Register. Upon any resignation or removal of the Registrar, the
Issuer shall promptly appoint a successor or, in the absence of such appointment
or until such appointment is effective, assume the duties of Registrar.

 

(ii)If a Person other than the Trustee is appointed by the Issuer as Registrar,
the Issuer will give the Trustee prompt written notice (with a copy to the
Portfolio Manager) of the appointment of a Registrar and of the location, and
any change in the location, of the Register, and the Trustee shall have the
right to inspect the Register at all reasonable times and to obtain copies
thereof and the Trustee shall have the right to rely upon a certificate executed
on behalf of the Registrar by an Officer thereof as to the names and addresses
of the Holders and the principal amounts and numbers of such Notes. Upon written
request at any time, the Registrar shall provide to the Issuer, the Portfolio
Manager or any Holder a current list of Holders as reflected in the Register. At
the expense of the Issuer and at the direction of the Issuer or the Portfolio
Manager, the Trustee shall request a list of participants from the book-entry
depositories and provide such list to the Issuer or the Portfolio Manager, as
applicable.

 

(iii)Subject to this Section 2.5, upon surrender for registration of transfer of
any Notes at the office or agency of the Issuer to be maintained as provided in
Section 7.2, the Issuer shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes of any Minimum Denomination and of a like aggregate principal or face
amount.

 

(iv)At the option of the Holder, Notes may be exchanged for Notes of like terms,
in any Minimum Denominations and of like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Note is surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Notes that the Holder making the exchange is
entitled to receive.

 

(v)All Notes authenticated and delivered upon any registration of transfer or
exchange of Notes shall be the valid obligations of the Issuer, evidencing the
same debt (to the extent they evidence debt), and entitled to the same benefits
under this Indenture as the Notes surrendered upon such registration of transfer
or exchange.

 

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(vi)Every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument of transfer in
form reasonably satisfactory to the Registrar duly executed by the Holder
thereof or such Holder’s attorney duly authorized in writing, with such
signature guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in Securities Transfer Agents Medallion Program (“STAMP”) or such
other “signature guarantee program” as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.

 

(vii)No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer, the Registrar or the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. The Registrar or the Trustee shall be
permitted to request such evidence reasonably satisfactory to it documenting the
identities and/or signatures of the transferor and transferee.

 

(b)(i) No Note may be sold or transferred (including, without limitation, by
pledge or hypothecation) unless such sale or transfer is exempt from the
registration requirements of the Securities Act, is exempt from the registration
requirements under applicable state securities laws and will not cause either of
the Issuer or the pool of collateral to become subject to the requirement that
it register as an investment company under the Investment Company Act.

 

(ii)No Note may be offered, sold, delivered or transferred (including, without
limitation, by pledge or hypothecation) except (i) to (A) a Qualified Purchaser
that is not a “U.S. person” (as defined under Regulation S) in accordance with
the requirements of Regulation S, (B) a QIB/QP or (C) solely in the case of
Certificated Notes, an IAI/QP and (ii) in accordance with any applicable law.

 

(iii)[Reserved].

 

(iv)No Note may be offered, sold or delivered (i) as part of the distribution by
the Initial Purchaser and the Placement Agents at any time or (ii) otherwise
until after the Restricted Period within the United States or to, or for the
benefit of, “U.S. persons” (as defined under Regulation S) except in accordance
with Rule 144A or an exemption from the registration requirements of the
Securities Act, to Qualified Purchasers that are (x) purchasing for their own
account or for the accounts of one or more Qualified Institutional Buyers for
which the purchaser is acting as a fiduciary or agent or (y) solely in the case
of Certificated Notes issued to an Other Account, an Institutional Accredited
Investor. The Notes may be sold or resold, as the case may be, in offshore
transactions to Qualified Purchasers that are non-”U.S. persons” (as defined
under Regulation S) in reliance on Regulation S. No Rule 144A Global Note may at
any time be held by or on behalf of any Person that is not a QIB/QP, and no
Temporary Global Note or Regulation S Global Note may be held at any time by or
on behalf of any Person that is either (A) not a Qualified Purchaser or (B) a
U.S. person. None of the Issuer, the Trustee or any other Person may register
the Notes under the Securities Act or any state or other securities laws or the
applicable laws of any other jurisdiction.

 

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(c)No transfer of a beneficial interest in a Note will be effective if the
transferee’s acquisition, holding or disposition of such interest would
constitute or result in a prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code (or in a violation of any Similar Law or other
applicable law), unless an exemption is available and all conditions have been
satisfied.

 

(d)Notwithstanding anything contained herein to the contrary, the Trustee will
not be responsible for ascertaining whether any transfer complies with, or for
otherwise monitoring or determining compliance with, the registration provisions
of or any exemptions from the Securities Act, applicable state securities laws
or the applicable laws of any other jurisdiction, ERISA, the Code or the
Investment Company Act; provided that, if a Transfer Certificate is specifically
required by the terms of this Section 2.5 to be provided to the Trustee, the
Trustee shall be under a duty to receive and examine the same to determine
whether or not the certificate substantially conforms on its face to the
applicable requirements of this Indenture and shall promptly notify the party
delivering the same if such certificate does not comply with such terms;
provided further, the Trustee shall not be required to obtain any certificate
specifically required by the terms of this Section 2.5 if the Trustee is not
notified of or in a position to know of any transfer requiring such a
certificate to be presented by the proposed transferor or transferee.

 

(e)Transfers of Global Notes shall only be made in accordance with this Section
2.5(e).

 

(i)Rule 144A Global Note to Regulation S Global Note. If a holder of a
beneficial interest in a Rule 144A Global Note deposited with DTC wishes at any
time to exchange its interest in such Rule 144A Global Note for an interest in
the corresponding Regulation S Global Note, or to transfer its interest in such
Rule 144A Global Note to a Person who wishes to take delivery thereof in the
form of an interest in the corresponding Regulation S Global Note, such holder
(provided that, such holder or, in the case of a transfer, the transferee, is a
Qualified Purchaser that is not a U.S. person and is acquiring such interest in
an offshore transaction in accordance with Regulation S) may, subject to the
immediately succeeding sentence and the rules and procedures of DTC, exchange or
transfer, or cause the exchange or transfer of, such interest for an equivalent
beneficial interest in the corresponding Regulation S Global Note. Upon receipt
by the Trustee or the Registrar of (A) instructions given in accordance with
DTC’s procedures from an Agent Member directing the Trustee or the Registrar to
credit or cause to be credited a beneficial interest in the corresponding
Regulation S Global Note, but not less than the Minimum Denomination applicable
to such holder’s Notes, in an amount equal to the beneficial interest in the
Rule 144A Global Note to be exchanged or transferred, (B) a written order given
in accordance with DTC’s procedures containing information regarding the
participant account of DTC and the Euroclear or Clearstream account to be
credited with such increase and (C) a Transfer Certificate from the transferor
and the transferee in the form of Exhibit B-2, then the Trustee or the Registrar
shall approve the instructions at DTC to reduce the principal amount of the Rule
144A Global Note and to increase the principal amount of the Regulation S Global
Note by the aggregate principal amount of the beneficial interest in the Rule
144A Global Note to be exchanged or transferred, and to credit or cause to be
credited to the securities account of the Person specified in such instructions
a beneficial interest in the corresponding Regulation S Global Note equal to the
reduction in the principal amount of the Rule 144A Global Note.

 

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(ii)Regulation S Global Note to Rule 144A Global Note. If a holder of a
beneficial interest in a Regulation S Global Note deposited with DTC wishes at
any time to exchange its interest in such Regulation S Global Note for an
interest in the corresponding Rule 144A Global Note or to transfer its interest
in such Regulation S Global Note to a Person who wishes to take delivery thereof
in the form of an interest in the corresponding Rule 144A Global Note, such
holder may, subject to the immediately succeeding sentence and the rules and
procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or
transfer, or cause the exchange or transfer of, such interest for an equivalent
beneficial interest in the corresponding Rule 144A Global Note. Upon receipt by
the Trustee or the Registrar of (A) instructions from Euroclear, Clearstream
and/or DTC, as the case may be, directing the Registrar to cause to be credited
a beneficial interest in the corresponding Rule 144A Global Note in an amount
equal to the beneficial interest in such Regulation S Global Note, but not less
than the Minimum Denomination applicable to such holder’s Notes to be exchanged
or transferred, such instructions to contain information regarding the
participant account with DTC to be credited with such increase and (B) a
Transfer Certificate from the transferor and the transferee in the form of
Exhibit B-1, then the Registrar will approve the instructions at DTC to reduce,
or cause to be reduced, such Regulation S Global Note by the aggregate principal
amount of the beneficial interest in such Regulation S Global Note to be
transferred or exchanged and the Registrar shall instruct DTC, concurrently with
such reduction, to credit or cause to be credited to the securities account of
the Person specified in such instructions a beneficial interest in the
corresponding Rule 144A Global Note equal to the reduction in the principal
amount of such Regulation S Global Note.

 

(f)Transfers and exchanges of or for Certificated Notes will only be made in
accordance with this Section 2.5(f) and Section 2.10.

 

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(i)If a Depository Event has occurred or an Event of Default has occurred and is
continuing and a holder of a Certificated Note wishes at such time to exchange
its interest in such Certificated Note for one or more Certificated Notes or to
transfer such Certificated Note to a Person who wishes to take delivery thereof
in the form of a Certificated Note, such holder may exchange or transfer its
interest upon delivery of the documents set forth in the following sentence.
Upon receipt by the Registrar of (A) a Holder’s Certificated Note properly
endorsed for assignment to the transferee, and (B) a Transfer Certificate from
the transferor and the transferee in the form of Exhibit B-3, the Registrar
shall cancel such Certificated Note in accordance with Section 2.9, record the
transfer in the Register in accordance with Section 2.5(a) and upon execution by
the Issuer and authentication and delivery by the Trustee, deliver one or more
Certificated Notes bearing the same designation as the Certificated Note
endorsed for transfer, registered in the names specified in the assignment
described in clause (A) above, in principal amounts designated by the transferee
(the aggregate of such principal amounts being equal to the aggregate principal
amount of the Certificated Note surrendered by the transferor), and in Minimum
Denominations.

 

(ii)If an Other Account holding a Certificated Note wishes at any time to
transfer such Certificated Note to a Person who wishes to take delivery thereof
in the form of an interest in a Rule 144A Global Note, such Other Account may,
subject to the immediately succeeding sentence and the rules and procedures of
Euroclear, Clearstream and/or DTC, as the case may be, transfer, or cause the
transfer of, such Certificated Note to such Person in the form of a beneficial
interest in a Rule 144A Global Note. Upon receipt by the Registrar of (A) such
Other Account’s Certificated Note properly endorsed for assignment to the
transferee, (B) instructions given in accordance with DTC’s procedures from an
Agent Member directing the Registrar to credit or cause to be credited a
beneficial interest in a Rule 144A Global Note in an amount equal to the
Certificated Note to be transferred, but not less than the Minimum Denomination
applicable to such Other Account’s Certificated Notes, such instructions to
contain information regarding the participant account with DTC to be credited
with such increase and (C) a Transfer Certificate from the transferor and the
transferee in the form of Exhibit B-1, then the Registrar shall cancel such
Certificated Note in accordance with Section 2.9, record the transfer in the
Register in accordance with Section 2.5(a) and the Registrar shall instruct DTC,
concurrently with such cancellation, to credit or cause to be credited to the
securities account of the Person specified in such instructions a beneficial
interest in a Rule 144A Global Note equal to the principal amount of the
Certificated Note transferred.

 

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(iii)If an Other Account holding a Certificated Note wishes at any time to
transfer such Certificated Note to a Person who wishes to take delivery thereof
in the form of an interest in a Regulation S Global Note, such Other Account
(provided that, the transferee is a Qualified Purchaser that is not a U.S.
person and is acquiring such interest in an offshore transaction) may, subject
to the immediately succeeding sentence and the rules and procedures of
Euroclear, Clearstream and/or DTC, as the case may be, transfer, or cause the
transfer of, such Certificated Note to such Person in the form of a beneficial
interest in a Regulation S Global Note. Upon receipt by the Registrar of (A)
such Other Account’s Certificated Note properly endorsed for assignment to the
transferee, (B) instructions given in accordance with Euroclear, Clearstream or
DTC’s procedures, as the case may be, from an Agent Member directing the
Registrar to credit or cause to be credited a beneficial interest in a
Regulation S Global Note in an amount equal to the Certificated Note to be
transferred, but not less than the Minimum Denomination applicable to such Other
Account’s Certificated Notes, such instructions to contain information regarding
the participant account with DTC and the Euroclear or Clearstream account to be
credited with such increase and (C) a Transfer Certificate from the transferor
and the transferee in the form of Exhibit B-2, then the Registrar shall cancel
such Certificated Note in accordance with Section 2.9, record the transfer in
the Register in accordance with Section 2.5(a) and the Registrar shall instruct
DTC, concurrently with such cancellation, to credit or cause to be credited to
the securities account of the Person specified in such instructions a beneficial
interest in a Regulation S Global Note equal to the principal amount of the
Certificated Note transferred.

  

(g)If Notes are issued upon the transfer, exchange or replacement of Notes
bearing the applicable legends set forth in the applicable Exhibit A hereto, and
if a request is made to remove such applicable legend on such Notes, the Notes
so issued shall bear such applicable legend, or such applicable legend shall not
be removed, as the case may be, unless there is delivered to the Trustee and the
Issuer such satisfactory evidence, which may include an Opinion of Counsel
acceptable to them, as may be reasonably required by the Issuer (and which shall
by its terms permit reliance by the Trustee), to the effect that neither such
applicable legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of the
Securities Act, the Investment Company Act, ERISA or the Code. Upon provision of
such satisfactory evidence, the Trustee or its Authenticating Agent, at the
written direction of the Issuer shall, after due execution by the Issuer
authenticate and deliver Notes that do not bear such applicable legend.

 

(h)Each Person who becomes a beneficial owner of an interest in a Global Note
will be deemed to have represented and agreed as follows:

 

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(i)In connection with the purchase of such Notes: (A) none of the Issuer, the
Portfolio Manager, the Transferor, the Retention Holder, the Initial Purchaser,
the Placement Agents, the Trustee, the Collateral Administrator or any of their
respective Affiliates is acting as a fiduciary or financial or investment
adviser for such beneficial owner; (B) such beneficial owner is not relying (for
purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of the Issuer, the
Portfolio Manager, the Transferor, the Retention Holder, the Trustee, the
Collateral Administrator, the Initial Purchaser, either Placement Agent or any
of their respective Affiliates other than any statements in the Offering
Circular, and such beneficial owner has read and understands the Offering
Circular; (C) such beneficial owner has consulted with its own legal,
regulatory, tax, business, investment, financial and accounting advisors to the
extent it has deemed necessary and has made its own independent investment
decisions (including decisions regarding the suitability of any transaction
pursuant to this Indenture) based upon its own judgment and upon any advice from
such advisors as it has deemed necessary and not upon any view expressed by the
Issuer, the Portfolio Manager, the Trustee, the Collateral Administrator, the
Initial Purchaser, either Placement Agent or any of their respective Affiliates;
(D) such beneficial owner is either (1) (in the case of a Rule 144A Global Note)
both (a) a “qualified institutional buyer” (as defined under Rule 144A under the
Securities Act) that is not a broker-dealer which owns and invests on a
discretionary basis less than U.S.$25,000,000 in securities of issuers that are
not affiliated persons of the dealer and is not a plan referred to in paragraph
(a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A under the Securities Act or a trust
fund referred to in paragraph (a)(1)(i)(F) of Rule 144A under the Securities Act
that holds the assets of such a plan, if investment decisions with respect to
the plan are made by beneficiaries of the plan and (b) a Qualified Purchaser for
purposes of Section 3(c)(7) of the Investment Company Act (or a corporation,
partnership, limited liability company or other entity (other than a trust),
each shareholder, partner, member or other equity owner of which is a Qualified
Purchaser) or (2) (in the case of a beneficial owner of an interest in a
Regulation S Global Note) a Qualified Purchaser that is not a “U.S. person” and
is acquiring the Notes in an offshore transaction (as defined in Regulation S)
in reliance on the exemption from registration provided by Regulation S; (E)
such beneficial owner is acquiring its interest in such Notes for its own
account; (F) such beneficial owner was not formed for the purpose of investing
in such Notes; (G) such beneficial owner understands that the Issuer or the
Portfolio Manager may receive a list of participants holding interests in the
Notes from one or more book-entry depositories; (H) such beneficial owner will
hold and transfer at least the Minimum Denomination of such Notes; (I) such
beneficial owner is a sophisticated investor and is purchasing the Notes with a
full understanding of all of the terms, conditions and risks thereof, and is
capable of and willing to assume those risks; (J) such beneficial owner will
provide notice of the relevant transfer restrictions to subsequent transferees;
(K) it will not hold the Notes for the benefit of any other Person and will be
the sole beneficial owner thereof for all purposes; (L) in accordance with the
provisions therefor in this Indenture, it will not sell participation interests
in such Notes or enter into any other arrangement pursuant to which any other
Person will be entitled to a beneficial interest in the distributions on such
Notes; (M) all Notes purchased directly or indirectly by it will constitute an
investment of no more than 40% of its assets; and (N) such beneficial owner is
not purchasing such Notes with a view to the resale, distribution or other
disposition thereof in violation of the Securities Act; provided that, none of
the representations set forth in clauses (A) through (C) above is made by the
Portfolio Manager, any affiliate thereof, or any account or fund managed by the
Portfolio Manager or any of its affiliates.

 

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(ii)Such beneficial owner’s acquisition, holding and disposition of the Notes
will not constitute or result in a prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or in a non-exempt violation of any Similar
Laws or other applicable law) unless an exemption is available and all
conditions have been satisfied. If the purchaser or transferee of any Note or
beneficial interest therein is a Benefit Plan Investor, it will be required or
deemed to represent, warrant and agree that (i) none of the Transaction Parties,
nor any of their affiliates, has provided any investment advice within the
meaning of Section 3(21)(A)(ii) of ERISA, and regulations thereunder, to the
Benefit Plan Investor or to the Fiduciary (as defined below), in connection with
its acquisition of Notes, and (ii) the Fiduciary is exercising its own
independent judgment in evaluating the transaction. Such beneficial owner
understands that the representations made in this clause will be deemed made on
each day from the date of its acquisition of an interest in such Notes through
and including the date on which it disposes of such interest. If any such
representation becomes untrue, or if there is a change in its status as a
Benefit Plan Investor or a Controlling Person, it will immediately notify the
Trustee. It agrees to indemnify and hold harmless the Issuer, the Trustee, the
Initial Purchaser, the Placement Agents and the Portfolio Manager and their
respective Affiliates from any cost, damage, or loss incurred by them as a
result of any such representation being untrue.

 

(iii)Such beneficial owner understands that such Notes are being offered only in
a transaction not involving any public offering in the United States within the
meaning of the Securities Act, such Notes have not been and will not be
registered under the Securities Act, and, if in the future such beneficial owner
decides to offer, resell, pledge or otherwise transfer such Notes, such Notes
may be offered, resold, pledged or otherwise transferred only in accordance with
the provisions of this Indenture and the legend on such Notes. Such beneficial
owner acknowledges that no representation has been made as to the availability
of any exemption under the Securities Act or any state or other securities laws
for resale of such Notes. Such beneficial owner understands that neither the
Issuer nor the pool of collateral has been registered under the Investment
Company Act, and acknowledges that the Issuer is exempt from registration as
such by virtue of Section 3(c)(7) of the Investment Company Act.

 

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(iv)Such beneficial owner is aware that, except as otherwise provided in this
Indenture, any Notes being sold to it in reliance on Regulation S will be
represented by one or more Temporary Global Notes or Regulation S Global Notes,
as applicable, and that beneficial interests therein may be held only through
DTC for the respective accounts of Euroclear or Clearstream.

 

(v)Such beneficial owner will provide notice to each person to whom it proposes
to transfer any interest in the Notes of the transfer restrictions and
representations set forth in this Section 2.5, including the Exhibits referenced
herein.

 

(vi)It acknowledges and agrees that the failure to provide the Issuer and the
Trustee (and any of their agents) with the properly completed and signed tax
certifications (generally, in the case of U.S. federal income tax, an IRS Form
W-9 (or applicable successor form) in the case of a person that is a U.S. Tax
Person or the appropriate IRS Form W-8 (or applicable successor form) in the
case of a person that is not a U.S. Tax Person) may result in withholding from
payments in respect of the Note, including U.S. federal withholding or back-up
withholding.

 

(vii)Such beneficial owner agrees that it will not, prior to the date which is
one year (or, if longer, the applicable preference period then in effect) plus
one day after the payment in full of all Notes, cause a Bankruptcy Filing
against the Issuer. Such beneficial owner further acknowledges and agrees that
if it causes any such Bankruptcy Filing against the Issuer prior to the
expiration of the period specified in the previous sentence, (A) any claim that
it has against the Issuer (including under all Notes of any Class held by such
Filing Holder(s)) or with respect to any Assets (including any proceeds thereof)
will, notwithstanding anything to the contrary in the Priority of Payments and
notwithstanding any objection to, or rescission of, such filing, be fully
subordinate in right of payment to the claims of each Holder of any Note (and
each other secured creditor of the Issuer) that is not a Filing Holder, with
such subordination being effective until each Note held by each Holder of any
Note (and each claim of each other secured creditor of the Issuer) that is not a
Filing Holder is paid in full in accordance with the Priority of Payments (after
giving effect to such subordination), (B) it will promptly return or cause all
amounts received by it following such Bankruptcy Filing to be returned to the
Issuer and (C) it will take all necessary action to give effect to this
agreement. This agreement will constitute a “subordination agreement” within the
meaning of Section 510(a) of the Bankruptcy Code.

 

(viii)Such beneficial owner understands and agrees that the Notes are limited
recourse obligations of the Issuer, payable solely from proceeds of the Assets
in accordance with the Priority of Payments and following realization of the
Assets, and application of the proceeds thereof in accordance with this
Indenture, all obligations of and any claims against the Issuer hereunder or in
connection therewith after such realization shall be extinguished and shall not
thereafter revive.

 

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(ix)If it is not a U.S. Tax Person, it represents and agrees that it is not and
will not become a member of an “expanded group” (within the meaning of the
regulations issued under Section 385 of the Code) that includes a domestic
corporation (as determined for U.S. federal income tax purposes) if either (i)
the Issuer is an entity disregarded as separate from such domestic corporation
for U.S. federal income tax purposes or (ii) the Issuer is a “controlled
partnership” (within the meaning of the regulations) with respect to such
expanded group or an entity disregarded as separate from such controlled
partnership for U.S. federal income tax purposes.

 

(x)It will treat the Notes as indebtedness for U.S. federal, state and local
income and franchise tax purposes, except as otherwise required by law.

 

(xi)It acknowledges and agrees that (A) the Trustee will provide to the Issuer
and the Portfolio Manager upon reasonable request all information reasonably
available to the Trustee in connection with regulatory matters, including any
information that is necessary or advisable in order for the Issuer or the
Portfolio Manager (or its parent or Affiliates) to comply with regulatory
requirements, (B) with respect to each Certifying Person, unless such Certifying
Person instructs the Trustee otherwise, the Trustee will upon request of the
Issuer or the Portfolio Manager share with the Issuer and the Portfolio Manager
the identity of such Certifying Person, as identified to the Trustee by written
certification from such Certifying Person, (C) the Trustee will obtain and
provide to the Issuer and the Portfolio Manager upon request a list of
participants in DTC, Euroclear or Clearstream holding positions in the Notes,
(D) upon written request, the registrar shall provide to the Issuer, the
Portfolio Manager, the Initial Purchaser, either Placement Agent or any Holder a
current list of Holders as reflected in the Register, and by accepting such
information, each Holder will be deemed to have agreed that such information
will be used for no purpose other than the exercise of its rights under this
Indenture and (E) the Trustee will have no liability for any such disclosure
under (A) through (D) or, subject to the duties and responsibilities of the
Trustee set forth in this Indenture, the accuracy thereof.

 

(xii)It agrees to provide to the Issuer and the Portfolio Manager all
information reasonably available to it that is reasonably requested by the
Issuer or the Portfolio Manager in connection with regulatory matters, including
any information that is necessary or advisable in order for the Issuer or the
Portfolio Manager (or its Affiliates) to comply with regulatory requirements
applicable to the Issuer or the Portfolio Manager from time to time.

 

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

 

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(xiv)If it is not a U.S. Tax Person, it represents that either (a) it is not (i)
a bank (or an entity affiliated with a bank) extending credit pursuant to a loan
agreement entered into in the ordinary course of its trade or business (within
the meaning of Section 881(c)(3)(A) of the Code), (ii) a “10-percent
shareholder” with respect to the Issuer within the meaning of Section 871(h)(3)
or Section 881(c)(3)(D) of the Code, and (iii) a “controlled foreign
corporation” that is related to the Issuer within the meaning of Section
881(c)(3)(C) of the Code; (b) it is a person that is eligible for benefits under
an income tax treaty with the United States that eliminates U.S. federal income
taxation of U.S. source interest not attributable to a permanent establishment
in the United States; or (c) it has provided an IRS Form W-8ECI representing
that all payments received or to be received by it on the Notes are effectively
connected with the conduct of a trade or business in the United States.

 

(xv)Such beneficial owner acknowledges and agrees that the Issuer has the right
to compel (A) any Non-Permitted Holder or Non-Permitted ERISA Holder to sell its
interest in the Notes or may sell such interest in the Notes on behalf of such
Non-Permitted Holder or Non-Permitted ERISA Holder and (B) in the case of
Re-Pricing Eligible Notes, any Non-Consenting Holder to sell its interest in
such Notes, to sell such interest on behalf of such Non-Consenting Holder or to
redeem such Notes.

 

(xvi)Such beneficial owner covenants that it will not transfer all or any part
of the Notes (or purport to do so) if such transfer will cause (A) the Issuer to
be in violation of the United States Bank Secrecy Act, as amended by the USA
PATRIOT Act of 2001, and the United States Money Laundering Control Act of 1986
(i.e., 18 U.S.C. §§ 1956 and 1957), as amended, or any similar U.S. federal or
state or non-U.S. laws or regulations (collectively “Anti-Money Laundering
Laws”); or (B) the Notes to be held by an entity that a U.S. person is
prohibited from dealing with under the laws, regulations, and Executive Orders
administered by OFAC.

 

(xvii)Such beneficial owner represents and warrants that no officer, director,
employee or agent of the beneficial owner has, in connection with its
acquisition of the Notes, been offered or received any payment of money or any
other thing of value, from the Issuer or any other person or entity, on behalf
of the Issuer, for the purpose of influencing or inducing any act or decision
related to such investment, or providing any improper advantage in connection
with such investment, in violation of applicable anti-bribery laws and
regulations, including but not limited to, the United States Foreign Corrupt
Practices Act of 1977, as amended.

 

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(xviii)Such beneficial owner does not know or have any reason to suspect that
(i) the monies used or to be used to acquire the Notes are, were or will be
derived from or related to any illegal activities, including but not limited to,
any activities that may contravene U.S. federal or state or non-U.S. laws and
regulations, including Anti-Money Laundering Laws, or (ii) the proceeds from the
beneficial owner’s acquisition of the Notes will be used to finance any
activities that may contravene U.S. federal or state or non-U.S. laws and
regulations, including Anti-Money Laundering Laws.

 

(xix)If such beneficial owner is a fund-of-funds or other entity investing on
behalf of third parties, such beneficial owner represents and warrants that (A)
such beneficial owner is in compliance in all material respects with all
applicable Anti-Money Laundering Laws and, if applicable, with regulations
administered by OFAC, (B) such beneficial owner has anti-money laundering
policies and procedures in place reasonably designed to verify the identity of
its beneficial owners and/or underlying investors and their sources of funds and
to confirm that no beneficial owner and/or underlying investor is a party with
whom a U.S. person is prohibited from dealing under regulations administered by
OFAC and (C) to the best of its knowledge, such beneficial owner and its
beneficial owners and/or underlying investors will not subject the Issuer to
criminal or civil violations of Anti-Money Laundering Laws or of regulations
administered by OFAC.

 

(xx)It will indemnify the Issuer, the Trustee and their respective agents from
any and all damages, cost and expenses (including any amount of taxes, fees,
interest, additions to tax, or penalties) resulting from the failure by it to
comply with its obligations under the Notes. The indemnification will continue
with respect to any period during which such Holder held a Note, notwithstanding
it ceasing to be a Holder of the Notes.

 

(xxi)It understands that the foregoing representations and agreements will be
relied upon by the Transaction Parties and their respective counsel, and by its
purchase of the Notes it consents to such reliance.

 

(i)Each Person who becomes a Holder of a Certificated Note shall be required to
make the representations and agreements set forth in the applicable Transfer
Certificate or, in the case of a purchase on the Closing Date, an investor
representation letter.

 

(j)Any purported transfer of a Note not in accordance with this Section 2.5
shall be null and void and shall not be given effect for any purpose whatsoever.

 

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(k)The Registrar, the Trustee and the Issuer shall be entitled to conclusively
rely on any transferor and transferee certificate delivered pursuant to this
Section 2.5 (or any certificate of ownership delivered pursuant to Section
2.10(d)) and shall be able to presume conclusively the continuing accuracy
thereof, in each case without further inquiry or investigation.

 

(l)Neither the Trustee nor the Registrar shall be liable for any delay in the
delivery of directions from DTC and may conclusively rely on, and shall be fully
protected in relying on, such direction as to the names of the beneficial owners
in whose names such Certificated Notes shall be registered or as to delivery
instructions for such Certificated Notes.

 

(m)Each purchaser, beneficial owner and subsequent transferee of Notes or
interest therein, by acceptance of such Notes or such an interest in such Notes,
agrees or is deemed to agree that (A) the Transaction Documents contain
limitations on the rights of the holders to institute legal or other proceedings
against the Issuer, the Issuer, the Initial Purchaser, the Placement Agents, the
Collateral Administrator, the Trustee and the Portfolio Manager, (B) it will
comply with the express terms of the applicable Transaction Documents if it
seeks to institute any such proceeding and (C) the Transaction Documents do not
impose any duty or obligation on the Issuer or its officers, shareholders,
members or managers to institute on behalf of any holder, or join any holder or
any other Person in instituting, any such proceeding.

 

(n)Each purchaser or subsequent transferee of Certificated Notes after the
Closing Date (including by way of a transfer of an interest in a Global Note)
will be required to provide, and no such purchase or transfer will be recorded
or otherwise recognized unless such purchaser has provided, the Issuer and the
Trustee with a Transfer Certificate in the form required hereunder.

 

(o)If the purchaser or transferee of any Notes or beneficial interest therein is
a Benefit Plan Investor, it will be deemed to represent, warrant and agree that
(i) none of the Issuer, the Initial Purchaser, the Placement Agents, the
Trustee, the Portfolio Manager, the Transferor, the Retention Holder, the
Collateral Administrator or any of their respective affiliates, has provided any
investment advice within the meaning of Section 3(21)(A)(ii) of ERISA to the
Benefit Plan Investor, or to any fiduciary or other person investing the assets
of the Benefit Plan Investor (“Fiduciary”), in connection with its acquisition
of Notes, and (ii) the Fiduciary is exercising its own independent judgment in
evaluating the investment in the Notes.

 

(p)To the extent required by the Issuer, as determined by the Issuer or the
Portfolio Manager on behalf of the Issuer, the Issuer may, upon written notice
to the Trustee, impose additional transfer restrictions on the Notes to comply
with the Anti-Money Laundering Laws, including, without limitation, requiring
each transferee of a Note to make representations to the Issuer in connection
with such compliance.

 

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Section 2.6.Mutilated, Defaced, Destroyed, Lost or Stolen Note

  

If (a) any mutilated or defaced Note is surrendered to a Transfer Agent, or if
there shall be delivered to the Issuer, the Trustee and the relevant Transfer
Agent evidence to their reasonable satisfaction of the destruction, loss or
theft of any Note, and (b) there is delivered to the Issuer, the Trustee and
such Transfer Agent, and any agent of the Issuer, the Trustee and/or such
Transfer Agent, such security or indemnity as may be required by them to save
each of them harmless, then, in the absence of notice to the Issuer, the Trustee
or such Transfer Agent that such Note has been acquired by a Protected
Purchaser, the Issuer shall execute and, upon Issuer Order (which Issuer Order
shall be deemed to be provided upon delivery of such executed Notes), the
Trustee shall authenticate and deliver to the Holder, in lieu of any such
mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor
(including the same date of issuance) and equal principal or face amount,
registered in the same manner, dated the date of its authentication, bearing
interest from the date to which interest has been paid on the mutilated,
defaced, destroyed, lost or stolen Note and bearing a number not
contemporaneously outstanding.

 

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

 

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

 

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

 

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

 

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

 

Section 2.7.Payment of Principal and Interest and Other Amounts; Principal and
Interest Rights Preserved

 

(a)Payments of interest on the Notes.

 

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(i)Notes of each Class shall accrue interest during each Interest Accrual Period
at the applicable Interest Rate and such interest will be payable in arrears on
each Payment Date on the Aggregate Outstanding Amount thereof on the first day
of the related Interest Accrual Period (after giving effect to payments of
principal thereof on such date), except as otherwise set forth below. Payment of
interest on each Class of Notes (and payments of available Interest Proceeds to
the Issuer) will be subordinated to the payment of interest on each related
Priority Class. Any payment of interest due on a Class of Deferred Interest
Notes on any Payment Date to the extent sufficient funds are not available to
make such payment in accordance with the Priority of Payments on such Payment
Date, but only if one or more Priority Classes are Outstanding with respect to
such Class of Deferred Interest Notes, shall constitute “Deferred Interest” with
respect to such Class and shall not be considered “due and payable” for the
purposes of Section 5.1(a) (and the failure to pay such interest shall not be an
Event of Default) until the earliest of (i) the Payment Date on which funds are
available to pay such Deferred Interest in accordance with the Priority of
Payments, (ii) the Redemption Date with respect to such Class of Deferred
Interest Notes and (iii) the Stated Maturity (or the earlier date of Maturity)
of such Class of Deferred Interest Notes. Deferred Interest shall be payable on
the first Payment Date on which funds are available to be used for such purpose
in accordance with the Priority of Payments, but in any event no later than the
earlier of the Business Day (A) which is the Redemption Date with respect to
such Class of Deferred Interest Notes and (B) which is the Stated Maturity (or
the earlier date of Maturity) of such Class of Deferred Interest Notes.
Regardless of whether any Priority Class is Outstanding with respect to any
Class of Deferred Interest Notes, to the extent that funds are not available on
any Payment Date to pay previously accrued Deferred Interest, such previously
accrued Deferred Interest will not be due and payable on such Payment Date and
any failure to pay such previously accrued Deferred Interest on such Payment
Date will not be an Event of Default. Interest will cease to accrue on each
Note, or in the case of a partial repayment, on such repaid part, from the date
of repayment or the respective Stated Maturity. To the extent lawful and
enforceable, interest on any interest that is not paid when due on any Class A-1
Notes or Class A-2 Notes or, if no Class A-1 Notes or Class A-2 Notes are
Outstanding, any Class B Notes, shall accrue at the Interest Rate for such Class
until paid as provided herein.

 

(b)The principal of each Note of each Class matures at par and is due and
payable on the date of the Stated Maturity for such Class, unless such principal
has been previously repaid or unless the unpaid principal of such Note becomes
due and payable at an earlier date by declaration of acceleration, call for
redemption or otherwise. Payments of principal on any Class of Notes which are
not paid, in accordance with the Priority of Payments, on any Quarterly Payment
Date (other than the Quarterly Payment Date which is the Stated Maturity (or the
earlier date of Maturity) of such Class of Notes or any Redemption Date),
because of insufficient funds therefor shall not be considered “due and payable”
for purposes of Section 5.1(a) until the Quarterly Payment Date on which such
principal may be paid in accordance with the Priority of Payments or all
Priority Classes with respect to such Class have been paid in full.

 

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(c)Principal payments on the Notes will be made in accordance with the Priority
of Payments and Section 9.5.

 

(d)The Paying Agent shall require the previous delivery of properly completed
and signed applicable tax certifications (generally, in the case of U.S. federal
income tax, an IRS Form W-9 (or applicable successor form) in the case of a U.S.
Tax Person or the applicable IRS Form W-8 (or applicable successor form) in the
case of a Person that is not a U.S. Tax Person), or any other certification
acceptable to it to enable the Issuer, the Trustee and any Paying Agent
(including, in each case, as any such other party may instruct) to determine
their duties and liabilities with respect to any taxes or other charges that
they may be required to pay, deduct or withhold from payments in respect of such
Note or the Holder or beneficial owner of such Note under any present or future
law or regulation of the United States, any other jurisdiction or any political
subdivision thereof or taxing authority therein or pursuant to the Issuer’s
agreement with any governmental authority or to comply with any reporting or
other requirements under any such law or regulation (including any cost basis
reporting obligations) and the delivery of any information required under FATCA.
The Issuer shall not be obligated to pay any additional amounts to the Holders
or beneficial owners of the Notes as a result of deduction or withholding for or
on account of any present or future taxes, duties, assessments or governmental
charges with respect to the Notes. Nothing herein shall be construed to impose
upon the Paying Agent a duty to determine the duties, liabilities or
responsibilities of any other party described herein under any applicable law or
regulation.

 

(e)Payments in respect of interest on and principal of any Note and any payment
with respect to any Interest will be made by the Trustee or by a Paying Agent,
in Dollars to DTC or its nominee with respect to a Global Note, and to the
Holder or its nominee with respect to a Certificated Note, by wire transfer, as
directed by the Holder, in immediately available funds to a Dollar account
maintained by DTC or its nominee with respect to a Global Note, and to the
Holder or its nominee with respect to a Certificated Note; provided that, (1) in
the case of a Certificated Note, the Holder thereof shall have provided written
wiring instructions to the Trustee or the applicable Paying Agent on or before
the related Record Date and (2) if appropriate instructions for any such wire
transfer are not received by the related Record Date, then such payment shall be
made by check drawn on a U.S. bank mailed to the address of the Holder specified
in the Register. Upon final payment due on the Stated Maturity of a Certificated
Note, the Holder thereof shall present and surrender such Note at the Corporate
Trust Office of the Trustee upon final payment; provided that, in the absence of
notice to the Issuer or the Trustee that the applicable Note has been acquired
by a Protected Purchaser, such final payment shall be made without presentation
or surrender, if the Trustee and the Issuer shall have been furnished such
security or indemnity as may be required by them to save them harmless and an
undertaking thereafter to surrender such certificate. None of the Issuer, the
Trustee, the Portfolio Manager or any Paying Agent will have any responsibility
or liability for any aspects of the records maintained by DTC, Euroclear,
Clearstream or any of the Agent Members relating to or for payments made thereby
on account of beneficial interests in a Global Note. In the case where any final
payment of principal and interest is to be made on any Note (other than on the
Stated Maturity thereof), the Trustee, in the name and at the expense of the
Issuer shall, not more than 30 nor less than three days prior to the date on
which such payment is to be made, provide to the applicable Holders a notice
which shall specify the date on which such payment will be made, the amount of
such payment per U.S.$1,000 original principal amount of Notes, and the place
where Certificated Notes may be presented and surrendered for such payment.

 

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(f)Payments of principal to Holders of each Class on each Payment Date shall be
made ratably among the Holders of such Class in the proportion that the
Aggregate Outstanding Amount of the Notes of such Class registered in the name
of each such Holder on the applicable Record Date bears to the Aggregate
Outstanding Amount of all Notes of such Class on such Record Date.

 

(g)Interest accrued with respect to the Notes shall be calculated on the basis
of the actual number of days elapsed in the applicable Interest Accrual Period
divided by 360.

 

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

 

(i)Notwithstanding any other provision of this Indenture, the obligations of the
Issuer under the Notes and this Indenture are limited recourse obligations of
the Issuer, payable solely from proceeds of the Assets at such time and
following realization of the Assets, and application of the proceeds thereof in
accordance with this Indenture, all obligations of and any remaining claims
against the Issuer hereunder or in connection herewith after such realization
shall be extinguished and shall not thereafter revive. No recourse shall be had
against any Officer, director, employee, shareholder, manager, member or
incorporator of the Issuer, the Portfolio Manager or their respective
Affiliates, successors or assigns for any amounts payable under the Notes or
this Indenture. It is understood that, except as expressly provided in this
Indenture, the foregoing provisions of this paragraph (i) shall not (A) prevent
recourse to the Assets for the sums due or to become due under any security,
instrument or agreement which is part of the Assets or (B) constitute a waiver,
release or discharge of any indebtedness or obligation evidenced by the Notes or
secured by this Indenture until such Assets have been realized. It is further
understood that the foregoing provisions of this paragraph (i) shall not limit
the right of any Person to name the Issuer as a party defendant in any
Proceeding or in the exercise of any other remedy under the Notes or this
Indenture, so long as no judgment in the nature of a deficiency judgment or
seeking personal liability shall be asked for or (if obtained) enforced against
any such Person or entity.

 

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

  

Section 2.8.Persons Deemed Owners

 

The Issuer, the Trustee and any agent of the Issuer or the Trustee shall treat
as the owner of each Note the Person in whose name such Note is registered on
the Register on the applicable Record Date for the purpose of receiving payments
on such Note and on any other date for all other purposes whatsoever (whether or
not such Note is overdue), and none of the Issuer, the Trustee or any agent of
the Issuer or the Trustee shall be affected by notice to the contrary.

 

Section 2.9.Cancellation

 

All Notes acquired by the Issuer, surrendered for payment, registration of
transfer, exchange or redemption, or mutilated, defaced or deemed lost or stolen
shall be promptly cancelled by the Trustee and may not be reissued or resold. No
Note may be surrendered (including in connection with any abandonment, donation,
gift, contribution or other event or circumstance) except (a) for payment as
provided herein, (b) for registration of transfer, exchange or redemption, (c)
purchase in accordance with Section 2.14 or (d) for replacement in connection
with any Note that is mutilated, defaced or deemed lost or stolen. The Issuer
may not acquire any of the Notes except as described under Section 2.14. The
preceding sentence shall not limit an Optional Redemption, Special Redemption,
Clean-Up Call Redemption or any other redemption effected pursuant to the terms
of this Indenture.

 

Section 2.10.DTC Ceases to be Depository

 

(a)A Global Note deposited with DTC pursuant to Section 2.2 shall be transferred
in the form of a corresponding Certificated Note to the beneficial owners
thereof (as instructed by DTC) only if (A) such transfer complies with Section
2.5 and (B) either (x) a Depository Event has occurred or (y) an Event of
Default or Enforcement Event has occurred and is continuing and such transfer is
requested by the Holder of such Global Note.

 

(b)Any Global Note that is transferable in the form of a corresponding
Certificated Note to the beneficial owner thereof pursuant to this Section 2.10
shall be surrendered by DTC to the Trustee’s office located in the Borough of
Manhattan, the City of New York to be so transferred, in whole or from time to
time in part, without charge, and the Issuer shall execute and the Trustee shall
authenticate and deliver, upon such transfer of each portion of such Global
Note, an equal aggregate principal amount of Certificated Notes (pursuant to the
instructions of DTC) in Minimum Denominations. Any Certificated Note delivered
in exchange for an interest in a Global Note shall be in registered form and,
except as otherwise provided by Section 2.5, bear the legends set forth in the
applicable Exhibit A and shall be subject to the transfer restrictions referred
to in such legends.

 

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

 

(d)In the event of the occurrence of either of the events specified in
subsection (a) of this Section 2.10, the Issuer will promptly make available to
the Trustee a reasonable supply of Certificated Notes.

 

In the event that Certificated Notes are not so issued by the Issuer to such
beneficial owners of interests in Global Notes as required by subsection (a) of
this Section 2.10, the Issuer expressly acknowledges that the beneficial owners
shall be entitled to pursue any remedy that the Holders of a Global Note would
be entitled to pursue in accordance with Article V (but only to the extent of
such beneficial owner’s interest in the Global Note) as if corresponding
Certificated Notes had been issued; provided that, the Trustee shall be entitled
to receive and rely upon any certificate of ownership provided by such
beneficial owners (including a certificate in the form of Exhibit D) and/or
other forms of reasonable evidence of such ownership as it may require.

 

Section 2.11.Notes Beneficially Owned by Persons Not QIB/QPs or IAI/QPs or in
Violation of ERISA Representations or Holder Reporting Obligations

 

(a)Notwithstanding anything to the contrary elsewhere in this Indenture, any
transfer of a beneficial interest in any (i) Rule 144A Global Note to a U.S.
person that is not a QIB/QP, (ii) Certificated Note to a U.S. person that is not
an IAI/QP, a QIB/QP or a non-U.S. person that is not a Qualified Purchaser,
(iii) Regulation S Global Note to a (x) U.S. person or (y) non-U.S. person that
is not a Qualified Purchaser or (iv) Note to a Non-Permitted ERISA Holder and,
in each case, that is not made pursuant to an applicable exemption under the
Securities Act and the Investment Company Act shall be null and void and any
such purported transfer of which the Issuer or the Trustee shall have notice may
be disregarded by the Issuer and the Trustee for all purposes.

  

(b)If any Person shall become the Holder or beneficial owner of a Note (i) in
the case of a Rule 144A Global Note, that is not a QIB/QP, (ii) in the case of
Certificated Notes only, that is not a QIB/QP or an IAI/QP, or that is not both
a non-U.S. person and a Qualified Purchaser, (iii) in the case of a Regulation S
Global Note, that is (A) a U.S. person or (B) a non-U.S. person that is a not a
Qualified Purchaser, (iv) whose ownership of such Note would prevent the Issuer
from having an exemption available under the Securities Act or would cause the
Issuer to lose the benefit of an exemption from registration as an “investment
company” under the Investment Company Act or (v) any Non-Permitted ERISA Holder
(any such Person, a “Non-Permitted Holder”), the Issuer shall, promptly after
discovery that such Person is a Non-Permitted Holder by the Issuer or the
Trustee (or upon notice to the Issuer from the Trustee if a Bank Officer of the
Trustee obtains actual knowledge or if it makes the discovery (who agrees to
notify the Issuer, with a copy to the Portfolio Manager, of such discovery, if
any)), send notice to such Non-Permitted Holder, with a copy to the Portfolio
Manager, demanding that such Non-Permitted Holder transfer its Notes or interest
therein to a Person that is not a Non-Permitted Holder within 30 days (or, in
the case of a Non-Permitted ERISA Holder, seven days) after the date of such
notice. If such Non-Permitted Holder fails to so transfer its Notes or interest
therein, the Issuer or the Portfolio Manager acting on behalf of the Issuer
shall have the right, without further notice to the Non-Permitted Holder, to
sell such Notes or interest therein to a purchaser selected by the Issuer that
is not a Non-Permitted Holder on such terms as the Issuer may choose. The
Issuer, or the Portfolio Manager (on its own or acting through an investment
bank or other financial intermediary selected by the Portfolio Manager at the
Issuer’s expense), acting on behalf of the Issuer, may select the purchaser by
soliciting one or more bids from one or more brokers or other market
professionals that regularly deal in securities similar to the Notes, and
selling such Notes to the highest such bidder; provided that the Portfolio
Manager, its Affiliates and Other Accounts shall be entitled to bid in any such
sale. However, the Issuer (or the Portfolio Manager on behalf of the Issuer) may
select a purchaser by any other means determined by it in its sole discretion.
The Holder of each Note, the Non-Permitted Holder and each other Person in the
chain of title from the Holder to the Non-Permitted Holder, by its acceptance of
an interest in the Notes agrees to cooperate with the Issuer, the Portfolio
Manager and the Trustee to effect such transfers. The proceeds of such sale, net
of any commissions, expenses and taxes due in connection with such sale shall be
remitted to the Non-Permitted Holder. The terms and conditions of any sale under
this sub-section shall be determined in the sole discretion of the Issuer, and
none of the Issuer, the Trustee or the Portfolio Manager shall be liable to any
Person having an interest in the Notes sold as a result of any such sale or the
exercise of such discretion.

 

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Section 2.12.Deduction or Withholding from Payments on Notes; No Gross Up.

 

If the Issuer is required to deduct or withhold tax from, or with respect to,
payments to any Holder of the Notes for any Tax, then the Trustee or other
Paying Agent, as applicable, shall deduct, or withhold, the amount required to
be deducted or withheld and remit to the relevant taxing authority such amount.
Without limiting the generality of the foregoing, the Trustee, the Paying Agent
or the Issuer may withhold any amount that it determines is required to be
withheld from any amounts otherwise distributable to any Holder of a Note. The
Issuer shall not be obligated to pay any additional amounts to the Holders or
beneficial owners of the Notes as a result of any withholding or deduction for,
or on account of, any Tax imposed on payments in respect of the Notes. The
amount of any withholding tax or deduction with respect to any Holder shall be
treated as cash distributed to such Holder at the time it is withheld or
deducted by the Trustee or Paying Agent and remitted to the appropriate taxing
authority.

   

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Section 2.13.Additional Issuance

 

(a)At any time during the Reinvestment Period or, solely in the case of a Risk
Retention Issuance, during and after the Reinvestment Period, the Issuer may
issue and sell additional notes of any one or more new classes of notes that are
fully subordinated to the existing Notes (or to the most junior class of notes
of the Issuer issued pursuant to this Indenture, if any class of Notes issued
pursuant to this Indenture other than the Notes is then Outstanding (such
additional notes, “Junior Mezzanine Notes”)) and/or additional notes of any one
or more existing Classes and use the net proceeds to purchase additional
Collateral Obligations or as otherwise permitted under this Indenture, subject
to satisfaction by the Issuer of the conditions set forth in Section 3.2 and
provided that, the following conditions are met:

 

(i)the Portfolio Manager, the Retention Holder and a Supermajority of the
Interests each consent in writing prior to such issuance; provided that, only
the consent of the Portfolio Manager and the Retention Holder shall be required
if additional notes are being issued in order to comply with the U.S. Risk
Retention Rules;

 

(ii)solely in the case of an additional issuance of any Class A-1 Notes (other
than any such additional issuance that is a Risk Retention Issuance or that is
being made contemporaneously with a Refinancing or an Optional Redemption of the
Class A-1 Notes), a Majority of the Class A-1 Notes consents to such issuance;

 

(iii)in the case of additional notes of any one or more existing Classes (other
than a Risk Retention Issuance), the aggregate principal amount of Notes of such
Class issued in all additional issuances may not exceed 100% of the respective
original aggregate principal amount of the Notes of such Class, except that a
larger proportion of Junior Mezzanine Notes may be issued;

 

(iv)in the case of additional notes of any one or more existing Classes, the
terms of the notes issued must be identical to the respective terms of
previously issued Notes of the applicable Class (except that the interest due on
additional notes will accrue from the issue date of such additional notes and,
the interest rate and price of such notes do not have to be identical to those
of the initial Notes of that Class but, in the case of the Notes, the interest
rate spread over LIBOR may not exceed the interest rate spread over LIBOR
applicable to the initial Notes of that Class;

 

(v)in the case of additional notes of an existing Class of Notes, such
additional notes must be issued at a Cash sales price equal to or greater than
the principal amount thereof;

 

(vi)in the case of additional notes of any one or more existing Classes, unless
only Junior Mezzanine Notes are being issued or in the case of a Risk Retention
Issuance, additional notes of all Classes must be issued and such issuance of
additional notes must be proportional across all Classes;

 

101

 

 

(vii)the Issuer notifies each Rating Agency of such issuance prior to the
issuance date;

 

(viii)the proceeds of any additional notes (net of fees and expenses incurred in
connection with such issuance) shall be treated as Principal Proceeds and used
to purchase additional Collateral Obligations, to invest in Eligible Investments
or be applied pursuant to the Priority of Payments or, solely with the proceeds
of an issuance of Junior Mezzanine Notes, applied as otherwise permitted under
this Indenture (including any Permitted Use);

 

(ix)unless only Junior Mezzanine Notes are being issued or in the case of a Risk
Retention Issuance, immediately after giving effect to such issuance, each
Coverage Test is satisfied or, with respect to any Coverage Test that was not
satisfied immediately prior to giving effect to such issuance and will continue
not to be satisfied immediately after giving effect to such issuance, the degree
of compliance with respect to each Coverage Test is maintained or improved
immediately after giving effect to such issuance and the application of the
proceeds thereof;

 

(x)Tax Advice shall be delivered to the Issuer to the effect that (A) such
additional issuance shall not result in the Issuer becoming subject to U.S.
federal income taxation with respect to its net income or to any withholding tax
liability under Section 1446 of the Code and (B) any additional Class A-1 Notes,
Class A-2 Notes or Class B Notes will be treated as debt for U.S. federal income
tax purposes; provided, however, that the Tax Advice described in clause (x)(B)
will not be required with respect to any additional Notes that bear a different
CUSIP number (or equivalent identifier) from the Notes of the same Class that
are Outstanding at the time of the additional issuance;

 

(xi)the Issuer shall comply with the requirements of Section 2.5, 7.9 and 8.1,
as applicable;

  

(xii)in the case of any issuance of Junior Mezzanine Notes, either (A) Tax
Advice is delivered to the Trustee to the effect that such Junior Mezzanine
Notes will be treated as debt for U.S. federal income tax purposes, or (B) (1)
unless otherwise specified in a signed investor representation letter in
connection with the date such Junior Mezzanine Notes are issued, each purchaser
or transferee of any such note or any beneficial interest therein shall be
deemed to represent that it is not a Benefit Plan Investor or a Controlling
Person, that for so long as it holds such notes, it will not be a Benefit Plan
Investor or a Controlling Person and, if it is subject to Similar Law, its
acquisition and holding of such notes will not cause the Issuer to be subject to
any Similar Law, (2) any such Junior Mezzanine Notes sold to Persons that have
represented (or are deemed to have represented) that they are Benefit Plan
Investors or Controlling Persons shall be issued in the form of Certificated
Notes and (3) no transfer of an interest in any such Junior Mezzanine Note to a
proposed transferee that has represented that it is a Benefit Plan Investor or
Controlling Person will be effective, and the Trustee, the Registrar and the
Issuer will not recognize any such transfer, if to their knowledge, based on
representations made or deemed to have been made by holders of such Junior
Mezzanine Notes, such transfer would result in Benefit Plan Investors owning 25%
or more of the Aggregate Outstanding Amount of such class of Junior Mezzanine
Notes as determined in accordance with the Plan Asset Regulation and the
Indenture; provided that, for purposes of the foregoing calculation, (x) the
investment by a Benefit Plan Investor shall be treated as plan assets for
purposes of calculating the 25% threshold under the significant participation
test in accordance with the Plan Asset Regulation only the extent of the
percentage of the equity interests in such entity held by Benefit Plan Investors
and (y) any such Junior Mezzanine Note held by any Controlling Person shall be
excluded and treated as not Outstanding; provided, further, that, for the
avoidance of doubt, if clause (xii)(A) above is not satisfied with respect to
any Junior Mezzanine Notes issued after the Closing Date, the Registrar shall
not recognize any acquisition or transfer of Junior Mezzanine Notes if it knows,
based on representations made or deemed to have been made by the owners of such
notes or any interest therein that such transfer would result in 25% or more (or
such lesser percentage determined by the Portfolio Manager and notified to the
Trustee) of the Aggregate Outstanding Amount of the class of Junior Mezzanine
Notes to be transferred being held by Benefit Plan Investors, as calculated
pursuant to the Plan Asset Regulation and this Indenture, and (x) an Officer’s
certificate of the Issuer shall be delivered to the Trustee stating that the
applicable conditions of this Section 2.13(a) have been satisfied; and

 

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(xiii)the Trustee has received an Officer’s certificate from the Issuer (or the
Portfolio Manager on behalf of the Issuer) certifying that the conditions to
such additional issuance are satisfied.

 

(b)Any such additional issuance will be effected in a manner that will allow the
Issuer to accurately provide the information described in Treasury Regulations
section 1.1275-3(b)(1)(i).

 

(c)Such additional notes of an existing Class may be offered at prices that
differ from the applicable initial offering price.

 

(d)Any additional notes of an existing Class issued as described above will, to
the extent reasonably practicable (and other than in the case of a Risk
Retention Issuance), be offered first to Holders of such Class in such amounts
as are necessary to preserve their pro rata holdings of Notes of such Class.
Notwithstanding the foregoing, the Portfolio Manager and its Affiliates shall be
afforded priority to purchase additional notes to the extent required, as
determined by the Portfolio Manager in its sole discretion, to comply with the
U.S. Risk Retention Rules.

 

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(e)Notwithstanding the foregoing, the Issuer may, with the written consent of
the Portfolio Manager and the Issuer, at any time issue Junior Mezzanine Notes
to any Person for any reason and the proceeds of such issuance shall be treated
as Principal Proceeds or Interest Proceeds, as designated by the Portfolio
Manager in its sole discretion.

 

Section 2.14.Issuer Purchases of Notes

 

(a)The Portfolio Manager, on behalf of the Issuer, may, during the Reinvestment
Period only:

 

(i) use Principal Proceeds (other than any such Principal Proceeds described in
clause (a)(ii) below) to purchase the Notes (or beneficial interests therein),
in whole or in part, pursuant to a Note Purchase Offer (as defined below) and in
accordance with, and subject to, the terms described in this Section 2.14; and

 

(ii) use proceeds from Contributions accepted and received into the Contribution
Account (at the direction of the related Contributor or, if no such direction,
in the reasonable discretion of the Portfolio Manager) to purchase the Notes (or
beneficial interests therein), in whole or in part, through a tender offer, in
the open market or in privately negotiated transactions (in each case, subject
to applicable law), and in accordance with, and subject to, clauses (c), (d) and
(e) below.

 

The Trustee shall cancel as described under Section 2.9 any such purchased Notes
surrendered to it for cancellation, or, in the case of any Global Notes, the
Trustee shall decrease the Aggregate Outstanding Amount of such Global Notes in
its records by the full par amount of the purchased Notes, and instruct DTC or
its nominee, as the case may be, to conform its records.

 

(b)To effect a purchase of Notes with Principal Proceeds pursuant to clause
(a)(i) above, the Portfolio Manager on behalf of the Issuer shall, by notice to
the Holders of the Notes of such Class and Fitch, offer to purchase all or a
portion of the Notes (the “Note Purchase Offer”). The Note Purchase Offer shall
specify (i) the purchase price (as a percentage of par), which must be at a
discount from par, (ii) the maximum amount of Principal Proceeds that will be
used to effect such purchase and (iii) the length of the period during which
such offer will be open for acceptance. In connection with any such purchase by
the Issuer, the Issuer shall also pay accrued interest through the date of such
purchase from Interest Proceeds. Pursuant to the terms of the offer each such
Holder shall have the right, but not the obligation, to accept such offer in
accordance with its terms. If the Aggregate Outstanding Amount of Notes of the
relevant Class held by Holders who accept such offer exceeds the amount of
Principal Proceeds specified in such offer, a portion of the Notes of each
accepting Holder shall be purchased pro rata based on the respective principal
amount held by each such Holder, subject to the Minimum Denomination applicable
to such Holder’s Notes.

 

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(c)An Issuer purchase of the Notes may not occur unless each of the following
conditions is satisfied:

 

(i)(A) such purchases of Notes shall occur in the following sequential order of
priority: first, the Class A-1 Notes, until the Class A-1 Notes are retired in
full; second, the Class A-2 Notes, until the Class A-2 Notes are retired in
full; and third, the Class B Notes until the Class B Notes are retired in full;

 

(B)each such purchase shall be effected only at prices discounted from par;

 

(C)each Coverage Test is satisfied immediately prior to each such purchase and
will be satisfied, maintained or improved after giving effect to such purchase;

 

(D)to the extent that Sale Proceeds are used to consummate any such purchase,
either (I) each requirement or test, as the case may be, of the Concentration
Limitations and the Collateral Quality Test (other than the S&P CDO Monitor
Test) will be satisfied after giving effect to such purchase or (II) if any such
requirement or test was not satisfied immediately prior to such purchase, such
requirement or test will be maintained or improved after giving effect to such
purchase;

 

(E)no Event of Default shall have occurred and be continuing; and

 

(F)each such purchase shall otherwise be conducted in accordance with applicable
law;

 

(ii)the Trustee has received an Officer’s certificate of the Portfolio Manager
to the effect that the Note Purchase Offer has been provided to the holders of
the Class of Notes subject to the purchase offer, and the conditions in Section
2.14(c)(i) have been satisfied as determined in good faith by the Portfolio
Manager; and

 

(iii)prior notice of such purchase shall have been provided to each Rating
Agency.

 

(d)Any Notes purchased by the Issuer shall be surrendered to the Trustee for
cancellation in accordance with Section 2.9; provided that, any Notes purchased
by the Issuer on a date that is later than a Record Date but prior to the
related Payment Date will not be cancelled until the day following the Payment
Date; provided, further, that for purposes of calculation of the
Overcollateralization Ratio, any Notes purchased by the Issuer pursuant to this
Section 2.14 shall be deemed to remain Outstanding until all Notes of the
applicable Class and each Priority Class in the Note Payment Sequence have been
retired or redeemed in full, having an Aggregate Outstanding Amount equal to the
Aggregate Outstanding Amount as of the date of surrender, reduced
proportionately with, and to the extent of, any payments of principal on Notes
of the same Class thereafter.

 

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(e)In connection with any purchase of Notes pursuant to this Section 2.14, the
Issuer, or the Portfolio Manager on its behalf, may by Issuer Order provide
direction to the Trustee to take actions the Issuer, or the Portfolio Manager on
its behalf, deems necessary to give effect to the other provisions of this
Indenture that may be affected by such purchase of the Notes; provided that, no
such direction may conflict with any express provision of this Indenture,
including a requirement to obtain the consent of the Holders prior to taking any
such action.

 

ARTICLE III
CONDITIONS PRECEDENT

 

Section 3.1.Conditions to Issuance of Notes on Closing Date

 

(a)The Notes to be issued on the Closing Date shall be registered in the names
of the respective Holders thereof and executed by the Issuer and delivered to
the Trustee for authentication and thereupon the same shall be authenticated and
delivered by the Trustee upon Issuer Order and upon receipt by the Trustee of
the following:

 

(i)Officer’s Certificate of the Issuer Regarding Corporate Matters. An Officer’s
certificate of the Issuer (A) evidencing the authorization by Resolution of the
execution and delivery of this Indenture, the Portfolio Management Agreement,
the Collateral Administration Agreement, the Loan Sale Agreement, the Account
Agreement and the Purchase Agreement, the execution, authentication and delivery
of the Notes and specifying the Stated Maturity, principal amount and Interest
Rate of each Class of Notes to be authenticated and delivered and (B) certifying
that (1) the copy of the Resolution attached thereto is a true and complete copy
thereof, (2) such Resolution has not been rescinded and is in full force and
effect on and as of the Closing Date and (3) the Officers authorized to execute
and deliver such documents hold the offices and have the signatures indicated
thereon.

 

(ii)Governmental Approvals. From the Issuer either (A) a certificate of the
Issuer or other official document evidencing the due authorization, approval or
consent of any governmental body or bodies, at the time having jurisdiction in
the premises, together with an Opinion of Counsel of the Issuer that no other
authorization, approval or consent of any governmental body is required for the
performance by the Issuer of its obligations under this Indenture, the Portfolio
Management Agreement and the Collateral Administration Agreement or (B) an
Opinion of Counsel of the Issuer that no such authorization, approval or consent
of any governmental body is required for the performance by the Issuer of its
obligations under this Indenture, the Portfolio Management Agreement, the
Purchase Agreement and the Collateral Administration Agreement except as has
been given (provided that, the opinions delivered pursuant to Section
3.1(a)(iii) below may satisfy this requirement).

 

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(iii)U.S. Counsel Opinions. Opinions of Dechert LLP, special U.S. counsel to the
Issuer and the Portfolio Manager, Miles & Stockbridge P.C., special Maryland
counsel to the Portfolio Manager, Richards, Layton & Finger, P.A., special
Delaware counsel to the Issuer, and Alston & Bird LLP, counsel to the Trustee
and the Collateral Administrator, each dated the Closing Date.

 

(iv)[Reserved].

 

(v)Officer’s Certificate of Issuer Regarding Indenture. An Officer’s certificate
of the Issuer stating that, to the best of the signing Officer’s knowledge, the
Issuer is not in default under this Indenture and that the issuance of the Notes
will not result in a default or a breach of any of the terms, conditions or
provisions of, or constitute a default under, its organizational documents, any
indenture or other agreement or instrument to which it is a party or by which it
is bound, or any order of any court or administrative agency entered in any
Proceeding to which it is a party or by which it may be bound or to which it may
be subject; that all conditions precedent provided in this Indenture relating to
the authentication and delivery of the Notes have been complied with; that all
expenses due or accrued with respect to the Offering of such Notes or relating
to actions taken on or in connection with the Closing Date have been paid or
reserves therefor have been made; and that all of its representations and
warranties contained in this Indenture are true and correct as of the Closing
Date.

 

(vi)Portfolio Management Agreement, Collateral Administration Agreement and
Account Agreement. An executed counterpart of the Portfolio Management
Agreement, the Collateral Administration Agreement and the Account Agreement.

 

(vii)Certificate of the Portfolio Manager. An Officer’s certificate of the
Portfolio Manager, dated as of the Closing Date, to the effect that with respect
to each Collateral Obligation to be Delivered by the Issuer on the Closing Date,
and immediately before the Delivery of such Collateral Obligation on the Closing
Date, to the best of the Portfolio Manager’s knowledge:

 

(A)each Collateral Obligation in the Schedule of Collateral Obligations
satisfies the requirements of the definition of “Collateral Obligation”;

 

(B)the information with respect to each Collateral Obligation in the Schedule of
Collateral Obligations is true and correct and such schedule is complete with
respect to each such Collateral Obligation;

 

107

 

 

(C)the Issuer purchased or entered into each Collateral Obligation in the
Schedule of Collateral Obligations in compliance with Section 12.2; and

 

(D)the Aggregate Principal Balance of the Collateral Obligations which the
Issuer has purchased, acquired or entered into binding commitments to purchase
on or prior to the Closing Date for settlement on or after the Closing Date is
approximately U.S.$511,700,000.

 

(viii)Grant of Collateral Obligations. Contemporaneous with the issuance and
sale of the Notes on the Closing Date, the Grant pursuant to the Granting
Clauses of this Indenture of all of the Issuer’s right, title and interest in
and to the Collateral Obligations pledged to the Trustee for inclusion in the
Assets on the Closing Date shall be effective, and Delivery of such Collateral
Obligations (including each promissory note and all other Underlying Instruments
related thereto to the extent received by the Issuer) as contemplated by Section
3.3 shall have been effected.

 

(ix)Certificate of the Issuer Regarding Assets. An Officer’s certificate of an
Authorized Officer of the Issuer, dated as of the Closing Date, to the effect
that, with respect to each Collateral Obligation pledged to the Trustee for
inclusion in the Assets, on the Closing Date and immediately prior to Delivery
thereof:

 

(A)the Issuer is the owner of such Collateral Obligation free and clear of any
liens, claims or encumbrances of any nature whatsoever except for (i) those
which are being released on the Closing Date (ii) those Granted pursuant to or
permitted by this Indenture, (iii) encumbrances arising from due bills, if any,
with respect to interest, or a portion thereof, accrued on such Collateral
Obligation prior to the first Payment Date and owed by the Issuer to the seller
of such Collateral Obligation and (iv) any other Permitted Liens;

 

(B)the Issuer has acquired its ownership in such Collateral Obligation in good
faith without notice of any adverse claim, except as described in clause (A)
above;

 

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

 

108

 

 

(D)the Issuer has full right to Grant a security interest in and assign and
pledge all of its right, title and interest in such Collateral Obligation to the
Trustee;

 

(E)based on the certificate of the Portfolio Manager delivered pursuant to
Section 3.1(a)(vii), the information set forth with respect to such Collateral
Obligation in the Schedule of Collateral Obligations is true and correct;

 

(F)upon Grant by the Issuer, the Trustee has a first priority perfected security
interest in such Collateral Obligation (assuming that any Clearing Corporation,
intermediary or other entity not within the control of the Issuer involved in
the Delivery of such Collateral Obligation takes the actions required of it for
perfection of that interest), except as permitted by this Indenture; and

 

(G)based on the certificate of the Portfolio Manager delivered pursuant to
Section 3.1(a)(vii), the Aggregate Principal Balance of the Collateral
Obligations which the Issuer has purchased, acquired or has entered into binding
commitments to purchase prior to the Closing Date for settlement on or after the
Closing Date is approximately U.S.$ 511,700,000.

 

(x)Rating Letters. An Officer’s certificate of the Issuer to the effect that
attached thereto is a true and correct copy of a letter from each Rating Agency,
as applicable, and confirming that each Class of Notes has been assigned the
applicable Initial Rating and that such ratings are in effect on the Closing
Date.

 

(xi)Accounts. Evidence of the establishment of each of the Accounts.

 

(xii)Issuer Order for Deposit of Funds into Accounts. The Issuer has delivered
to the Trustee and the Trustee has deposited from the proceeds of the issuance
of the Notes (A) U.S.$0 into the Ramp-Up Account as Principal Proceeds for use
pursuant to Section 10.3(c), (B) U.S.$3,731,350 into the Expense Reserve Account
for use pursuant to Section 10.3(d); (C) U.S.$0 (the “Interest Reserve Amount”)
into the Interest Reserve Account for use pursuant to Section 10.3(e); and (D)
U.S.$0 into the Revolver Funding Account for use pursuant to Section 10.4.

 

(xiii)[Reserved].

 

(xiv)Other Documents. Such other documents as the Trustee may reasonably
require; provided that, nothing in this clause (xiv) shall imply or impose a
duty on the part of the Trustee to require any other documents.

  

 

109

 

Section 3.2.Conditions to Additional Issuance

 

(a)Any additional notes to be issued in accordance with Section 2.13 may be
executed by the Issuer and delivered to the Trustee, in the case of additional
notes, for authentication and thereupon the same shall be authenticated and
delivered by the Trustee upon Issuer Order and upon receipt by the Trustee of
the following:

 

(i)Officer’s Certificate of the Issuer Regarding Corporate Matters. An Officer’s
certificate of the Issuer (A) evidencing the authorization by Resolution of the
execution, authentication and delivery of the notes applied for by it and
specifying the Stated Maturity, principal amount and Interest Rate (if
applicable) of the notes applied for by it and (B) certifying that (1) the
attached copy of the Resolution is a true and complete copy thereof, (2) such
Resolution has not been rescinded and is in full force and effect on and as of
the date of issuance and (3) the Officers authorized to execute and deliver such
documents hold the offices and have the signatures indicated thereon.

 

(ii)Governmental Approvals. From the Issuer either (A) a certificate of the
Issuer or other official document evidencing the due authorization, approval or
consent of any governmental body or bodies, at the time having jurisdiction in
the premises, together with an Opinion of Counsel of such Issuer that no other
authorization, approval or consent of any governmental body is required for the
valid issuance of the additional notes or (B) an Opinion of Counsel of the
Issuer that no such authorization, approval or consent of any governmental body
is required for the valid issuance of such additional notes except as has been
given.

 

(iii)Officer’s Certificate of Issuer Regarding Indenture. An Officer’s
certificate of the Issuer stating that, to the best of the signing Officer’s
knowledge, the Issuer is not in default under this Indenture and that the
issuance of the additional notes applied for by it will not result in a default
or a breach of any of the terms, conditions or provisions of, or constitute a
default under, its organizational documents, any indenture or other agreement or
instrument to which it is a party or by which it is bound, or any order of any
court or administrative agency entered in any Proceeding to which it is a party
or by which it may be bound or to which it may be subject; that the provisions
of Section 2.13 and all conditions precedent provided in this Indenture relating
to the authentication and delivery of the additional notes applied for by it
have been complied with; that all expenses due or accrued with respect to the
offering of such notes or relating to actions taken on or in connection with the
additional issuance have been paid or reserves therefor have been made; and that
all of its representations and warranties contained herein are true and correct
as of the date of additional issuance.

 

(iv)Supplemental Indenture. A fully executed counterpart of any supplemental
indenture making such changes to this Indenture if necessary to permit such
additional issuance.

 

110

 

 

(v)[Reserved].

 

(vi)Issuer Order for Deposit of Funds into Accounts. An Issuer Order signed in
the name of the Issuer by an Authorized Officer of the Issuer, dated as of the
date of the additional issuance, authorizing the deposit of the net proceeds of
the issuance into the Collection Account for use pursuant to Section 10.2.

 

(vii)Evidence of Required Consents. A certificate of the Portfolio Manager
consenting to such additional issuance and satisfactory evidence of the consent
of the holder of the Interests to such issuance (which may be in the form of an
Officer’s certificate of the Issuer).

 

(viii)Issuer Order for Deposit of Funds into Expense Reserve Account. An Issuer
Order signed in the name of the Issuer by an Authorized Officer of the Issuer,
dated as of the date of the additional issuance, authorizing the deposit of the
requisite portion of the proceeds (if any), as directed by the Issuer (or the
Portfolio Manager on behalf of the Issuer) to the Trustee, of such additional
issuance into the Expense Reserve Account for use pursuant to Section 10.3(d).

 

(ix)Evidence of Required Consents. Satisfactory evidence of the consent to such
issuance by the Portfolio Manager.

 

(x)Other Documents. Such other documents as the Trustee may reasonably require;
provided that, nothing in this clause (x) shall imply or impose a duty on the
part of the Trustee to require any other documents.

 

Section 3.3.Delivery of Collateral Obligations and Eligible Investments

 

(a)The Portfolio Manager, on behalf of the Issuer, shall Deliver or cause to be
Delivered, on or prior to the Closing Date (with respect to the initial
Collateral Obligations) and within two (2) Business Days after the related
Cut-Off Date (with respect to any additional Collateral Obligations) to a
custodian appointed by the Issuer, which shall be a Securities Intermediary (the
“Custodian”) or the Bank, as applicable, all Assets in accordance with the
definition of “Deliver.”

 

(b)The Custodian appointed hereby shall act as custodian for the Issuer and as
custodian, agent and bailee for the Trustee on behalf of the Secured Parties for
purposes of perfecting the Trustee’s security interest in those Assets in which
a security interest is perfected by Delivery of the related Assets to the
Custodian. Initially, the Custodian shall be the Bank. Any successor custodian
shall be an Eligible Custodian. Subject to the limited right to relocate Assets
as provided in Section 7.5(b), the Trustee or the Custodian, as applicable,
shall hold (i) all Collateral Obligations, Eligible Investments, Cash and other
investments purchased in accordance with this Indenture and (ii) any other
property of the Issuer otherwise Delivered to the Trustee or the Custodian, as
applicable, by or on behalf of the Issuer, in the relevant Account established
and maintained pursuant to Article X; as to which in each case the Trustee shall
have entered into the Account Agreement with the Custodian providing, inter
alia, that the establishment and maintenance of such Account will be governed by
a law of a jurisdiction satisfactory to the Issuer and the Trustee.

 

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(c)Each time that the Portfolio Manager on behalf of the Issuer directs or
causes the acquisition of any Collateral Obligation, Eligible Investment or
other investment, the Portfolio Manager (on behalf of the Issuer) shall, if the
Collateral Obligation, Eligible Investment or other investment is required to
be, but has not already been, transferred to the relevant Account, cause the
Collateral Obligation, Eligible Investment or other investment to be Delivered
to the Custodian to be held in the Custodial Account (or in the case of any such
investment that is not a Collateral Obligation, in the Account in which the
funds used to purchase the investment are held in accordance with Article X) for
the benefit of the Trustee in accordance with this Indenture. The security
interest of the Trustee in the funds or other property used in connection with
the acquisition shall, immediately and without further action on the part of the
Trustee, be released. The security interest of the Trustee shall nevertheless
come into existence and continue in the Collateral Obligation, Eligible
Investment or other investment so acquired, including all interests of the
Issuer in any contracts related to and proceeds of such Collateral Obligation,
Eligible Investment or other investment.

 

ARTICLE IV
SATISFACTION AND DISCHARGE; ILLIQUID ASSETS; LIMITATION ON
ADMINISTRATIVE EXPENSES

 

Section 4.1.Satisfaction and Discharge of Indenture

 

This Indenture shall be discharged and shall cease to be of further effect
except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, defaced, destroyed, lost or stolen Notes, (iii)
rights of Holders to receive payments of principal thereof and interest that
accrued prior to Maturity (and to the extent lawful and enforceable, interest on
due and unpaid accrued interest) thereon, (iv) the rights, obligations and
immunities of the Portfolio Manager hereunder and under the Portfolio Management
Agreement and of the Collateral Administrator under the Collateral
Administration Agreement, (v) the rights of Holders as beneficiaries hereof with
respect to the property deposited with the Trustee and payable to all or any of
them (subject to Section 2.7(i)) and (vi) the rights and immunities of the
Trustee hereunder, and the obligations of the Trustee hereunder in connection
with the foregoing clauses (i) through (v) and otherwise under this Article IV
(and the Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture)
when:

 

(a)(x) either:

 

(i)all Notes theretofore authenticated and delivered to Holders (other than (A)
Notes which have been mutilated, defaced, destroyed, lost or stolen and which
have been replaced or paid as provided in Section 2.6 or, (B) Notes for whose
payment Money has theretofore irrevocably been deposited in trust and thereafter
repaid to the Issuer or discharged from such trust, as provided in Section 7.3)
have been delivered to the Trustee for cancellation; or

 

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(ii)all Notes not theretofore delivered to the Trustee for cancellation (A) have
become due and payable, or (B) will become due and payable at their Stated
Maturity within one year, or (C) are to be called for redemption pursuant to
Article IX under an arrangement satisfactory to the Trustee for the giving of
notice of redemption by the Issuer pursuant to Sections 9.4 or 9.7 and the
Issuer has irrevocably deposited or caused to be deposited with the Trustee, in
trust for such purpose, Cash or non-callable direct obligations of the United
States of America (provided that, the obligations are entitled to the full faith
and credit of the United States of America or are debt obligations which are
rated “AAA” by S&P and “AAA” by Fitch, in an amount sufficient, as recalculated
in writing by a firm of Independent certified public accountants which are
nationally recognized) sufficient to pay and discharge the entire indebtedness
on such Notes, for principal and interest payable thereon under this Indenture
to the date of such deposit (in the case of Notes which have become due and
payable), or to their Stated Maturity or Redemption Date, as the case may be,
and shall have Granted to the Trustee a valid perfected security interest in
such cash or obligations that is of first priority or free of any adverse claim,
as applicable, and shall have furnished an Opinion of Counsel with respect to
the creation and perfection of such security interest; provided that, this
subsection (ii) shall not apply if an election to act in accordance with the
provisions of Section 5.5(a) shall have been made and not rescinded; and

 

(y)       the Issuer has paid or caused to be paid all other sums payable by the
Issuer hereunder and under the Collateral Administration Agreement and the
Portfolio Management Agreement; or

 

(b)all Assets of the Issuer that are subject to the lien of this Indenture have
been realized and the proceeds thereof have been distributed, in each case in
accordance with this Indenture, and the Accounts have been closed;

 

provided that, in each case, the Issuer has delivered to the Trustee an
Officer’s certificate (which may rely on information provided by the Trustee or
the Collateral Administrator as to the Cash, Collateral Obligations, Equity
Securities and Eligible Investments included in the Assets), stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

 

Notwithstanding the satisfaction and discharge of this Indenture, the rights and
obligations of the Issuer, the Trustee, the Portfolio Manager and, if
applicable, the Holders, as the case may be, under Sections 2.7, 4.2, 5.4(d),
5.9, 5.18, 6.1. 6.3, 6.6, 6.7, 7.1, 7.3, 13.1 and 14.15 shall survive.

  

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Section 4.2.Application of Trust Money

 

All Cash and obligations deposited with the Trustee pursuant to Section 4.1
shall be held in trust and applied by it in accordance with the provisions of
the Notes and this Indenture, including, without limitation, the Priority of
Payments, to the payment of principal and interest (or other amounts with
respect to the Interests), either directly or through any Paying Agent, as the
Trustee may determine; and such Cash and obligations shall be held in a
segregated account identified as being held in trust for the benefit of the
Secured Parties.

 

Section 4.3.Repayment of Monies Held by Paying Agent

 

In connection with the satisfaction and discharge of this Indenture with respect
to the Notes, all Monies then held by any Paying Agent other than the Trustee
under the provisions of this Indenture shall, upon demand of the Issuer, be paid
to the Trustee to be held and applied pursuant to Section 7.3 and in accordance
with the Priority of Payments and thereupon such Paying Agent shall be released
from all further liability with respect to such Monies.

 

Section 4.4.Disposition of Illiquid Assets

 

(a)If the Assets consist exclusively of Illiquid Assets, Eligible Investments
and/or Cash, the Portfolio Manager may request bids with respect to each such
Illiquid Asset as described below after providing notice to the Holders and
requesting that any Holder that wishes to bid on any such Illiquid Asset notify
the Trustee (with a copy to the Portfolio Manager) of such intention within 15
Business Days after the date of such notice. The Trustee shall, after the end of
such 15 Business Day period, offer the Illiquid Assets for sale as determined
and directed by the Portfolio Manager (in a manner and according to terms
determined by the Portfolio Manager (including from Persons identified to the
Trustee by the Portfolio Manager) and pursuant to sale documentation provided by
the Portfolio Manager) and, if any Holder so notifies the Trustee that it wishes
to bid, such Holder shall be included in the distribution of sale offering or
bid solicitation material in connection therewith and thereby given an
opportunity to participate with other bidders, if any. The Trustee shall request
bids for the sale of each such Illiquid Asset, in accordance with the procedures
established by the Portfolio Manager, from (i) at least three Persons identified
to the Trustee by the Portfolio Manager that make a market in or specialize in
obligations of the nature of such Illiquid Asset, (ii) the Portfolio Manager,
(iii) each Holder that so notified the Trustee that it wishes to bid and (iv) in
the case of a public sale, any other participating bidders, and the Trustee
shall have no responsibility for the sufficiency or acceptability of such
procedures for any purpose or for any results obtained. The Trustee shall notify
the Portfolio Manager promptly of the results of such bids. Subject to the
requirements of applicable law, (x) if the aggregate amount of the highest bids
received (if any) is greater than or equal to U.S.$100,000, the Issuer shall
sell each Illiquid Asset to the highest bidder (which may include the Portfolio
Manager and its Affiliates) and (y) if the aggregate amount of the highest bids
received is less than U.S.$100,000 or no bids are received, the Trustee shall
dispose of the Illiquid Assets as directed by the Portfolio Manager in its
reasonable business judgment, which may include (with respect to each Illiquid
Asset) (I) selling it, at no cost to the Trustee, to the highest bidder (which
may include the Portfolio Manager and its Affiliates) if a bid was received;
(II) donating it, at no cost to the Trustee, to a charitable organization
designated by the Portfolio Manager; (III) returning it to its issuer or Obligor
for cancellation or (IV) abandonment.

 

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(b)Notwithstanding the foregoing, the Trustee shall not be under any obligation
to dispose of or offer for sale any Illiquid Assets pursuant to clause (a) above
if the Trustee is not reasonably satisfied that payment of all expenses, costs
and liabilities to be incurred by the Trustee in connection with such
disposition or offer, as the case may be, are indemnified or provided for in a
manner acceptable to the Trustee. In addition, the Trustee shall not dispose of
Illiquid Assets in accordance with Section 4.4(a) if directed not to do so, at
any time following notice of such disposal and prior to release, or acceptance
of an offer for sale, of such Illiquid Asset, by a Majority of the Interests;
provided that, arrangements satisfactory to the Trustee have been made to pay
for any accrued and unpaid Administrative Expenses and any additional
Administrative Expenses (including any dissolution and discharge expenses)
reasonably expected to be incurred (after giving effect to Section 4.5). If the
Trustee is so directed and no satisfactory arrangements for payment have been
made, then the Trustee shall be entitled to disregard such direction and shall
have no liability for taking or omitting to take any action in respect of such
direction. In any event, the Trustee shall have no liability for the results of
any such sale or disposition of Illiquid Assets, including, without limitation,
if the proceeds received, if any, are insufficient to pay all outstanding
Administrative Expenses in full.

 

Section 4.5.Limitation on Obligation to Incur Administrative Expenses

 

If at any time the sum of (i) the amount of the Eligible Investments, (ii) Cash
and (iii) amounts reasonably expected to be received by the Issuer in Cash
during the current Collection Period (as determined by the Portfolio Manager in
its reasonable judgment) is less than the Dissolution Expenses, then
notwithstanding any other provision of this Indenture, the Issuer shall no
longer be required to incur Administrative Expenses as otherwise required by
this Indenture to any Person or entity other than the Trustee, the Collateral
Administrator (or any other capacity in which the Bank is acting pursuant to the
Transaction Documents) and their respective Affiliates, including for Opinions
of Counsel in connection with supplemental indentures pursuant to Article VIII,
annual opinions under Section 7.6, services of legal advisors and accountants
under Sections 7.17 and 10.9 and fees of the Rating Agencies under Section 7.14,
and failure to pay such amounts or provide or obtain such opinions, reports or
services shall not constitute a Default hereunder, and the Trustee shall have no
liability for any failure to obtain or receive any of the foregoing opinions,
reports or services. The foregoing shall not, however, limit, supersede or alter
any right afforded to the Trustee under this Indenture (or the Bank in any other
capacity) to refrain from taking action in the absence of its receipt of any
such opinion, report or service which it reasonably determines is necessary for
its own protection.

  

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ARTICLE V
REMEDIES

 

Section 5.1.Events of Default

 

“Event of Default”, wherever used herein, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):

 

(a)a default in the payment, when due and payable, of (i) any interest on any
Class A-1 Note or Class A-2 Note or, if there are no Class A-1 Notes or Class
A-2 Notes Outstanding, any Class B Note, and, in each case, the continuation of
any such default for five Business Days, or (ii) any principal of, or interest
or Deferred Interest on, or any Redemption Price in respect of, any Note at its
Stated Maturity or on any Redemption Date (other than a Special Redemption
Date); provided, that (x) in the case of a default under clause (i) or (ii)
(other than such a default with respect to the payment of interest on or
principal of the Class A-1 Notes only) where (A) such default is due solely to a
delayed or failed settlement of any Asset sale by the Issuer (or the Portfolio
Manager on the Issuer’s behalf), (B) the Issuer (or the Portfolio Manager on the
Issuer’s behalf) had entered into a binding agreement for the sale of such Asset
prior to the applicable date on which such payment is due and payable, (C) such
delayed or failed settlement is due solely to circumstances beyond the control
of the Issuer and the Portfolio Manager and (D) the Issuer (or the Portfolio
Manager on the Issuer’s behalf) has used commercially reasonable efforts to
cause such settlement to occur prior to such date and without such delay or
failure, then such default will not be an Event of Default unless such failure
continues for 60 calendar days, (y) in the case of a default resulting from a
failure to disburse due to an administrative error or omission by the Portfolio
Manager, the Trustee, the Collateral Administrator, the Registrar or any Paying
Agent, such default will not be an Event of Default unless such failure
continues for 10 Business Days after a Bank Officer of the Trustee receives
written notice or has actual knowledge of such administrative error or omission
(irrespective of whether the cause of such administrative error or omission has
been determined) and (z) in the case of any default on any Redemption Date
(other than a Special Redemption Date) with respect to which the notice of
redemption has not been withdrawn in accordance with this Indenture, such
default will not be an Event of Default unless such default continues for a
period of seven or more Business Days;

 

(b)the failure on any Payment Date to disburse amounts in excess of $100,000
that are available in the Payment Account with respect to any amount payable in
connection with the Notes, in each case, in accordance with the Priority of
Payments and continuation of such failure for a period of 10 Business Days;
provided, that in the case of a default resulting from a failure to disburse due
to an administrative error or omission by the Portfolio Manager, the Trustee,
the Collateral Administrator, the Registrar or any Paying Agent or is due to
another non-credit related reason, such default will not be an Event of Default
unless such failure continues for 10 Business Days after a Bank Officer of the
Trustee receives written notice or has actual knowledge of such administrative
error or omission, irrespective of whether the cause of such administrative
error or omission has been determined;

 

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(c)either of the Issuer or the Assets becomes an investment company required to
be registered under the Investment Company Act (and such requirement has not
been eliminated after a period of 45 days);

 

(d)except as otherwise provided in this Section 5.1, a default in any material
respect in the performance, or breach in any material respect, of any other
covenant or other agreement of the Issuer in this Indenture (it being
understood, without limiting the generality of the foregoing, that any failure
to meet any Concentration Limitation, Collateral Quality Test or Coverage Test
is not an Event of Default and any failure to satisfy the requirements of
Section 7.18 is not an Event of Default, except in either case to the extent
provided in clause (g) below), or the failure of any material representation or
warranty of the Issuer made in this Indenture or in any certificate or other
writing delivered pursuant hereto or in connection herewith to be correct in all
material respects when the same shall have been made, which default, breach or
failure has a material adverse effect on the Holders, and the continuation of
such default, breach or failure for a period of 45 days after notice by the
Trustee at the direction of the Holders of a Majority of the Controlling Class
to the Issuer and the Portfolio Manager specifying such default, breach or
failure and requiring it to be remedied and stating that such notice is a
“Notice of Default” hereunder; provided that, if the Issuer (as notified to the
Trustee by the Portfolio Manager in writing), has commenced curing such default,
breach or failure during such 45-day period specified above, such default,
breach or failure shall not constitute an Event of Default under this clause (d)
unless it continues for a period of 60 days (in lieu of, but not in addition to,
such 45-day period specified above); provided, further, that the failure to
effect a Refinancing, Optional Redemption or Re-Pricing Amendment will not be an
Event of Default;

 

(e)the entry of a decree or order by a court having competent jurisdiction
adjudging the Issuer as bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of or in
respect of the Issuer under the Bankruptcy Code or any other applicable law, or
appointing a receiver, liquidator, assignee, or sequestrator (or other similar
official) of the Issuer or of any substantial part of its property,
respectively, or ordering the winding-up or liquidation of its affairs,
respectively, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days;

 

(f)the institution by the Issuer of Proceedings to have the Issuer adjudicated
as bankrupt or insolvent, or the consent of the Issuer to the institution of
bankruptcy or insolvency Proceedings against the Issuer or the filing by the
Issuer of a petition or answer or consent seeking reorganization or relief under
the Bankruptcy Code or any other similar applicable law, or the consent by the
Issuer to the filing of any such petition or to the appointment in a Proceeding
of a receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Issuer or of any substantial part of its property,
respectively, or the making by the Issuer of an assignment for the benefit of
creditors, or the admission by the Issuer in writing of its inability to pay its
debts generally as they become due, or the taking of any action by the Issuer in
furtherance of any such action or the members of the Issuer passing a resolution
(in accordance with the Issuer LLCA) to have the Issuer wound up on a voluntary
basis; or

 

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(g)on any Measurement Date on which any Class A-1 Notes are Outstanding, failure
of the percentage equivalent of a fraction, (i) the numerator of which is equal
to (1) the sum of (x) the Aggregate Principal Balance of the Collateral
Obligations, excluding Defaulted Obligations and (y) without duplication, the
amounts on deposit in the Collection Account and the Ramp-Up Account (including
Eligible Investments therein) representing Principal Proceeds plus (2) the
aggregate Market Value of all Defaulted Obligations on such date and (ii) the
denominator of which is equal to the Aggregate Outstanding Amount of the Class
A-1 Notes, to equal or exceed 102.5%.

 

Promptly upon obtaining knowledge of the occurrence of an Event of Default, (i)
the Issuer, (ii) the Trustee and (iii) the Portfolio Manager shall notify each
other. Upon the occurrence of an Event of Default known to a Bank Officer of the
Trustee, the Trustee shall, not later than three Business Days thereafter,
notify the Holders, each Paying Agent, DTC and each of the Rating Agencies of
such Event of Default in writing (unless such Event of Default has been waived
as provided in Section 5.14).

 

Section 5.2.Acceleration of Maturity; Rescission and Annulment

 

(a)If an Event of Default occurs and is continuing (other than an Event of
Default specified in Section 5.1(e) or (f)), the Trustee may (with the written
consent of a Supermajority of the Controlling Class), and shall (upon the
written direction of a Supermajority of the Controlling Class), by notice to the
Issuer, the Trustee, the Portfolio Manager and each Rating Agency, declare the
principal of the Notes to be immediately due and payable, and upon any such
declaration the principal of the Notes, together with all accrued and unpaid
interest thereon (including, in the case of Deferred Interest Notes, any
Deferred Interest) through the date of acceleration and other amounts payable
hereunder, shall become immediately due and payable. If an Event of Default
specified in Section 5.1(e) or (f) occurs, all unpaid principal, together with
all accrued and unpaid interest thereon, of all the Notes, and other amounts
payable thereunder and hereunder, shall automatically become due and payable
without any declaration or other act on the part of the Trustee or any Holder.

 

(b)At any time after such a declaration of acceleration of Maturity has been
made and before a judgment or decree for payment of the Money due has been
obtained by the Trustee as hereinafter provided in this Article V, a Majority of
the Controlling Class by written notice to the Issuer, the Trustee, each Rating
Agency and the Portfolio Manager, may rescind and annul such declaration and its
consequences if:

 

(i)The Issuer has paid or deposited with the Trustee a sum sufficient to pay:

 

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(A)all unpaid installments of interest and principal then due and payable on the
Notes (other than the non-payment of amounts that have become due solely due to
acceleration);

 

(B)to the extent that the payment of such interest is lawful, interest upon any
Deferred Interest at the applicable Interest Rate; and

 

(C)all unpaid taxes and Administrative Expenses (subject to the Administrative
Expense Cap) of the Issuer and other sums paid or advanced by the Trustee
hereunder or by the Collateral Administrator under the Collateral Administration
Agreement or hereunder, accrued and unpaid Base Management Fee and any other
amounts then payable by the Issuer hereunder prior to such Administrative
Expenses and such Base Management Fees; and

 

(ii)it has been determined that all Events of Default, other than the nonpayment
of the interest on or principal of the Notes that has become due solely by such
acceleration, have (A) been cured, and a Majority of the Controlling Class by
written notice to the Trustee, with a copy to the Portfolio Manager, has agreed
with such determination (which agreement shall not be unreasonably withheld), or
(B) been waived as provided in Section 5.14.

 

No such rescission shall affect any subsequent Event of Default or impair any
right consequent thereon. Any hedge agreement in effect upon such declaration of
an acceleration must remain in effect until liquidation of the Assets has begun
and such declaration is no longer capable of being rescinded or annulled;
provided that, the Issuer shall nevertheless be entitled to designate an early
termination date under and in accordance with the terms of such hedge agreement.

 

Section 5.3.Collection of Indebtedness and Suits for Enforcement by Trustee

 

The Issuer covenants that if a default shall occur in respect of the payment of
any principal of or interest when due and payable on any Note, it will, upon
demand of the Trustee, pay to the Trustee, for the benefit of the Holder of such
Note, the whole amount, if any, then due and payable on such Note for principal
and interest with interest upon the overdue principal and, to the extent that
payments of such interest shall be legally enforceable, upon overdue
installments of interest, at the applicable Interest Rate, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee and its agents and counsel.

 

If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee,
in its own name and as trustee of an express trust, may, and shall upon the
written direction of a Supermajority of the Controlling Class, institute a
Proceeding for the collection of the sums so due and unpaid, may prosecute such
Proceeding to judgment or final decree, and may enforce the same against the
Issuer or any other Obligor upon the Notes and collect the Monies adjudged or
decreed to be payable in the manner provided by law out of the Assets.

 

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If an Event of Default or Enforcement Event occurs and is continuing, the
Trustee may in its discretion, and shall (subject to its rights hereunder,
including pursuant to Section 6.3(d)) upon written direction of the
Supermajority of the Controlling Class, proceed to protect and enforce its
rights and the rights of the Secured Parties by such appropriate Proceedings as
the Trustee shall deem most effectual (if no such direction is received by the
Trustee) or as the Trustee may be directed by the Supermajority of the
Controlling Class, to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy
or legal or equitable right vested in the Trustee by this Indenture or by law.

 

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

 

(a)to file and prove a claim or claims for the whole amount of principal and
interest owing and unpaid in respect of the Notes upon direction by a Majority
of the Controlling Class and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for reasonable compensation to the Trustee and each predecessor Trustee,
and their respective agents, attorneys and counsel, and for reimbursement of all
reasonable expenses and liabilities incurred, and all advances made, by the
Trustee and each predecessor Trustee, except as a result of negligence or bad
faith) and of the Holders of the Notes allowed in any Proceedings relative to
the Issuer or other Obligor upon the Notes or to the creditors or property of
the Issuer or such other Obligor;

 

(b)unless prohibited by applicable law and regulations, to vote on behalf of the
Holders of the Notes upon the written direction of a Majority of the Controlling
Class, in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency Proceedings or
person performing similar functions in comparable Proceedings; and

 

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

 

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

 

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

 

Notwithstanding anything in this Section 5.3 to the contrary, the Trustee may
not sell or liquidate the Assets or institute Proceedings in furtherance thereof
pursuant to this Section 5.3 except according to the provisions specified in
Section 5.5(a).

 

Section 5.4.Remedies

 

(a)If the Maturity of the Notes has been accelerated as provided in Section
5.2(a) and such acceleration and its consequences have not been rescinded and
annulled as provided in Section 5.2(b) (an “Enforcement Event”), the Issuer
agrees that the Trustee may, and shall, upon written direction (with a copy to
the Portfolio Manager) of a Supermajority of the Controlling Class (subject to
the Trustee’s rights hereunder, including pursuant to Section 6.3(d)), to the
extent permitted by applicable law, exercise one or more of the following
rights, privileges and remedies:

 

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

 

(ii)sell or cause the sale of all or a portion of the Assets or rights or
interests therein, at one or more public or private sales called and conducted
in any manner permitted by law and in accordance with this Section 5.4 and
Section 5.17;

 

(iii)institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Assets;

 

(iv)exercise any remedies of a secured party under the UCC and take any other
appropriate action to protect and enforce the rights and remedies of the Trustee
and the Holders of the Notes hereunder (including exercising all rights of the
Trustee under the Account Agreement); and

 

(v)exercise any other rights and remedies that may be available at law or in
equity;

 

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provided that, the Trustee may not sell or liquidate the Assets or institute
Proceedings in furtherance thereof pursuant to this Section 5.4 except according
to the provisions of Section 5.5(a).

 

The Trustee may, but need not, obtain and rely upon an opinion or advice of an
Independent investment banking firm of national reputation (the cost of which
shall be payable as an Administrative Expense) experienced in structuring and
distributing securities similar to the Notes, which may be the Initial
Purchaser, a Placement Agent or other appropriate advisors, as to the
feasibility of any action proposed to be taken in accordance with this Section
5.4 and as to the sufficiency of the proceeds and other amounts receivable with
respect to the Assets to make the required payments of principal of and interest
on the Notes, which opinion or advice shall be conclusive evidence as to such
feasibility or sufficiency and the cost of which shall be commercially
reasonable.

 

(b)If an Event of Default as described in Section 5.1(d) has occurred and is
continuing the Trustee may, and at the written direction of the Holders of a
Majority of the Controlling Class in accordance with Section 5.8(b) shall
(subject to the Trustee’s rights hereunder, including pursuant to Section
6.3(d)), institute a Proceeding solely to compel performance of the covenant or
agreement or to cure the representation or warranty, the breach of which gave
rise to the Event of Default under such Section 5.1(d), and enforce any
equitable decree or order arising from such Proceeding.

 

(c)Upon any sale, whether made under the power of sale hereby given or by virtue
of judicial Proceedings, any Secured Party and any Affiliate of the Issuer may
bid for and purchase the Assets or any part thereof and, upon compliance with
the terms of sale, may hold, retain, possess or dispose of such property in its
or their own absolute right without accountability.

 

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

 

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

 

(d)Notwithstanding any other provision of this Indenture, none of the Trustee,
the Secured Parties or the beneficial owners or Holders of any Notes may (and
the beneficial owners and Holders of each Class of Notes agree, for the benefit
of all beneficial owners and Holders of each Class of Notes, that they shall
not), prior to the date which is one year (or if longer, any applicable
preference period then in effect) plus one day after the payment in full of all
Notes, institute against, or join any other Person in instituting against, the
Issuer, any bankruptcy, winding-up, reorganization, arrangement, insolvency,
winding-up, moratorium or liquidation Proceedings, or other Proceedings under
U.S. federal or state bankruptcy or similar laws. Nothing in this Section 5.4
shall preclude, or be deemed to estop, the Trustee, any Secured Party or any
Holder (i) from taking any action prior to the expiration of the aforementioned
period in (A) any case or Proceeding voluntarily filed or commenced by the
Issuer or (B) any involuntary insolvency Proceeding filed or commenced by a
Person other than the Trustee, such Secured Party or such Holder, respectively,
or (ii) from commencing against the Issuer or any of its properties any legal
action which is not a bankruptcy, reorganization, arrangement, insolvency,
winding-up, moratorium or liquidation Proceeding.

 

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(e)Notwithstanding anything to the contrary set forth herein, prior to the
public sale of any Collateral Obligation made under the power of sale hereby
given in connection with an acceleration or other exercise of remedies, the
Trustee shall offer the Portfolio Manager or an Affiliate thereof a right of
first refusal to purchase such Collateral Obligation (exercisable within two
Business Days after the related bid is provided by the Portfolio Manager to the
Trustee) at a price equal to the highest bid price determined by two of the
nationally recognized loan pricing services identified in clause (i) of the
definition of Market Value received by the Portfolio Manager (and provided to
the Trustee) in accordance with this Indenture (or if only one bid price is
available, such bid price). The Trustee shall have no responsibility or
liability for (i) selling a Collateral Obligation to the Portfolio Manager or an
Affiliate thereof as described above, or the inability of any such party to
provide a firm bid or (ii) any delay, failure or loss of value in liquidating a
Collateral Obligation as a result of the requirements above.

 

Section 5.5.Optional Preservation of Assets

 

(a)If an Event of Default has occurred and is continuing (other than an Event of
Default specified in Section 5.1(e) or (f)) or an Enforcement Event has occurred
(unless the Trustee has commenced remedies pursuant to Section 5.4), then the
Portfolio Manager may continue to direct sales and other dispositions, and
purchases, of Collateral Obligations in accordance with and to the extent
permitted pursuant to Article XII and Section 4.4. If an Event of Default has
occurred and is continuing or an Enforcement Event has occurred, the Trustee
shall retain the Assets securing the Notes intact (subject to the rights of the
Portfolio Manager pursuant to the preceding sentence), collect and cause the
collection of the proceeds thereof and make and apply all payments and deposits
and maintain all accounts in respect of the Assets and the Notes in accordance
with the Priority of Payments and the provisions of Article X, Article XII and
Article XIII, unless:

 

(i)the Trustee, pursuant to Section 5.5(c) and in consultation with the
Portfolio Manager, determines that the anticipated proceeds of a sale or
liquidation of all or any portion of the Assets (after deducting the anticipated
reasonable expenses of any such sale or liquidation) would be sufficient to
discharge in full the amounts then due (or, in the case of interest, accrued)
and unpaid on the Notes for principal and interest (including accrued and unpaid
Deferred Interest) and all other amounts that, pursuant to the Priority of
Payments, are required to be paid prior to such payments on such Notes
(including any amounts due and owing, and any amounts anticipated to be due and
owing), as Administrative Expenses (without regard to the Administrative Expense
Cap), and the Portfolio Manager and a Majority of the Controlling Class agrees
with such determination; or

 

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(ii)in the case of an Event of Default pursuant to Sections 5.1(a), (e), (f) or
(g) (without regard to the occurrence of any other Event of Default prior or
subsequent to the occurrence of such Event of Default), (x) for so long as any
Class A-1 Notes remain Outstanding, a Supermajority of the Class A-1 Notes
directs the sale and liquidation of the Assets and (y) at any time when no Class
A-1 Notes are Outstanding, a Supermajority of each Class of Notes (voting
separately by Class) directs the sale and liquidation of the Assets; or

 

(iii)in the case of an Event of Default pursuant to Sections 5.1(b), (c) or (d),
a Supermajority of each Class of the Notes (voting separately by Class) directs
the sale and liquidation of the Assets.

 

Directions by Holders under clauses (ii) and (iii) above will be effective when
delivered to the Issuer, the Trustee and the Portfolio Manager. For the
avoidance of doubt, for the purposes of this Section 5.5, the Class A-1 Notes
will constitute and vote together as a single Class and the Class A-2 Notes will
constitute and vote together as a single Class.

 

(b)Nothing contained in Section 5.5(a) shall be construed to require the Trustee
to sell the Assets securing the Notes if the conditions set forth in clause (i),
(ii) or (iii) of Section 5.5(a) are not satisfied. Nothing contained in Section
5.5(a) shall be construed to require the Trustee to preserve the Assets securing
the Notes if prohibited by applicable law.

 

(c)In determining whether the condition specified in Section 5.5(a)(i) exists,
the Trustee shall obtain, with the cooperation and assistance of the Portfolio
Manager, bid prices with respect to each security contained in the Assets from
two nationally recognized dealers (as specified (if possible) by the Portfolio
Manager in writing) at the time making a market in such securities and shall
compute the anticipated proceeds of sale or liquidation on the basis of the
lower of such bid prices for each such security. In the event that the Trustee
is only able to obtain bid prices with respect to each Asset from one nationally
recognized dealer at the time making a market in such Assets, the Trustee shall
compute the anticipated proceeds of the sale or liquidation on the basis of such
one bid price for each such Asset. If the Trustee is unable to obtain any bids,
the condition specified in Section 5.5(a)(i) shall be deemed to not be
satisfied. In addition, for the purposes of determining issues relating to the
execution of a sale or liquidation of the Assets and the execution of a sale or
other liquidation thereof in connection with a determination whether the
condition specified in Section 5.5(a)(i) exists, the Trustee may retain and rely
on an opinion or advice of an Independent investment banking firm of national
reputation or other appropriate advisors (the cost of which shall be
commercially reasonable and payable as an Administrative Expense).

 

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The Trustee shall deliver to the Holders and the Portfolio Manager a report
stating the results of any determination required pursuant to Section 5.5(a)(i)
no later than 10 days after such determination is made. The Trustee shall make
the determinations required by Section 5.5(a)(i) at the written request of a
Supermajority of the Controlling Class at any time during which the second
sentence of Section 5.5(a) applies; provided that, any such request made more
frequently than once in any 90-day period shall be at the expense of such
requesting party or parties.

 

(d)The Trustee shall promptly give written notice to each Rating Agency then
rating any Notes that remain Outstanding of any such liquidation of the Assets
(or subsequent rescission thereof) pursuant to this Section 5.5.

 

Section 5.6.Trustee May Enforce Claims Without Possession of Notes

 

All rights of action and claims under this Indenture or under any of the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any trial or other Proceeding relating
thereto, and any such action or Proceeding instituted by the Trustee shall be
brought in its own name as trustee and any recovery of judgment shall be applied
as set forth in Section 5.7.

 

Section 5.7.Application of Money Collected

 

Following the commencement of exercise of remedies by the Trustee pursuant to
Section 5.4, any Money collected by the Trustee with respect to the Notes
pursuant to this Article V and any Money that may then be held or thereafter
received by the Trustee with respect to the Notes hereunder shall be applied,
subject to Section 13.1 and in accordance with the Special Priority of Payments,
at the date or dates fixed by the Trustee. Upon the final distribution of all
proceeds of any liquidation effected hereunder, the provisions of Section 4.1(b)
shall be deemed satisfied for the purposes of discharging this Indenture
pursuant to Article IV.

 

Section 5.8.Limitation on Suits

 

No Holder of any Note shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, any other Transaction
Document, any of the Notes or any other matter related thereto, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

(a)such Holder previously has given to the Trustee (with a copy to the Portfolio
Manager) written notice of an Event of Default;

 

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(b)the Holders of a Majority of the Controlling Class shall have made a written
request upon the Trustee to institute Proceedings in respect of such Event of
Default in its own name as Trustee hereunder and such Holder or Holders have
provided the Trustee indemnity or security reasonably satisfactory to the
Trustee against the costs, expenses (including reasonable attorneys’ fees and
expenses) and liabilities to be incurred in compliance with such request;

 

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

 

(d)no direction inconsistent with such written request has been given to the
Trustee during such 30-day period by a Supermajority of the Controlling Class;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes of the same Class or to obtain or to seek to obtain
priority or preference over any other Holders of the Notes of the same Class or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal and ratable benefit of all the Holders of Notes of the same
Class subject to and in accordance with Section 13.1 and the Priority of
Payments.

 

In the event the Trustee shall receive conflicting or inconsistent requests and
indemnity pursuant to this Section 5.8 from two or more groups of Holders of the
Controlling Class, each representing less than a Majority of the Controlling
Class, the Trustee shall act in accordance with the request specified by the
group of Holders with the greatest percentage of the Aggregate Outstanding
Amount of the Controlling Class, notwithstanding any other provisions of this
Indenture. If all such groups represent the same percentage, the Trustee, in its
sole discretion, may determine what action, if any, shall be taken.

 

Section 5.9.Unconditional Rights of Holders to Receive Principal and Interest

 

Subject to Section 2.7(i), but notwithstanding any other provision of this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest on such Note
(including, in the case of Deferred Interest Notes, any Deferred Interest), as
such principal, interest and other amounts become due and payable in accordance
with the Priority of Payments and Section 13.1, as the case may be, and, subject
to the provisions of Section 5.4 and Section 5.8, to institute proceedings for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. Holders of Notes ranking junior to Notes
still Outstanding shall have no right to institute Proceedings for the
enforcement of any such payment until such time as no Note ranking senior to
such Note remains Outstanding, which right shall be subject to the provisions of
Section 5.4(d) and Section 5.8, and shall not be impaired without the consent of
any such Holder.

  

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Section 5.10.Restoration of Rights and Remedies

 

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

 

Section 5.11.Rights and Remedies Cumulative

 

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

 

Section 5.12.Delay or Omission Not Waiver

 

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

 

Section 5.13.Control by Supermajority of Controlling Class

 

Notwithstanding any other provision of this Indenture, a Supermajority of the
Controlling Class shall have the right following the occurrence, and during the
continuance of, an Event of Default or Enforcement Event to cause the
institution of and direct the time, method and place of conducting any
Proceeding for any remedy available to the Trustee or exercising any trust or
power conferred upon the Trustee under this Indenture; provided, that:

 

(a)such direction shall not conflict with any rule of law or with any express
provision of this Indenture;

 

(b)the Trustee may take any other action deemed proper by the Trustee that is
not inconsistent with such direction; provided, that subject to Section 6.1, the
Trustee need not take any action that it determines might involve it in
liability (unless the Trustee has received the indemnity as set forth in clause
(c) below);

 

(c)the Trustee shall have been provided with security or indemnity reasonably
satisfactory to it; and

 

(d)notwithstanding the foregoing, any direction to the Trustee to undertake a
Sale and liquidation of the Assets must satisfy the requirements of Section 5.5.

 

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Section 5.14.Waiver of Past Defaults

 

Prior to the time a judgment or decree for payment of the Money due has been
obtained by the Trustee, as provided in this Article V, a Majority of the
Controlling Class may on behalf of the Holders of all the Notes waive (i) any
past Event of Default, (ii) any occurrence that is, or with notice or the lapse
of time or both would become, an Event of Default and (iii) any future
occurrence that would give rise to an Event of Default of a type previously
waived and its consequences, except any such Event of Default or occurrence:

 

(a)in the payment of the principal of or interest on any Note (which may be
waived only with the consent of the Holder of such Note);

 

(b)in respect of a covenant or provision hereof that under Section 8.2 cannot be
modified or amended without the waiver or consent of the Holder of each
Outstanding Note materially and adversely affected thereby (which may be waived
only with the consent of each such Holder); or

 

(c)in respect of a representation contained in Section 7.19 (which may be waived
by a Majority of the Controlling Class if the Global Rating Agency Condition is
satisfied).

 

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

 

Upon any such waiver (other than a waiver of a future event), such Event of
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture. Any waiver of
any future occurrence must be revocable by a Majority of the Controlling Class,
and may also be specifically limited to a designated period of time.

 

Section 5.15.Undertaking for Costs

 

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

  

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Section 5.16.Waiver of Stay or Extension Laws

 

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

 

Section 5.17.Sale of Assets

 

(a)The power to effect any sale (a “Sale”) of any portion of the Assets pursuant
to Sections 5.4 and 5.5 shall not be exhausted by any one or more Sales as to
any portion of such Assets remaining unsold, but shall continue unimpaired until
the entire Assets shall have been sold or all amounts secured by the Assets
shall have been paid. The Trustee may upon notice to the Holders (with a copy to
the Portfolio Manager), and shall, upon direction of a Majority of the
Controlling Class, from time to time postpone any Sale by public announcement
made at the time and place of such Sale. The Trustee hereby expressly waives its
rights to any amount fixed by law as compensation for any Sale; provided that,
the Trustee and the Portfolio Manager shall be authorized to deduct the
reasonable costs, charges and expenses incurred by it in connection with such
Sale from the proceeds thereof notwithstanding the provisions of Section 6.7;
provided, further, that this Section 5.17 shall be qualified in its entirety by
reference to Section 5.4(e).

 

(b)Subject to Section 5.4(e), the Trustee may bid for and acquire any portion of
the Assets in connection with a public Sale thereof, and may pay all or part of
the purchase price by crediting against amounts owing on the Notes or other
amounts secured by the Assets, all or part of the net proceeds of such Sale
after deducting the reasonable costs, charges and expenses incurred by the
Trustee in connection with such Sale notwithstanding the provisions of Section
6.7. The Notes need not be produced in order to complete any such Sale, or in
order for the net proceeds of such Sale to be credited against amounts owing on
the Notes. The Trustee may hold, lease, operate, manage or otherwise deal with
any property so acquired in any manner permitted by law in accordance with this
Indenture.

 

(c)If any portion of the Assets consists of securities issued without
registration under the Securities Act (“Unregistered Securities”), the Trustee
may seek an Opinion of Counsel, or, if no such Opinion of Counsel can be
obtained and with the consent of a Majority of the Controlling Class, seek a no
action position from the Securities and Exchange Commission or any other
relevant federal or state regulatory authorities, regarding the legality of a
public or private Sale of such Unregistered Securities.

 

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

 

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(e)Without limiting any rights of any party under Section 5.4(e), and
notwithstanding any prior notice delivered thereunder, the Trustee shall provide
notice as soon as reasonably practicable of any public Sale to the Holders of
the Interests, and the Holders of the Interests and the Portfolio Manager shall
be permitted to participate in any such public Sale to the extent permitted by
applicable law and to the extent such Holders or the Portfolio Manager, as
applicable, meet any applicable eligibility requirements with respect to such
Sale.

 

Section 5.18.Action on the Notes

 

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

 

ARTICLE VI
THE TRUSTEE

 

Section 6.1.Certain Duties and Responsibilities

 

(a)Except during the occurrence and continuation of an Event of Default known to
the Trustee:

 

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

 

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

 

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(b)If an Event of Default known to the Trustee has occurred and is continuing,
the Trustee shall, prior to the receipt of directions, if any, from a Majority
(or Supermajority, as applicable) of the Controlling Class, or such other
percentage as permitted by this Indenture, exercise such of the rights and
powers vested in it by this Indenture, including providing direction to the
Trustee on behalf of the Holders and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances
in the conduct of such person’s own affairs.

 

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

 

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

 

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

 

(iii)the Trustee shall not be liable with respect to any action taken or omitted
to be taken by it in good faith in accordance with the direction of the Issuer
or the Portfolio Manager in accordance with this Indenture and/or a Majority (or
such other percentage as may be required by the terms hereof) of the Controlling
Class (or other Class if required or permitted by the terms hereof), relating to
the time, method and place of conducting any Proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture;

 

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

 

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

 

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

 

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(e)The Trustee will deliver all notices to the Holders forwarded to the Trustee
by the Issuer or the Portfolio Manager for such purpose. Upon the Trustee
receiving written notice from the Portfolio Manager that an event constituting
“cause” as defined in the Portfolio Management Agreement has occurred, the
Trustee shall, not later than three Business Days thereafter, notify the
Holders.

 

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

 

(g)The Trustee shall, upon reasonable (but no less than three Business Days’)
prior written notice to the Trustee, permit any representative of a Holder of a
Note, during the Trustee’s normal business hours, to examine all books of
account, records, reports and other papers of the Trustee (other than items
protected by attorney-client privilege) relating to the Notes, to make copies
and extracts therefrom (the reasonable out of pocket expenses incurred in making
any such copies or extracts to be reimbursed to the Trustee by such Holder) and
to discuss the Trustee’s actions, as such actions relate to the Trustee’s duties
with respect to the Notes, with the Trustee’s Officers and employees responsible
for carrying out the Trustee’s duties with respect to the Notes; provided that,
no reports prepared by the Issuer’s Independent certified public accountants
will be available for examination in violation of any confidentiality provisions
contained therein.

 

(h)If within 80 calendar days of delivery of financial information or
disbursements (which delivery may be via posting to the Trustee’s Website) the
Bank receives written notice of an error or omission related thereto and, within
five calendar days following the Bank’s providing a copy of such notice to the
Portfolio Manager and the Issuer, the Portfolio Manager or the Issuer confirms
such error or omission, the Bank shall use reasonable efforts to correct such
error or omission and such use of reasonable efforts shall be the only
obligation of the Bank in connection therewith. Beyond such period the Bank
shall not be required to take any action and shall have no responsibility for
the same. In no event shall the Bank be obligated to take any action at any time
at the request or direction of any Person unless such Person shall have offered
to the Bank indemnity or security reasonably satisfactory to it.

 

(i)The Trustee shall not have any obligation to (i) confirm the compliance by
the Issuer, the Retention Holder or any other Person with EU Securitization
Laws, U.S. Risk Retention Rules or the retention requirements of any other
jurisdiction or (ii) determine or monitor whether a Retention Deficiency occurs.

 

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(j)The Trustee is authorized, at the request of the Portfolio Manager, to accept
directions or otherwise enter into agreements regarding the remittance of fees
owing to the Portfolio Manager.

 

(k)The Trustee shall have no obligation to determine or verify the owners of the
Interests in the Issuer. In connection with the provision of notices to such
owners or the acceptance of an approval, consent or instruction therefrom, the
Trustee shall be entitled to (i) provide any such notice to the Issuer as
described in Section 14.4 hereof and (ii) conclusively rely upon any notice from
the Issuer (or the Portfolio Manager on its behalf) as to any notice, consent,
approval or instruction from the owners of the Interests, and shall have no
liability for any failure or delay in acting hereunder as a result of a failure
or delay on the part of the Issuer or the owners of such Interests to provide
such notice, consent, approval or instruction.

 

(l)The Trustee shall have no obligation to determine or verify (i) if a
Substitution Event has occurred, (ii) whether a Substitution Period has expired
or if the Substitute Collateral Obligations Qualification Conditions in
connection with any substitution have been satisfied, or (iii) the satisfaction
of the Repurchase and Substitution Limit in connection with any repurchase or
substitution or the calculation of the Transfer Deposit Amount in connection
therewith.

 

(m)The Trustee shall have no liability or responsibility for (i) the
determination or selection of an Alternative Rate (including, without
limitation, whether the conditions for the designation of such rate have been
satisfied or whether any such rate constitutes a Designated Alternative Rate),
(ii) the compliance with the Bankruptcy Exchange Test or the requirements for an
Exchange Transaction, (iii) the determination of Exchanged Equity Security
Excess Proceeds or (iv) the purchase of any Closing Date Participation
Interests, and makes no representation or warranty in respect of the sufficiency
or validity of the Loan Sale Agreement or the terms thereof.

 

Section 6.2.Notice of Default

 

Promptly (and in no event later than three Business Days) after the occurrence
of any Default actually known to a Bank Officer of the Trustee or after any
declaration of acceleration has been made or delivered to the Trustee pursuant
to Section 5.2, the Trustee shall notify the Portfolio Manager, each Rating
Agency and all Holders of all Defaults hereunder known to the Trustee, unless
such Default shall have been cured or waived.

 

Section 6.3.Certain Rights of Trustee

 

Except as otherwise provided in Section 6.1:

 

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

 

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

 

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

 

(d)the Trustee shall be under no obligation to exercise or to honor any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
provided to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses (including reasonable attorneys’ fees and expenses)
and liabilities which might reasonably be incurred by it in compliance with such
request or direction;

 

(e)the Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, note or other paper or
document, but the Trustee, in its discretion, may, and upon the written
direction of a Majority of the Controlling Class shall (subject to the right of
the Trustee hereunder to be satisfactorily indemnified), make such further
inquiry or investigation into such facts or matters as it may see fit or as it
shall be directed, and the Trustee shall be entitled, on reasonable prior notice
(but in any case, not less than five Business Days) to the Issuer and the
Portfolio Manager, to examine the books and records relating to the Notes and
the Assets, personally or by agent or attorney, during the Issuer’s or the
Portfolio Manager’s normal business hours; provided that, the Trustee shall, and
shall cause its agents to, hold in confidence all such information, except (i)
to the extent disclosure may be required by law or any Governmental Authority
and (ii) to the extent that the Trustee, in its sole discretion, may determine
that such disclosure is consistent with its obligations hereunder; provided,
further, that the Trustee may disclose on a confidential basis any such
information to its agents, attorneys and auditors in connection with the
performance of its responsibilities hereunder so long as the Trustee causes such
agents, attorneys and auditors to hold in confidence all such information;

 

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

 

(g)the Trustee shall not be liable for any action it takes or omits to take in
good faith that it reasonably believes to be authorized or within its rights or
powers hereunder;

 

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(h)nothing herein shall be construed to impose an obligation on the part of the
Trustee to recalculate, monitor, evaluate or verify or independently determine
the accuracy of any report, certificate or information received from the Issuer
or Portfolio Manager (unless and except to the extent otherwise expressly set
forth herein);

 

(i)to the extent any defined term hereunder, or any calculation required to be
made or determined by the Trustee hereunder, is dependent upon or defined by
reference to generally accepted accounting principles (as in effect in the
United States) (“GAAP”), the Trustee shall be entitled to request and receive
(and rely upon) instruction from the Issuer, from a firm of nationally
recognized accountants (which may or may not be the Independent accountants
appointed by the Issuer pursuant to Section 10.9(a)) or the accountants
identified in the Accountants’ Report (and in the absence of its receipt of
timely instruction therefrom, shall be entitled to obtain from an Independent
accountant at the expense of the Issuer) as to the application of GAAP in such
connection, in any instance;

 

(j)the Trustee shall not be liable for the actions or omissions of, or any
inaccuracies in the records of, the Portfolio Manager, the Issuer, the
Transferor, the EU Retention Holder, DTC, Euroclear, Clearstream or any other
clearing agency or depository or any Paying Agent (other than the Trustee), and
without limiting the foregoing, the Trustee shall not be under any obligation to
monitor, evaluate or verify compliance by the Portfolio Manager with the terms
hereof or of the Portfolio Management Agreement, or by the Transferor with the
terms of the Loan Sale Agreement or by the EU Retention Holder under the EU
Retention Undertaking Letter, or to verify or independently determine the
accuracy of information received by the Trustee from the Portfolio Manager (or
from any selling institution, agent bank, trustee or similar source) with
respect to the Assets;

 

(k)notwithstanding any term hereof (or any term of the UCC that might otherwise
be construed to be applicable to a Securities Intermediary) to the contrary,
neither the Trustee nor the Custodian shall be under a duty or obligation in
connection with the acquisition or Grant by the Issuer to the Trustee of any
item constituting the Assets, or to evaluate the sufficiency of the documents or
instruments delivered to it by or on behalf of the Issuer in connection with its
Grant or otherwise, or in that regard to examine any Underlying Instrument, in
each case, in order to determine compliance with applicable requirements of and
restrictions on transfer in respect of such Assets;

 

(l)in the event the Bank is also acting in the capacity of Paying Agent,
Registrar, Transfer Agent, Calculation Agent or Custodian, the rights,
protections, benefits, immunities and indemnities afforded to the Trustee
pursuant to this Article VI shall also be afforded to the Bank acting in such
capacities; provided that, such rights, protections, benefits, immunities and
indemnities shall be in addition to any rights, immunities and indemnities
provided in the Account Agreement or any other documents to which the Bank in
such capacity is a party;

 

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(m)any permissive right of the Trustee to take or refrain from taking actions
enumerated in this Indenture shall not be construed as a duty;

 

(n)to the extent permitted by applicable law, the Trustee shall not be required
to give any bond or surety in respect of the execution of this Indenture or
otherwise;

 

(o)the Trustee shall not be deemed to have notice or knowledge of any matter
unless a Bank Officer has actual knowledge thereof or unless written notice
thereof is received by the Trustee at the Corporate Trust Office and such notice
references the Notes generally, the Issuer or this Indenture;

 

(p)the Trustee shall not be responsible for delays or failures in performance
resulting from circumstances beyond its control (such circumstances include but
are not limited to acts of God, strikes, lockouts, riots, acts of war, loss or
malfunctions of utilities, computer (hardware or software) or communications
services);

 

(q)to the extent not inconsistent herewith, the rights, protections, indemnities
and immunities afforded to the Trustee pursuant to this Indenture also shall be
afforded to the Collateral Administrator; provided that, such rights,
protections, immunities and indemnities shall be in addition to any rights,
protections, immunities and indemnities provided in the Collateral
Administration Agreement;

 

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

 

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

 

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

 

(u)whenever in the administration of this Indenture the Trustee shall (i) deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, rely upon
an Officer’s certificate or Issuer Order, or (ii) be required to determine the
value of any Assets or funds hereunder or the cash flows projected to be
received therefrom, the Trustee may, in the absence of bad faith on its part,
rely on reports of nationally recognized accountants (which may or may not be
the Independent accountants appointed by the Issuer), investment bankers or
other Persons qualified to provide the information required to make such
determination, including nationally recognized dealers in securities of the type
being valued and securities quotation services; and

 

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(v)the Trustee will be under no obligation to (i) confirm or verify whether the
conditions to the Delivery of the Assets have been satisfied or (ii) determine
whether or not a Collateral Obligation is eligible for purchase or exchange
hereunder or meets the criteria in the definition thereof.

 

Section 6.4.     Not Responsible for Recitals or Issuance of Notes

 

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

 

Section 6.5.     May Hold Notes

 

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

 

Section 6.6.     Money Held in Trust

 

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

 

Section 6.7.     Compensation and Reimbursement

 

(a)The Issuer agrees:

 

(i)to pay the Trustee on each Payment Date reasonable compensation, as set forth
in a separate fee schedule, for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);

 

(ii)except as otherwise expressly provided herein, to reimburse the Trustee in a
timely manner upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision of
this Indenture or other Transaction Document (including, without limitation,
securities transaction charges and the reasonable compensation and expenses and
disbursements of its agents and legal counsel and of any accounting firm or
investment banking firm employed by the Trustee pursuant to Section 5.4, 5.5 or
10.7, except any such expense, disbursement or advance as may be attributable to
its negligence, willful misconduct or bad faith) but with respect to securities
transaction charges, only to the extent any such charges have not been waived
during a Collection Period due to the Trustee’s receipt of a payment from a
financial institution with respect to certain Eligible Investments, as specified
by the Portfolio Manager;

 

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

 

(iv)to pay the Trustee reasonable additional compensation together with its
expenses (including reasonable counsel fees) for any collection or enforcement
action taken pursuant to Article V.

 

(b)The Trustee shall receive amounts pursuant to this Section 6.7 and any other
amounts payable to it under this Indenture only as provided in Sections
11.1(a)(i), (ii) and (iii) (or in such other manner in which Administrative
Expenses are permitted to be paid under this Indenture) and only to the extent
that funds are available for the payment thereof. Subject to Section 6.9, the
Trustee shall continue to serve as Trustee under this Indenture notwithstanding
the fact that the Trustee shall not have received amounts due it hereunder;
provided that, nothing herein shall impair or affect the Trustee’s rights under
Section 6.9. No direction by the Holders shall affect the right of the Trustee
to collect amounts owed to it under this Indenture. If on any date when a fee or
expense shall be payable to the Trustee pursuant to this Indenture insufficient
funds are available for the payment thereof, any portion of a fee or expense not
so paid shall be deferred and payable on such later date on which a fee or
expense shall be payable and sufficient funds are available therefor.

 

(c)The Trustee hereby agrees not to cause any Bankruptcy Filing with respect to
the Issuer until at least one year (or if longer the applicable preference
period then in effect) plus one day, after the payment in full of all Notes
issued under this Indenture.

 

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(d)The Issuer’s payment obligations to the Trustee under this Section 6.7 shall
be secured by the lien of this Indenture, and shall survive the discharge of
this Indenture and the resignation or removal of the Trustee. When the Trustee
incurs expenses after the occurrence of a Default or an Event of Default under
Section 5.1(e) or (f), the expenses are intended to constitute expenses of
administration under Bankruptcy Code or any other applicable federal or state
bankruptcy, insolvency or similar law.

 

Section 6.8.     Corporate Trustee Required; Eligibility

 

(a)There shall at all times be a Trustee hereunder which shall be an Independent
organization or entity organized and doing business under the laws of the United
States of America or of any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least U.S.$200,000,000, subject to supervision or examination by federal or
state authority, having a rating of at least “BBB+” by S&P (or such other rating
for which the S&P Rating Condition is satisfied) and at least a long-term credit
rating of “A” and short-term credit rating of “F1” by Fitch and having an office
within the United States; provided, that if the Trustee is downgraded by the
applicable Rating Agency below such Rating Agency’s minimum rating or
counterparty risk assessment as set forth in this sentence, the Trustee (x)
shall promptly notify the Issuer and the Portfolio Manager of such downgrade in
writing and (y) may, with the consent of the Portfolio Manager and the Issuer to
the following procedure, retain its eligibility if it obtains or has obtained
(at its own expense) or, to the extent the Issuer or the Portfolio Manager
requests that the Trustee retain its eligibility (at the Issuer’s expense),
prior to appointment of a successor trustee, (i) a confirmation from the
applicable Rating Agency that downgraded the Trustee or counterparty risk
assessment that such Rating Agency’s then-current rating of the Notes will not
be downgraded or withdrawn by reason of such downgrade of the Trustee’s rating
or (ii) a written waiver or other written acknowledgement (which may be
evidenced by an exchange of electronic messages or facsimiles) from such Rating
Agency that it will not review such Rating Agency’s then-current rating of the
Notes in such circumstances. If such organization or entity publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 6.8, the combined capital and surplus of such organization or entity
shall be deemed to be its combined capital and surplus as set forth in its most
recent published report of condition. The Trustee shall inform the Issuer and
the Portfolio Manager upon satisfaction of the foregoing requirements. If at any
time the Trustee shall cease to be eligible and fails to obtain such
confirmation, waiver or acknowledgement in accordance with the provisions of
this Section 6.8, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article VI.

 

(b)The Trustee shall be a “bank” (as defined under the Investment Company Act)
and shall not be “affiliated” (as defined in Rule 405 under the Securities Act)
with the Issuer or any person involved in the organization or operation of the
Issuer and shall not offer or provide credit or credit enhancement to the
Issuer.

 

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(c)If such organization or entity publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section 6.8, the combined
capital and surplus of such organization or entity shall be deemed to be its
combined capital and surplus as set forth in its most recent published report of
condition.

 

(d)If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 6.8, it shall resign immediately in the manner and
with the effect hereinafter specified in this Article VI.

 

Section 6.9.     Resignation and Removal; Appointment of Successor

 

(a)No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article VI shall become effective until the acceptance
of appointment by the successor Trustee under Section 6.10.

 

(b)The Trustee may resign at any time by giving not less than 60 days’ written
notice thereof to the Issuer, the Portfolio Manager, the Holders and each Rating
Agency. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor trustee or trustees satisfying the requirements of Section
6.8 by written instrument, in duplicate, executed by an Authorized Officer of
the Issuer, one copy of which shall be delivered to the Trustee so resigning and
one copy to the successor Trustee or Trustees, together with a copy to each
Holder and the Portfolio Manager; provided that, such successor Trustee shall be
appointed only upon the written consent of a Majority of each Class of the Notes
or, at any time when an Event of Default has occurred and is continuing or an
Enforcement Event has occurred or when a successor Trustee has been appointed
pursuant to Section 6.9(e), by an Act of a Majority of the Controlling Class. If
no successor Trustee shall have been appointed and an instrument of acceptance
by a successor Trustee shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee or
any Holder, on behalf of itself and all others similarly situated, may petition
any court of competent jurisdiction for the appointment of a successor Trustee
satisfying the requirements of Section 6.8.

 

(c)The Trustee may be removed at any time with 30 days’ notice by Act of a
Majority of each Class of Notes (for which purpose, the Class A-1 Notes will
constitute and vote together as a single Class, the Class A-2 Notes will
constitute and vote together as a single Class and the Class B Notes will
constitute and vote together as a single Class) or, at any time when an Event of
Default has occurred and is continuing or an Enforcement Event has occurred by
an Act of a Majority of the Controlling Class, delivered to the Trustee and to
the Issuer.

 

(d)If at any time:

 

(i)the Trustee shall cease to be eligible under Section 6.8 and shall fail to
resign after written request therefor by the Issuer or by any Holder; or

 

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

 

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

 

(e)If the Trustee shall resign, be removed or become incapable of acting, or if
a vacancy shall occur in the office of the Trustee for any reason (other than
resignation), the Issuer, by Issuer Order, shall promptly appoint a successor
Trustee. If the Issuer shall fail to appoint a successor Trustee within 30 days
after such resignation, removal or incapability or the occurrence of such
vacancy, a successor Trustee may be appointed by a Majority of the Controlling
Class by written instrument delivered to the Issuer and the retiring Trustee.
The successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede any successor Trustee
proposed by the Issuer. If no successor Trustee shall have been so appointed by
the Issuer or a Majority of the Controlling Class and shall have accepted
appointment in the manner hereinafter provided, subject to Section 5.15, any
Holder or the Trustee may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.

 

(f)The Issuer shall give prompt notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee by providing notice of
such event to the Portfolio Manager, to each Rating Agency and to the Holders.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office. If the Issuer fails to provide such notice within 10
days after acceptance of appointment by the successor Trustee, the successor
Trustee shall cause such notice to be given at the expense of the Issuer.

 

(g)If the Bank shall resign or be removed as Trustee, the Bank shall also resign
or be removed as Paying Agent, Calculation Agent, Registrar and any other
capacity in which the Bank is then acting pursuant to this Indenture or any
other Transaction Document.

 

Section 6.10.     Acceptance of Appointment by Successor

 

Every successor Trustee appointed hereunder shall meet the requirements of
Section 6.8 and shall execute, acknowledge and deliver to the Issuer and the
retiring Trustee an instrument accepting such appointment and making the
representations and warranties set forth in this Indenture. Upon delivery of the
required instruments, the resignation or removal of the retiring Trustee shall
become effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, duties and
obligations of the retiring Trustee; but, on request of the Issuer or a Majority
of any Class of Notes or the successor Trustee, such retiring Trustee shall,
upon payment of its charges then unpaid, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all property and Money held by such retiring Trustee hereunder. Upon
request of any such successor Trustee, the Issuer shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.

 

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Section 6.11.     Merger, Conversion, Consolidation or Succession to Business of
Trustee

 

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

 

Section 6.12.     Co-Trustees

 

At any time or times, for the purpose of meeting the legal requirements of any
jurisdiction in which any part of the Assets may at the time be located, the
Issuer and the Trustee shall have power to appoint one or more Persons to act as
co-trustee that satisfies the eligibility requirements set forth in Section 6.8
(subject to notice to the Rating Agencies), jointly with the Trustee, of all or
any part of the Assets, with the power to file such proofs of claim and take
such other actions pursuant to Section 5.6 herein and to make such claims and
enforce such rights of action on behalf of the Holders, as such Holders
themselves may have the right to do, subject to the other provisions of this
Section 6.12 and to perform such other acts as may be determined by the Issuer
and the Trustee.

 

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

 

Should any written instrument from the Issuer be required by any co-trustee so
appointed, more fully confirming to such co-trustee such property, title, right
or power, any and all such instruments shall, on request, be executed,
acknowledged and delivered by the Issuer. The Issuer agrees to pay as
Administrative Expenses, to the extent funds are available therefor under the
Priority of Payments, for any reasonable fees and expenses in connection with
such appointment.

 

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

 

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

 

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(b)the rights, powers, duties and obligations hereby conferred or imposed upon
the Trustee in respect of any property covered by the appointment of a
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee or by the Trustee and such co-trustee jointly as shall be provided in
the instrument appointing such co-trustee;

 

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

 

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

 

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

 

(f)any Act of Holders delivered to the Trustee shall be deemed to have been
delivered to each co-trustee.

 

The Issuer shall notify each Rating Agency and the Portfolio Manager of the
appointment of a co-trustee hereunder.

 

Section 6.13.     Certain Duties of Trustee Related to Delayed Payment of
Proceeds

 

In the event that the Trustee shall not have received a payment with respect to
any Asset on its Due Date, (a) the Trustee shall promptly notify the Issuer and
the Portfolio Manager in writing (including by email) and (b) unless within
three Business Days (or the end of the applicable grace period for such payment,
if any) after such notice (x) such payment shall have been received by the
Trustee or (y) the Issuer, in its absolute discretion (but only to the extent
permitted by Section 10.2(a)), shall have made provision for such payment
satisfactory to the Trustee in accordance with Section 10.2(a), the Trustee
shall, not later than the Business Day immediately following the last day of
such period and in any case upon request by the Portfolio Manager, request the
issuer of such Asset, the trustee under the related Underlying Instrument or
paying agent designated by either of them, as the case may be, to make such
payment as soon as practicable after such request but in no event later than
three Business Days after the date of such request. In the event that such
payment is not made within such time period, the Trustee, subject to the
provisions of clause (iv) of Section 6.1(c), shall take such action as the
Portfolio Manager shall direct. Any such action shall be without prejudice to
any right to claim a Default or Event of Default under this Indenture. In the
event that the Issuer or the Portfolio Manager requests a release of an Asset
and/or delivers an additional Collateral Obligation in connection with any such
action under the Portfolio Management Agreement or this Indenture, such release
and/or substitution shall be subject to Section 10.8 and Article XII of this
Indenture, as the case may be. Notwithstanding any other provision hereof, the
Trustee shall deliver to the Issuer or its designee any payment with respect to
any Asset or any additional Collateral Obligation received after the Due Date
thereof to the extent the Issuer previously made provisions for such payment
satisfactory to the Trustee in accordance with this Section 6.13 and such
payment shall not be deemed part of the Assets.

 

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Section 6.14.     Authenticating Agents

 

Upon the request of the Issuer, the Trustee shall, and if the Trustee so chooses
the Trustee may, appoint one or more Authenticating Agents with power to act on
its behalf and subject to its direction in the authentication of Notes in
connection with issuance, transfers and exchanges under Sections 2.4, 2.5, 2.6
and 8.5, as fully to all intents and purposes as though each such Authenticating
Agent had been expressly authorized by such Sections to authenticate such Notes.
For all purposes of this Indenture, the authentication of Notes by an
Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the
authentication of Notes by the Trustee.

 

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

 

Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and the Issuer (with a copy to the Portfolio
Manager). The Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Issuer (with a copy to the Portfolio Manager). Upon receiving such notice of
resignation or upon such a termination, the Trustee shall promptly appoint a
successor Authenticating Agent and shall give written notice of such appointment
to the Issuer (with a copy to the Portfolio Manager).

 

Unless the Authenticating Agent is also the same entity as the Trustee, the
Issuer agrees to pay to each Authenticating Agent from time to time reasonable
compensation for its services, and reimbursement for its reasonable expenses
relating thereto as an Administrative Expense. The provisions of Sections 2.8,
6.4 and 6.5 shall be applicable to any Authenticating Agent.

 

Section 6.15.     Withholding

 

If any withholding tax is imposed on the Issuer’s payment (or allocations of
income) under the Notes by law or pursuant to the Issuer’s agreement with a
Governmental Authority, such tax shall reduce the amount otherwise distributable
to the relevant Holder. The Trustee is hereby authorized and directed to retain
from amounts otherwise distributable to any Holder sufficient funds for the
payment of any tax that is legally owed or required to be withheld by the Issuer
by law or pursuant to the Issuer’s agreement with a Governmental Authority (but
such authorization shall not prevent the Trustee from contesting any such tax in
appropriate proceedings and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings) and to timely remit such amounts
to the appropriate taxing authority. The amount of any withholding tax imposed
by law or pursuant to the Issuer’s agreement with a Governmental Authority with
respect to any Note shall be treated as Cash distributed to the relevant Holder
at the time it is withheld by the Trustee. If there is a possibility that
withholding is required by applicable law with respect to a distribution, the
Paying Agent or the Trustee may, in its sole discretion, withhold such amounts
in accordance with this Section 6.15. If any Holder or beneficial owner wishes
to apply for a refund of any such withholding tax, the Trustee shall reasonably
cooperate with such Person in providing readily available information so long as
such Person agrees to reimburse the Trustee for any out-of-pocket expenses
incurred. Nothing herein shall impose an obligation on the part of the Trustee
to determine the amount of any tax or withholding obligation on the part of the
Issuer or in respect of the Notes.

 

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Section 6.16.     Representative for Holders Only; Agent for each other Secured
Party

 

With respect to the security interest created hereunder, the delivery of any
Asset to the Trustee is to the Trustee as representative of the Holders and
agent for each other Secured Party. In furtherance of the foregoing, the
possession by the Trustee of any Asset, the endorsement to or registration in
the name of the Trustee of any Asset (including without limitation as
entitlement holder of the Custodial Account) are all undertaken by the Trustee
in its capacity as representative of the Holders and agent for each other
Secured Party.

 

Section 6.17.     Representations and Warranties of the Bank

 

The Bank hereby represents and warrants as follows:

 

(a)Organization. The Bank has been duly organized and is validly existing as a
national banking association with trust powers under the laws of the United
States and has the power to conduct its business and affairs as a trustee,
paying agent, registrar, transfer agent, Custodian, and Securities Intermediary.

 

(b)Authorization; Binding Obligations. The Bank has the corporate power and
authority to perform the duties and obligations of Trustee, Paying Agent,
Registrar, Transfer Agent, Calculation Agent and Custodian. The Bank has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Indenture, and all of the documents required to be executed
by the Bank pursuant hereto. This Indenture has been duly authorized, executed
and delivered by the Bank and constitutes the legal, valid and binding
obligation of the Bank enforceable in accordance with its terms subject, as to
enforcement, (i) to the effect of bankruptcy, insolvency or similar laws
affecting generally the enforcement of creditors’ rights as such laws would
apply in the event of any bankruptcy, receivership, insolvency or similar event
applicable to the Bank and (ii) to general equitable principles (whether
enforcement is considered in a proceeding at law or in equity).

 

(c)Eligibility. The Bank is eligible under Sections 6.8(a) and 6.8(b) to serve
as Trustee.

 

(d)No Conflict. Neither the execution, delivery and performance of this
Indenture, nor the consummation of the transactions contemplated by this
Indenture, (i) is prohibited by, or requires the Bank to obtain any consent,
authorization, approval or registration under, any law, statute, rule,
regulation, judgment, order, writ, injunction or decree that is binding upon the
Bank or any of its properties or assets, or (ii) will violate any provision of,
result in any default or acceleration of any obligations under, result in the
creation or imposition of any lien pursuant to, or require any consent under,
any material agreement to which the Bank is a party or by which it or any of its
property is bound.

 

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ARTICLE VII
COVENANTS

 

Section 7.1.     Payment of Principal and Interest

 

The Issuer will duly and punctually pay the principal of and interest on the
Notes in accordance with the terms of such Notes and this Indenture pursuant to
the Priority of Payments.

 

Amounts properly withheld under the Code or other applicable law (including
FATCA) or pursuant to the Issuer’s agreement with a Governmental Authority by
any Person from a payment under a Note shall be considered as having been paid
by the Issuer to the relevant Holder for all purposes of this Indenture.

 

Section 7.2.     Maintenance of Office or Agency

 

The Issuer hereby appoints the Trustee as a Paying Agent for payments on the
Notes and the Trustee at its applicable Corporate Trust Office, as the Issuer’s
agent where Notes may be surrendered for registration of transfer or exchange.
The Issuer may at any time and from time to time appoint additional paying
agents; provided that, no paying agent shall be appointed in a jurisdiction
which subjects payments on the Notes to withholding tax solely as a result of
such Paying Agent’s activities or its location. If at any time the Issuer shall
fail to maintain the appointment of a paying agent, or shall fail to furnish the
Trustee with the address thereof, presentations and surrenders may be made
(subject to the limitations described in the preceding sentence), and Notes may
be presented and surrendered for payment, to the Trustee at its main office.

 

Section 7.3.     Money for Note Payments to be Held in Trust

 

All payments of amounts due and payable with respect to the Notes that are to be
made from amounts withdrawn from the Payment Account shall be made on behalf of
the Issuer by the Trustee or a Paying Agent with respect to payments on the
Notes.

 

When the Issuer shall have a Paying Agent that is not also the Registrar and/or
the Trustee, they shall furnish, or cause the Registrar to furnish, no later
than the fifth calendar day after each Record Date a list, if necessary, in such
form as such Paying Agent may reasonably request, of the names and addresses of
the Holders and of the certificate numbers of individual Notes held by each such
Holder.

 

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

 

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The initial Paying Agent shall be as set forth in Section 7.2. Any additional or
successor Paying Agents shall be appointed by Issuer Order with written notice
thereof to the Trustee, with a copy to the Portfolio Manager; provided that, so
long as the Notes of any Class are rated by a Rating Agency, with respect to any
additional or successor Paying Agent, either (i) such Paying Agent has a
long-term debt rating of “A+” or higher by S&P or a short-term debt rating of
“A-1” by S&P and (to the extent that Fitch is rating any Notes then Outstanding)
a short-term credit rating of at least “F1” by Fitch or a long-term rating of at
least “A” by Fitch or (ii) the Global Rating Agency Condition is satisfied. If
such successor Paying Agent ceases to have a long-term debt rating of “A+” or
higher by S&P or a short-term debt rating “A-1” by S&P and (to the extent that
Fitch is rating any Notes then Outstanding) a short-term credit rating of at
least “F1” by Fitch or a long-term rating of at least “A” by Fitch, the Issuer
shall promptly remove such Paying Agent and appoint a successor Paying Agent.
The Issuer shall not appoint any Paying Agent that is not, at the time of such
appointment, a depository institution or trust company subject to supervision
and examination by federal and/or state and/or national banking authorities. The
Issuer shall cause each Paying Agent other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee (and if the Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section 7.3, that such Paying Agent will:

 

(a)allocate all sums received for payment to the Holders of the Notes and the
Issuer for which it acts as Paying Agent on each Payment Date and any Redemption
Date among such Holders in the proportion specified in the applicable
Distribution Report to the extent permitted by applicable law;

 

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

 

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

 

(d)if such Paying Agent is not the Trustee, immediately give the Trustee, with a
copy to the Portfolio Manager, notice of any default by the Issuer (or any other
Obligor upon the Notes) in the making of any payment required to be made; and

 

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(e)if such Paying Agent is not the Trustee, during the continuance of any such
default, upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.

 

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

 

Except as otherwise required by applicable law, any Money deposited with the
Trustee or any Paying Agent in trust for any payment on any Note and remaining
unclaimed for two years after such amount has become due and payable shall be
paid to the Issuer on Issuer Order; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment of such amounts (but only to the extent of the amounts so paid to the
Issuer) and all liability of the Trustee or such Paying Agent with respect to
such trust Money shall thereupon cease. The Trustee or such Paying Agent, before
being required to make any such release of payment, may, but shall not be
required to, adopt and employ, at the expense of the Issuer any reasonable means
of notification of such release of payment.

 

Section 7.4.     Existence of Issuer

 

(a)The Issuer shall, to the maximum extent permitted by applicable law, maintain
in full force and effect its existence and rights as a limited liability company
organized under the laws of the State of Delaware, and shall obtain and preserve
its qualification to do business as a limited liability company in each
jurisdiction in which such qualifications are or shall be necessary to protect
the validity and enforceability of this Indenture, the Notes or any of the
Assets; provided that, the Issuer shall be entitled to change its jurisdiction
of organization from the State of Delaware to any other jurisdiction reasonably
selected by the Issuer so long as (i) the Issuer has received a legal opinion
(upon which the Trustee may conclusively rely) to the effect that such change is
not disadvantageous in any material respect to the Holders, (ii) written notice
of such change shall have been given to the Trustee by the Issuer, which notice
shall be forwarded by the Trustee to the Holders, the Portfolio Manager and each
Rating Agency and (iii) on or prior to the 15th Business Day following receipt
of such notice the Trustee shall not have received written notice from a
Majority of the Controlling Class objecting to such change.

 

(b)The Issuer (i) shall ensure that all limited liability company or other
formalities regarding its existence (including, if required, holding regular
meetings of its manager(s) and member(s), or other similar, meetings) are
followed, except where the failure to do so could not reasonably be expected to
have a material adverse effect on the validity and enforceability of this
Indenture, the Notes or any of the Assets, and (ii) shall not have any employees
(other than its officers to the extent such officers might be considered
employees). The Issuer shall not take any action, or conduct its affairs in a
manner, that is likely to result in its separate existence being ignored or in
its assets and liabilities being substantively consolidated with any other
Person in a bankruptcy, reorganization or other insolvency proceeding. Without
limiting the foregoing, (i) the Issuer shall not have any subsidiaries, and (ii)
(x) the Issuer shall not (A) except as contemplated by the Offering Circular,
any Transaction Document or the Issuer LLCA, engage in any transaction with any
member or affiliate that would constitute a conflict of interest or (B) make
distributions other than in accordance with the Issuer LLCA, and (y) the Issuer
shall, except when otherwise required for consolidated accounting purposes or
tax purposes, (A) maintain books and records separate from any other Person, (B)
maintain its accounts separate from those of any other Person, (C) not commingle
its assets with those of any other Person, (D) conduct its own business in its
own name, (E) maintain separate financial statements (except to the extent
required to be consolidated under GAAP), (F) pay its own liabilities out of its
own funds, (G) maintain an arm’s length relationship with its Affiliates, (H)
use separate stationery, invoices and checks, (I) hold itself out as a separate
Person, (J) correct any known misunderstanding regarding its separate identity
and (K) have at least one Independent Manager.

 

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Section 7.5.     Protection of Assets

 

(a)The Issuer (or the Portfolio Manager on its behalf) will cause the taking of
such action within the Portfolio Manager’s control as is reasonably necessary in
order to maintain the perfection and priority of the security interest of the
Trustee in the Assets; provided that, the Issuer (or the Portfolio Manager on
its behalf) shall be entitled to rely on any Opinion of Counsel delivered
pursuant to Section 7.6 and any Opinion of Counsel with respect to the same
subject matter delivered pursuant to Section 3.1(a)(iii) and (iv) to determine
what actions are reasonably necessary, and shall be fully protected in so
relying on such an Opinion of Counsel, unless the Issuer (or the Portfolio
Manager on its behalf) has actual knowledge that the procedures described in any
such Opinion of Counsel are no longer adequate to maintain such perfection and
priority. The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and file or authorize the filing of all such
Financing Statements, continuation statements, instruments of further assurance
and other instruments, and shall take such other action as may be necessary or
advisable or desirable to secure the rights and remedies of the Holders of the
Notes hereunder and to:

 

(i)Grant more effectively all or any portion of the Assets;

 

(ii)maintain, preserve and perfect any Grant made or to be made by this
Indenture including, without limitation, the first priority nature of the lien
or carry out more effectively the purposes hereof;

 

(iii)perfect, publish notice of or protect the validity of any Grant made or to
be made by this Indenture (including, without limitation, any and all actions
necessary or desirable as a result of changes in law or regulations);

 

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(iv)enforce any of the Assets or other instruments or property included in the
Assets;

 

(v)preserve and defend title to the Assets and the rights therein of the Trustee
and the Holders of the Notes in the Assets against the claims of all Persons and
parties; or

 

(vi)pay or cause to be paid any and all taxes levied or assessed upon all or any
part of the Assets.

 

The Issuer hereby designates the Trustee as its agent and attorney in fact to
prepare and file any Financing Statement, continuation statement and all other
instruments, and take all other actions, required pursuant to this Section 7.5.
Such designation shall not impose upon the Trustee, or release or diminish, the
Issuer’s obligations under this Section 7.5. The Issuer further authorizes and
shall cause the Issuer’s United States counsel to file without the Issuer’s
signature a Financing Statement on the Closing Date that names the Issuer as
debtor and the Trustee, on behalf of the Secured Parties, as secured party and
that describes “all assets” of the Issuer as the Assets in which the Trustee has
a Grant.

 

(b)The Trustee shall not, except in accordance with this Indenture, permit the
removal of any portion of the Assets or transfer any such Assets from the
Account to which it is credited, or cause or permit any change in the Delivery
made pursuant to Section 3.3 with respect to any Assets, if, after giving effect
thereto, the jurisdiction governing the perfection of the Trustee’s security
interest in such Assets is different from the jurisdiction governing the
perfection at the time of delivery of the most recent Opinion of Counsel
pursuant to Section 7.6 (or, if no Opinion of Counsel has yet been delivered
pursuant to Section 7.6, the Opinion of Counsel delivered at the Closing Date
pursuant to Section 3.1(a)(iii)) unless the Trustee shall have received an
Opinion of Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property and the priority thereof will
continue to be maintained after giving effect to such action or actions.

 

Section 7.6.     Opinions as to Assets

 

So long as the Notes are Outstanding, within the six-month period preceding the
fifth anniversary of the Closing Date (and every five years thereafter), the
Issuer shall furnish to the Trustee and each Rating Agency an Opinion of Counsel
relating to the security interest Granted by the Issuer to the Trustee, stating
that, as of the date of such opinion, the lien and security interest created by
this Indenture with respect to the Assets remain in effect and that no further
action (other than as specified in such opinion) needs to be taken to ensure the
continued effectiveness of such lien over the next year.

 

Section 7.7.     Performance of Obligations

 

(a)The Issuer shall not take any action, and will use its best efforts not to
permit any action to be taken by others, that would release any Person from any
of such Person’s covenants or obligations under any instrument included in the
Assets, except in the case of enforcement action taken with respect to any
Defaulted Obligation in accordance with the provisions hereof and actions by the
Portfolio Manager under the Portfolio Management Agreement and in conformity
with this Indenture or as otherwise required hereby.

 

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(b)The Issuer may, with the prior written consent of a Majority of each Class of
Notes (except in the case of the Portfolio Management Agreement and the
Collateral Administration Agreement, in which case no consent shall be
required), contract with other Persons, including the Portfolio Manager, the
Trustee and the Collateral Administrator for the performance of actions and
obligations to be performed by the Issuer hereunder and under the Portfolio
Management Agreement by such Persons. Notwithstanding any such arrangement, the
Issuer shall remain primarily liable with respect thereto. In the event of such
contract, the performance of such actions and obligations by such Persons shall
be deemed to be performance of such actions and obligations by the Issuer; and
the Issuer will punctually perform, and use their best efforts to cause the
Portfolio Manager, the Trustee, the Collateral Administrator and such other
Person to perform, all of their obligations and agreements contained in the
Portfolio Management Agreement, this Indenture, the Collateral Administration
Agreement or any such other agreement.

 

(c)The Issuer shall notify each Rating Agency (with a copy to the Portfolio
Manager) within 10 Business Days after any material breach of any Transaction
Document, following any applicable cure period for such breach.

 

Section 7.8.     Negative Covenants

 

(a)The Issuer will not, from and after the Closing Date:

 

(i)sell, transfer, exchange or otherwise dispose of, or pledge, mortgage,
hypothecate or otherwise encumber (or permit such to occur or suffer such to
exist), any part of the Assets, except as expressly permitted by this Indenture
and the Portfolio Management Agreement;

 

(ii)claim any credit on, make any deduction from, or dispute the enforceability
of payment of the principal or interest payable (or any other amount) in respect
of the Notes (other than amounts withheld or deducted in accordance with the
Code or any applicable tax or similar laws of any other applicable jurisdiction
or pursuant to the Issuer’s agreement with any Governmental Authority);

 

(iii)(A) incur or assume or guarantee any indebtedness, other than the Notes,
this Indenture and the transactions contemplated hereby, or (B) (1) issue any
additional class of notes except in accordance with Section 2.13 and 3.2 or (2)
issue any additional limited liability company interests, except in accordance
with the Issuer LLCA;

 

(iv)(A) permit the validity or effectiveness of this Indenture or any Grant
hereunder to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to this Indenture or the
Notes except as may be permitted hereby or by the Portfolio Management
Agreement, (B) except as permitted by this Indenture, permit any lien, charge,
adverse claim, security interest, mortgage or other encumbrance (other than the
lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden any part of the Assets, any interest therein or the proceeds thereof, or
(C) except as permitted by this Indenture, take any action that would permit the
lien of this Indenture not to constitute a valid first priority security
interest in the Assets;

 

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(v)amend the Portfolio Management Agreement except pursuant to the terms thereof
and Article XV of this Indenture;

 

(vi)dissolve or liquidate in whole or in part, except as permitted hereunder or
required by applicable law;

 

(vii)other than as expressly provided herein, pay any distributions other than
in accordance with the Priority of Payments; provided that, the Issuer shall be
permitted to make distributions to its members of any amounts received by it in
accordance with the Priority of Payments;

 

(viii)permit the formation of any subsidiaries;

 

(ix)conduct business under any name other than its own;

 

(x)have any employees (other than officers to the extent such officers might be
considered are employees);

 

(xi)fail to maintain an Independent Manager in accordance with the Issuer LLCA;

 

(xii)sell, transfer, exchange or otherwise dispose of Assets, or enter into an
agreement or commitment to do so or enter into or engage in any business with
respect to any part of the Assets, except as expressly permitted by both this
Indenture and the Portfolio Management Agreement;

 

(xiii)permit the transfer of any of its membership interests so long as any
Notes are Outstanding; and

 

(xiv)subject to Section 8.2(f), enter into any hedge agreement.

 

(b)[Reserved].

 

(c)The Issuer shall not be party to any agreements under which it has a future
payment obligation without including customary “non-petition” and “limited
recourse” provisions therein (and shall not amend or eliminate such provisions
in any agreement to which it is party), except for any agreements related to the
purchase and sale of any Collateral Obligations or Eligible Investments which
contain customary (as determined by the Portfolio Manager in its sole
discretion) purchase or sale terms or which are documented using customary (as
determined by the Portfolio Manager in its sole discretion) loan trading
documentation.

 

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(d)The Issuer shall not enter into any agreement amending, modifying or
terminating any Transaction Document without notifying each Rating Agency (with
a copy to the Portfolio Manager).

 

(e)The Issuer may not acquire any of the Notes (including any Notes surrendered
or abandoned) other than pursuant to and in accordance with Section 2.14. This
Section 7.8(e) shall not be deemed to limit an optional special or mandatory
redemption pursuant to the terms of this Indenture.

 

Section 7.9.     Statement as to Compliance

 

On or before March 31 in each calendar year commencing in 2020, or immediately
if there has been a Default under this Indenture and prior to the issuance of
any additional notes pursuant to Section 2.13, the Issuer shall deliver to the
Trustee (to be forwarded by the Trustee, to the Portfolio Manager, each Holder
making a written request therefor and each Rating Agency) an Officer’s
certificate of the Issuer that, having made reasonable inquiries of the
Portfolio Manager, and to the best of the knowledge, information and belief of
the Issuer, there did not exist, as at a date not more than five days prior to
the date of the certificate, nor had there existed at any time prior thereto
since the date of the last certificate (if any), any Default hereunder or, if
such Default did then exist or had existed, specifying the same and the nature
and status thereof, including actions undertaken to remedy the same, and that
the Issuer has complied with all of its obligations under this Indenture or, if
such is not the case, specifying those obligations with which it has not
complied.

 

Section 7.10.   Issuer May Consolidate, Etc., Only on Certain Terms

 

The Issuer (the “Merging Entity”) shall not consolidate or merge with or into
any other Person or, except as permitted under this Indenture, transfer or
convey all or substantially all of its assets to any Person, unless permitted by
United States and Delaware law and unless:

 

(a)the Merging Entity shall be the surviving entity, or the Person (if other
than the Merging Entity) formed by such consolidation or into which the Merging
Entity is merged or to which all or substantially all of the assets of the
Merging Entity are transferred (the “Successor Entity”) (i) if the Merging
Entity is the Issuer, shall be a company organized and existing under the laws
of the State of Delaware or such other jurisdiction approved by a Majority of
the Controlling Class (provided that, no such approval shall be required in
connection with any such transaction undertaken solely to effect a change in the
jurisdiction of incorporation pursuant to Section 7.4), and (ii) in any case
shall expressly assume, by an indenture supplemental hereto and an omnibus
assumption agreement, executed and delivered to the Trustee, the Portfolio
Manager, the Collateral Administrator and each Holder, the due and punctual
payment of the principal of and interest on all Notes, the payments to the
Issuer and the performance and observance of every covenant of this Indenture
and of each other Transaction Document on its part to be performed or observed,
all as provided herein or therein, as applicable;

 

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(b)the Trustee shall have received, as soon as reasonably practicable and in any
case no less than five (5) days prior to such merger or consolidation, notice of
such consolidation or merger and shall have distributed copies of such notice to
each Rating Agency of such merger or consolidation, and the Trustee shall have
received written confirmation from each Rating Agency that its ratings issued
with respect to the Notes then rated by such Rating Agency shall not be reduced
or withdrawn as a result of the consummation of such transaction;

 

(c)if the Merging Entity is not the Successor Entity, the Successor Entity shall
have agreed with the Trustee (i) to observe the same legal requirements for the
recognition of such formed or surviving corporation as a legal entity separate
and apart from any of its Affiliates as are applicable to the Merging Entity
with respect to its Affiliates and (ii) not to consolidate or merge with or into
any other Person or transfer or convey the Assets or all or substantially all of
its assets to any other Person except in accordance with the provisions of this
Section 7.10;

 

(d)if the Merging Entity is not the Successor Entity, the Successor Entity shall
have delivered to the Trustee and each Rating Agency an Officer’s certificate
and an Opinion of Counsel each stating that such Person is duly organized,
validly existing and in good standing in the jurisdiction in which such Person
is organized; that such Person has sufficient power and authority to assume the
obligations set forth in subsection (a) above and to execute and deliver an
indenture supplemental hereto for the purpose of assuming such obligations; that
such Person has duly authorized the execution, delivery and performance of an
indenture supplemental hereto for the purpose of assuming such obligations and
that such supplemental indenture is a valid, legal and binding obligation of
such Person, enforceable in accordance with its terms, subject only to
bankruptcy, reorganization, insolvency, moratorium and other laws affecting the
enforcement of creditors’ rights generally and to general principles of equity
(regardless of whether such enforceability is considered in a Proceeding in
equity or at law); if the Merging Entity is the Issuer, that, immediately
following the event which causes such Successor Entity to become the successor
to the Issuer, (i) such Successor Entity has title, free and clear of any lien,
security interest or charge, other than the lien and security interest of this
Indenture and any other Permitted Liens, to the Assets securing all of the
Notes, and (ii) the Trustee continues to have a valid perfected first priority
security interest in the Assets securing all of the Notes; and in each case as
to such other matters as the Trustee or any Holder may reasonably require;
provided that, nothing in this clause (d) shall imply or impose a duty on the
Trustee to require such other documents;

 

(e)immediately after giving effect to such transaction, no Default, Event of
Default or Enforcement Event has occurred and is continuing;

 

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(f)the Merging Entity shall have notified the Portfolio Manager of such
consolidation, merger, transfer or conveyance and shall have delivered to the
Trustee and each Holder an Officer’s certificate and an Opinion of Counsel each
stating that such consolidation, merger, transfer or conveyance and such
supplemental indenture comply with this Article VII and that all conditions
precedent in this Article VII relating to such transaction have been complied
with and that such transaction will not (1) result in the Successor Entity
becoming subject to U.S. federal income taxation with respect to its net income
or to any withholding tax liability under Section 1446 of the Code or (2) have a
material adverse effect on the tax treatment of the Issuer or the tax
consequences to the Holders of any Class of Notes Outstanding at the time of
such consolidation, merger, transfer or conveyance, as described in the Offering
Circular under the heading “Certain U.S. Federal Income Tax Considerations”;

 

(g)the Merging Entity shall have delivered to the Trustee an Opinion of Counsel
stating that after giving effect to such transaction, the Issuer (or, if
applicable, the Successor Entity) will not be required to register as an
investment company under the Investment Company Act; and

 

(h)after giving effect to such transaction, the outstanding stock of the Merging
Entity (or, if applicable, the Successor Entity) will not be beneficially owned
within the meaning of the Investment Company Act by any U.S. person.

 

Section 7.11.     Successor Substituted

 

Upon any consolidation or merger, or transfer or conveyance of all or
substantially all of the assets of the Issuer in accordance with Section 7.10 in
which the Merging Entity is not the surviving corporation, the Successor Entity
shall succeed to, and be substituted for, and may exercise every right and power
of, the Merging Entity under this Indenture with the same effect as if such
Person had been named as the Issuer herein. In the event of any such
consolidation, merger, transfer or conveyance, the Person named as the “Issuer”
in the first paragraph of this Indenture or any successor which shall
theretofore have become such in the manner prescribed in this Article VII may be
dissolved, wound up and liquidated at any time thereafter, and such Person
thereafter shall be released from its liabilities as Obligor and maker on all
the Notes and from its obligations under this Indenture.

 

Section 7.12.     No Other Business

 

From and after the Closing Date, the Issuer shall not engage in any business or
activity other than issuing and selling the Notes and any additional notes
pursuant to this Indenture and acquiring, owning, holding, selling, lending,
exchanging, redeeming, pledging, contracting for the management of and otherwise
dealing with Collateral Obligations and the other Assets in connection
therewith, and entering into hedge agreements, the Collateral Administration
Agreement, the Account Agreement, the Portfolio Management Agreement and the
other applicable Transaction Documents and agreements specifically contemplated
by this Indenture, and such other activities which are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith or ancillary thereto. The Issuer may amend, or permit the amendment
of, the provisions of the Issuer LLCA which relate to its bankruptcy remote
nature or separateness covenants only if such amendment would satisfy the Global
Rating Agency Condition.

 

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Section 7.13.     Acknowledgment of Portfolio Manager Standard of Care

 

The Issuer acknowledges that it shall be responsible for its own compliance with
the covenants set forth in this Article VII and that, to the extent the Issuer
has engaged the Portfolio Manager to take certain actions on its behalf in order
to comply with such covenants, the Portfolio Manager shall only be required to
perform such actions in accordance with the Portfolio Manager Standard set forth
in Section 2(a) of the Portfolio Management Agreement (or the corresponding
provision of any portfolio management agreement entered into as a result of FS
KKR Capital Corp. no longer serving as Portfolio Manager thereunder). The Issuer
further acknowledges and agrees that the Portfolio Manager shall have no
obligation to take any action to cure any breach of a covenant set forth in this
Article VII until such time as a Responsible Officer of the Portfolio Manager
has actual knowledge of such breach.

 

Section 7.14.     Ratings; Review of Credit Estimates

 

(a)So long as any of the Notes of any Class remain Outstanding, on or before
March 31 in each year commencing in 2020, the Issuer shall obtain and pay for an
annual review of the rating of each such Class of Notes from each Rating Agency,
as applicable. The Issuer shall promptly notify the Trustee and the Portfolio
Manager in writing (and the Trustee shall promptly provide the Holders with a
copy of such notice) if at any time the then-current rating of any such Class of
Notes has been, or is known will be, changed or withdrawn.

 

(b)The Issuer shall obtain and pay for an annual review of (i) any Collateral
Obligation which has an S&P Rating derived as set forth in clause (iii)(b) of
the definition of the term “S&P Rating” and (ii) to the extent that Fitch is
rating any Notes then Outstanding, any Collateral Obligation that has a Fitch
Rating determined pursuant to clause (e) under the heading “Fitch Rating” in
Schedule 5.

 

Section 7.15.     Reporting

 

At any time when the Issuer is not subject to Section 13 or 15(d) of the
Exchange Act and is not exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, upon the written request of a Holder or, upon the written
request to the Trustee in the form of Exhibit D, a beneficial owner of a Note,
the Issuer shall promptly furnish or cause to be furnished Rule 144A Information
to such Holder or beneficial owner, to a prospective purchaser of such Note
designated by such Holder or beneficial owner, or to the Trustee for delivery
upon an Issuer Order to such Holder or beneficial owner or a prospective
purchaser designated by such Holder or beneficial owner, as the case may be, in
order to permit compliance by such Holder or beneficial owner with Rule 144A
under the Securities Act in connection with the resale of such Note. “Rule 144A
Information” shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto).

 

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Section 7.16.     Calculation Agent

 

(a)The Issuer hereby agrees that for so long as any Notes remain Outstanding
there shall at all times be an agent appointed (which does not control or is not
controlled or under common control with the Issuer or its Affiliates or the
Portfolio Manager or its Affiliates) to calculate LIBOR in respect of each
Interest Accrual Period (or, for the first Interest Accrual Period, the related
portion thereof) in accordance with the terms of Exhibit C hereto (the
“Calculation Agent”); provided that, “LIBOR” shall never be less than 0%. The
Issuer hereby appoints the Collateral Administrator as the Calculation Agent.
The Calculation Agent may be removed by the Issuer or the Portfolio Manager, on
behalf of the Issuer, at any time. If the Calculation Agent is unable or
unwilling to act as such or is removed by the Issuer or the Portfolio Manager,
on behalf of the Issuer, the Issuer or the Portfolio Manager, on behalf of the
Issuer, shall promptly appoint a replacement Calculation Agent which does not
control or is not controlled by or under common control with the Issuer or its
Affiliates or the Portfolio Manager or its Affiliates. The Calculation Agent may
not resign its duties or be removed without a successor having been duly
appointed.

 

(b)The Calculation Agent shall be required to agree (and the Collateral
Administrator as Calculation Agent does hereby agree) that, as soon as possible
after 11:00 a.m. London time on each Interest Determination Date, but in no
event later than 11:00 a.m. New York time on the London Banking Day immediately
following each Interest Determination Date, the Calculation Agent shall
calculate the Interest Rate applicable to each Class of Notes during the related
Interest Accrual Period (or portion thereof, in the case of the first Interest
Accrual Period) and the Note Interest Amount applicable to each Class of Notes
(in each case, rounded to the nearest cent, with half a cent being rounded
upward) payable on the related Payment Date in respect of such Class of Notes
and the related Interest Accrual Period. At such time, the Calculation Agent
shall communicate such rates and amounts to the Issuer, the Trustee, each Paying
Agent, the Portfolio Manager, the Collateral Administrator, Euroclear and
Clearstream. The Calculation Agent shall also specify to the Portfolio Manager
(on behalf of the Issuer) and the Collateral Administrator the quotations upon
which the foregoing rates and amounts are based, and in any event the
Calculation Agent shall notify the Portfolio Manager (on behalf of the Issuer)
and the Collateral Administrator before 5:00 p.m. (New York time) on every
Interest Determination Date if it has not determined and is not in the process
of determining any such Interest Rate or Note Interest Amount, together with its
reasons therefor. The Calculation Agent’s determination of the foregoing rates
and amounts for any Interest Accrual Period (or portion thereof) shall (in the
absence of manifest error) be final and binding upon all parties. The Collateral
Administrator, in its capacity as Calculation Agent, will have no (i)
responsibility or liability for the selection or determination of an Alternative
Rate as a successor or replacement base rate to LIBOR and will be entitled to
rely upon any designation of such Alternative Rate in accordance with the
definition thereof and (ii) liability for any failure or delay in performing its
duties under the Collateral Administration Agreement as a result of the
unavailability of a “LIBOR” rate as described in the definition thereof;
provided that, it performs its duties thereunder in good faith without willful
misconduct or gross negligence.

 

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Section 7.17.     Certain Tax Matters

 

(a)The Issuer shall treat the Notes as indebtedness for U.S. federal, state and
local income and franchise tax purposes, except as otherwise required by law.

 

(b)The Issuer has not elected, and will not elect to treat itself, or take any
other action that would cause it to be treated as an association taxable as a
corporation for U.S. federal, state or local income or franchise tax purposes,
and shall make any election necessary to avoid classification as an association
taxable as a corporation for U.S. federal, state or local income or franchise
tax purpose.

 

(c)The Issuer will treat each purchase of Collateral Obligations as a “purchase”
for tax accounting and reporting purposes; provided that a purchase by the
Issuer of a Collateral Obligation from a person whom the Issuer is disregarded
as a separate entity will not be recognized.

 

(d)The Issuer shall file, or cause to be filed, any tax returns, including
information tax returns, required by any Governmental Authority.

 

(e)Upon the Issuer’s receipt of a request of a Holder of a Note that has been
issued with more than a de minimis “original issue discount” (as defined in
Section 1273 of the Code) or written request of a Person certifying that it is
an owner of a beneficial interest in a Note that has been issued with more than
a de minimis “original issue discount” for the information described in Treasury
Regulation section 1.1275-3(b)(1)(i) that is applicable to such Note, the Issuer
will cause its Independent certified public accountants to provide promptly to
the Trustee and such requesting Holder or owner of a beneficial interest in such
a Note all of such information.

 

Section 7.18.     Effective Date; Purchase of Additional Collateral Obligations

 

(a)The Issuer will use commercially reasonable efforts to purchase (or enter
into commitments to purchase), on or before the Effective Date, Collateral
Obligations, such that the Target Initial Par Condition is satisfied.

 

(b)During the period from the Closing Date to and including the Effective Date
(and to the extent necessary to secure the confirmations described in Section
7.18(c), after the Effective Date), the Issuer will use the following funds to
purchase additional Collateral Obligations in the following order: (i) to pay
for the principal portion of any Collateral Obligation, first, any amounts on
deposit in the Ramp-Up Account and second, any Principal Proceeds on deposit in
the Collection Account and (ii) to the extent any funds remain in the Ramp-Up
Account and the Collection Account after paying the amounts described in
subclause (i), to pay for accrued interest on any such Collateral Obligation,
first, any amounts on deposit in the Ramp-Up Account and second, any Principal
Proceeds on deposit in the Collection Account. In addition, the Issuer will use
commercially reasonable efforts to acquire such Collateral Obligations that will
satisfy or comply with, on the Effective Date, the Concentration Limitations,
the Collateral Quality Test (other than the S&P CDO Monitor Test) and each
Overcollateralization Ratio Test.

 

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(c)Within 30 Business Days after the Effective Date (but in any event, prior to
the Determination Date relating to the first Quarterly Payment Date), the Issuer
shall (x) provide, or (at the Issuer’s expense) cause the Portfolio Manager to
provide, to the Trustee (based on the information set forth in the Effective
Date Report provided by the Collateral Administrator as described below) (i) an
Accountants’ Report (the “Effective Date Accountants’ Comparison AUP Report”)
that compares, in each case as of the Effective Date, by reference to such
sources as shall be specified therein, the following information: the issuer,
Principal Balance, coupon/spread, stated maturity, S&P Rating, S&P Industry
Classification, Fitch Rating and country of Domicile with respect to each
Collateral Obligation as of the Effective Date and the information provided by
the Issuer with respect to every other asset included in the Assets (or, if
unavailable, by reference to such sources as shall be specified therein); (ii)
an Accountants’ Report (the “Effective Date Accountants’ Recalculation AUP
Report” and, together with the Effective Date Accountants’ Comparison AUP
Report, the “Effective Date Accountants’ AUP Reports”) recalculating, as of the
Effective Date, the level of compliance with, or satisfaction or
non-satisfaction of (1) the Target Initial Par Condition, (2) each
Overcollateralization Ratio Test, (3) the Concentration Limitations and (4) the
Collateral Quality Test (other than the S&P CDO Monitor Test) (such items (1)
through (4), the “Specified Test Items”); and with respect to the items in
clauses (i) and (ii) above, specifying the procedures undertaken by them to
review data and computations relating to each such Effective Date Accountants’
AUP Report and (y) provide to the Trustee and each Rating Agency a report (which
the Issuer shall cause the Collateral Administrator to draft and compile on its
behalf in accordance with, and subject to the terms of, the Collateral
Administration Agreement) containing the following information, in each case
determined as of the Effective Date (the “Effective Date Report”): (A) the
information required in a Monthly Report, (B) the Specified Test Items and (C) a
list of all Closing Date Participation Interests held by the Issuer on the
Effective Date. If (i) the Issuer provides the Effective Date Accountants’ AUP
Reports to the Collateral Administrator with the results of the Specified Test
Items, (ii) the Issuer causes the Collateral Administrator to provide to S&P and
Fitch the Effective Date Report and such report does not indicate the failure to
satisfy any component of the Specified Test Items, (iii) the results of the
Specified Test Items set forth in the Effective Date Report conform to the
results set forth in the Effective Date Accountants’ AUP Reports, (iv) the S&P
CDO Monitor Test is satisfied, (v) the S&P Effective Date Adjustments have been
made and (v) the Issuer or the Collateral Administrator on behalf of the Issuer
has provided to S&P the Effective Date Report and the Excel Default Model Input
File used to determine that the S&P CDO Monitor Test is satisfied, then a
written confirmation from S&P of its Initial Rating of each Class of Notes shall
be deemed to have been provided (the “S&P Effective Date Condition”). If the S&P
Effective Date Condition has not been satisfied, the Issuer shall request such
written confirmation from S&P.

 

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For the avoidance of doubt, the Effective Date Report shall not include or refer
to the Effective Date Accountants’ AUP Reports and, the Issuer and the Portfolio
Manager shall not disclose to any Person (including a Holder) any information,
documents or reports provided to it by such firm of Independent accountants,
other than as required by a court of competent jurisdiction or as otherwise
required by applicable legal or regulatory process. In accordance with SEC
Release No. 34-72936, Form 15-E, only in its complete and unedited form which
includes the Effective Date Accountants’ Comparison AUP Report as an attachment,
will be provided by the Independent accountants to the Issuer who will post such
Form 15-E, except for the redaction of any sensitive information, on the 17g-5
Website. Copies of the Effective Date Accountants’ Recalculation AUP Report or
any other agreed-upon procedures report provided by the Independent accountants
to the Issuer or Portfolio Manager will not be provided to any other party
including the Rating Agencies or posted on the 17g-5 Website, except as set
forth in this paragraph or in an access letter between such Person and the
Independent accountants.

 

Upon receipt of the Effective Date Report, the Trustee (if not the same Person
as the Collateral Administrator) shall compare the information contained in such
Effective Date Report to the information contained in its records with respect
to the Assets and shall, within three Business Days after receipt of such
Effective Date Report, notify the Issuer, the Collateral Administrator, the
Rating Agencies and the Portfolio Manager if the information contained in the
Effective Date Report does not conform to the information maintained by the
Trustee with respect to the Assets. If any discrepancy exists, the Trustee and
the Issuer, or the Portfolio Manager on behalf of the Issuer, shall attempt to
resolve the discrepancy. If such discrepancy cannot be promptly resolved, the
Trustee shall within five Business Days of its initial notice to the Issuer,
Collateral Administrator, Rating Agencies and the Portfolio Manager of the
discrepancy notify the Portfolio Manager who shall, on behalf of the Issuer,
request that the Independent accountants selected by the Issuer pursuant to
Section 10.9 perform agreed-upon procedures on the Effective Date Report and the
Trustee’s records to determine the cause of such discrepancy. If such procedures
reveals an error in the Effective Date Report or the Trustee’s records, the
Effective Date Report or the Trustee’s records shall be revised accordingly and
notice of any error in the Effective Date Report shall be sent as soon as
practicable by the Issuer to all recipients of such report.

 

(d)If, by the Determination Date relating to the first Payment Date, the
Effective Date Ratings Confirmation has not been obtained (an “Effective Date
Rating Failure”), then the Portfolio Manager, on behalf of the Issuer, shall
instruct the Trustee in writing prior to the related Determination Date transfer
amounts from the Ramp-Up Account to the Collection Account as Principal Proceeds
or apply Interest Proceeds to purchase additional Collateral Obligations or make
payments on the Notes in an amount sufficient to obtain the Effective Date
Ratings Confirmation (provided that, the amount of such transfer would not
result in an inability to pay interest with respect to the Class A-1 Notes or
the Class A-2 Notes); provided that, in the alternative, the Portfolio Manager
on behalf of the Issuer may take such other action, including but not limited
to, a Special Redemption, transferring amounts from the Ramp-Up Account to the
Collection Account as Principal Proceeds or applying Interest Proceeds (for use
in a Special Redemption), sufficient to obtain the Effective Date Ratings
Confirmation. The Issuer shall provide notice to Fitch of any Effective Date
Rating Failure.

 

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Notwithstanding the foregoing, if an Effective Date Rating Failure occurs and
the Portfolio Manager reasonably believes that it shall obtain the Effective
Date Ratings Confirmation without the use of Interest Proceeds to acquire
additional Collateral Obligations or to effect a Special Redemption, the
Portfolio Manager may elect to retain some or all of the Interest Proceeds
otherwise available for such purposes in the Collection Account for distribution
as Interest Proceeds on the second Quarterly Payment Date.

 

(e)The failure of the Issuer to satisfy the requirements of this Section 7.18
shall not constitute an Event of Default unless such failure would otherwise
constitute an Event of Default under Section 5.1(d) hereof and the Issuer, or
the Portfolio Manager acting on behalf of the Issuer, has acted in bad faith.
The proceeds of the issuance of the Notes which are not applied to pay for the
purchase of Collateral Obligations purchased by the Issuer on or before the
Closing Date (including, without limitation, repayment of any amounts borrowed
by the Issuer in connection with the purchase of Collateral Obligations prior to
the Closing Date) or to pay other applicable fees and expenses will be deposited
in the Ramp-Up Account as Principal Proceeds on the Closing Date for the
purchase of additional Collateral Obligations. At the written direction of the
Issuer (or the Portfolio Manager on behalf of the Issuer), the Trustee shall
apply amounts held in the Ramp-Up Account to purchase additional Collateral
Obligations from the period beginning on the Closing Date to and including the
Effective Date, as described in clause (b) above. If on the Effective Date, any
amounts on deposit in the Ramp-Up Account have not been applied to purchase
Collateral Obligations, such amounts shall be applied as described in Section
10.3(c).

 

Section 7.19.     Representations Relating to Security Interests in the Assets

 

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

 

(i)The Issuer owns such Asset free and clear of any lien, claim or encumbrance
of any person, other than such as are created under, or permitted by, this
Indenture, other than such as are released on the related Cut-Off Date
contemporaneously with the purchase of such Asset on the Cut-Off Date.

 

(ii)Other than the security interest Granted to the Trustee pursuant to this
Indenture, except as permitted by this Indenture, the Issuer has not pledged,
assigned, sold, granted a security interest in, or otherwise conveyed any of the
Assets. The Issuer has not authorized the filing of and is not aware of any
Financing Statements against the Issuer that include a description of collateral
covering the Assets other than any Financing Statement relating to the security
interest Granted to the Trustee hereunder or that has been terminated; the
Issuer is not aware of any judgment, PBGC liens or tax lien filings against the
Issuer.

 

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(iii)All Assets constitute Cash, accounts (as defined in Article 9 of the UCC),
Instruments, general intangibles (as defined in Article 9 of the UCC),
Uncertificated Securities, Certificated Securities or security entitlements to
financial assets resulting from the crediting of financial assets to a
“securities account” (as defined in Article 8 of the UCC).

 

(iv)All Accounts constitute “securities accounts” (as defined in Article 8 of
the UCC) or related “deposit accounts” (as defined in Article 9 of the UCC).

 

(v)This Indenture creates a valid and continuing security interest (as defined
in Article 1 of the UCC) in such Assets in favor of the Trustee, for the benefit
and security of the Secured Parties, which security interest is prior to all
other liens, claims and encumbrances (except as permitted otherwise in this
Indenture), and is enforceable as such against creditors of and purchasers from
the Issuer.

 

(vi)The Issuer has caused or will have caused, within 10 days after the Closing
Date, the filing of all appropriate Financing Statements in the proper office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Assets Granted to the Trustee, for the benefit and
security of the Secured Parties.

 

(vii)None of the Instruments that constitute or evidence the Assets has any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Trustee, for the benefit of the Secured
Parties.

 

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

 

(ix)All Assets other than the Accounts and the Selling Institution Collateral
have been credited to one or more Accounts (other than any “general intangibles”
within the meaning of the applicable Uniform Commercial Code and any instruments
evidencing debt underlying a participation held by a collateral agent).

 

(x)(A) The Issuer has delivered to the Trustee a fully executed Account
Agreement pursuant to which the Custodian has agreed to comply with all
instructions and Entitlement Orders originated by the Trustee relating to the
Accounts without further consent by the Issuer or (B) the Issuer has taken all
steps necessary to cause the Custodian to identify in its records the Trustee as
the person having a security entitlement against the Custodian in each of the
Accounts or as the person who is the “customer” (within the meaning of Section
4-104(1)(e) of the UCC) with respect to each of the Accounts.

 

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(xi)The Accounts are not in the name of any Person other than the Issuer or the
Trustee. The Issuer has not consented to the Custodian to comply with the
Entitlement Order or instruction of any Person other than the Trustee (and the
Issuer prior to a notice of exclusive control being provided by the Trustee,
which notice the Trustee agrees it shall not deliver except after the occurrence
and during the continuance of an Event of Default or an Enforcement Event).

 

(b)The Issuer agrees to notify the Rating Agencies, with a copy to the Portfolio
Manager, promptly if it becomes aware of the breach of any of the
representations and warranties contained in this Section 7.19 and shall not
waive any of the representations and warranties in this Section 7.19 or any
breach thereof.

 

Section 7.20.     Rule 17g-5 Compliance

 

(a)To enable the Rating Agencies to comply with their obligations under Rule
17g-5, the Issuer shall cause to be posted on the 17g-5 Website, at the same
time such information is provided to the Rating Agencies, all information the
Issuer provides to the Rating Agencies for the purposes of determining the
initial credit ratings of the Notes or undertaking credit rating surveillance of
the Notes.

 

(b)Pursuant to the Collateral Administration Agreement, the Issuer has appointed
the Collateral Administrator as its agent (in such capacity, the “Information
Agent”) to post to the 17g-5 Website any information that the Information Agent
receives from the Issuer, the Trustee or the Portfolio Manager (or their
respective representatives or advisors) that is designated as information to be
so posted.

 

(c)The Issuer and the Trustee agree that any notice, report, request for the
Global Rating Agency Condition to be satisfied or other information provided by
any of the Issuer or the Trustee (or any of their respective representatives or
advisors) to any Rating Agency hereunder or under any other Transaction Document
for the purposes of undertaking credit rating surveillance of the Notes shall be
provided, substantially concurrently, by the Issuer or the Trustee, as the case
may be, to the Information Agent for posting on the 17g-5 Website.

 

(d)The Trustee shall have no obligation to engage in or respond to any oral
communications with respect to the transactions contemplated hereby, any
Transaction Documents relating hereto or in any way relating to the Notes or for
the purposes of determining the initial credit rating of the Notes or
undertaking credit rating surveillance of the Notes with any Rating Agency or
any of its respective officers, directors or employees.

 

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(e)The Trustee will not be responsible for creating or maintaining the 17g-5
Website, posting any information to the 17g-5 Website or assuring that the 17g-5
Website complies with the requirements of this Indenture, Rule 17g-5 or any
other law or regulation. In no event shall the Trustee be deemed to make any
representation in respect of the content of the 17g-5 Website or compliance by
the 17g-5 Website with this Indenture, Rule 17g-5 or any other law or
regulation.

 

(f)The Information Agent and the Trustee shall not be responsible or liable for
the dissemination of any identification numbers or passwords for the 17g-5
Website, including by Issuer, the Rating Agencies, a nationally recognized
statistical rating organization (“NRSRO”), any of their respective agents or any
other party. Additionally, neither the Information Agent nor the Trustee shall
be liable for the use of the information posted on the 17g-5 Website, whether by
the Issuer, the Rating Agencies, an NRSRO or any other third party that may gain
access to the 17g-5 Website or the information posted thereon.

 

(g)Notwithstanding anything therein to the contrary, the maintenance by the
Trustee of the Trustee’s Website described in Article X shall not be deemed as
compliance by or on behalf of the Issuer with Rule 17g-5 or any other law or
regulation related thereto.

 

(h)The Information Agent’s forwarding of information to the 17g-5 Website is
ministerial only and the Information Agent shall have no obligation or duty to
verify, confirm or otherwise determine whether the information being delivered
to the 17g-5 Website is accurate, complete, conforms to the transaction, or
otherwise is or is not anything other than what it purports to be. The
Collateral Administrator and the Information Agent shall not be deemed to have
obtained actual knowledge of any information merely by the posting of such
information to the 17g-5 Website to the extent such information was not produced
by the Trustee, the Collateral Administrator or the Information Agent, as
applicable.

 

(i)In accordance with SEC Release No. 34-72936, Form 15-E, only in its complete
and unedited form which includes the Effective Date Accountants’ Comparison AUP
Report as an attachment, shall be provided by the Independent accountants to the
Issuer who shall post such Form 15-E on the 17g-5 Website. Copies of the
Effective Date Accountants’ Recalculation AUP Report or any other agreed-upon
procedures report provided by the Independent accountants to the Issuer shall
not be provided to any other party including the Rating Agencies or posted on
the 17g-5 Website except as expressly provided for herein.

 

Section 7.21.     Contesting Insolvency Filings

 

The Issuer, upon receipt of notice of any Bankruptcy Filing, shall, provided
funds are available for such purpose, timely file an answer and any other
appropriate pleading objecting to such Bankruptcy Filing. The reasonable fees,
costs, charges and expenses incurred by the Issuer (including reasonable
attorneys’ fees and expenses) in connection with taking any such action shall be
“Administrative Expenses” unless paid on behalf of the Issuer.

 

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Section 7.22.     Use of Name

 

The Issuer acknowledges that it does not own the “Franklin Square”, “FS”, “FS
Investments” “KKR”, “FS KKR” or related name or trademark and is permitted to
use such names solely (i) on non-exclusive, non-sublicensable basis on their own
print materials and (ii) for so long as FS KKR Capital Corp. (or an Affiliate
thereof) remains the Portfolio Manager and, if FS KKR Capital Corp. resigns or
is removed as Portfolio Manager under the Portfolio Management Agreement, the
Issuer shall as soon as reasonably practical (but in no event later than 30 days
after such resignation or removal) and at its own expense, change its name to
remove any reference to any such name, trademark or any similar or related
reference thereto.

 

ARTICLE VIII
SUPPLEMENTAL INDENTURES

 

Section 8.1.     Supplemental Indentures Without Consent of Holders

 

(a)Without the consent of any Holder, but with the written consent of the
Portfolio Manager, the Issuer, when authorized by Resolutions, at any time and
from time to time, may, subject to Section 8.3 and without an Opinion of Counsel
being provided to the Issuer or the Trustee as to whether any Class of Notes
would be materially and adversely affected thereby, enter into one or more
indentures supplemental hereto, in form reasonably satisfactory to the Trustee
for any of the following purposes:

 

(i)to evidence the succession of another Person to the Issuer and the assumption
by any such successor Person of the covenants of the Issuer herein and in the
Notes;

 

(ii)to add to the covenants of the Issuer or the Trustee for the benefit of the
Secured Parties or to surrender any right or power herein conferred upon the
Issuer;

 

(iii)to convey, transfer, assign, mortgage or pledge any property to or with the
Trustee or add to the conditions, limitations or restrictions on the authorized
amount, terms and purposes of the issue, authentication and delivery of the
Notes;

 

(iv)to evidence and provide for the acceptance of appointment hereunder by a
successor Trustee and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Sections
6.9, 6.10 and 6.12;

 

(v)to correct or amplify the description of any property at any time subject to
the lien of this Indenture, or to better assure, convey and confirm unto the
Trustee any property subject or required to be subjected to the lien of this
Indenture (including, without limitation, any and all actions necessary or
desirable as a result of changes in law or regulations, whether pursuant to
Section 7.5 or otherwise) or to subject to the lien of this Indenture any
additional property;

 

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(vi)to modify the restrictions on and procedures for resales and other transfers
of Notes to assure compliance with ERISA or to reflect any changes in ERISA or
other applicable law or regulation (or the interpretation thereof) or to enable
the Issuer to rely upon any exemption from registration under the Securities Act
or upon any exemption from registration as, or exclusion or exception from the
definition of, an “investment company” under the Investment Company Act or to
remove restrictions on resale and transfer to the extent not required hereunder;

 

(vii)to make such changes (including the removal and appointment of any listing
agent, transfer agent, paying agent or additional registrar in the country of
any other listing) as shall be necessary or advisable in order for the Notes to
be or remain listed on an exchange, including such changes required or requested
by any Governmental Authority, stock exchange authority, listing agent, transfer
agent, paying agent or additional registrar for any Class of Notes, or to be
de-listed from an exchange;

 

(viii)otherwise to correct or supplement any inconsistency or defective
provisions, or cure any ambiguity, omission or manifest errors in this Indenture
or to conform the provisions of this Indenture to the Offering Circular or any
other Transaction Document or other document delivered in connection with the
Notes; provided that, notwithstanding anything herein to the contrary and
without regard to any other consent requirement specified herein, any
supplemental indenture to be entered into pursuant to this clause (viii) may
also provide for any corrective measures or ancillary amendments to this
Indenture to give effect to such supplemental indenture as if it had been
effective as of the Closing Date;

 

(ix)to take any action necessary, advisable or helpful to prevent the Issuer,
the Holders of any Class of Notes or the Trustee from becoming subject to (or
otherwise to minimize) any withholding or other taxes or assessments;

 

(x)at any time during the Reinvestment Period (or after the Reinvestment Period,
in the case of clauses (C) and (D) below), to facilitate the issuance by the
Issuer in accordance with Sections 2.13, 3.2, 9.1 and 9.2 (for which any
required consent has been obtained) of (A) additional notes of any one or more
new classes that are fully subordinated to the existing Notes (or to the most
junior class of notes of the Issuer issued pursuant to this Indenture, if any
class of securities issued pursuant to this Indenture other than the Notes is
then Outstanding); (B) additional notes of any one or more existing Classes; (C)
replacement notes in connection with a Refinancing; or (D) to make such changes
as are necessary to effect a Risk Retention Issuance; provided that, any
modifications in connection with the issuance of any additional notes or
replacement notes in connection with a Refinancing (other than modifications
determined by the Portfolio Manager to be necessary for such issuance of
additional notes or replacement notes not to be subject to (or to comply with)
any U.S. Risk Retention Rules, or in connection with a Risk Retention Issuance,
which shall not require the consent of any Holder), which modifications may
include the establishment of a non-call period, prohibition of future
refinancings and establishment of a LIBOR floor as part of the interest rate,
shall not require the consent of any Holder;

 

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(xi)to accommodate the settlement of any Notes in book-entry form through the
facilities of DTC or otherwise;

 

(xii)to change the name of the Issuer in connection with any change in name or
identity of the Portfolio Manager or as otherwise required pursuant to a
contractual obligation or to avoid the use of a trade name or trademark in
respect of which the Issuer does not have a license;

 

(xiii)to amend, modify or otherwise accommodate changes to this Indenture to
comply with any rule or regulation, enacted or modified by any regulatory agency
of the United States federal government after the Closing Date that is
applicable to the Notes;

 

(xiv)to enter into any additional agreements not expressly prohibited by this
Indenture or any amendment, modification or waiver (including, without
limitation, amendments, modifications and waivers to this Indenture to the
extent not described in this Section 8.1), so long as such agreement, amendment,
modification or waiver is not reasonably expected to materially and adversely
affect the rights or interests of any Holders of any Class of Notes; provided
that, any such additional agreements include customary limited recourse and
non-petition provisions; provided further that a Majority of the Controlling
Class has consented to such additional agreements, amendment, modification or
waiver;

 

(xv)to change the date (but not the frequency) on which reports are required to
be delivered under this Indenture;

 

(xvi)to modify provisions of this Indenture relating to the creation, perfection
and preservation of the security interest of the Trustee in Assets to conform
with applicable law;

 

(xvii)to amend, modify or otherwise accommodate changes to this Indenture so
that (A) the Issuer is not a “covered fund” under the Volcker Rule, (B) the
Notes are not considered to constitute “ownership interests” under the Volcker
Rule or (C) ownership of the Notes will otherwise be exempt from the Volcker
Rule;

 

(xviii)to modify the procedures in this Indenture relative to compliance with
Rule 17g-5 or to permit compliance with the Dodd-Frank Act (including the U.S.
Risk Retention Rules) and/or the EU Securitization Laws, as each may be amended
or superseded from time to time, as applicable to the Issuer, the Portfolio
Manager or the Notes or any rules or regulations thereunder or to reduce costs
to the Issuer as a result thereof;

 

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(xix)to accommodate an assignment by the Portfolio Manager, pursuant to the
provisions of the Portfolio Management Agreement, of all of its rights and
obligations under the Portfolio Management Agreement; provided that, a Majority
of the Controlling Class, to the extent materially and adversely affected
thereby, has consented to such supplemental indenture;

 

(xx)to make any changes to this Indenture necessary or advisable in connection
with the adoption of an Alternative Rate duly adopted in accordance with the
definition of LIBOR; provided that, for the avoidance of doubt, no supplemental
indenture shall be entered into pursuant to this clause (xx) for purposes of
adopting a new Alternative Rate itself or otherwise to modify the definition of
LIBOR or the procedures for adopting an Alternative Rate provided therein;

 

(xxi)subject to the approval of a Majority of the Interests, in connection with
a Refinancing of all Classes of Notes in full, to (a) effect an extension of the
end of the Reinvestment Period, (b) establish a non-call period for the
replacement notes or loans or other financial arrangements issued or entered
into in connection with such Refinancing, (c) modify the Weighted Average Life
Test, (d) provide for a stated maturity of the replacement notes or loans or
other financial arrangements issued or entered into in connection with such
Refinancing that is later than the Stated Maturity of the Notes or (e) make any
other amendments that would otherwise be subject to the consent rights of the
Notes pursuant to this Article VIII;

 

(xxii)with the consent of a Majority of the Controlling Class, to modify any
defined term in Section 1.1 or any Schedule to this Indenture that begins with
or includes the word “Fitch”, “Moody’s” or “S&P” (other than the defined terms
“Global Rating Agency Condition” and “S&P Rating Condition”);

 

(xxiii)with the consent of a Majority of the Controlling Class, to modify or
amend (A) the Investment Criteria, (B) the restrictions on the sales of
Collateral Obligations, (C) the Collateral Quality Test and the definitions
related thereto or the calculation thereof or (D) any component of the
Concentration Limitations and the definitions related thereto or the calculation
thereof, so long as the Portfolio Manager certifies in an Officer’s certificate
that no Class of Notes then-Outstanding (other than the Controlling Class) would
be materially and adversely affected thereby;

 

(xxiv)with the consent of a Majority of the Controlling Class, to modify the
definition of “Credit Improved Obligation” or “Credit Risk Obligation” in a
manner not materially adverse to any holders of any Class of Notes as evidenced
by an Officer’s certificate of the Portfolio Manager to the effect that such
modification would not be materially adverse to the holder of any Class of
Notes;

 

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(xxv)to take any action necessary or advisable to prevent the Issuer or the pool
of Assets to be required to register under the Investment Company Act, or to
avoid any requirement that the Portfolio Manager or any Affiliate consolidate
with the Issuer on its financial statements for financial reporting purposes
(provided that, no Holders are materially and adversely affected thereby);

 

(xxvi)with the consent of a Majority of the Controlling Class, to modify any
provision to facilitate an exchange of one obligation for another obligation of
the same Obligor that has substantially identical terms except transfer
restrictions, including to effect any serial designation relating to the
exchange; provided that, no such supplemental indenture shall be required to
facilitate any exchange of one obligation for another obligation in accordance
with Article XII hereof;

 

(xxvii)to make any modification determined by the Portfolio Manager to be
necessary or advisable to comply with the U.S. Risk Retention Rules, including
(without limitation), in connection with an Optional Redemption, Refinancing,
Re-Pricing, additional issuance of notes pursuant to Section 2.13 or material
amendment to any of the Transaction Documents;

 

(xxviii)to amend, modify or otherwise accommodate changes to this Indenture to
comply with any state, rule, regulation or technical or interpretive guidance
enacted, effective or issued by any applicable Governmental Authority after the
Closing Date that are applicable to the Issuer, the Notes or the transactions
contemplated hereunder or by the Offering Circular, including any applicable EU
Securitization Laws, U.S. Risk Retention Rules, securities laws or the
Dodd-Frank Act and all rules, regulations and technical or interpretive guidance
thereunder; and

 

(xxix)to reduce the Minimum Denominations of the Notes.

 

(b)In addition, with the consent of a Majority of the Class A-1 Notes (unless
the Holders of the Class A-1 Notes fail to provide consent or objection within
30 days after the Trustee sends notice to the Holders of such proposed
supplemental indenture, in which case such Holders will be deemed to have
consented thereto) the Issuer and the Trustee may enter into supplemental
indentures to (A) to evidence any waiver or elimination by any Rating Agency of
any requirement or condition of such Rating Agency set forth herein or (B)
conform to ratings criteria and other guidelines relating generally to
collateral debt obligations published by any Rating Agency, including any
alternative methodology published by any Rating Agency.

 

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Section 8.2.     Supplemental Indentures With Consent of Holders

 

(a)With the consent of the Portfolio Manager, a Majority of the Notes of each
Class materially and adversely affected thereby (which consent may be deemed as
set forth in Section 8.3(d) below), if any, the Trustee and the Issuer may
execute one or more indentures supplemental hereto to add any provisions to, or
change in any manner or eliminate any of the provisions of, this Indenture or
modify in any manner the rights of the Holders of the Notes of any Class under
this Indenture; provided that, notwithstanding anything in this Indenture to the
contrary, no such supplemental indenture shall, without the consent of each
Holder of each Outstanding Note of each Class materially and adversely affected
thereby:

 

(i)change the Stated Maturity of the principal of or the due date of any
installment of interest on any Note, reduce the principal amount thereof, reduce
the rate of interest thereon (other than in connection with a Refinancing,
Re-Pricing, or in connection with the adoption of an Alternative Rate), or,
except as otherwise expressly permitted by this Indenture, reduce the Redemption
Price with respect to any Note, or change the earliest date on which Notes of
any Class may be redeemed to an earlier date, change the provisions of this
Indenture relating to the application of proceeds of any Assets to the payment
of principal of or interest on the Notes or distributions to the Issuer (other
than, following a redemption in full of the Notes, an amendment to permit
distributions to the Issuer or the holders of Interests on dates other than
Payment Dates) or change any place where, or the coin or currency in which,
Notes or the principal thereof or interest or any distribution thereon is
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of redemption,
on or after the applicable Redemption Date); provided that, with respect to
lowering the rate of interest payable on a Class of Notes, the consent of
Holders of the other Classes of Notes shall not be required;

 

(ii)reduce or increase the percentage of the Aggregate Outstanding Amount of
Holders of each Class whose consent is required for the authorization of any
such supplemental indenture or for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder or their consequences
provided for in this Indenture;

 

(iii)materially impair or materially adversely affect the Assets except as
otherwise permitted in this Indenture;

 

(iv)except as otherwise permitted by this Indenture, permit the creation of any
lien ranking prior to or on a parity with the lien of this Indenture with
respect to any part of the Assets or terminate such lien on any property at any
time subject hereto or deprive the Holder of any Note of the security afforded
by the lien of this Indenture;

 

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(v)reduce or increase the percentage of the Aggregate Outstanding Amount of
Holders of any Class of Notes whose consent is required to request the Trustee
to preserve the Assets or rescind the Trustee’s election to preserve the Assets
pursuant to Section 5.5 or to sell or liquidate the Assets pursuant to Section
5.4 or 5.5;

 

(vi)modify any of the provisions of this Indenture with respect to entering into
supplemental indentures, except to increase the percentage of Outstanding Notes
or Interests the consent of the Holders of which is required for any such action
or to provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Note or Interest Outstanding
and materially and adversely affected thereby;

 

(vii)modify the definition of the term “Controlling Class,” the definition of
the term “Class” (except changes that relate to a Re-Pricing or an Optional
Redemption) the definition of the term “Notes,” the definition of the term
“Majority,” the definition of the term “Supermajority,” the definition of the
term “Outstanding” or the Priority of Payments set forth in Section 11.1(a); or

 

(viii)modify any of the provisions of this Indenture in such a manner as to
affect the rights of the Holders of any Notes to the benefit of any provisions
for the redemption of such Notes contained herein.

 

(b)With the consent of the Portfolio Manager and a Majority of the Controlling
Class, the Trustee and the Issuer may execute one or more indentures
supplemental hereto to modify or amend any component of the Concentration
Limitations and the definitions related thereto which affect the calculation
thereof.

 

(c)[Reserved].

 

(d)With the consent of the Portfolio Manager and a Majority of each Class
materially and adversely affected thereby, the Trustee and the Issuer may
execute one or more supplemental indentures to modify the Subordinated
Management Fee.

 

(e)[Reserved].

 

(f)If any supplemental indenture permits the Issuer to enter into a Synthetic
Obligation or other hedge agreement, swap or derivative transaction (each, a
“hedge agreement”), the Issuer and the Trustee shall not enter into such
supplemental indenture without the consent of a Majority of the Controlling
Class and a Majority of the Interests; provided that, the supplemental indenture
shall require that, before entering into any such hedge agreement, the following
additional conditions are satisfied: (i) either (1) the Portfolio Manager is
registered as a commodity pool operator with the CFTC or (2) the Portfolio
Manager is exempt from registration with the CFTC as a commodity pool operator;
(ii) the Global Rating Agency Condition has been satisfied with respect thereto;
and (iii) the Issuer receives written advice of counsel that the Issuer entering
into such hedge agreement will not, in and of itself, cause the Issuer to become
a “covered fund” as defined for purposes of the Volcker Rule.

 

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Section 8.3.     Execution of Supplemental Indentures

 

(a)The Trustee shall join in the execution of any such supplemental indenture
and to make any further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee’s own rights, duties,
liabilities or immunities under this Indenture or otherwise, except to the
extent required by law.

 

(b)In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article VIII or the modifications thereby of the
trusts created by this Indenture, the Trustee will be entitled to receive, and
(subject to Sections 6.1 and 6.3) will be fully protected in relying in good
faith upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and that all
conditions precedent thereto have been complied with.

 

(c)At the cost of the Issuer, for so long as any Notes shall remain Outstanding,
not later than 10 Business Days (or, in the case of a supplemental indenture
effecting a Refinancing, five Business Days) prior to the execution of any
proposed supplemental indenture pursuant to Section 8.1 or Section 8.2, the
Trustee will provide to the Portfolio Manager, the Collateral Administrator, the
Rating Agencies and the Holders a notice attaching a copy of such supplemental
indenture. Any consent given to a proposed supplemental indenture by the Holder
of any Note shall be irrevocable and binding on all future holders or beneficial
owners of that Note, irrespective of the execution date of the supplemental
indenture. If the required consent to a proposed supplemental indenture is
received from the applicable Holders prior to the end of the applicable notice
period, the supplemental indenture may be executed prior to the end of such
period. If the Holders of the required percentage of the Aggregate Outstanding
Amount of the relevant Notes have not consented to a proposed supplemental
indenture within five Business Days prior to the proposed execution date
thereof, on the first Business Day following such period, the Trustee shall
provide all such consents (and any other applicable responses from the Holders)
received to the Issuer and the Portfolio Manager so that they may determine
which Holders have consented to the proposed supplemental indenture and which
Holders (and, to the extent such information is available to the Trustee, which
beneficial owners) have not consented to the proposed supplemental indenture. In
the case of a supplemental indenture being entered into pursuant to Section
8.1(a)(x)(C), the foregoing notice periods shall not apply and a copy of the
proposed supplemental indenture shall be included in the notice of Optional
Redemption provided to each holder of Notes pursuant to Section 9.2.

 

(d)Unless, within 10 Business Days after the Trustee sends notice to the Holders
of any proposed supplemental indenture, a Majority of any Class from whom
consent is not being requested notifies the Trustee and the Issuer that the
Holders of such Class believe that they will be materially and adversely
affected by such proposed supplemental indenture, the Holders of such Class will
be deemed for all purposes not to be materially and adversely affected by such
proposed supplemental indenture. Notwithstanding anything herein to the
contrary, and solely for purposes of any supplemental indenture proposed
pursuant to Sections 8.1 or 8.2, a Holder shall be deemed to have provided
consent to any amendment or modification undertaken pursuant thereto if (i) such
Holder affirmatively provides written consent or (ii) such Holder fails to
deliver written objection (including via e-mail to the address provided in the
notice of supplemental indenture) to such amendment or modification on or prior
to the 10th Business Day following the date on which notice of such amendment or
modification is sent by the Trustee.

 

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(e)At the cost of the Issuer, the Trustee will provide to the Portfolio Manager,
the Collateral Administrator, the Holders and the Rating Agencies a copy of the
executed supplemental indenture after its execution. Any failure of the Trustee
to publish, mail or deliver such notice, or any defect therein, will not in any
way impair or affect the validity of any such supplemental indenture.

 

(f)It shall not be necessary for any Act of Holders to approve the particular
form of any proposed supplemental indenture, but it shall be sufficient, if the
consent of any Holders to such proposed supplemental indenture is required, that
such Act shall approve the substance thereof.

 

(g)The Portfolio Manager shall not be bound to follow any amendment or
supplement to this Indenture unless it has received written notice of such
amendment or supplement and a copy of such amendment or supplement from the
Issuer or the Trustee. The Trustee will not be obligated to enter into any
amendment or supplement that, as determined by the Trustee, adversely affects
its duties, obligations, liabilities or protections under this Indenture. No
amendment to this Indenture will be effective against the Collateral
Administrator if such amendment would adversely affect the Collateral
Administrator, including, without limitation, any amendment or supplement that
would increase the duties or liabilities of, or adversely change the economic
consequences to, the Collateral Administrator, unless the Collateral
Administrator otherwise consents in writing. No amendment or supplement to this
Indenture shall amend or modify this Section 8.3 without the Portfolio Manager’s
prior written consent in its sole and absolute discretion.

 

(h)Notwithstanding any other provision relating to supplemental indentures
herein, at any time after the expiration of the Non-Call Period, if any Class of
Notes has been or, contemporaneously with the effectiveness of any supplemental
indenture will be, paid in full in accordance with this Indenture as so
supplemented or amended, the written consent of any Holder of any Note of such
Class, as applicable, will not be required with respect to such supplemental
indenture.

 

(i)Any Class of Notes being refinanced shall be deemed not to be materially and
adversely affected by terms of the supplemental indenture related to such
Refinancing or that become effective on the refinancing date. Any Non-Consenting
Holders of a Re-Priced Class shall be deemed not to be materially and adversely
affected by any terms of the supplemental indenture related to, in connection
with and to become effective on or immediately after the Re-Pricing Date with
respect to such Class.

 

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Section 8.4.     Effect of Supplemental Indentures

 

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

 

Section 8.5.     Reference in Notes to Supplemental Indentures

 

Notes authenticated and delivered, including as part of a transfer, exchange or
replacement pursuant to Article II of Notes originally issued hereunder, after
the execution of any supplemental indenture pursuant to this Article VIII may,
and if required by the Issuer shall, bear a notice as to any matter provided for
in such supplemental indenture. If the Issuer shall so determine, new Notes, so
modified as to conform in the opinion of the Issuer to any such supplemental
indenture, may be prepared and executed by the Issuer and authenticated and
delivered by the Trustee in exchange for Outstanding Notes.

 

Section 8.6.     Re-Pricing Amendment

 

For the avoidance of doubt, the Issuer and the Trustee may, without regard for
the provisions of this Article VIII (other than Section 8.3(b)), enter into a
supplemental indenture pursuant to Section 9.8(d) solely to modify the spread
over LIBOR applicable to a Re-Priced Class, and, to the extent applicable, to
extend the Non-Call Period applicable to such Re-Priced Class or make changes to
the definition of “Redemption Price” (any such amendment, a “Re-Pricing
Amendment”).

 

ARTICLE IX
REDEMPTION OF NOTES

 

Section 9.1.     Mandatory Redemption

 

If a Coverage Test is not met on any Determination Date on which such Coverage
Test is applicable, the Issuer shall apply available amounts in the Payment
Account pursuant to the Priority of Payments on the related Quarterly Payment
Date to make payments in accordance with the Note Payment Sequence to the extent
necessary to achieve compliance with such Coverage Test, as applicable.

 

Section 9.2.     Optional Redemption

 

(a)On any Business Day after the Non-Call Period, at the written direction of a
Majority of the Interests and with the consent of the Portfolio Manager, (i) the
Notes shall be redeemed by the Issuer in whole (with respect to all Classes of
Notes) but not in part from Sale Proceeds and/or Refinancing Proceeds, all other
available proceeds from a Contribution (if applicable) and all other funds
available for such purpose in the Collection Account and the Payment Account; or
(ii) the Notes shall be redeemed by the Issuer in part by Class from Refinancing
Proceeds, Partial Redemption Interest Proceeds (so long as any Class of Notes to
be redeemed represents not less than the entire Class of such Notes) and all
other available proceeds from a Contribution (if applicable). In connection with
any such redemption (each such redemption, an “Optional Redemption”), the Notes
shall be redeemed at the applicable Redemption Prices. To effect an Optional
Redemption, the above described written direction must be provided to the Issuer
and the Trustee (with a copy to the Portfolio Manager) not later than 10
Business Days prior to the Business Day on which such redemption is to be made,
or such shorter period (not to be less than five Business Days) as the Trustee
and the Portfolio Manager may agree; provided that, all Notes to be redeemed
must be redeemed simultaneously.

 

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(b)Upon receipt of a notice of an Optional Redemption of the Notes in whole but
not in part pursuant to Section 9.2(a)(i) (subject to Sections 9.2(d) and 9.2(e)
with respect to a redemption from proceeds that include Refinancing Proceeds),
the Portfolio Manager shall direct the sale (and the manner thereof), acting in
accordance with the Portfolio Manager Standard to maximize the proceeds of such
sale, of all or part of the Collateral Obligations and other Assets in an amount
sufficient that the proceeds from such sale, any Refinancing Proceeds (if
applicable), all other available proceeds from a Contribution (if applicable)
and all other funds available for such purpose in the Collection Account and the
Payment Account will be at least sufficient to pay the Redemption Prices of the
Notes to be redeemed (or such lesser amount that the Holders of such Class have
elected to receive, where Holders of such Class have elected to receive less
than 100% of the Redemption Price that would otherwise be payable to the Holders
of such Class), all amounts senior in right of payment to the Notes (including
any accrued and unpaid Base Management Fee) and all accrued and unpaid
Administrative Expenses (regardless of the Administrative Expense Cap) payable
under the Priority of Payments (collectively, the “Required Redemption Amount”).
If such proceeds of such sale, any Refinancing Proceeds (if applicable), all
other available proceeds from a Contribution (if applicable) and all other funds
available for such purpose in the Collection Account and the Payment Account
would not be at least equal to the Required Redemption Amount, the Notes may not
be redeemed. The Portfolio Manager, in its sole discretion, may effect the sale
of all or any part of the Collateral Obligations or other Assets through the
direct sale of such Collateral Obligations or other Assets or by participation
or other arrangement.

 

(c)[Reserved].

 

(d)In addition to (or in lieu of) a sale of Assets in the manner provided in
Section 9.2(b), the Notes may, on any Business Day after the Non-Call Period, be
redeemed in whole from Refinancing Proceeds and Sale Proceeds or in part by
Class from Refinancing Proceeds, Partial Redemption Interest Proceeds and all
other available proceeds from a Contribution as provided in Section 9.2(a)(ii);
provided that, the terms of such Refinancing must be acceptable to the Portfolio
Manager and a Majority of the Interests and such Refinancing otherwise satisfies
the conditions described below. For the avoidance of doubt, any Class of Notes
may be redeemed from Refinancing Proceeds resulting from a loan obtained by the
Issuer.

 

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(e)In the case of a Refinancing upon a redemption of the Notes in whole but not
in part pursuant to Section 9.2(a)(i), such Refinancing will be effective only
if: (i) the Refinancing Proceeds, all Sale Proceeds from the sale of Collateral
Obligations and Eligible Investments in accordance with the procedures set forth
herein, and all other available funds will be at least sufficient to redeem
simultaneously the Notes, in whole but not in part, and to pay the other amounts
included in the Required Redemption Amount, including the reasonable fees,
costs, charges and expenses incurred by the Issuer, the Trustee, the Portfolio
Manager and the Collateral Administrator (including reasonable attorneys’ fees
and expenses) in connection with such Refinancing, (ii) the Sale Proceeds,
Refinancing Proceeds and other available funds are used (to the extent
necessary) to make such redemption, (iii) the agreements relating to the
Refinancing contain limited recourse and non-petition provisions equivalent
(mutatis mutandis) to those contained in Section 2.7(i), Section 5.4(d) and
Section 13.1(d) and (iv) the Portfolio Manager has consented to such
Refinancing. The Portfolio Manager, in connection with a Refinancing pursuant to
which all Notes are being refinanced, may designate Principal Proceeds up to the
Excess Par Amount as of the related Determination Date as Interest Proceeds for
payment on the Redemption Date. Notice of any such designation will be provided
to the Trustee (with copies to the Rating Agencies) on or before the related
Determination Date.

 

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(f)In the case of a Refinancing upon a redemption of the Notes in part by Class
pursuant to Section 9.2(d), such Refinancing will be effective only if (i) the
Global Rating Agency Condition has been satisfied with respect to any remaining
Notes that were not the subject of the Refinancing; (ii) the Refinancing
Proceeds together with any available Interest Proceeds and any Partial
Redemption Interest Proceeds will be at least sufficient to pay in full the
aggregate Redemption Prices of the entire Class or Classes of Notes subject to
Refinancing; (iii) the Refinancing Proceeds are used (to the extent necessary)
to make such redemption; (iv) the agreements relating to the Refinancing contain
limited recourse and non-petition provisions equivalent (mutatis mutandis) to
those contained in Section 2.7(i), Section 5.4(d) and Section 13.1(d); (v) for
each Class of Notes being refinanced, the aggregate principal amount of any
obligations providing the Refinancing is equal to the Aggregate Outstanding
Amount of the Class of Notes being redeemed with the proceeds of such
obligations, except that (x) in connection with a Refinancing of the Controlling
Class of Notes, the aggregate principal amount of the obligations providing the
Refinancing may be lower than the Aggregate Outstanding Amount of such Class of
Notes being redeemed and (y) the aggregate principal amount of the obligations
providing the Refinancing may be greater than the Aggregate Outstanding Amount
of the Class of Notes being redeemed, so long as (A) the S&P Rating Condition
has been satisfied with respect thereto and Fitch has confirmed in writing that
such Refinancing will not cause its then-current ratings of any Class of Notes
to be reduced or withdrawn and (B) after giving effect to such proposed
Refinancing, each Overcollateralization Ratio Test is either satisfied or, if
not satisfied, maintained or improved (disregarding from the principal amount of
the refinancing obligations, for purposes of the comparison in this clause (B),
an amount, as determined by the Portfolio Manager, up to U.S.$1,000,000
representing the reasonable fees, costs, charges and expenses expected to be
incurred in connection with the Refinancing of such Class); (vi) the stated
maturity of each class of obligations providing the Refinancing is no earlier
than the corresponding Stated Maturity of each Class of Notes being refinanced;
(vii) the reasonable fees, costs, charges and expenses incurred in connection
with such Refinancing have been paid or will be adequately provided for from the
Refinancing Proceeds, Partial Redemption Interest Proceeds and all other
available proceeds from a Contribution (except for expenses owed to persons that
the Portfolio Manager informs the Trustee will be paid solely as Administrative
Expenses payable in accordance with the Priority of Payments); (viii) either (x)
the spread over LIBOR or the fixed interest rate, as applicable, of each class
of obligations providing the Refinancing will not be greater than the spread
over LIBOR or the fixed interest rate, as applicable, of the Notes of the
corresponding Class being refinanced by such new class of obligations or (y) the
weighted average of the spread over LIBOR and the fixed rates payable in respect
of all of the obligations providing the Refinancing is less than or equal to the
weighted average of the spread over LIBOR and the fixed rate payable on all of
the Classes of Notes being refinanced (determined based on the respective
spreads over LIBOR or the fixed interest rate, as applicable, of such Classes of
Notes); provided that, (A) any Class of Notes that bears a fixed rate may be
refinanced with obligations that bear interest at a floating rate (i.e., at a
stated spread over LIBOR) so long as LIBOR plus the relevant spread with respect
to such obligations comprising the Refinancing of such Class is less than the
applicable Interest Rate with respect to such Class of Notes that bear a fixed
rate on the date of such Refinancing and (B) any Class of Notes that bears a
floating rate may be refinanced with obligations that bear interest at a fixed
rate so long as the fixed rate of the obligations comprising the Refinancing of
such Class is less than LIBOR plus the relevant spread with respect to such
Class of Notes on the date of such Refinancing; (ix) the obligations providing
the Refinancing are subject to the Priority of Payments and do not rank higher
in priority pursuant to the Priority of Payments than the Class of Notes being
refinanced; (x) the voting rights, consent rights, redemption rights and all
other rights of the obligations providing the Refinancing are the same as the
rights of the corresponding Class of Notes being refinanced except that, the
earliest date on which the obligations providing the Refinancing may be redeemed
at the option of the Issuer may be different from the earliest date on which the
Notes redeemed in connection with such Refinancing were subject to redemption at
the option of the Issuer; (xi) Tax Advice has been delivered to the Issuer to
the effect that such Refinancing will not result in the Issuer becoming subject
to U.S. federal income taxation with respect to its net income or to any
withholding tax liability under Section 1446 of the Code and (xii) the Portfolio
Manager has consented to such Refinancing.

 

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(g)Notwithstanding anything herein to the contrary, any Refinancing Proceeds
from a Refinancing upon a redemption of the Notes in part by Class pursuant to
Section 9.2(d) will not constitute Interest Proceeds or Principal Proceeds, but
shall be applied directly on the related Partial Redemption Date together with
Partial Redemption Interest Proceeds and all other available proceeds from a
Contribution to redeem the corresponding Class of Notes being refinanced without
regard to the Priority of Payments; provided, that to the extent such proceeds
are not applied to redeem the corresponding Class of Notes being refinanced or
to pay related Administrative Expenses, such Refinancing Proceeds will be
treated as Principal Proceeds.

 

(h)Notwithstanding anything herein to the contrary, if a Refinancing is obtained
meeting the requirements specified above as certified by the Portfolio Manager,
the Issuer and, at the direction of the Portfolio Manager, the Trustee shall
amend this Indenture to the extent necessary to reflect the terms of the
Refinancing and no further consent for such amendments shall be required from
the Holders of any Class of Notes. In connection with a Refinancing upon a
redemption of Notes in whole or in part, any Refinancing Proceeds that remain
after paying the applicable Redemption Prices and related Administrative
Expenses will be transferred to the Collection Account as Principal Proceeds;
provided that, in connection with a redemption upon a Refinancing in whole of
the Notes the Portfolio Manager may designate any such remaining Refinancing
Proceeds as Interest Proceeds for use on or after the Redemption Date.

 

Section 9.3.     Tax Redemption

 

(a)The Notes shall be redeemed on any Business Day in whole but not in part (any
such redemption, a “Tax Redemption”) at the applicable Redemption Prices from
Sale Proceeds and all other funds available for such purpose in the Collection
Account and the Payment Account at the written direction (delivered to the
Trustee, with a copy to the Portfolio Manager) of (x) a Majority of any Affected
Class or (y) a Majority of the Interests, in either case following (I) the
occurrence and continuation of a Tax Event with respect to payments under one or
more Collateral Obligations forming part of the Assets which results in a
payment by, or charge or tax burden to, the Issuer that results or will result
in the withholding of 5.0% or more of Scheduled Distributions for any Collection
Period or (II) the occurrence and continuation of a Tax Event resulting in a tax
burden on the Issuer in an aggregate amount in any Collection Period in excess
of U.S.$1,000,000.

 

(b)Upon its receipt of such written direction directing a Tax Redemption, the
Trustee shall promptly notify the Holders and each Rating Agency thereof.

 

(c)If an Officer of the Portfolio Manager obtains actual knowledge of the
occurrence of a Tax Event, the Portfolio Manager shall promptly notify the
Issuer, the Collateral Administrator and the Trustee thereof, and upon receipt
of such notice the Trustee shall promptly notify the Holders and each Rating
Agency thereof.

 

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Section 9.4.     Redemption Procedures

 

(a)In the event of any Optional Redemption pursuant to Section 9.2, the written
direction of the Issuer and/or the Portfolio Manager shall be provided to the
Trustee (with a copy to the Portfolio Manager in the case of direction of the
Issuer) not later than 10 Business Days (or such shorter period as the Trustee
and the Portfolio Manager may agree, not to be less than five Business Days)
prior to the Business Day on which such redemption is to be made (which date
shall be designated in such notice) and the Issuer shall, at least 10 Business
Days prior to the Redemption Date (or such shorter period as the Trustee and the
Portfolio Manager may agree, not to be less than five Business Days), notify the
Trustee in writing (and the Trustee in turn shall, in the name and at the
expense of the Issuer, notify the Holders and each Rating Agency, with a copy to
the Portfolio Manager, at least five Business Days prior to the Redemption Date)
of such Redemption Date, the applicable Record Date, the principal amount of
Notes to be redeemed on such Redemption Date and the applicable Redemption
Prices. Notice of a Tax Redemption pursuant to Section 9.3 shall be provided not
later than five Business Days prior to the applicable Redemption Date to each
Holder at such Holder’s address in the Register and each Rating Agency.

 

(b)All notices of redemption delivered pursuant to Section 9.4(a) shall state:

 

(i)the applicable Redemption Date;

 

(ii)the Redemption Prices of the Notes to be redeemed;

 

(iii)that all of the Notes to be redeemed are to be redeemed in full and that
interest on such Notes shall cease to accrue on the Redemption Date specified in
the notice; and

 

(iv)the place or places where Notes are to be surrendered for payment of the
Redemption Prices, which shall be the Corporate Trust Office.

 

The Issuer may, and, if directed by the Portfolio Manager, as applicable, shall,
withdraw any notice of an Optional Redemption delivered pursuant to Section 9.2
(or any notice of a Tax Redemption delivered pursuant to Section 9.3, if the
Portfolio Manager believes that the proceeds of the Assets will be insufficient
to pay, together with other required amounts, the Redemption Price of any Class
of Notes, and Holders of such Class have not elected to receive the lesser
amount that will be available), following good faith efforts by the Issuer and
the Portfolio Manager to facilitate such redemption on any day up to and
including the Business Day before the proposed Redemption Date. Any withdrawal
of such notice of an Optional Redemption will be made by written notice to the
Trustee (with a copy to the Portfolio Manager, if applicable). If the Issuer so
withdraws any notice of an Optional Redemption or Tax Redemption or is otherwise
unable to complete a redemption of the Notes pursuant to Section 9.2 or 9.3, the
proceeds received from the sale of any Collateral Obligations and other Assets
sold in contemplation of such redemption may be reinvested in accordance with
the Investment Criteria during the Reinvestment Period at the Portfolio
Manager’s sole discretion (on behalf of the Issuer). The Trustee will provide
notice, in the name and at the expense of the Issuer, to the Holders, the
Portfolio Manager and each Rating Agency of the withdrawal of any notice of
redemption. Notwithstanding the foregoing, in the event that a scheduled
Refinancing upon a redemption of the Notes in whole fails to settle, such
redemption will be deemed to be revoked and no payments will be due to any
Holder on account of such redemption.

 

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Notice of redemption pursuant to Section 9.2 or 9.3 shall be given by the Issuer
or, upon an Issuer Order, by the Trustee in the name and at the expense of the
Issuer. Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Notes.

 

(c)Unless Refinancing Proceeds are being used to redeem the Notes in whole or in
part, in the event of any Optional Redemption or Tax Redemption pursuant to
Section 9.2 or 9.3, no Notes may be optionally redeemed unless (i) at least two
Business Days before the scheduled Redemption Date the Portfolio Manager shall
have furnished to the Trustee evidence, in a form reasonably satisfactory to the
Trustee, that the Portfolio Manager on behalf of the Issuer has entered into a
binding agreement or agreements with (a) a financial or other institution or
institutions whose short-term unsecured debt obligations (other than such
obligations whose rating is based on the credit of a Person other than such
institution) are rated, or guaranteed by a Person whose short-term unsecured
debt obligations are rated, at least “A-1” by S&P and at least “F1” by Fitch or
(b) a special purpose entity that satisfies all then-current bankruptcy
remoteness criteria of the Rating Agencies to purchase (directly or by
participation or other arrangement), not later than the Business Day immediately
preceding the scheduled Redemption Date in immediately available funds, all or
part of the Assets at a purchase price at least sufficient, together with the
Eligible Investments maturing, redeemable or putable to the issuer thereof at
par on or prior to the scheduled Redemption Date, Scheduled Distributions from
the Assets expected to be received on or prior to the scheduled Redemption Date
and all other funds available for such purpose in the Collection Account and the
Payment Account, to pay all Administrative Expenses (regardless of the
Administrative Expense Cap) payable in accordance with the Priority of Payments
and redeem all of the Notes on the scheduled Redemption Date at the applicable
Redemption Prices (or in the case of any Class of Notes, such lesser amount that
the Holders of such Class have elected to receive, where Holders of such Class
have elected to receive less than 100% of the Redemption Price that would
otherwise be payable to the Holders of such Class), (ii) at least two Business
Days before the scheduled Redemption Date, the Issuer shall have received
proceeds of disposition of all or part of the Assets that, together with
Scheduled Distributions from the Assets expected to be received on or prior to
the scheduled Redemption Date and all other funds available for such purpose in
the Collection Account and the Payment Account, are at least sufficient to pay
all Administrative Expenses (regardless of the Administrative Expense Cap) and
any accrued and unpaid Base Management Fee and Subordinated Management Fee
(other than any Waived Management Fees) payable in accordance with the Priority
of Payments and redeem all of the Notes on the scheduled Redemption Date at the
applicable Redemption Prices (or in the case of any Class of Notes, such lesser
amount that the Holders of such Class have elected to receive, where Holders of
such Class have elected to receive less than 100% of the Redemption Price that
would otherwise be payable to the Holders of such Class), or (iii) prior to
selling any Collateral Obligations and/or Eligible Investments, the Portfolio
Manager shall certify to the Trustee that, in its judgment, the aggregate sum of
(A) expected proceeds from the sale of Eligible Investments, (B) for each
Collateral Obligation, its Market Value and (C) Scheduled Distributions from the
Assets expected to be received on or prior to the scheduled Redemption Date and
all other funds available for such purpose in the Collection Account and the
Payment Account shall exceed the sum of (x) the aggregate Redemption Prices (or
in the case of any Class of Notes, such lesser amount that the Holders of such
Class have elected to receive, where Holders of such Class have elected to
receive less than 100% of the Redemption Price that would otherwise be payable
to the Holders of such Class) of the outstanding Notes and (y) all
Administrative Expenses (regardless of the Administrative Expense Cap) payable
under the Priority of Payments. Any certification delivered by the Portfolio
Manager pursuant to this Section 9.4(c) shall include (1) the prices of, and
expected proceeds from, the sale (directly or by participation or other
arrangement) of any Collateral Obligations and/or Eligible Investments and (2)
all calculations required by this Section 9.4(c). Any Holder, the Portfolio
Manager or any of the Portfolio Manager’s Affiliates or accounts or funds
managed thereby shall have the right, subject to the same terms and conditions
afforded to other bidders, to bid on Assets to be sold as part of an Optional
Redemption or a Tax Redemption.

 

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Section 9.5.     Notes Payable on Redemption Date

 

(a)Notice of redemption pursuant to Section 9.4 or Section 9.7 having been given
as set forth therein, the Notes to be redeemed shall, on the Redemption Date,
subject to Section 9.4(c) and Section 9.7(b), as applicable, and the Issuer’s
right to withdraw any notice of redemption pursuant to Section 9.4(b) and
9.7(c), as applicable, become due and payable at the Redemption Prices therein
specified, and from and after the Redemption Date (unless the Issuer shall
default in the payment of the Redemption Prices and accrued interest) all such
Notes that are Notes shall cease to bear interest on the Redemption Date.
Holders of Certificated Notes, upon final payment on a Note to be so redeemed,
shall present and surrender such Note at the place specified in the notice of
redemption on or prior to such Redemption Date; provided that, in the absence of
notice to the Issuer or the Trustee that the applicable Note has been acquired
by a Protected Purchaser, such final payment shall be made without presentation
or surrender, if the Trustee and the Issuer shall have been furnished such
security or indemnity as may be required by it to save it harmless and an
undertaking thereafter to surrender such certificate. Payments of interest on
Notes so to be redeemed which are payable on or prior to the Redemption Date
shall be payable to the Holders, or holders of one or more predecessor Notes,
registered as such at the close of business on the relevant Record Date
according to the terms and provisions of Section 2.7(e).

 

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(b)If any Note called for redemption shall not be paid upon surrender thereof
for redemption, the principal thereof shall, until paid, bear interest from the
Redemption Date at the applicable Interest Rate for each successive Interest
Accrual Period such Note remains Outstanding; provided that, the reason for such
non-payment is not the fault of such Holder.

 

Section 9.6.     Special Redemption

 

The Notes shall be redeemed in part by the Issuer on any Business Day (i) after
the Effective Date, if the Portfolio Manager notifies the Trustee that a
redemption is required pursuant to Section 7.18 in order to obtain the Effective
Date Ratings Confirmation, (ii) during the Reinvestment Period, if the Portfolio
Manager notifies the Trustee at least five Business Days prior to the applicable
Special Redemption Date that it has been unable, for a period of at least 20
consecutive Business Days, to identify additional Collateral Obligations that
are deemed appropriate by the Portfolio Manager, in its sole discretion, and
which would satisfy the Investment Criteria in sufficient amounts to permit the
investment or reinvestment of all or a portion of the funds then in the
Collection Account that are to be invested in additional Collateral Obligations
or (iii) if a Retention Deficiency exists, to the extent necessary to reduce
such Retention Deficiency to zero (in each case a “Special Redemption”). Any
such notice in the case of clause (ii) above shall be based upon the Portfolio
Manager having attempted, in accordance with the Portfolio Manager Standard, to
identify additional Collateral Obligations as described above. On the first
Quarterly Payment Date (and all subsequent Quarterly Payment Dates) following
the Collection Period in which such notice is given (a “Special Redemption
Date”), the amount in the Collection Account representing (1) in the case of a
Special Redemption necessary for the Issuer to obtain the Effective Date Ratings
Confirmation, all Interest Proceeds and all other Principal Proceeds available
in accordance with the Priority of Payments (other than Interest Proceeds and/or
Principal Proceeds that the Portfolio Manager has chosen to apply to the
purchase of additional Collateral Obligations), (2) in the case of a Special
Redemption during the Reinvestment Period pursuant to clause (ii) above,
Principal Proceeds which the Portfolio Manager has determined cannot be
reinvested in additional Collateral Obligations or (3) in the case of a Special
Redemption in connection with a Retention Deficiency, Principal Proceeds
necessary to reduce such Retention Deficiency to zero, will in each case be
applied in accordance with the Priority of Payments. Notice of redemption
pursuant to this Section 9.6 shall be given by the Trustee not less than (x) in
the case of a Special Redemption described in clause (i) above, one Business Day
prior to the applicable Special Redemption Date and (y) in the case of a Special
Redemption described in clause (ii) above, three Business Days prior to the
applicable Special Redemption Date in each case to each holder of Notes and to
each Rating Agency (with a copy to the Portfolio Manager).

 

Section 9.7.     Clean-Up Call Redemption

 

(a)At the written direction of the Portfolio Manager to the Issuer and the
Trustee, with copies to the Rating Agencies, at least 20 Business Days prior to
the proposed Redemption Date, the Notes shall be subject to redemption by the
Issuer, in whole but not in part (a “Clean-Up Call Redemption”), at the
Redemption Prices therefor, on any Business Day after the Non-Call Period on
which the Collateral Principal Amount is less than 20% of the Target Initial Par
Amount. Upon receipt from the Portfolio Manager of a direction in writing to
effect a Clean-Up Call Redemption, the Issuer shall set the related Redemption
Date and the Record Date and give written notice thereof to the Trustee, the
Collateral Administrator, the Portfolio Manager and the Rating Agencies not
later than 10 Business Days prior to the Redemption Date (and the Trustee in
turn shall, in the name and at the expense of the Issuer, notify the Holders of
the Redemption Date, the applicable Record Date, that the Notes shall be
redeemed in full, and the Redemption Prices to be paid, at least 7 Business Days
prior to the Redemption Date).

 

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(b)A Clean-Up Call Redemption may not occur unless (i) on or before the second
Business Day immediately preceding the related Redemption Date, the Portfolio
Manager or any other Person purchases the Assets of the Issuer (other than the
Eligible Investments referred to in clause (A)(4) below) for a price in Cash
(the “Clean-Up Call Redemption Price”) at least equal to the greater of (A) the
sum of (1) the Aggregate Outstanding Amount of the Notes, plus (2) all unpaid
interest on the Notes accrued to the date of such redemption (including any
shortfall amounts, if any), plus (3) the aggregate of all other amounts owing by
the Issuer on the date of such redemption that are payable in accordance with
the Priority of Payments (including, for the avoidance of doubt, all outstanding
Administrative Expenses), minus (4) the balance of the Eligible Investments in
the Collection Account; and (B) the Market Value of such Assets being purchased
and (ii) the Portfolio Manager certifies in writing to the Trustee prior to the
sale of the Assets that subclause (i) shall be satisfied upon such purchase.
Upon receipt by the Trustee of the certification from the Portfolio Manager
described in subclause (ii), the Trustee (pursuant to written direction from the
Issuer) and the Issuer shall take all actions necessary to sell, assign and
transfer the Assets to the Portfolio Manager or such other Person upon payment
in immediately available funds of the Clean-Up Call Redemption Price. The
Trustee shall deposit such payment into the Collection Account in accordance
with the instructions of the Portfolio Manager.

 

(c)Any notice of a Clean-Up Call Redemption delivered pursuant to Section 9.7(a)
may be withdrawn by the Issuer on any day up to and including the Business Day
prior to the related scheduled Redemption Date by written notice to the Trustee,
the Rating Agencies and the Portfolio Manager only if amounts at least equal to
the Clean-Up Call Redemption Price are not received in full in immediately
available funds by the second Business Day immediately preceding such Redemption
Date.

 

(d)The Trustee will give notice of any such withdrawal of a Clean-Up Call
Redemption, at the expense of the Issuer, to each Holder of Notes that were to
be redeemed at such Holder’s address in the Register not later than the Business
Day prior to the related scheduled Redemption Date.

 

(e)On the Redemption Date related to any Clean-Up Call Redemption, the Clean-Up
Call Redemption Price shall be distributed pursuant to the Priority of Payments.

 

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Section 9.8.     Re-Pricing of the Notes

 

(a)The Issuer, with the consent of the Portfolio Manager, may reduce the spread
over LIBOR applicable with respect to any Class of Re-Pricing Eligible Notes
(any such reduction with respect to any such Class of Notes, a “Re-Pricing” and
any Class of Re-Pricing Eligible Notes to be subject to a Re-Pricing, a
“Re-Priced Class”) on any Business Day after the Non-Call Period; provided that,
the Issuer shall not effect any Re-Pricing unless each condition specified in
this Section 9.8 is satisfied with respect thereto. For the avoidance of doubt,
no terms of any Re-Pricing Eligible Notes other than the Interest Rate
applicable thereto may be modified or supplemented in connection with a
Re-Pricing; provided that, in connection with any Re-Pricing, (x) the Non-Call
Period with respect to such Re-Priced Class may, with the consent of the Issuer,
be extended and/or (y) the definition of “Redemption Price” may be revised, with
the written consent of the Issuer, to reflect any agreed upon make-whole
payments for the applicable Re-Priced Class. In connection with any Re-Pricing,
the Issuer may engage a broker-dealer (the “Re-Pricing Intermediary”) upon the
recommendation and subject to the approval of the Issuer and such Re-Pricing
Intermediary shall assist the Issuer in effecting the Re-Pricing.

 

(b)At least fourteen (14) days prior to the Business Day fixed for any proposed
Re-Pricing (the “Re-Pricing Date”), the Issuer or the Re-Pricing Intermediary on
behalf of the Issuer, shall deliver a notice in writing (with a copy to the
Portfolio Manager, the Trustee and each Rating Agency) to each Holder of the
proposed Re-Priced Class, which notice shall (i) specify the proposed Re-Pricing
Date and the revised spread (or range of spreads from which a single spread will
be chosen prior to the Re-Pricing Date) over LIBOR to be applied with respect to
such Class (such spread, the “Re-Pricing Rate”), (ii) request that each Holder
of the Re-Priced Class approve the proposed Re-Pricing or provide a proposed
Re-Pricing Rate at which it would consent to such Re-Pricing that is within the
range provided, if any, in clause (i) above (such proposal, a “Holder Proposed
Re-Pricing Rate”), (iii) request that each consenting Holder of the Re-Priced
Class deliver a response in writing to the Issuer, or to the Re-Pricing
Intermediary on behalf of the Issuer, which response (the “Holder Purchase
Request”) shall indicate the aggregate principal amount of the Re-Priced Class
that such Holder is willing to purchase (or retain) at such Re-Pricing Rate
(including within any range provided) specified in such notice, and (iv) state
that the Issuer (or in the case of the following clause (a), the Re-Pricing
Intermediary on behalf of the Issuer) will have the right to (a) cause all such
Holders that did not deliver an Accepted Purchase Request (each, a
“Non-Consenting Holder”) to sell their Notes of the Re-Priced Class on the
Re-Pricing Date to one or more transferees at a sale price equal to the
applicable Redemption Price, (b) redeem such Notes at the applicable Redemption
Price with the proceeds of an issuance of Re-Pricing Replacement Notes or (c)
amend, without consent, the interest rate applicable to the Notes of the
Re-Priced Class held by Non-Consenting Holders to the Re-Pricing Rate in the
event that the Issuer is unable to issue Re-Pricing Replacement Notes; provided
that, at the direction of the Portfolio Manager, the Issuer may delay the
Re-Pricing Date or determine the Re-Pricing Rate taking into consideration any
Holder Proposed Re-Pricing Rates at any time up to two (2) Business Days prior
to the Re-Pricing Date (upon notice to each Holder of the proposed Re-Priced
Class, with a copy to the Portfolio Manager, the Trustee and each Rating
Agency). Failure to give a notice of Re-Pricing, or any defect therein, to any
Holder of any Re-Priced Class shall not impair or affect the validity of the
Re-Pricing or give rise to any claim based upon such failure or defect.

 

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Any notice of Re-Pricing may be withdrawn (thereby canceling the Re-Pricing) by
(x) the Portfolio Manager or (y) the Issuer, with the consent of the Portfolio
Manager (to the extent applicable), in each case, for any reason by delivery of
a written notice to the Trustee and the Issuer no later than the Business Day
prior to the proposed Re-Pricing Date. Once withdrawn, a subsequent notice of
Re-Pricing may be given in accordance with this Section 9.8. At the cost of the
Issuer, the Trustee shall provide a copy of such written notice to the Rating
Agencies.

 

(c)In the event that any Holder of the Re-Priced Class does not deliver a
written consent to the proposed Re-Pricing on or before the date that is at
least five (5) Business Days (such date as determined by the Issuer in its sole
discretion) after the date of such notice, the Issuer, or the Re-Pricing
Intermediary on behalf of the Issuer, shall deliver written notice thereof to
any Consenting Holder of the Re-Priced Class who delivered a Holder Purchase
Request with a Holder Proposed Re-Pricing Rate that is equal to or less than the
Re-Pricing Rate as determined by the Portfolio Manager (such request, an
“Accepted Purchase Request” and any Holder providing such Accepted Purchase
Request, a “Consenting Holder”) specifying the Aggregate Outstanding Amount of
the Notes of the Re-Priced Class that such Consenting Holder has offered to
purchase at the Re-Pricing Rate and the Aggregate Outstanding Amount of the
Notes that will be sold to such Consenting Holder. Notwithstanding the above,
the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, will cause
the sale and transfer of Notes of any Non-Consenting Holders, without further
notice to such Non-Consenting Holders, on the Re-Pricing Date to a transferee
designated by the Re-Pricing Intermediary on behalf of the Issuer. All sales of
Notes to be effected pursuant to this clause (c) will be made at the Redemption
Price with respect to such Notes, and will be effected only if the related
Re-Pricing is effected in accordance with this Section 9.8. The Holder of each
Re-Pricing Eligible Note, by its acceptance of an interest in the Re-Pricing
Eligible Notes, agrees to sell and transfer its Notes in accordance with this
Section 9.8 and agrees to cooperate with the Issuer (or the Re-Pricing
Intermediary on behalf of the Issuer) and the Trustee to effect such sales and
transfers. In the event that the Issuer (or the Re-Pricing Intermediary on
behalf of the Issuer) receives Accepted Purchase Requests with respect to more
than the Aggregate Outstanding Amount of the Notes of the Re-Priced Class held
by Non-Consenting Holders, the Issuer, or the Re-Pricing Intermediary on behalf
of the Issuer, shall cause the sale and transfer of such Notes or will sell
Re-Pricing Replacement Notes to such Consenting Holders at the applicable
Redemption Prices and, if applicable, conduct a redemption of Non-Consenting
Holders’ Notes of the Re-Priced Class with the sale of Re-Pricing Replacement
Notes, without further notice to the Non-Consenting Holders thereof, on the
Re-Pricing Date to the Consenting Holders delivering Accepted Purchase Requests,
with respect thereto, pro rata (subject to the applicable minimum denominations)
based on the Aggregate Outstanding Amount of the Notes such Consenting Holders
indicated an interest in purchasing pursuant to their Holder Purchase Requests.
In the event that the Issuer receives Accepted Purchase Requests with respect to
less than the Aggregate Outstanding Amount of the Notes of the Re-Priced Class
held by Non-Consenting Holders, the Issuer, or the Re-Pricing Intermediary on
behalf of the Issuer, shall cause the sale and transfer of such Notes of the
Re-Priced Class or will sell Re-Pricing Replacement Notes to such Consenting
Holders at the applicable Redemption Prices and, if applicable, conduct a
redemption of Non-Consenting Holders’ Notes of the Re-Priced Class with the sale
of Re-Pricing Replacement Notes, without further notice to the Non-Consenting
Holders thereof, on the Re-Pricing Date to the Consenting Holders delivering
Accepted Purchase Requests with respect thereto, and any excess Notes of the
Re-Priced Class held by Non-Consenting Holders shall be sold to one or more
purchasers designated by the Issuer (or the Re-Pricing Intermediary on behalf of
the Issuer) or redeemed with proceeds from the sale of Re-Pricing Replacement
Notes. All sales of Non-Consenting Holders’ Notes or Re-Pricing Replacement
Notes to be effectuated pursuant to this clause (c) shall be made at the
applicable Redemption Price, and shall be effectuated only if the related
Re-Pricing is effectuated in accordance with the provisions hereof.

 

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(d)The Issuer shall not effect any proposed Re-Pricing unless:

 

(i)the Issuer and the Trustee (at the direction of the Issuer) shall have
entered into a supplemental indenture dated as of the Re-Pricing Date, which can
be executed and delivered without regard to the provisions of Article VIII
hereof, solely to modify the spread over LIBOR applicable to the Re-Priced Class
and, to the extent applicable, (with the consent of the Issuer) to extend the
Non-Call Period applicable to such Re-Priced Class or make changes to the
definition of “Redemption Price”;

 

(ii)confirmation has been received that all Notes of the Re-Priced Class held by
Non-Consenting Holders have been sold and transferred pursuant to clause (c)
above;

 

(iii)each Rating Agency shall have been notified of such Re-Pricing;

 

(iv)all expenses of the Issuer and the Trustee (including the fees of the
Re-Pricing Intermediary and fees of counsel) incurred in connection with the
Re-Pricing do not exceed the amount of Interest Proceeds available after taking
into account all amounts required to be paid pursuant to Section 11.1(a)(i) on
the subsequent Payment Date prior to the distribution of any remaining Interest
Proceeds to the Issuer, unless such expenses have been paid or shall be
adequately provided for (including without limitation, with Contributions) by an
entity other than the Issuer; and

 

(v)the Issuer shall have obtained Tax Advice to the effect that such Re-Pricing
will not result in the Issuer becoming subject to U.S. federal income taxation
with respect to its net income or to any withholding tax liability under Section
1446 of the Code.

 

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(e)The Issuer shall direct the Trustee to segregate payments and take other
reasonable steps to effect the Re-Pricing and the Trustee shall have the
authority to take such actions as may be directed by the Issuer or the Portfolio
Manager on behalf of the Issuer (or the Re-Pricing Intermediary on behalf of the
Issuer) or Portfolio Manager shall deem necessary or desirable to effect a
Re-Pricing. In order to give effect to the Re-Pricing, the Issuer may, to the
extent necessary, obtain and assign a separate CUSIP or CUSIPs to the Notes of
each Class held by consenting Holders or Non-Consenting Holders.

 

(f)A second notice of a Re-Pricing shall be given by the Trustee not less than
seven (7) Business Days prior to the proposed Re-Pricing Date, to each Holder of
Notes of the Re-Priced Class at the address in the Register (with a copy to the
Portfolio Manager), specifying the applicable Re-Pricing Date and the specific
Re-Pricing Rate. Notice of Re-Pricing shall be given by the Trustee at the
expense of the Issuer. Failure to give a notice of Re-Pricing, or any defect
therein, to any Holder of any Re-Priced Class will not impair or affect the
validity of the Re-Pricing or give rise to any claim based upon such failure or
defect.

 

(g)The Holder of each Note, by its acceptance of an interest in the Notes,
agrees (i) to sell and transfer its Notes in accordance with the provisions
hereof and to cooperate with the Issuer, the Re-Pricing Intermediary (if any)
and the Trustee to effectuate such sales and transfers and (ii) in the event
that such Holder (x) does not consent to a proposed Re-Pricing or to a sale of
its interest and (y) does not otherwise cooperate with the Issuer, the
Re-Pricing Intermediary (if any) and the Trustee, in each case to effectuate
such sales and transfers within the time period described herein, then such
Holder shall be deemed to consent to such Re-Pricing.

 

The Trustee shall be entitled to receive, and shall be fully protected in
relying upon an Opinion of Counsel stating that a Re-Pricing is permitted by
this Indenture and that all conditions precedent thereto have been complied
with. The Trustee shall receive and shall rely on an Issuer Order providing
direction and any additional information requested by the Trustee in order to
effect a Re-Pricing in accordance with this Section 9.8.

 

ARTICLE X
ACCOUNTS, ACCOUNTING AND RELEASES

 

Section 10.1.     Collection of Money

 

Except as otherwise expressly provided herein, the Trustee may demand payment or
delivery of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all Money and other
property payable to or receivable by the Trustee pursuant to this Indenture,
including all payments due on the Assets, in accordance with the terms and
conditions of such Assets. The Trustee shall segregate and hold all such Money
and property received by it in trust for the Holders and shall apply it as
provided in this Indenture. Each Account established under this Indenture shall
be established and maintained (a) with a federal or state chartered depository
institution or trust company (x) rated at least “A” and “A-1” by S&P (or at
least “A+” by S&P if such institution has no short-term rating) and (y)
satisfies the Fitch Eligible Counterparty Ratings or (b) in segregated trust
accounts with the corporate trust department of a federal or state-chartered
deposit institution subject to regulations regarding fiduciary funds on deposit
similar to Title 12 of the Code of Federal Regulations Section 9.10(b), that (1)
is rated at least “BBB+” by S&P and (2) satisfies the Fitch Eligible
Counterparty Ratings and, if any such institution fails at any time to satisfy
the requirements set forth in clauses (a) or (b) above, as applicable, the
assets held in such account shall be moved no later than 30 calendar days after
such event to another institution that satisfies such requirements. Such
institution shall have a combined capital and surplus of at least
U.S.$200,000,000. All Cash deposited in the Accounts shall be invested only in
Eligible Investments or Collateral Obligations in accordance with the terms of
this Indenture. To avoid the consolidation of the Assets of the Issuer with the
general assets of the Bank under any circumstances, the Trustee shall comply,
and shall cause the Custodian to comply, with all law applicable to it as a
national bank with trust powers holding segregated trust assets in a fiduciary
capacity; provided that, the foregoing shall not be construed to prevent the
Trustee or Custodian from investing the Assets of the Issuer in Eligible
Investments described in clause (b) of the definition thereof that are
obligations of the Bank. The accounts established by the Trustee pursuant to
this Article X may include any number of sub-accounts deemed necessary for
convenience in administering the Assets.

 

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Section 10.2.     Collection Account

 

(a)In accordance with this Indenture and the Account Agreement, the Trustee
shall, prior to the Closing Date, establish at the Custodian a single
non-interest bearing segregated trust account, held in the name of the Trustee,
for the benefit of the Secured Parties, which shall be designated as the
“Collection Account” and which shall be maintained with the Custodian in
accordance with the Account Agreement. The Trustee shall immediately upon
receipt, or upon transfer from the Expense Reserve Account or Revolver Funding
Account deposit into the Collection Account, all funds and property received by
the Trustee and (x) designated for deposit in the Collection Account or (y) not
designated under this Indenture for deposit in any other Account, including all
proceeds received from the disposition of any Assets (unless simultaneously
reinvested in additional Collateral Obligations in accordance with Article XII
or in Eligible Investments). The Issuer may, but under no circumstances shall be
required to, deposit from time to time into the Collection Account, in addition
to any amount required hereunder to be deposited therein, such Monies received
from external sources for the benefit of the Secured Parties (other than
payments on or in respect of the Collateral Obligations, Eligible Investments or
other existing Assets) as the Issuer deems, in its sole discretion, to be
advisable and to designate them as Interest Proceeds or Principal Proceeds. All
Monies deposited from time to time in the Collection Account pursuant to this
Indenture shall be held by the Trustee as part of the Assets and shall be
applied to the purposes herein provided. Subject to Sections 10.2(d) and
10.2(f), amounts in the Collection Account shall be reinvested pursuant to
Section 10.6(a). Notwithstanding the foregoing, for administrative purposes, the
Collection Account described above may consist of three single non-interest
bearing segregated trust accounts, each held in the name of the Trustee, for the
benefit of the Secured Parties, one of which shall be designated as the
“Interest Collection Account” into which Interest Proceeds which would otherwise
be deposited in the Collection Account shall be held, another of which shall be
designated as the “Principal Collection Account” into which Principal Proceeds
which would otherwise be deposited in the Collection Account shall be held and
another of which shall be designated as the “Pending Transfer Deposit Amount
Collection Account” into which Transfer Deposit Amounts which would otherwise be
deposited in the Collection Account shall be held in accordance with Section
12.5(a).

 

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(b)The Trustee, within one Business Day after receipt of any distribution or
other proceeds in respect of the Assets which are not Cash, shall so notify the
Issuer (with a copy to the Portfolio Manager) and the Issuer shall use its
commercially reasonable efforts to, within five Business Days after receipt of
such notice from the Trustee (or as soon as practicable thereafter), sell such
distribution or other proceeds for Cash in an arm’s length transaction and
deposit the proceeds thereof in the Collection Account; provided that, subject
to the requirements of Section 12.1, the Issuer (i) need not sell such
distributions or other proceeds if it delivers an Issuer Order or an Officer’s
certificate to the Trustee certifying that such distributions or other proceeds
constitute Collateral Obligations or Eligible Investments or (ii) may otherwise
retain such distribution or other proceeds for up to two years from the date of
receipt thereof if it delivers an Officer’s certificate to the Trustee
certifying that (x) it will sell such distribution within such two-year period
and (y) retaining such distribution is not otherwise prohibited by this
Indenture.

 

(c)At any time when reinvestment is permitted pursuant to Article XII, the
Portfolio Manager on behalf of the Issuer may by Issuer Order direct the Trustee
to, and upon receipt of such Issuer Order the Trustee shall, withdraw funds on
deposit in the Collection Account representing Principal Proceeds (together with
Interest Proceeds but only to the extent used to pay for accrued interest on an
additional Collateral Obligation, or to the extent permitted by Section 7.18(e))
and reinvest (or invest, in the case of funds referred to in Section 7.18) such
funds in additional Collateral Obligations or exercise a warrant held in the
Assets, in each case in accordance with the requirements of Article XII and such
Issuer Order; provided that, funds on deposit in the Collection Account
representing Principal Proceeds may be used to exercise a warrant or similar
right only if such Principal Proceeds were received in connection with a
Contribution designated for such use. At any time during the Reinvestment
Period, and subject to Section 2.14, the Portfolio Manager on behalf of the
Issuer may by Issuer Order direct the Trustee to, and upon receipt of such
Issuer Order the Trustee shall, (i) withdraw funds on deposit in the Collection
Account representing Principal Proceeds for purchases of Notes in accordance
with the provisions of Section 2.14 and (ii) withdraw funds on deposit in the
Collection Account representing Interest Proceeds to pay accrued interest
through the date of such purchase in accordance with the provisions of Section
2.14. At any time, the Portfolio Manager on behalf of the Issuer may by Issuer
Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee
shall, withdraw funds on deposit in the Collection Account representing
Principal Proceeds and deposit such funds in the Revolver Funding Account to
meet funding requirements with respect to Delayed Drawdown Collateral
Obligations or Revolving Collateral Obligations.

 

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(d)The Portfolio Manager on behalf of the Issuer may by Issuer Order direct the
Trustee to, and upon receipt of such Issuer Order the Trustee shall, pay from
amounts on deposit in the Collection Account on any Business Day during any
Interest Accrual Period (i) any amount required to exercise a warrant or right
to acquire securities held in the Assets in accordance with the requirements of
Article XII and such Issuer Order, and (ii) from Interest Proceeds only, any
Administrative Expenses (such payments to be counted against the Administrative
Expense Cap for the applicable period and to be subject to the order of priority
as stated in the definition of Administrative Expenses); provided, that the
aggregate Administrative Expenses paid pursuant to this Section 10.2(d) during
any Collection Period shall not exceed the Administrative Expense Cap for the
related Payment Date; provided further that Principal Proceeds on deposit in the
Collection Account may be used to exercise a warrant or similar right only if
such Principal Proceeds were received in connection with a Contribution
designated for such use; provided further that if any amounts are used to
exercise a warrant or right, any Equity Securities received in connection
therewith shall be sold promptly pursuant to Section 12.1(d). The Trustee shall
not be obligated to make such payment if, in the reasonable determination of the
Trustee, such payment would leave insufficient funds, taking into account the
Administrative Expense Cap, for payments anticipated to be or become due or
payable on the next Payment Date that are given a higher priority in the
definition of Administrative Expenses.

 

(e)The Trustee shall transfer to the Payment Account (other than, with respect
to Exchanged Equity Security Excess Proceeds, any additional amounts received
after the initial distribution thereof that will be distributed on a later
Payment Date), from the Collection Account for application pursuant to Section
11.1(a), not later than the Business Day immediately preceding each Payment
Date, the amount set forth to be so transferred in the Distribution Report for
such Payment Date.

 

(f)Subject to the requirements in Section 10.6(a), amounts received in the
Collection Account during a Collection Period shall be invested in Eligible
Investments with stated maturities not later than the earlier of (A) the date
that is 60 days after the date of delivery thereof and (B) the Business Day
immediately preceding the Payment Date immediately following the date of
delivery thereof. All proceeds from the Eligible Investments shall be retained
in the Collection Account unless used to purchase additional Collateral
Obligations in accordance with the Investment Criteria, or used as otherwise
permitted under this Indenture.

 

(g)An aggregate amount of Principal Proceeds received by the Issuer up to an
amount equal to (x) 1.0% of the Target Initial Par Amount minus (y) the
aggregate amount of any previously identified Designated Unused Proceeds from
time to time (“Designated Principal Proceeds”) may be designated by the
Portfolio Manager as Interest Proceeds from time to time on any Business Day
after the Effective Date and on or prior to the second Payment Date so long as
no Event of Default has occurred and is continuing, no Effective Date Rating
Failure has occurred and the Target Initial Par Balance will exceed the Target
Initial Par Amount after giving effect to such withdrawal and transfer. For the
avoidance of doubt, the aggregate amount of Designated Principal Proceeds and
Designated Unused Proceeds is not permitted to exceed 1.0% of the Target Initial
Par Amount. Upon receipt of notice of such designation, the Trustee will
designate such Designated Principal Proceeds as Interest Proceeds in the
Collection Account.

 

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Section 10.3.     Transaction Accounts

 

(a)Payment Account. In accordance with this Indenture and the Account Agreement,
the Trustee shall, prior to the Closing Date, establish at the Custodian a
single, segregated non-interest bearing trust account held in the name of the
Trustee, for the benefit of the Secured Parties, which shall be designated as
the “Payment Account” which shall be maintained with the Custodian in accordance
with the Account Agreement. Except as provided in Section 11.1(a), the only
permitted withdrawal from or application of funds on deposit in, or otherwise to
the credit of, the Payment Account shall be to pay amounts due and payable on
the Notes and distributions to the Issuer in accordance with their terms and the
provisions of this Indenture and, upon Issuer Order, to pay Administrative
Expenses, Management Fees and other amounts specified herein, each in accordance
with the Priority of Payments. The Issuer shall not have any legal, equitable or
beneficial interest in the Payment Account other than in accordance with this
Indenture and the Priority of Payments. Amounts in the Payment Account shall
remain uninvested.

 

(b)Custodial Account. In accordance with this Indenture and the Account
Agreement, the Trustee shall, prior to the Closing Date, establish at the
Custodian a single, segregated non-interest bearing trust account held in the
name of the Trustee, for the benefit of the Secured Parties, which shall be
designated as the “Custodial Account” which shall be maintained with the
Custodian in accordance with the Account Agreement. All Collateral Obligations
and Equity Securities shall be credited to the Custodial Account as provided
herein. The only permitted withdrawals from the Custodial Account shall be in
accordance with the provisions of this Indenture. The Trustee agrees to give the
Issuer, with a copy to the Portfolio Manager, immediate notice if an Authorized
Officer of the Trustee receives written notice or has actual knowledge that the
Custodial Account or any assets or securities on deposit therein, or otherwise
to the credit of the Custodial Account, shall become subject to any writ, order,
judgment, warrant of attachment, execution or similar process. The Issuer shall
not have any legal, equitable or beneficial interest in the Custodial Account
other than in accordance with this Indenture and the Priority of Payments.
Amounts in the Custodial Account shall remain uninvested.

 

191 

 

 

(c)Ramp-Up Account. The Trustee shall, prior to the Closing Date, establish at
the Custodian a single, segregated non-interest bearing trust account held in
the name of the Trustee, for the benefit of the Secured Parties, which shall be
designated as the “Ramp-Up Account” which shall be maintained with the Custodian
in accordance with the Account Agreement. The Issuer hereby directs the Trustee
to deposit the amount specified in Section 3.1(a)(xii)(A) to the Ramp-Up Account
as Principal Proceeds. In connection with any purchase of an additional
Collateral Obligation, the Trustee will apply amounts held in the Ramp-Up
Account as provided by Section 7.18(b). On the first Business Day after the
Effective Date, or upon the occurrence of an Event of Default, the Trustee will
deposit any remaining amounts in the Ramp-Up Account (excluding any proceeds
that will be used to settle binding commitments entered into prior to such date)
(“Unused Proceeds”) into the Collection Account as Principal Proceeds; provided,
however, that, on any Business Day after the Closing Date to and including the
second Payment Date, the Portfolio Manager may designate an amount of Unused
Proceeds up to (x) 1.0% of the Target Initial Par Amount minus (y) the aggregate
amount of any previously identified Designated Principal Proceeds (“Designated
Unused Proceeds”) as Interest Proceeds, so long as no Event of Default has
occurred and is continuing, no Effective Date Rating Failure has occurred and
the Target Initial Par Condition is satisfied after giving effect to such
withdrawal and transfer and, upon the Portfolio Manager’s direction, such
designated amount will be withdrawn from the Ramp-Up Account and deposited into
the Collection Account as Interest Proceeds. For the avoidance of doubt, the
aggregate amount of Designated Principal Proceeds and Designated Unused Proceeds
is not permitted to exceed 1.0% of the Target Initial Par Amount. The Issuer
shall provide the Target Initial Par Balance as of such date immediately
following such deposit into the Collection Account on the next Monthly Report.
Any income earned on amounts deposited in the Ramp-Up Account will be deposited
in the Collection Account as Interest Proceeds.

 

(d)Expense Reserve Account. In accordance with this Indenture and the Account
Agreement, the Trustee shall, prior to the Closing Date, establish at the
Custodian a single, segregated non-interest bearing trust account held in the
name of the Trustee, for the benefit of the Secured Parties, which shall be
designated as the “Expense Reserve Account” which shall be maintained with the
Custodian in accordance with the Account Agreement. The Issuer hereby directs
the Trustee to deposit to the Expense Reserve Account (i) the amount specified
in Section 3.1(a)(xii)(B) and (ii) in connection with any additional issuance of
notes, the amount specified in Section 3.2(a)(viii). On any Business Day from
the Closing Date to and including the Determination Date relating to the second
Payment Date following the Closing Date, the Trustee shall apply funds from the
Expense Reserve Account, as directed by the Portfolio Manager, to pay expenses
of the Issuer incurred in connection with the establishment of the Issuer, the
structuring and consummation of the Offering and the issuance of the Notes and
any additional issuance. By the Determination Date relating to the second
Payment Date following the Closing Date, all funds in the Expense Reserve
Account (after deducting any expenses paid on such Determination Date) will be
deposited in the Collection Account as Interest Proceeds and/or Principal
Proceeds (in the respective amounts directed by the Portfolio Manager in its
sole discretion). On any Business Day after the Determination Date relating to
the second Payment Date following the Closing Date, the Trustee shall apply
funds from the Expense Reserve Account (except as provided in the next
sentence), as directed by the Portfolio Manager, to pay expenses of the Issuer
incurred in connection with any additional issuance of notes or as a deposit to
the Collection Account as Principal Proceeds. Any income earned on amounts
deposited in the Expense Reserve Account will be deposited in the Collection
Account as Interest Proceeds as it is paid.

 

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(e)Interest Reserve Account. The Trustee shall, prior to the Closing Date,
establish at the Custodian a single, segregated non-interest bearing trust
account held in the name of the Trustee for the benefit of the Secured Parties
which shall be designated as the “Interest Reserve Account” which shall be
maintained with the Custodian in accordance with the Account Agreement. On the
Closing Date, the Issuer hereby directs the Trustee to deposit the Interest
Reserve Amount into the Interest Reserve Account. On or before the Determination
Date in the second Collection Period, at the direction of the Portfolio Manager,
the Issuer may direct that any portion of the then remaining Interest Reserve
Amount be transferred to the Collection Account and included as Interest
Proceeds or Principal Proceeds for such Collection Period. On the Payment Date
relating to the second Collection Period, all amounts on deposit in the Interest
Reserve Account shall be transferred to the Payment Account and applied as
Interest Proceeds or Principal Proceeds (as directed by the Portfolio Manager)
in accordance with the Priority of Payments, and the Trustee shall close the
Interest Reserve Account. Amounts credited to the Interest Reserve Account shall
be reinvested pursuant to Section 10.6(a). Any income earned on amounts
deposited in the Interest Reserve Account will be deposited in the Interest
Reserve Account.

 

(f)Contribution Account. The Trustee shall, on or prior to the Closing Date,
establish a segregated, non-interest bearing trust account held in the name of
the Trustee for the benefit of the Secured Parties, which shall be designated as
the “Contribution Account.” At any time during or after the Reinvestment Period,
any Holder of Interests may, by delivery of a written notice to the Trustee
substantially in the form of Exhibit F hereto (a “Contribution Notice”) at least
three Business Days prior to the date such Holder proposes to make such
Contribution, and with the prior written consent of the Portfolio Manager, make
a contribution of Cash, Eligible Investments and/or Collateral Obligations
(each, a “Contribution” and each such Holder, a “Contributor”) to the Issuer for
any purpose (including, without limitation, any Permitted Use and/or to make any
Cure Contribution). Each accepted Contribution shall be received into the
Contribution Account and applied by the Portfolio Manager, on behalf of the
Issuer, to a Permitted Use as directed by the Contributor in the related
Contribution Notice or, if no direction is given by the Contributor, at the
Portfolio Manager’s sole discretion. No Contribution or any portion thereof
shall be returned to the Contributor at any time. Any income earned on amounts
deposited in the Contribution Account shall be deposited in the Collection
Account as Interest Proceeds. For the avoidance of doubt, Contributions shall
not increase any rights held by any Holder.

 

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Section 10.4.     The Revolver Funding Account

 

The Trustee shall, prior to the Closing Date, establish at the Custodian, a
single, segregated non-interest bearing trust account held in the name of the
Trustee for the benefit of the Secured Parties which shall be designated as the
“Revolver Funding Account” which shall be maintained with the Custodian in
accordance with the Account Agreement. The Issuer hereby directs the Trustee to
deposit the amount specified in Section 3.1(a)(xii)(D) to the Revolver Funding
Account to be reserved for unfunded funding obligations under any Delayed
Drawdown Collateral Obligations and Revolving Collateral Obligations purchased
on or before the Closing Date. Upon the purchase of any Delayed Drawdown
Collateral Obligation or Revolving Collateral Obligation, Principal Proceeds in
an amount equal to the undrawn portion of such obligation shall be withdrawn
first from the Ramp-Up Account and, if necessary, from the Collection Account,
as directed by the Portfolio Manager, and deposited by the Trustee pursuant to
such direction in the Revolver Funding Account; provided, that if such Delayed
Drawdown Collateral Obligation or Revolving Collateral Obligation is a
Participation Interest with respect to which the Selling Institution requires
funds to be deposited with the Selling Institution or its custodian in an amount
equal to any portion of the undrawn amount of such obligation as collateral for
the funding obligations under such obligation (such funds, the “Selling
Institution Collateral”), the Portfolio Manager on behalf of the Issuer shall
direct the Trustee to (and pursuant to such direction the Trustee shall) deposit
such funds in the amount of the Selling Institution Collateral with such Selling
Institution or custodian rather than in the Revolver Funding Account; provided
that such Selling Institution or custodian is an Eligible Custodian.

 

Upon initial purchase of any Delayed Drawdown Collateral Obligation or Revolving
Collateral Obligation, funds deposited in the Revolver Funding Account in
respect of such Collateral Obligation and Selling Institution Collateral
deposited with the Selling Institution in respect of such Collateral Obligation
shall be treated as part of the purchase price therefor. Amounts on deposit in
the Revolver Funding Account shall be invested in overnight funds that are
Eligible Investments selected by the Portfolio Manager pursuant to Section 10.6
and earnings from all such investments shall be deposited in the Collection
Account as Interest Proceeds.

 

Funds shall be deposited in the Revolver Funding Account upon the purchase of
any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation
and upon the receipt by the Issuer of any Principal Proceeds with respect to a
Revolving Collateral Obligation as directed by the Portfolio Manager, such that
the amount of funds on deposit in the Revolver Funding Account shall be equal to
or greater than the aggregate amount of unfunded funding obligations
(disregarding the portion, if any, of any such unfunded funding obligations that
is collateralized by Selling Institution Collateral) under all such Delayed
Drawdown Collateral Obligations and Revolving Collateral Obligations then
included in the Assets, as determined by the Portfolio Manager.

 

Any funds in the Revolver Funding Account (other than earnings from Eligible
Investments therein) shall be available, at the direction of the Portfolio
Manager, solely to cover any drawdowns on the Delayed Drawdown Collateral
Obligations and Revolving Collateral Obligations; provided, that any excess of
(i) the amounts on deposit in the Revolver Funding Account over (ii) the sum of
the unfunded funding obligations (disregarding the portion, if any, of any such
unfunded funding obligations that is collateralized by Selling Institution
Collateral) under all Delayed Drawdown Collateral Obligations and Revolving
Collateral Obligations that are included in the Assets (which excess may occur
for any reason, including upon (A) the sale or maturity of a Delayed Drawdown
Collateral Obligation or Revolving Collateral Obligation, (B) the occurrence of
an event of default with respect to any such Delayed Drawdown Collateral
Obligation or Revolving Collateral Obligation or (C) any other event or
circumstance which results in the irrevocable reduction of the undrawn
commitments under such Delayed Drawdown Collateral Obligation or Revolving
Collateral Obligation) may be transferred by the Trustee (at the written
direction of the Portfolio Manager on behalf of the Issuer) from time to time as
Principal Proceeds to the Collection Account.

 

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Section 10.5.     [Reserved]

 

Section 10.6.     Reinvestment of Funds in Accounts; Reports by Trustee

 

(a)By Issuer Order (which may be in the form of standing instructions), the
Issuer (or the Portfolio Manager on behalf of the Issuer) shall at all times
direct the Trustee to, and, upon receipt of such Issuer Order, the Trustee
shall, invest all funds on deposit in the Collection Account, Interest Reserve
Account, the Ramp-Up Account, the Contribution Account, the Revolver Funding
Account and the Expense Reserve Account as so directed in Eligible Investments
having stated maturities no later than the Business Day preceding the next
Payment Date (or such shorter maturities expressly provided herein). If at a
time when no Event of Default has occurred and is continuing (regardless of any
acceleration of the Maturity of the Notes), the Issuer shall not have given any
such investment directions, the Trustee shall seek instructions from the
Portfolio Manager within three Business Days after transfer of any funds to such
accounts. If the Trustee does not thereafter receive written instructions from
the Portfolio Manager within five Business Days after transfer of such funds to
such accounts, it shall invest and reinvest the funds held in such accounts, as
fully as practicable, in the Standby Direct Investment. If at a time when an
Event of Default has occurred and is continuing, the Issuer shall not have given
such investment directions to the Trustee for three consecutive days, the
Trustee shall invest and reinvest such Monies as fully as practicable in the
Standby Direct Investment. Except to the extent expressly provided otherwise
herein, all interest and other income from such investments shall be credited to
the Collection Account upon receipt as Interest Proceeds, any gain realized from
such investments shall be credited to the Collection Account upon receipt as
Principal Proceeds, and any loss resulting from such investments shall be
charged to the Collection Account as a reduction in Principal Proceeds. The
Trustee shall not in any way be held liable by reason of any insufficiency of
such accounts which results from any loss relating to any such investment;
provided that, nothing herein shall relieve the Bank of (i) its obligations or
liabilities under any security or obligation issued by the Bank or any Affiliate
thereof or (ii) liability for any loss resulting from negligence, willful
misconduct or fraud on the part of the Bank or any Affiliate thereof. Except as
expressly provided herein, the Trustee shall not otherwise be under any duty to
invest (or pay interest on) amounts held hereunder from time to time.
Notwithstanding anything to the contrary in this clause (a), if an Eligible
Investment is issued by the Bank, such Eligible Investment may mature on the
relevant Payment Date. For the avoidance of doubt, the stated maturity of each
Eligible Investment must also be in compliance with the definition thereof
(including any requirement in the definition of “Eligible Investment” that the
stated maturity of an Eligible Investment be shorter than required pursuant to
this Section 10.6(a)).

 

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(b)The Trustee agrees to give the Issuer, with a copy to the Portfolio Manager,
immediate notice if any Bank Officer has actual knowledge that any Account or
any funds on deposit in any Account, or otherwise to the credit of an Account,
shall become subject to any writ, order, judgment, warrant of attachment,
execution or similar process.

 

(c)The Trustee shall supply, in a timely fashion, to the Issuer, each Rating
Agency and the Portfolio Manager any information regularly maintained by the
Trustee that the Issuer, the Rating Agencies or the Portfolio Manager may from
time to time reasonably request with respect to the Assets, the Accounts and the
other Assets and provide any other requested information reasonably available to
the Trustee by reason of its acting as Trustee hereunder and required to be
provided by Section 10.7 or to permit the Portfolio Manager to perform its
obligations under the Portfolio Management Agreement or the Issuer’s obligations
hereunder that have been delegated to the Portfolio Manager. The Trustee shall
promptly forward to the Portfolio Manager copies of notices and other writings
received by it from the issuer of any Collateral Obligation or from any Clearing
Agency with respect to any Collateral Obligation which notices or writings
advise the holders of such Collateral Obligation of any rights that the holders
might have with respect thereto (including, without limitation, requests to vote
with respect to amendments or waivers and notices of prepayments and
redemptions) as well as all periodic financial reports received from such issuer
and Clearing Agencies with respect to such issuer.

 

(d)In addition to any credit, withdrawal, transfer or other application of funds
with respect to any Account set forth in this Article X, any credit, withdrawal,
transfer or other application of funds with respect to any Account authorized
elsewhere in this Indenture is hereby authorized.

 

(e)Any account established under this Indenture may include (and shall be deemed
to include) any number of subaccounts deemed necessary or advisable by the
Trustee in the administration of the accounts.

 

(f)For the avoidance of doubt, the Accounts (including income, if any, earned on
the investments of funds in any such Account) will be owned by the Issuer, for
federal income tax purposes. The Issuer is required to provide to the Trustee
(i) an IRS Form W-9 or appropriate IRS Form W-8 no later than the Closing Date,
and (ii) any additional IRS forms (or updated versions of any previously
submitted IRS forms) or other documentation upon the reasonable request of the
Trustee as may be necessary (A) to reduce or eliminate the imposition of U.S.
withholding taxes and (B) to permit the Trustee to fulfill its tax reporting
obligations under applicable law with respect to the Accounts or any amounts
paid to the Issuer. If any IRS form or other documentation previously delivered
by the Issuer to the Trustee pursuant to this clause (f) becomes inaccurate in
any respect, the Issuer shall timely provide to the Trustee accurately updated
and complete versions of such IRS forms or other documentation. The Bank, both
in its individual capacity and in its capacity as Trustee, shall have no
liability to the Issuer or any other Person in connection with any tax
withholding amounts paid or withheld from the Accounts pursuant to applicable
law arising from the Issuer’s failure to timely provide an accurate, correct and
complete IRS Form W-9, an appropriate IRS Form W-8 or such other documentation
contemplated under this paragraph. For the avoidance of doubt, no funds shall be
invested with respect to such Accounts absent the Trustee having first received
(1) the requisite written investment direction with respect to the investment of
such funds, and (2) the IRS forms and other documentation required by this
paragraph.

 

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Section 10.7.     Accountings

 

(a)Monthly. Not later than the 15th calendar day (or, if such day is not a
Business Day, the next succeeding Business Day) of each calendar month (other
than a month in which a Payment Date occurs) and commencing in the first
calendar month following the Closing Date, the Issuer shall compile and make
available (or cause to be compiled and made available) to each Rating Agency,
the Trustee, the Portfolio Manager, the Initial Purchaser and the Placement
Agents and, upon written instructions (which may be in the form of standing
instructions) from the Portfolio Manager with all appropriate contact
information, the CLO Information Service and, upon written request therefor, to
any Holder and, upon written notice to the Trustee in the form of Exhibit D, any
beneficial owner of a Note, a monthly report on a trade date basis (each such
report a “Monthly Report”). As used herein, the “Monthly Report Determination
Date” with respect to any calendar month will be the last Business Day of the
month prior to such calendar month (other than a month in which a Quarterly
Payment Date occurs). The Monthly Report for a calendar month shall contain the
following information with respect to the Collateral Obligations and Eligible
Investments included in the Assets, and shall be determined as of the Monthly
Report Determination Date for such calendar month:

 

(i)Aggregate Principal Balance of Collateral Obligations and Eligible
Investments representing Principal Proceeds.

 

(ii)Adjusted Collateral Principal Amount of Collateral Obligations.

 

(iii)Collateral Principal Amount of Collateral Obligations.

 

(iv)A list of Collateral Obligations, including, with respect to each such
Collateral Obligation, the following information:

 

(A)The Obligor thereon (including the issuer ticker, if any);

 

(B)The CUSIP or security identifier thereof;

 

(C)The LoanX ID thereof;

 

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(D)The Principal Balance thereof (other than any accrued interest that was
purchased with Principal Proceeds (but excluding any capitalized interest));

 

(E)The percentage of the aggregate Collateral Principal Amount represented by
such Collateral Obligation;

 

(F)The related interest rate or spread;

 

(G)The LIBOR floor, if any (as provided by or confirmed with the Portfolio
Manager);

 

(H)The stated maturity thereof;

 

(I)The related S&P Industry Classification;

 

(J)The S&P Rating, unless such rating is based on a credit estimate unpublished
by S&P or such rating is a confidential rating or a private rating by S&P;

 

(K)The related Fitch Industry Classification;

 

(L)The Fitch Rating, unless such rating is based on a credit opinion unpublished
by Fitch or such rating is a confidential rating or a private rating by Fitch;

 

(M)The country of Domicile;

 

(N)An indication as to whether each such Collateral Obligation is (1) a Senior
Secured Loan, (2) a Second Lien Loan, (3) an Unsecured Loan, (4) a Participation
Interest (indicating the related Selling Institution and its ratings by each
Rating Agency), (5) a Delayed Drawdown Collateral Obligation, (6) a Revolving
Collateral Obligation, (7) a Fixed Rate Obligation, (8) a Current Pay
Obligation, (9) a DIP Collateral Obligation, (10) a Discount Obligation, (11) a
Discount Obligation purchased in the manner described in clause (y) of the
proviso to the definition “Discount Obligation”, (12) a Bridge Loan, (13) a
Cov-Lite Loan, (14) [reserved], (15) a Deferrable Obligation, (16) a First Lien
Last Out Loan or (17) a Purchased Defaulted Obligation;

 

(O)With respect to each Collateral Obligation that is a Discount Obligation
purchased in the manner described in clause (y) of the proviso to the definition
“Discount Obligation;”

 

(I)the identity of the Collateral Obligation (including whether such Collateral
Obligation was classified as a Discount Obligation at the time of its original
purchase) the proceeds of whose sale are used to purchase the purchased
Collateral Obligation;

 

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(II)the purchase price (as a percentage of par) of the purchased Collateral
Obligation and the sale price (as a percentage of par) of the Collateral
Obligation the proceeds of whose sale are used to purchase the purchased
Collateral Obligation; and

 

(III)the Aggregate Principal Balance of Collateral Obligations that have been
excluded from the definition of Discount Obligation and relevant calculations
indicating whether such amount is in compliance with the limitations described
in clause (y) of the proviso to the definition of Discount Obligation;

 

(P)With respect to each Senior Secured Loan included in the Assets (but, for the
avoidance of doubt, excluding any Second Lien Loan), the Senior Net Leverage
Ratio of the related Obligor on such Senior Secured Loan (as provided by the
Portfolio Manager);

 

(Q)The S&P Recovery Rate;

 

(R)The Market Value of such Collateral Obligation;

 

(S)The purchase price (as a percentage of par) of such Collateral Obligation;
and

 

(T)The payment frequency of such Collateral Obligation.

 

(v)If the Monthly Report Determination Date occurs on or after the Effective
Date and on or prior to Maturity (including after the last day of the
Reinvestment Period), for each of the limitations and tests specified in the
definitions of Concentration Limitations and Collateral Quality Test, (1) the
result, (2) the related minimum or maximum test level and (3) a determination as
to whether such result satisfies the related test.

 

(vi)The Fitch Rating Factor, if publicly available.

 

(vii)The Fitch Recovery Rate, if publicly available (including the applicable
Fitch recovery rating and Fitch recovery rate in accordance with the definition
of “Fitch Recovery Rate”).

 

(viii)The calculation of each of the following:

 

(A)Each Interest Coverage Ratio (and setting forth the percentage required to
satisfy each Interest Coverage Test); and

 

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(B)Each Overcollateralization Ratio (and setting forth the percentage required
to satisfy each Overcollateralization Ratio Test).

 

(ix)The calculation specified in Section 5.1(g).

 

(x)For each Account, (A) the name of the financial institution that holds such
account, (B) the applicable ratings from S&P and Fitch required under Section
10.1 for such institution and (C) a schedule showing the beginning Balance, each
credit or debit specifying the nature, source and amount (including with respect
to any Designated Principal Proceeds and Designated Unused Proceeds), and the
ending Balance.

 

(xi)A schedule showing for each of the following the beginning Balance, the
amount of Interest Proceeds received from the date of determination of the
immediately preceding Monthly Report, and the ending Balance for the current
Measurement Date:

 

(A)Interest Proceeds from Collateral Obligations; and

 

(B)Interest Proceeds from Eligible Investments.

 

(xii)Purchases, principal payments, and sales:

 

(A)The identity, Principal Balance (other than any accrued interest that was
purchased with Principal Proceeds (but excluding any capitalized interest)),
Principal Proceeds and Interest Proceeds received, and date for (X) each
Collateral Obligation that was released for sale or other disposition pursuant
to Section 12.1 since the last Monthly Report Determination Date and (Y) each
prepayment or redemption of a Collateral Obligation, and in the case of (X),
whether such Collateral Obligation was a Credit Risk Obligation or a Credit
Improved Obligation, and whether the sale of such Collateral Obligation was a
discretionary sale and whether such sale of a Collateral Obligation was to an
Affiliate of the Portfolio Manager;

 

(B)The identity, Principal Balance (other than any accrued interest that was
purchased with Principal Proceeds (but excluding any capitalized interest)), and
Principal Proceeds and Interest Proceeds expended to acquire each Collateral
Obligation acquired pursuant to Section 12.2 since the last Monthly Report
Determination Date and whether such Collateral Obligation was obtained through a
purchase from an Affiliate of the Portfolio Manager; and

 

(C)Following the Reinvestment Period, with respect to each Prepaid Obligation
and each Credit Risk Obligation sold since the prior Monthly Report, its stated
maturity.

 

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(xiii)The identity of each Defaulted Obligation, the S&P Collateral Value and
Market Value of each such Defaulted Obligation and date of default thereof.

 

(xiv)The identity of each Collateral Obligation with an S&P Rating of “CCC+” or
below and/or a Fitch Rating of “CCC+” or below and the Market Value of each such
Collateral Obligation.

 

(xv)The identity of each Deferring Obligation, the S&P Collateral Value and
Market Value of each Deferring Obligation, and the date on which interest was
last paid in full in Cash thereon.

 

(xvi)The identity of each Current Pay Obligation, the Market Value of each such
Current Pay Obligation, and the percentage of the Collateral Principal Amount
comprised of Current Pay Obligations.

 

(xvii)The Aggregate Principal Balance, measured cumulatively from the Closing
Date onward, of all Collateral Obligations that would have been acquired through
a Distressed Exchange but for the operation of the second proviso in the
definition of Distressed Exchange.

 

(xviii)The Weighted Average Floating Spread.

 

(xix)Whether any Trading Plans were entered into since the last Monthly Report
Determination Date and the identity of any Assets acquired and/or disposed of in
connection with each such Trading Plan.

 

(xx)For each Eligible Investment, the Obligor, credit rating, and maturity date.

 

(xxi)Such other information as any Rating Agency or the Portfolio Manager may
reasonably request.

 

(xxii)A list of any Credit Amendments effected since the last Monthly Report
Determination Date and the Aggregate Principal Balance of all Assets that have
been the subject of Credit Amendments since the Closing Date (as provided by the
Portfolio Manager).

 

(xxiii)If a deposit is made into the Collection Account pursuant to Section
10.3(c), the Target Initial Par Balance as of the date specified in Section
10.3(c).

 

(xxiv)With respect to each Bankruptcy Exchange: (A) the sale price and S&P
Recovery Rate of each Defaulted Obligation being exchanged, (B) the purchase
price, Obligor, S&P Rating and S&P Recovery Rate of each debt obligation
received in a Bankruptcy Exchange and (C) the Principal Balance of the debt
obligations received in a Bankruptcy Exchange as a percentage of the Collateral
Principal Amount and the Aggregate Principal Balance of all debt obligations
received in Bankruptcy Exchanges since the Closing Date as a percentage of the
Collateral Principal Amount.

 

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(xxv)The results of the S&P CDO Monitor Test (with a statement as to whether it
is passing or failing), including, in addition to the information set forth in
clause (xxvi) below, the Class Default Differential for the Highest Ranking S&P
Class and the characteristics of the Current Portfolio. In addition, prior to
the Effective Date and together with each Monthly Report, the Issuer shall
provide to S&P the Excel Default Model Input File, which shall include the LoanX
identifications of any Collateral Obligations, at cdo_surveillance@spglobal.com.

 

(xxvi)The following information (with the terms used in clauses (A) through (I)
below having the meanings assigned thereto in Schedule 3 hereto).

 

(A)S&P CDO Monitor Adjusted BDR;

 

(B)S&P CDO Monitor BDR;

 

(C)S&P CDO Monitor SDR;

 

(D)S&P Default Rate Dispersion;

 

(E)S&P Expected Portfolio Default Rate;

 

(F)S&P Industry Diversity Measure;

 

(G)S&P Obligor Diversity Measure;

 

(H)S&P Regional Diversity Measure; and

 

(I)S&P Weighted Average Life.

 

(xxvii)The Aggregate Principal Balance of all Senior Secured Loans owned by the
Issuer.

 

(xxviii)(A) The calculation of the Weighted Average Leverage Ratio and each
component of such calculation, including: (1) the products of (x) the Senior Net
Leverage Ratio of each Senior Secured Loan by (y) the Principal Balance of such
Senior Secured Loan (in each case as reported under clause (iv) above), (2) the
sum of the products obtained pursuant to the calculation under clause (1) above,
and (3) the quotient obtained by dividing (x) the sum obtained pursuant to the
calculation under clause (2) above and (y) the Aggregate Principal Balance of
all Senior Secured Loans owned by the Issuer (as reported under clause (xxvii)
above) and (B) a determination as to whether the Weighted Average Leverage Ratio
satisfies the Weighted Average Leverage Ratio Test; and

 

(xxix)The Aggregate Principal Balance of all Cov-Lite Loans.

 

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Upon receipt of each Monthly Report, the Trustee (if not the same Person as the
Collateral Administrator) shall compare the information contained in such
Monthly Report to the information contained in its records with respect to the
Assets and shall, within three Business Days after receipt of such Monthly
Report, notify the Issuer, the Collateral Administrator, the Rating Agencies and
the Portfolio Manager if the information contained in the Monthly Report does
not conform to the information maintained by the Trustee with respect to the
Assets. In the event that any discrepancy exists, the Trustee and the Issuer, or
the Portfolio Manager on behalf of the Issuer, shall attempt to resolve the
discrepancy. If such discrepancy cannot be promptly resolved, the Trustee shall
within five Business Days notify the Portfolio Manager who shall, on behalf of
the Issuer, request that the Independent accountants appointed by the Issuer
pursuant to Section 10.9 perform the agreed-upon procedures on such Monthly
Report and the Trustee’s records to determine the cause of such discrepancy. If
such review reveals an error in the Monthly Report or the Trustee’s records, the
Monthly Report or the Trustee’s records shall be revised accordingly and, as so
revised, shall be utilized in making all calculations pursuant to this Indenture
and notice of any error in the Monthly Report shall be sent as soon as
practicable by the Issuer to all recipients of such report which may be
accomplished by making a notation of such error in the subsequent Monthly
Report.

 

(b)Quarterly Payment Date Accounting. The Issuer shall render an accounting
(each a “Distribution Report”), determined as of the close of business on each
Determination Date preceding a Quarterly Payment Date, and shall make available
such Distribution Report to the Trustee, the Portfolio Manager, the Initial
Purchaser, the Placement Agents, the CLO Information Service, each Rating Agency
then rating a Class of Notes and, upon written request therefor, any Holder and,
upon written notice to the Trustee in the form of Exhibit D, any beneficial
owner of a Note not later than the Business Day preceding the related Quarterly
Payment Date. The Distribution Report shall contain the following information:

 

(i)the information required to be in the Monthly Report pursuant to Section
10.7(a);

 

(ii)(a) the Aggregate Outstanding Amount of the Notes of each Class at the
beginning of the Interest Accrual Period and such amount as a percentage of the
original Aggregate Outstanding Amount of the Notes of such Class, (b) the amount
of principal payments to be made on the Notes of each Class on the next Payment
Date, the amount of any Deferred Interest on the Class B Notes and the Aggregate
Outstanding Amount of the Notes of each Class after giving effect to the
principal payments, if any, on the next Payment Date and such amount as a
percentage of the original Aggregate Outstanding Amount of the Notes of such
Class, and (c) the amount of distributions to be paid to the Issuer on the next
Payment Date;

 

(iii)the Interest Rate and accrued interest for each Class of Notes for such
Quarterly Payment Date;

 

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(iv)the amounts payable pursuant to each clause of Section 11.1(a)(i), each
clause of Section 11.1(a)(ii) and each clause of Section 11.1(a)(iii), as
applicable, on the related Quarterly Payment Date;

 

(v)for the Collection Account:

 

(A)the Balance of Principal Proceeds on deposit in the Collection Account at the
end of the related Collection Period and the Balance of Interest Proceeds on
deposit in the Collection Account on the next Business Day following the end of
the related Collection Period;

 

(B)the amounts payable from the Collection Account to the Payment Account, in
order to make payments pursuant to Section 11.1(a)(i) and Section 11.1(a)(ii) on
the next Payment Date (net of amounts which the Portfolio Manager intends to
reinvest in additional Collateral Obligations pursuant to Article XII); and

 

(C)the Balance remaining in the Collection Account immediately after all
payments and deposits to be made on such Quarterly Payment Date; and

 

(vi)such other information as the Portfolio Manager may reasonably request.

 

Each Distribution Report shall constitute instructions to the Trustee to
withdraw funds from the Payment Account and pay or transfer such amounts set
forth in such Distribution Report in the manner specified and in accordance with
the priorities established in Section 11.1 and Article XIII.

 

(c)Interest Rate Notice. The Issuer (or the Collateral Administrator on its
behalf) shall include in the Monthly Report a notice setting forth the Interest
Rate for each Class of Notes for the Interest Accrual Period preceding the next
Payment Date.

 

(d)Failure to Provide Accounting. If the Trustee shall not have received any
accounting provided for in this Section 10.7 on the first Business Day after the
date on which such accounting is due to the Trustee, the Trustee shall notify
the Portfolio Manager who shall use all reasonable efforts to obtain such
accounting by the applicable Payment Date. To the extent the Portfolio Manager
is required to provide any information or reports pursuant to this Section 10.7
as a result of the failure of the Issuer to provide such information or reports,
the Portfolio Manager shall be entitled to retain an Independent certified
public accountant in connection therewith and the reasonable costs incurred by
the Portfolio Manager for such Independent certified public accountant shall be
paid by the Issuer.

 

(e)Required Content of Certain Reports. Each Monthly Report and each
Distribution Report sent to any Holder or beneficial owner of an interest in a
Note shall contain, or be accompanied by, the following notices:

 

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“The Investment Company Act of 1940, as amended (the “Investment Company Act”)
requires that all holders of the outstanding securities of the Issuer be
“qualified purchasers” as defined in Section 2(a)(51)(A) of the Investment
Company Act and related rules (“Qualified Purchasers”). Under the rules, the
Issuer must have a “reasonable belief” that all holders of its outstanding
securities, including transferees, are Qualified Purchasers. Consequently, all
sales and resales of the Notes must be made solely to purchasers that are
Qualified Purchasers. Each purchaser of a Note will be deemed (or required, as
the case may be) to represent at the time of purchase that: (i) the purchaser is
a Qualified Purchaser who is either (x) an institutional “accredited investor”
(“IAI”) within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, as amended (the “Securities Act”), (y) a qualified
institutional buyer as defined in Rule 144A under the Securities Act (“QIB”) or
(z) a non-U.S. person acquiring such notes in an offshore transaction (as
defined in Regulation S under the Securities Act) in reliance on the exemption
from registration provided by Regulation S under the Securities Act (a person
satisfying one of clauses (x), (y) or (z), a “QIB/IAI/non-U.S. person”); (ii)
the purchaser is acting for its own account or the on behalf of the account of
another Qualified Purchaser that is a QIB/IAI/non-U.S. person (as applicable);
(iii) the purchaser is not formed for the purpose of investing in the Issuer;
(iv) the purchaser, and each account for which it is purchasing, will hold and
transfer at least the Minimum Denomination of the Notes specified in the
Indenture; (v) the purchaser can make the representations set forth in Section
2.5 of the Indenture or the appropriate Exhibit to the Indenture; (vi) the
purchaser understands that the Issuer may receive a list of participants holding
positions in securities from one or more book-entry depositories; (vii) the
purchaser will provide written notice of the foregoing, and of any applicable
restrictions on transfer, to any subsequent transferees. The Notes may only be
transferred to another Qualified Purchaser and QIB/IAI/non-U.S. person (as
applicable) and all subsequent transferees are deemed to have made
representations (i) through (vii) above.”

 

“The Issuer directs that the recipient of this notice, and any recipient of a
copy of this notice, provide a copy to any Person having an interest in this
Note as indicated on the books of DTC or on the books of a participant in DTC or
on the books of an indirect participant for which such participant in DTC acts
as agent.”

 

“The Indenture provides that if, notwithstanding the restrictions on transfer
contained therein, the Issuer determines that any holder of, or beneficial owner
of an interest in a Note is determined not to have been a Qualified Purchaser at
the time of acquisition of such Note or beneficial interest therein, the Issuer
may require, by notice to such Holder or beneficial owner, that such Holder or
beneficial owner sell all of its right, title and interest to such Note (or any
interest therein) to a Person that is either (x) Qualified Purchaser that is not
a U.S. person (as defined in Regulation S) acquiring the Notes in an offshore
transaction (as defined in Regulation S) in reliance on the exemption from
registration provided by Regulation S, or (y) a Qualified Purchaser who is
either an AI or a QIB (as applicable), with such sale to be effected within 30
days after notice of such sale requirement is given. If such holder or
beneficial owner fails to effect the transfer required within such 30-day
period, (i) the Issuer or the Portfolio Manager acting for the Issuer, without
further notice to such holder, shall and is hereby irrevocably authorized by
such holder or beneficial owner, to cause its Note or beneficial interest
therein to be transferred in accordance with Section 2.11 of the Indenture to a
Person that certifies to the Trustee, the Issuer and the Portfolio Manager, in
connection with such transfer, that such Person meets the qualifications set
forth in clauses (x) and (y) above and (ii) pending such transfer, no further
payments will be made in respect of such Note or beneficial interest therein
held by such holder or beneficial owner.”

 

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Each holder receiving this report agrees to keep all non-public information
herein confidential and not to use such information for any purpose other than
its evaluation of its investment in the Notes; provided that, any holder may
provide such information on a confidential basis to any prospective purchaser of
such holder’s Notes that is permitted by the terms of this Indenture to acquire
such holder’s Notes and that agrees to keep such information confidential in
accordance with the terms of this Indenture.

 

(f)Distribution of Reports and Documents. The Trustee will make the Monthly
Report, the Distribution Report, this Indenture and the Portfolio Management
Agreement available through the Trustee’s Website. Parties that are unable to
use the above distribution option are entitled to have a paper copy mailed to
them by first-class mail by calling the Trustee’s Corporate Trust Office. The
Trustee shall have the right to change the way such statements and documents are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties, and the Trustee shall provide timely and
adequate notification to all above parties regarding any such changes. As a
condition to access to the Trustee’s Website, the Trustee may require
registration and the acceptance of a disclaimer. The Trustee shall be entitled
to rely on, but shall not be responsible for, the content or accuracy of any
information provided in the Monthly Report and the Distribution Report which the
Trustee disseminates in accordance with this Indenture and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion. Furthermore, the
Trustee is hereby directed to make available to Intex each Monthly Report and
Distribution Report.

 

Section 10.8.     Release of Assets

 

(a)The Portfolio Manager may, by Issuer Order delivered to the Trustee no later
than the settlement date of any sale of an obligation (or, in the case of
physical settlement, no later than the Business Day preceding such date),
certifying with respect to settlements after the Effective Date that the
applicable conditions set forth in Article XII have been met (which
certification shall be deemed to have been provided by the Portfolio Manager
upon delivery of an Issuer Order in respect of such sale), direct the Trustee to
deliver such obligation against receipt of payment therefor.

 

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(b)The Portfolio Manager may, by Issuer Order delivered to the Trustee no later
than the settlement date of any redemption or payment in full of a Collateral
Obligation or Eligible Investment (or, in the case of physical settlement, no
later than the Business Day preceding such date) certifying that such obligation
is being redeemed or paid in full, direct the Trustee or, at the Trustee’s
instruction, the Custodian, to deliver such obligation, if in physical form,
duly endorsed, or, if such obligation is a Clearing Corporation Note, to cause
it to be presented (or in the case of a general intangible or a participation,
cause such actions as are necessary to transfer such obligation to the
designated transferee free of liens, claims or encumbrances created by this
Indenture), to the appropriate paying agent therefor on or before the date set
for redemption or payment, in each case against receipt of the redemption price
or payment in full thereof.

 

(c)Subject to Article XII, the Portfolio Manager may, by Issuer Order delivered
to the Trustee no later than the settlement date of an exchange, tender or sale
(or, in the case of physical settlement, no later than the Business Day
preceding such date), certifying that a Collateral Obligation is subject to a
tender offer, voluntary redemption, exchange offer, conversion or other action
having a similar effect when required under this Indenture (an “Offer”) and
setting forth in reasonable detail the procedure for response to such Offer,
direct the Trustee or, at the Trustee’s instructions, the Custodian, to deliver
such obligation, if in physical form, duly endorsed, or, if such obligation is a
Clearing Corporation Note, to cause it to be delivered, in accordance with such
Issuer Order, in each case against receipt of payment therefor.

 

(d)Subject to Article XII, the Portfolio Manager may, by Issuer Order delivered
to the Trustee no later than the settlement date of an exchange (or in the case
of physical settlement, no later than the Business Day preceding such date),
certifying that the exchange satisfies the conditions set forth in the
definition of Bankruptcy Exchange, direct the Trustee to deliver such
obligation, if in physical form, duly endorsed, or, if such obligation is a
Clearing Corporation Note, to cause it to be delivered, in accordance with the
Issuer Order, in each case against receipt of another debt obligation therefor.

 

(e)The Trustee shall deposit any proceeds received by it from the disposition of
a Collateral Obligation or Eligible Investment in the Collection Account, unless
such proceeds are simultaneously applied to the purchase of Collateral
Obligations or Eligible Investments.

 

(f)The Trustee shall, (i) upon receipt of an Issuer Order, release from the lien
of this Indenture any Illiquid Assets sold, distributed or disposed of pursuant
to Article IV, and (ii) upon receipt of an Issuer Order at such time as there
are no Notes Outstanding and all obligations of the Issuer hereunder have been
satisfied, release the Assets from the lien of this Indenture.

 

(g)[Reserved].

 

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(h)The Trustee shall, upon receipt of an Issuer Order, release from the lien of
this Indenture any Selling Institution Collateral in accordance with Section
10.4.

 

(i)Following delivery of any obligation pursuant to clauses (a) through (c) and
(e) through (g) above, such obligation shall be released from the lien of this
Indenture without further action by the Trustee or the Issuer.

 

(j)The Trustee shall, upon receipt of an Issuer Order, release from the lien of
this Indenture any Assets sold, transferred, exchanged or otherwise disposed of
or distributed in accordance with the terms of this Indenture.

 

Section 10.9.     Reports by Independent Accountants

 

(a)At the Closing Date, the Issuer (or the Portfolio Manager on behalf of the
Issuer) shall appoint one or more firms of Independent certified public
accountants of recognized international reputation for purposes of reviewing and
delivering any Accountants’ Reports required by this Indenture, which may be the
firm of Independent certified public accountants that performs accounting
services for the Issuer or the Portfolio Manager. The Issuer (or the Portfolio
Manager on behalf of the Issuer) may remove any firm of Independent certified
public accountants at any time without the consent of any Holder. Upon any
resignation by such firm or removal of such firm by the Issuer, the Issuer (or
the Portfolio Manager on behalf of the Issuer) shall promptly appoint by Issuer
Order delivered to the Trustee and each Rating Agency a successor thereto that
shall also be a firm of Independent certified public accountants of recognized
international reputation, which may be a firm of Independent certified public
accountants that performs accounting services for the Issuer or the Portfolio
Manager. If the Issuer shall fail to appoint a successor to a firm of
Independent certified public accountants which has resigned within 30 days after
such resignation, the Issuer shall promptly notify the Trustee, with a copy to
the Portfolio Manager, of such failure in writing. If the Issuer shall not have
appointed a successor within 10 days thereafter, the Trustee shall promptly
notify the Portfolio Manager, who shall appoint a successor firm of Independent
certified public accountants of recognized international reputation. The fees of
such Independent certified public accountants and its successor shall be payable
by the Issuer.

 

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(b)On or before March 31]of each year commencing in 2020, the Issuer shall cause
to be delivered to the Trustee a report (subject to the terms of an agreed upon
procedures letter) from a firm of Independent certified public accountants for
each Distribution Report received since the last statement (i) indicating that
the calculations within those Distribution Reports have been recalculated and
compared to the information provided by the Issuer in accordance with the
applicable provisions of this Indenture and (ii) recalculating the Aggregate
Principal Balance of the Assets and the Aggregate Principal Balance of the
Collateral Obligations securing the Notes as of the immediately preceding
Determination Dates; provided that, in the event of a conflict between such firm
of Independent certified public accountants and the Issuer with respect to any
matter in this Section 10.9, the determination by such firm of Independent
public accountants shall be conclusive. To the extent a Holder or a beneficial
owner of a Note requests the yield to maturity in respect of the relevant Note
in order to determine any “original issue discount” in respect thereof, the
Trustee shall request that the firm of Independent certified public accountants
appointed by the Issuer recalculate such yield to maturity. The Trustee shall
have no responsibility to calculate the yield to maturity nor to verify the
accuracy of such Independent certified public accountants’ calculation. In the
event that the firm of Independent certified public accountants fails to
calculate such yield to maturity, the Trustee shall have no responsibility to
provide such information to Holder or a beneficial owner of a Note. Neither the
Trustee nor the Collateral Administrator shall have any responsibility to the
Issuer or the Secured Parties to make any inquiry or investigation as to, and
shall have no obligation in respect of, the terms of any engagement of
Independent public accountants by the Issuer (or the Portfolio Manager on behalf
of the Issuer); provided, however, that the Trustee shall be authorized by the
Issuer under this Section 10.9 to execute any acknowledgement or other agreement
with the Independent accountants required for the Trustee to receive any of the
reports or instructions provided for in this Indenture, which acknowledgment or
agreement may include, among other things, (i) acknowledgement of the
responsibility for the sufficiency of the procedures to be performed by the
Independent accountants for its purposes, (ii) releases by the Trustee (on
behalf of itself and the Holders) of claims against the Independent accountants
and acknowledgment of other limitations of liability in favor of the Independent
accountants and (iii) restrictions or prohibitions on the disclosure of
information or documents provided to it by such firm of Independent accountants
(including to the Holders). It is understood and agreed that the Trustee will
deliver such letter of agreement in conclusive reliance on the foregoing
direction of the Issuer, and the Trustee shall make no inquiry or investigation
as to, and shall have no obligation in respect of, the sufficiency, validity or
correctness of such procedures. The Trustee shall not be required to make any
such agreements that adversely affect the Bank in its individual capacity.

 

(c)Upon the written request of the Trustee, or any Holder of an Interest, the
Issuer will cause the firm of Independent certified public accountants appointed
pursuant to Section 10.9(a) to provide any Holder of Interests with all of the
information required to be provided by the Issuer pursuant to Section 7.17 or
assist the Issuer in the preparation thereof.

 

Section 10.10.     Reports to Rating Agencies and Additional Recipients

 

In addition to the information and reports specifically required to be provided
to each Rating Agency pursuant to the terms of this Indenture, the Issuer shall
provide each Rating Agency with all information or reports delivered to the
Trustee hereunder (with the exception of any Effective Date Accountants’ AUP
Reports or any other Accountants’ Report other than as provided in the last
sentence of this Section 10.10), and such additional information as any Rating
Agency may from time to time reasonably request (including, with respect to
credit estimates or any Collateral Obligation subject to a private rating or a
credit opinion, notification to S&P and Fitch in accordance with Section 14.3(a)
of any material modification that would result in substantial changes to the
terms of any loan document relating to such Collateral Obligation or any release
of collateral thereunder not permitted by such loan documentation). In
accordance with SEC Release No. 34-72936, Form 15-E, only in its complete and
unedited form which includes the Effective Date Accountants’ Comparison AUP
Report as an attachment, shall be provided by the Independent accountants to the
Issuer who shall post such Form 15-E on the 17g-5 Website.

 

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Section 10.11.     Procedures Relating to the Establishment of Accounts
Controlled by the Trustee

 

Notwithstanding anything else contained herein, the Issuer agrees that with
respect to each of the Accounts, it will cause the Custodian establishing such
accounts to enter into an Account Agreement and, if the Custodian is the Bank,
shall cause the Bank to comply with the provisions of such Account Agreement.
Notwithstanding anything else contained herein, the Trustee may open such
subaccounts of any such Account as it deems necessary or appropriate for
convenience of administration.

 

Section 10.12.     Section 3(c)(7) Procedures

 

(a)DTC Actions. The Issuer will direct DTC to take the following steps in
connection with the Global Notes (or such other appropriate steps regarding
legends of restrictions on the Global Notes under Section 3(c)(7) of the
Investment Company Act and Rule 144A as may be customary under DTC procedures at
any given time):

 

(i)The Issuer will direct DTC to include the marker “3c7” in the DTC
20-character security descriptor and the 48-character additional descriptor for
the Global Notes.

 

(ii)The Issuer will direct DTC to cause each physical deliver order ticket that
is delivered by DTC to purchasers to contain the 20-character security
descriptor. The Issuer will direct DTC to cause each deliver order ticket that
is delivered by DTC to purchasers in electronic form to contain a “3c7”
indicator and a related user manual for participants. Such user manual will
contain a description of the relevant restrictions imposed by Section 3(c)(7).

 

(iii)On or prior to the Closing Date, the Issuer will instruct DTC to send a
Section 3(c)(7) notice to all DTC participants in connection with the offering
of the Global Notes.

 

(iv)In addition to the obligations of the Registrar set forth in Section 2.5,
the Issuer will from time to time (upon the request of the Trustee) make a
request to DTC to deliver to the Issuer a list of all DTC participants holding
an interest in the Global Notes.

 

(v)The Issuer will cause each CUSIP number obtained for a Global Note to have
“3c7” and “144A” indicators, as applicable, attached to such CUSIP number.

 

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(b)Bloomberg Screens, Etc. The Issuer will from time to time request all
third-party vendors to include on screens maintained by such vendors appropriate
legends regarding restrictions on the Global Notes under Section 3(c)(7) of the
Investment Company Act and Rule 144A

 

ARTICLE XI
APPLICATION OF MONIES

 

Section 11.1.Disbursements of Monies from Payment Account

 

(a)Notwithstanding any other provision in this Indenture, but subject to the
other subsections of this Section 11.1 and to Section 13.1, on each Payment
Date, the Trustee shall disburse amounts transferred from the Collection Account
to the Payment Account pursuant to Section 10.2 (and in respect of the second
Payment Date, amounts transferred from the Interest Reserve Account to the
Payment Account pursuant to Section 10.3(e)) in accordance with the following
priorities (subject to the subsections described above in this sentence and the
following proviso, the “Priority of Payments”); provided, that unless an
Enforcement Event has occurred and is continuing or the Special Priority of
Payments otherwise applies, (x) Interest Proceeds transferred from the
Collection Account shall be applied solely in accordance with Section
11.1(a)(i); and (y) Principal Proceeds transferred from the Collection Account
shall be applied solely in accordance with Section 11.1(a)(ii):

 

(i)On each Quarterly Payment Date, unless an Enforcement Event has occurred and
is continuing or the Special Priority of Payments otherwise applies, Interest
Proceeds on deposit in the Collection Account, to the extent received on or
before the related Determination Date (or if such Determination Date is not a
Business Day, the next succeeding Business Day) and in the case of the second
Payment Date, Interest Proceeds on deposit in the Interest Reserve Account, in
each case that are transferred into the Payment Account, shall be applied in the
following order of priority:

 

(A)(1) first, to the payment of taxes and governmental fees owing by the Issuer,
if any, and (2) second, to the payment of the accrued and unpaid Administrative
Expenses, in the priority stated in the definition thereof, up to the
Administrative Expense Cap;

 

(B)to the extent not deferred by the Portfolio Manager pursuant to Section
11.1(d) or otherwise waived by the Portfolio Manager in accordance with Section
11.1(e), to the payment of the Base Management Fee due and payable to the
Portfolio Manager (including any accrued and unpaid interest thereon) and any
unpaid Deferred Base Management Fee that has been deferred with respect to prior
Payment Dates which the Portfolio Manager elects to have paid on such Payment
Date pursuant to Section 11.1(d); provided that, amounts paid as any Deferred
Base Management Fee pursuant to this clause (B) may not exceed the Deferred Base
Management Fee Cap; provided further that any accrued and unpaid interest
pursuant to this clause (B) shall be paid solely to the extent that, after
giving effect on a pro forma basis to such payment, sufficient Interest Proceeds
remain to pay in full all interest (including Deferred Interest) due and payable
on each Class of Notes on such Payment Date;

 

211 

 

(C)to the payment of accrued and unpaid interest on the Class A-1 Notes;

 

(D)to the payment of accrued and unpaid interest on the Class A-2 Notes;

 

(E)if either of the Class A Coverage Tests (except, in the case of the Class A
Interest Coverage Test, if such Payment Date is the first Payment Date after the
Closing Date) is not satisfied on the related Determination Date, to make
payments in accordance with the Note Payment Sequence to the extent necessary to
cause all Class A Coverage Tests that are applicable on such Payment Date to be
satisfied on a pro forma basis after giving effect to all payments pursuant to
this clause (E);

 

(F)to the payment of accrued and unpaid interest (excluding Deferred Interest,
but including interest on Deferred Interest) on the Class B Notes;

 

(G)if either of the Class B Coverage Tests (except, in the case of the Class B
Interest Coverage Test, if such Payment Date is the first Payment Date after the
Closing Date) is not satisfied on the related Determination Date, to make
payments in accordance with the Note Payment Sequence to the extent necessary to
cause all Class B Coverage Tests on such Payment Date to be satisfied on a pro
forma basis after giving effect to all payments pursuant to this clause (G);

 

(H)to the payment of any Deferred Interest on the Class B Notes;

 

(I)with respect to any Payment Date following the Effective Date upon which an
Effective Date Rating Failure has occurred and is continuing, amounts available
for distribution pursuant to this clause (I) shall be used, in the discretion of
the Portfolio Manager, either (i) for application in accordance with the Note
Payment Sequence on such Payment Date or (ii) for the purchase of additional
Collateral Obligations, or in any combination of clauses (i) and (ii) above, in
each case in amounts sufficient to obtain the Effective Date Ratings
Confirmation;

 

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(J)[reserved];

 

(K)to the extent not deferred by the Portfolio Manager pursuant to Section
11.1(d) or otherwise waived by the Portfolio Manager in accordance with Section
11.1(e), to the payment of the Subordinated Management Fee due and payable to
the Portfolio Manager (including any accrued and unpaid interest thereon) and
any unpaid Deferred Subordinated Management Fee that has been deferred with
respect to prior Payment Dates which the Portfolio Manager elects to have paid
on such Payment Date pursuant to Section 11.1(d);

 

(L)first, to the payment (in the same manner and order of priority stated in the
definition thereof) of any Administrative Expenses not paid pursuant to clause
(A)(2) above due to the limitation contained therein and second, any Deferred
Base Management Fee not paid pursuant to clause (B) above due to the limitations
contained therein; and

 

(M)any remaining Interest Proceeds shall be paid to the Issuer.

 

(ii)On each Quarterly Payment Date, unless an Enforcement Event has occurred and
is continuing or the Special Priority of Payments otherwise applies, Principal
Proceeds on deposit in the Collection Account that are received on or before the
related Determination Date (or if such Determination Date is not a Business Day,
the next succeeding Business Day) and that are transferred to the Payment
Account (which will not include (i) amounts required to meet funding
requirements with respect to Delayed Drawdown Collateral Obligations and
Revolving Collateral Obligations that are deposited in the Revolver Funding
Account, (ii) during the Reinvestment Period, Principal Proceeds that will be
used to reinvest in Collateral Obligations that the Issuer has already committed
to purchase, and (iii) after the Reinvestment Period, subject to Section
12.2(a)(y), Principal Proceeds permitted to be used to settle Post-Reinvestment
Period Settlement Obligations) and in the case of the second Payment Date,
Principal Proceeds on deposit in the Interest Reserve Account that are
transferred to the Payment Account, shall be applied in the following order of
priority:

 

(A)to pay the amounts referred to in clauses (A) through (D) of Section
11.1(a)(i) (in the same manner and order of priority stated therein), but only
to the extent not paid in full thereunder;

 

(B)to pay the amounts referred to in clause (E) of Section 11.1(a)(i) but only
to the extent not paid in full thereunder and to the extent necessary to cause
the Coverage Tests that are applicable on such Payment Date with respect to the
Class A Notes to be met as of the related Determination Date on a pro forma
basis after giving effect to any payments made through this clause (B);

 

213 

 

(C)to pay the amounts referred to in clause (F) of Section 11.1(a)(i) to the
extent not paid in full thereunder, only to the extent that the Class B Notes
are the Controlling Class;

 

(D)to pay the amounts referred to in clause (G) of Section 11.1(a)(i) but only
to the extent not paid in full thereunder and to the extent necessary to cause
the Coverage Tests that are applicable on such Payment Date with respect to the
Class B Notes to be met as of the related Determination Date on a pro forma
basis after giving effect to any payments made through this clause (D);

 

(E)to pay the amounts referred to in clause (H) of Section 11.1(a)(i) to the
extent not paid in full thereunder, only to the extent that the Class B Notes
are the Controlling Class;

 

(F)with respect to any Payment Date following the Effective Date, if after the
application of Interest Proceeds as provided in clause (I) of Section
11.1(a)(i), the Effective Date Ratings Confirmation has not been obtained,
amounts available for distribution pursuant to this clause (F) shall be used for
application in accordance with the Note Payment Sequence on such Payment Date in
an amount sufficient to obtain Effective Date Ratings Confirmation;

 

(G)if such Quarterly Payment Date is a Special Redemption Date, to make payments
in the amount, if any, of the Principal Proceeds that the Portfolio Manager has
determined cannot be practicably reinvested in additional Collateral
Obligations, in accordance with the Note Payment Sequence;

 

(H)(1) during the Reinvestment Period, to the Collection Account as Principal
Proceeds to invest in Eligible Investments (pending the purchase of additional
Collateral Obligations) and/or to apply toward the purchase of additional
Collateral Obligations, and (2) subject to Section 12.2(a)(y), after the
Reinvestment Period, as designated by the Portfolio Manager, to the Collection
Account as Principal Proceeds to invest in any Eligible Investments (pending the
purchase of Post-Reinvestment Period Settlement Obligations) and/or to settle
Post-Reinvestment Period Settlement Obligations;

 

(I)to make payments in accordance with the Note Payment Sequence;

 

(J)to pay the amounts referred to in clause (K) of Section 11.1(a)(i) only to
the extent not already paid;

 

214 

 

(K)to pay the amounts referred to in clause (L) of Section 11.1(a)(i) only to
the extent not already paid; and

 

(L)any remaining Principal Proceeds shall be paid to the Issuer.

 

(iii)Notwithstanding the provisions of the foregoing Sections 11.1(a)(i) and
11.1(a)(ii), (x) upon the occurrence of an Enforcement Event on each date or
dates fixed by the Trustee pursuant to Section 5.7, (y) on any Redemption Date
(other than a Partial Redemption Date, any other Redemption Date relating to a
Refinancing, a Special Redemption Date or a Redemption Date occurring in
connection with a mandatory redemption pursuant to Section 9.1) and (z) at
Stated Maturity, proceeds in respect of the Assets on deposit in the Collection
Account that are received on or before the related Determination Date and that
are transferred to the Payment Account in accordance with Section 10.2(e) will
be applied in the following order of priority (the “Special Priority of
Payments”):

 

(A)(1) first, to the payment of taxes and governmental fees owing by the Issuer,
if any, and (2) second, to the payment of the accrued and unpaid Administrative
Expenses, in the priority stated in the definition thereof, up to the
Administrative Expense Cap (provided that, following the commencement of any
sales of Assets pursuant to Section 5.5(a), the Administrative Expense Cap shall
be disregarded);

 

(B)to the extent not deferred by the Portfolio Manager pursuant to Section
11.1(d) or otherwise waived by the Portfolio Manager in accordance with Section
11.1(e), to the payment of the Base Management Fee due and payable to the
Portfolio Manager (including any accrued and unpaid interest thereon) and any
unpaid Deferred Base Management Fee that has been deferred with respect to prior
Payment Dates which the Portfolio Manager elects to have paid on such Payment
Date pursuant to Section 11.1(d); provided that, amounts paid as any Deferred
Base Management Fee pursuant to this clause (B) may not exceed the Deferred Base
Management Fee Cap; provided further that any accrued and unpaid interest
pursuant to this clause (B) shall be paid solely to the extent that, after
giving effect on a pro forma basis to such payment, sufficient Interest Proceeds
remain to pay in full (after taking into account any Deferred Base Management
Fee that the Portfolio Manager elects to have paid on such Payment Date) all
amounts due under clauses (C) through (I) below;

 

(C)to the payment of accrued and unpaid interest (including any defaulted
interest) on the Class A-1 Notes;

 

(D)to the payment of principal of the Class A-1 Notes;

 

215 

 

(E)to the payment of accrued and unpaid interest (including any defaulted
interest) on the Class A-2 Notes;

 

(F)to the payment of principal of the Class A-2 Notes;

 

(G)to the payment of accrued and unpaid interest (excluding Deferred Interest,
but including interest on Deferred Interest) on the Class B Notes;

 

(H)to the payment of Deferred Interest on the Class B Notes;

 

(I)to the payment of principal of the Class B Notes;

 

(J)to the extent not deferred by the Portfolio Manager pursuant to Section
11.1(d) or otherwise waived by the Portfolio Manager in accordance with Section
11.1(e), to the payment of the Subordinated Management Fee due and payable
(including any accrued and unpaid interest thereon) to the Portfolio Manager and
any unpaid Deferred Subordinated Management Fee that has been deferred with
respect to prior Payment Dates which the Portfolio Manager elects to have paid
on such Payment Date pursuant to Section 11.1(d);

 

(K)first, to the payment of (in the same manner and order of priority stated in
the definition thereof) any Administrative Expenses not paid pursuant to clause
(A)(2) above due to the limitation contained therein and second, any Deferred
Base Management Fee not paid pursuant to clause (B) above due to the limitations
contained therein; and

 

(L)any remaining Interest Proceeds and Principal Proceeds shall be paid to the
Issuer.

 

(b)If on any Payment Date the amount available in the Payment Account is
insufficient to make the full amount of the disbursements required by the
Distribution Report, the Trustee shall make the disbursements called for in the
order and according to the priority set forth under Section 11.1(a) above,
subject to Section 13.1, to the extent funds are available therefor.

 

(c)In connection with the application of funds to pay Administrative Expenses of
the Issuer in accordance with Section 11.1(a)(i), Section 11.1(a)(ii) and
Section 11.1(a)(iii), the Trustee shall remit such funds, to the extent
available, as directed and designated in an Issuer Order (which may be in the
form of standing instructions, and standing instructions are hereby provided to
pay Administrative Expenses in such amounts and to such entities as indicated in
the Distribution Report in respect of such Payment Date) delivered to the
Trustee no later than the Business Day prior to each Payment Date; provided
that, such direction and designation by Issuer Order shall not be necessary for,
and shall be subject to, the payment of amounts pursuant to, and in the priority
stated in, the definition of Administrative Expenses.

 

216 

 

(d)The Portfolio Manager may, in its sole discretion, elect to defer payment of
all or a portion of the Base Management Fee or the Subordinated Management Fee
(other than any Waived Management Fees) on any Payment Date by providing notice
to the Trustee and the Issuer of such election on or before the Determination
Date preceding such Payment Date which notice shall specify the amount to be
deferred. On any Payment Date following a Payment Date on which the Portfolio
Manager has elected to defer all or a portion of the Base Management Fee or the
Subordinated Management Fee, the Portfolio Manager may elect to receive all or a
portion of the applicable Deferred Management Fee that has otherwise not been
paid to the Portfolio Manager by providing notice to the Trustee of such
election on or before the related Determination Date, which notice shall specify
the amount of such Deferred Management Fee that the Portfolio Manager elects to
receive on such Payment Date. Accrued and unpaid Base Management Fees or
Subordinated Management Fees deferred at the election of the Portfolio Manager
shall be deferred without interest. For the avoidance of doubt, accrued and
unpaid Base Management Fees or Subordinated Management Fees that are deferred as
a result of insufficient funds (other than any Waived Management Fees) in
accordance with the Priority of Payments shall bear interest at LIBOR
(calculated in the same manner as LIBOR in respect of the Notes) plus 0.30% per
annum.

 

(e)The Portfolio Manager may, in its sole discretion, by written notice to the
Trustee delivered not later than the related Determination Date, elect to
irrevocably waive payment of or distribution in respect of all or any portion of
the Base Management Fee and/or the Subordinated Management Fee (including any
Deferred Management Fees and any accrued and unpaid interest thereon, if
applicable) otherwise payable or distributable and available to be paid or
distributed to it on any Payment Date in accordance with the Priority of
Payments (the “Waived Management Fee”). Any such Waived Management Fee shall not
thereafter become due and payable and any claim of the Portfolio Manager therein
shall be extinguished.

 

(f)Not less than eight Business Days preceding each Payment Date, the Portfolio
Manager shall certify to the Trustee (which may be a standing certification) the
amount described in clause (i)(b) of the definition of Dissolution Expenses. If
the distributions to be made pursuant to this Section 11.1 on any Payment Date
would cause the Aggregate Principal Balance of the remaining Collateral
Obligations immediately following such Payment Date (excluding Defaulted
Obligations, Equity Securities and Illiquid Assets) to be less than the amount
of Dissolution Expenses (as determined by the Trustee based on such
certification by the Portfolio Manager), the Trustee will provide written notice
thereof to the Issuer at least five Business Days before such Payment Date.

 

(g)Any amounts to be paid to the Issuer pursuant to the terms hereof shall be
paid by the Trustee or Paying Agent directly to an account of the Issuer
designated in writing by the Issuer (which account shall initially be as set
forth on Exhibit E hereto).

 

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ARTICLE XII
SALE OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS

 

Section 12.1.Sales of Collateral Obligations

 

Subject to the satisfaction of the conditions specified in Section 12.3 and,
notwithstanding any acceleration of the Maturity of the Notes, unless the
Trustee has commenced exercising remedies pursuant to Section 5.4, the Portfolio
Manager on behalf of the Issuer may, but will not be required to (except as
otherwise specified in this Section 12.1), direct the Trustee to sell or
otherwise dispose of, and the Trustee shall sell or otherwise dispose of, on
behalf of the Issuer in the manner directed by the Portfolio Manager pursuant to
this Section 12.1, any Collateral Obligation or Equity Security, if, as
certified by the Portfolio Manager (which certification shall be deemed to be
provided upon delivery of an Issuer Order or trade confirmation in respect of
such sale or disposition), to the best of its knowledge, such sale or other
disposition meets the requirements of any one of Sections 12.1(a) through (i)
(subject in each case to any applicable requirement of disposition under Section
12.1(h)). For purposes of this Section 12.1, the Sale Proceeds of a Collateral
Obligation sold by the Issuer shall include any Principal Financed Accrued
Interest received in respect of such sale or other disposition.

 

(a)Credit Risk Obligations. The Portfolio Manager may direct the Trustee to sell
or otherwise dispose of any Credit Risk Obligation at any time without
restriction.

 

(b)Credit Improved Obligations. The Portfolio Manager may direct the Trustee to
sell or otherwise dispose of any Credit Improved Obligation at any time without
restriction.

 

(c)Defaulted Obligations. The Portfolio Manager may direct the Trustee to sell
or otherwise dispose of any Defaulted Obligation, or any other asset received by
the Issuer in a workout, restructuring or similar transaction at any time
without restriction. The Portfolio Manager may direct the Trustee to consummate
a Bankruptcy Exchange at any time without restriction so long as the conditions
set forth in the definition thereof are satisfied. With respect to each
Defaulted Obligation that has not been disposed of within three years after
becoming a Defaulted Obligation, the Market Value and Principal Balance of such
Defaulted Obligation shall be deemed to be zero.

 

(d)Equity Securities. The Portfolio Manager (i) may direct the Trustee to sell
or otherwise dispose of any Equity Security at any time without restriction and
(ii) shall use its commercially reasonable efforts to direct the Trustee to sell
or otherwise dispose of any Equity Security within 45 days after receipt if such
Equity Security constitutes Margin Stock or otherwise within three years of
receipt unless such sale or other disposition is prohibited by applicable law or
an applicable contractual restriction, in which case such Equity Security shall
be sold as soon as such sale or other disposition is permitted by applicable law
and not prohibited by such contractual restriction.

 

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(e)Optional Redemption. After the Issuer has notified the Trustee of an Optional
Redemption of the Notes in accordance with Section 9.2, the Portfolio Manager
shall, if necessary to effect the Optional Redemption, direct the Trustee to
sell or otherwise dispose of (which disposition may be through participation or
other arrangement) all or a portion of the Collateral Obligations if the
requirements of Article IX are satisfied. If any such disposition is made
through participations, the Issuer shall use reasonable efforts to cause such
participations to be converted to assignments within six months after the
disposition.

 

(f)Tax Redemption. After a Majority of an Affected Class has directed (by a
written direction delivered to the Trustee) a Tax Redemption and all of the
requirements of Article IX are satisfied, the Issuer (or the Portfolio Manager
on its behalf) shall, if necessary to effect the Tax Redemption, direct the
Trustee to sell or otherwise dispose of (which disposition may be through
participation or other arrangement) all or a portion of the Collateral
Obligations. If any such disposition is made through participations, the Issuer
shall use reasonable efforts to cause such participations to be converted to
assignments within six months after the disposition.

 

(g)Discretionary Sales. The Portfolio Manager may direct the Trustee to sell or
otherwise dispose of any Collateral Obligation at any time other than during a
Restricted Trading Period if: (i) after giving effect to such disposition, the
Aggregate Principal Balance of all Collateral Obligations disposed of as
described in this Section 12.1(g) during the preceding period of 12 calendar
months is not greater than 30% of the Collateral Principal Amount (measured as
of the first day of such 12-calendar month period or, for the first 12 calendar
months after the Effective Date, during the period commencing on the Effective
Date, as the case may be, it being understood that no such limitation shall
apply at any time prior to the Effective Date); provided that, for purposes of
determining the percentage of Collateral Obligations disposed of during any such
period, the amount of any Collateral Obligations disposed of shall be reduced to
the extent of any purchases (or irrevocable commitments to purchase) of
Collateral Obligations with the intention of purchasing another obligation of
the same Obligor that would be pari passu or senior to such sold Collateral
Obligation; (ii) after giving effect to such disposition, the Weighted Average
Leverage Ratio Test is satisfied or, if not satisfied, maintained or improved;
and (iii) either:

 

(A)at any time (I) the proceeds from such sale are at least sufficient to
maintain or improve the Adjusted Collateral Principal Amount (as measured before
such sale), or (II) after giving effect to such sale, the Aggregate Principal
Balance of all Collateral Obligations (excluding the Collateral Obligations
being disposed of but including, without duplication, the anticipated net
proceeds of such disposition) plus, the amounts on deposit in the Collection
Account and the Ramp-Up Account (including Eligible Investments therein)
representing Principal Proceeds will be (x) maintained or increased or (y) equal
to or greater than the Reinvestment Target Par Balance; or

 

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(B)during the Reinvestment Period, the Portfolio Manager reasonably believes
prior to such sale that it will be able to enter into binding commitments to
reinvest all or a portion of the proceeds of such disposition in one or more
additional Collateral Obligations with an Aggregate Principal Balance at least
equal to the Investment Criteria Adjusted Balance of the Collateral Obligation
sold within 45 Business Days of such sale.

 

(h)Mandatory Sales. The Portfolio Manager on behalf of the Issuer shall use its
commercially reasonable efforts to effect the sale or other disposition of any
Collateral Obligation that (A) no longer meets the criteria described in clause
(vii) of the definition of Collateral Obligation, within 18 months after the
failure of such Collateral Obligation to meet either such criteria and (B) no
longer meets the criteria described in clause (vi) of the definition of
Collateral Obligation (unless such disposition is prohibited by applicable law
or an applicable contractual restriction) within 45 days after the failure of
such Collateral Obligation to meet such criteria.

 

(i)Unrestricted Sales. If the Aggregate Principal Balance of the Collateral
Obligations is less than U.S.$10,000,000, the Portfolio Manager may direct the
Trustee to sell the Collateral Obligations without regard to the foregoing
limitations.

 

(j)Clean-Up Call Redemption. Notwithstanding the restrictions of Section
12.1(a), after the Portfolio Manager has notified the Issuer and the Trustee of
a Clean-Up Call Redemption, the Portfolio Manager may at any time direct the
Trustee to sell (and upon receipt of the certification from the Portfolio
Manager required by Section 9.7(b) the Trustee shall sell in the manner
specified) for settlement in immediately available funds any Collateral
Obligation; provided that, the Sale Proceeds therefrom are used for the purposes
specified in Section 9.7 (and applied pursuant to the Priority of Payments).

 

(k)Stated Maturity. Notwithstanding the restrictions of Section 12.1, the
Portfolio Manager shall, no later than the Determination Date for the Stated
Maturity, on behalf of the Issuer, direct the Trustee to sell (and the Trustee
shall sell in the manner specified) for settlement in immediately available
funds any Collateral Obligations scheduled to mature after the Stated Maturity
of the Notes and cause the distribution of any proceeds thereof to the Issuer.

 

(l)Covered Fund. The Portfolio Manager on behalf of the Issuer shall use its
commercially reasonable efforts to effect the sale or other disposition of any
Asset (including, but not limited to, Eligible Investments and Collateral
Obligations (other than any Loan)) in a prompt manner if the Issuer’s continued
ownership of such Asset would, in the sole reasonable judgment of the Portfolio
Manager, cause the Issuer to be a “covered fund” under the Volcker Rule.

 

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Section 12.2.Purchase of Additional Collateral Obligations

 

On any date during the Reinvestment Period, the Portfolio Manager on behalf of
the Issuer may, subject to the other requirements in this Indenture and certain
limitations specified in Section 12.2(a), but will not be required to, direct
the Trustee to invest Principal Proceeds, proceeds of additional notes issued
pursuant to Sections 2.13 and 3.2, amounts on deposit in the Ramp-Up Account and
Principal Financed Accrued Interest, and the Trustee shall invest such Principal
Proceeds and other amounts in accordance with such direction.

 

(a)Investment Criteria. No obligation may be purchased by the Issuer unless the
Portfolio Manager reasonably believes that the following conditions (the
“Investment Criteria”) are satisfied on a pro forma basis as of the date the
Portfolio Manager commits on behalf of the Issuer to make such purchase, in each
case as determined by the Portfolio Manager after giving effect to the
settlement of such purchase and all other sales (or other dispositions) or
purchases previously or simultaneously committed to; provided that, the
conditions set forth in clauses (x)(B), (C) and (D) below need only be satisfied
with respect to purchases of Collateral Obligations occurring on or after the
Effective Date:

 

(x)During the Reinvestment Period:

 

(A)such obligation is a Collateral Obligation;

 

(B)if the commitment to make such purchase occurs on or after the Effective Date
(or, in the case of the Interest Coverage Tests, on or after the Determination
Date occurring immediately prior to the second Payment Date), (1) each Coverage
Test will be satisfied, or if not satisfied, such Coverage Test will be
maintained or improved and (2) after giving effect to such investment, the
Weighted Average Leverage Ratio Test will be satisfied or, if not satisfied,
maintained or improved;

 

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(C)(1) in the case of an additional Collateral Obligation purchased with the
proceeds from the sale or other disposition of a Credit Risk Obligation or a
Defaulted Obligation, either (a) the Aggregate Principal Balance of all
additional Collateral Obligations purchased with the proceeds from such
disposition will at least equal the Sale Proceeds from such disposition, (b) the
Aggregate Principal Balance of the Collateral Obligations will be maintained or
increased (when compared to the Aggregate Principal Balance of the Collateral
Obligations immediately prior to such disposition), or (c) the Aggregate
Principal Balance of all Collateral Obligations (excluding the Collateral
Obligation being sold but including, without duplication, the Collateral
Obligation being purchased and the anticipated Cash proceeds, if any, of such
disposition that are not applied to the purchase of such additional Collateral
Obligation) plus, without duplication, the amounts on deposit in the Collection
Account and the Ramp-Up Account (including Eligible Investments therein)
representing Principal Proceeds, will be equal to or greater than the
Reinvestment Target Par Balance and (2) in the case of any other purchase of
additional Collateral Obligations purchased with the proceeds from the sale or
other disposition of a Collateral Obligation, either (a) the Aggregate Principal
Balance of the Collateral Obligations will be maintained or increased (when
compared to the Aggregate Principal Balance of the Collateral Obligations
immediately prior to such disposition) or (b) the Aggregate Principal Balance of
all Collateral Obligations (excluding the Collateral Obligation being sold but
including, without duplication, the Collateral Obligation being purchased and
the anticipated Cash proceeds, if any, of such disposition that are not applied
to the purchase of such additional Collateral Obligation) plus, without
duplication, the amounts on deposit in the Collection Account and the Ramp-Up
Account (including Eligible Investments therein) representing Principal
Proceeds, will be (x) maintained or increased or (y) equal to or greater than
the Reinvestment Target Par Balance; and

 

(D)other than in the case of a Bankruptcy Exchange or an Exchange Transaction,
either (1) each requirement or test, as the case may be, of the Concentration
Limitations and the Collateral Quality Test (except, in the case of an
additional Collateral Obligation purchased with the proceeds from the sale or
other disposition of a Credit Risk Obligation, a Defaulted Obligation or an
Equity Security, the S&P CDO Monitor Test) will be satisfied or (2) if any such
requirement or test was not satisfied immediately prior to such investment, such
requirement or test will be maintained or improved after giving effect to the
investment;

 

provided that, clauses (B), (C) and (D) above need not be satisfied with respect
to one single reinvestment if they are satisfied on an aggregate basis in
connection with a Trading Plan; provided, further, that clause (B) and the
Collateral Quality Test in clause (D) above need not be satisfied with respect
to any Purchased Defaulted Obligation or Defaulted Obligation acquired in a
Bankruptcy Exchange.

 

During the Reinvestment Period, following the sale or other disposition of any
Credit Improved Obligation or any discretionary sale or other discretionary
disposition of a Collateral Obligation, the Portfolio Manager shall use its
reasonable efforts to purchase additional Collateral Obligations within 45
Business Days after such disposition; provided that, any such purchase must
comply with the requirements of this Section 12.2.

 

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(y)        If the Issuer has entered into a written trade ticket or other
binding commitment to purchase a Collateral Obligation during the Reinvestment
Period, the settlement date for which is not scheduled to occur prior to the end
of the Reinvestment Period (each such Collateral Obligation, a
“Post-Reinvestment Period Settlement Obligation”), such Post-Reinvestment Period
Settlement Obligation shall be treated as having been purchased by the Issuer
prior to the end of the Reinvestment Period for purposes of the Investment
Criteria, and Principal Proceeds received during or after the end of the
Reinvestment Period may be applied to the payment of the purchase price of such
Collateral Obligation. Not later than the Business Day immediately preceding the
end of the Reinvestment Period, the Portfolio Manager shall deliver to the
Trustee a schedule of Post-Reinvestment Period Settlement Obligations, each of
which shall be treated as a purchase made during the Reinvestment Period for
purposes of this Section 12.2, and the Portfolio Manager shall certify to the
Trustee (which certification shall be deemed to be made upon the delivery of
such schedule) that sufficient Principal Proceeds are available (including for
this purpose, Cash on deposit in the Collection Account as well as any Principal
Proceeds that will be received by the Issuer from the sale of Collateral
Obligations for which the trade date has already occurred but the settlement
date has not yet occurred) to effect the settlement of such Collateral
Obligations. The Portfolio Manager agrees to use commercially reasonable efforts
to settle the purchase of any Collateral Obligation no later than 45 Business
Days after the trade date of such Collateral Obligation.

 

(b)Investment in Eligible Investments. Cash on deposit in any Account (other
than the Payment Account) may be invested at any time in Eligible Investments in
accordance with Article X.

 

(c)[Reserved].

 

(d)Maturity Amendment. At any time, the Issuer (or the Portfolio Manager on the
Issuer’s behalf) may not vote in favor of a Maturity Amendment unless, as
determined by the Portfolio Manager, (i) either (A) the Weighted Average Life
Test will be satisfied after giving effect to such Maturity Amendment or (B) if
the Weighted Average Life Test was not satisfied immediately prior to giving
effect to such Maturity Amendment, the level of compliance with the Weighted
Average Life Test will be improved or maintained after giving effect to such
Maturity Amendment, in either case after giving effect to any Trading Plan in
effect during the applicable Trading Plan Period and (ii) after giving effect to
such Maturity Amendment, the stated maturity of the Collateral Obligation that
is the subject of such Maturity Amendment is not later than the earliest Stated
Maturity of the Notes; provided that, notwithstanding the foregoing
requirements, clause (i) above (1) is not required to be satisfied if the Issuer
(or the Portfolio Manager on behalf of the Issuer) did not affirmatively vote in
favor of such Maturity Amendment and (2) shall not apply to any Credit Amendment
if, (I) immediately after giving effect to such Credit Amendment, the Aggregate
Principal Balance of all Collateral Obligations subject to a Credit Amendment
with the affirmative vote of the Issuer (or the Portfolio Manager on the
Issuer’s behalf) at any time will not exceed 10.0% of the Target Initial Par
Amount or (II) such amendment or modification is in connection with an
insolvency, bankruptcy, reorganization, debt restructuring or workout of the
Obligor of such Collateral Obligation and the Aggregate Principal Balance of all
Collateral Obligations that have been subject to this clause (II) since the
Closing Date does not exceed 10.0% of the Target Initial Par Amount; provided,
further, that the Issuer (or the Portfolio Manager on behalf of the Issuer) may
vote in favor of any Maturity Amendment without regard to clause (i) above so
long as the Portfolio Manager intends to sell such Collateral Obligation within
30 days after the effective date of such Maturity Amendment and reasonably
believes that any such sale will be completed prior to the end of such 30-day
period.

 

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(e)Notwithstanding anything in this Indenture to the contrary, as a condition to
any purchase of an additional Collateral Obligation, if the amounts on deposit
in the Collection Account (including Eligible Investments therein) representing
Principal Proceeds, after giving effect to all expected debits and credits in
connection with such purchase and all other sales and purchases (as applicable)
previously or simultaneously committed to but which have not settled, is a
negative amount, the absolute value of such amount, as determined by the
Portfolio Manager, may not be greater than 5.0% of the Adjusted Collateral
Principal Amount as of the Measurement Date immediately preceding the trade date
for such purchase.

 

Section 12.3.Conditions Applicable to All Sale and Purchase Transactions

 

(a)Any transaction effected under this Article XII or Section 10.6 shall be
conducted on an arm’s length basis and, if effected with a Person Affiliated
with the Portfolio Manager (or with an account or portfolio for which the
Portfolio Manager or any of its Affiliates serves as investment adviser), shall
be effected in accordance with the requirements of the Portfolio Management
Agreement on terms no less favorable to the Issuer than would be the case if
such Person were not so Affiliated; provided that, in the case of any Collateral
Obligation sold or otherwise transferred to a Person so Affiliated, the
Portfolio Manager shall either obtain (x) bids for such Collateral Obligation
from three unaffiliated loan market participants (or, if the Portfolio Manager
is unable to obtain bids from three such participants, then such lesser number
of unaffiliated loan market participants from which the Portfolio Manager can
obtain bids using efforts consistent with the Portfolio Manager Standard), or
(y) if the Portfolio Manager is unable to obtain any bids for such Collateral
Obligation from an unaffiliated loan market participant, a Valuation of the
Collateral Obligation (the highest bid provided by an unaffiliated loan market
participant described in clause (x) or the fair market value established by the
Valuation described in clause (y), the “Applicable Qualified Valuation”), and
such Affiliate shall acquire such Collateral Obligation for a price equal to the
price established by such Applicable Qualified Valuation; provided further that
an aggregate amount of Collateral Obligations not exceeding 15% of the Net
Purchased Loan Balance may be sold or otherwise transferred to the Transferor
pursuant hereto at a price greater than the Applicable Qualified Valuation, but
no greater than the Transfer Deposit Amount with respect to such Collateral
Obligation (and to the extent the Transfer Deposit Amount in respect of such
Collateral Obligation exceeds the fair market value thereof, such excess shall
be deemed to be a capital contribution from the Transferor to the Issuer);
provided, further, that the Trustee shall have no responsibility to oversee
compliance with this clause (a) by the other parties.

 

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(b)Upon any acquisition of a Collateral Obligation pursuant to this Article XII,
all of the Issuer’s right, title and interest to the Asset or Assets shall be
Assets Granted to the Trustee pursuant to this Indenture and shall be Delivered
to the Trustee. The Trustee shall also receive, not later than the related
Cut-Off Date, an Issuer Order certifying compliance with the provisions of this
Article XII; provided that, such requirement shall be satisfied and such
statements shall be deemed to have been made by the Issuer in respect of such
acquisition by the delivery to the Trustee of a trade ticket or an Issuer Order
in respect thereof.

 

(c)Notwithstanding anything contained in this Article XII to the contrary and
without limiting the right to make any other permitted purchases, sales or other
dispositions, the Issuer shall have the right to effect any sale or other
disposition of any Asset or purchase of any Collateral Obligation (provided,
that in the case of a purchase of a Collateral Obligation, such purchase
complies with the applicable requirements of the Portfolio Management Agreement)
and the Transferor shall have the right to exercise any optional purchase or
substitution right (x) with the consent of the Holders evidencing at least 75%
of the Aggregate Outstanding Amount of each Class of Notes and (y) of which each
Rating Agency and the Trustee (with a copy to the Portfolio Manager) have been
notified.

 

Section 12.4.Exchange Transactions

 

(a)Notwithstanding anything to the contrary set forth in Section 12.2, prior to
the end of the Reinvestment Period, a Defaulted Obligation (a “Purchased
Defaulted Obligation”) may be purchased with all or a portion of the Sale
Proceeds of another Defaulted Obligation (an “Exchanged Defaulted Obligation”)
(each such exchange referred to as an “Exchange Transaction”), if:

 

(i)when compared to the Exchanged Defaulted Obligation, the Purchased Defaulted
Obligation (A) is issued by a different Obligor, (B) but for the fact that such
debt obligation is a Defaulted Obligation, such Purchased Defaulted Obligation
would otherwise qualify as a Collateral Obligation and (C) the expected recovery
rate of such Purchased Defaulted Obligation, as determined by the Portfolio
Manager in good faith, is no less than the expected recovery rate of the
Exchanged Defaulted Obligation;

 

(ii)at the time of the purchase, (i) the Purchased Defaulted Obligation is no
less senior in right of payment vis-à-vis its related Obligor’s outstanding
indebtedness than the seniority of the Exchanged Defaulted Obligation and (ii)
the S&P Rating and/or Fitch Rating, if any, of the Purchased Defaulted
Obligation is the same or better respective rating (as applicable), if any, of
the Exchanged Defaulted Obligation;

 

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(iii)after giving effect to the purchase, (i) each of the Coverage Tests is
satisfied and (ii) the Collateral Principal Amount shall be maintained or
improved;

 

(iv)after giving effect to such purchase, the Concentration Limitations will be
satisfied or, if any Concentration Limitation was not satisfied prior to such
purchase, such Concentration Limitation will be maintained or improved;

 

(v)the period for which the Issuer held the Exchanged Defaulted Obligation will
be included for all purposes in this Indenture when determining the period for
which the Issuer holds the Purchased Defaulted Obligation;

 

(vi)the Exchanged Defaulted Obligation was not previously a Purchased Defaulted
Obligation acquired in a transaction pursuant to this Section 12.4; and

 

(vii)the Restricted Trading Period is not in effect; and

 

(viii)such purchase of the Purchased Defaulted Obligation will not, when taken
together with all other Purchased Defaulted Obligations then held by the Issuer,
cause the Aggregate Principal Balance of all of Purchased Defaulted Obligations
purchased pursuant to an Exchange Transaction, measured cumulatively since the
Closing Date, to exceed 10.0% of the Target Initial Par Amount.

 

For the avoidance of doubt, Exchange Transactions may occur by separate purchase
and sale transactions. If, at any time, a Purchased Defaulted Obligation no
longer satisfies the definition of Defaulted Obligation, it shall no longer be
considered a Purchased Defaulted Obligation.

 

Section 12.5.Optional Repurchase or Substitution of Collateral Obligations.

 

(a)Optional Substitutions.

 

(i)With respect to any Collateral Obligation as to which a Substitution Event
has occurred, subject to the limitations set forth in this Section 12.5, the
Transferor may (but shall not be obligated to), with the consent of the
Portfolio Manager (so long as FS KKR Capital Corp. is the Portfolio Manager)
either (x) convey to the Issuer one or more Collateral Obligations in exchange
for such Collateral Obligation or (y) deposit into the Pending Deposit Transfer
Amount Collection Account the Transfer Deposit Amount with respect to such
Collateral Obligation and then, prior to the expiration of the Substitution
Period, convey to the Issuer one or more Collateral Obligations in exchange for
the funds so deposited or a portion thereof.

 

(ii)

Any substitution pursuant to this Section 12.5(a) shall be initiated by delivery
of written notice in the form of Exhibit G hereto (a “Notice of Substitution”)
by the Transferor to the Trustee, the Issuer and the Portfolio Manager that the
Transferor intends to substitute a Collateral Obligation pursuant to this
Section 12.5(a) and shall be completed prior to the earliest of: (x) the
expiration of 90 days after delivery of such notice; (y) delivery of written
notice to the Trustee, the Issuer and the Portfolio Manager from the Transferor
stating that the Transferor does not intend to convey any additional Substitute
Collateral Obligations to the Issuer in exchange for any remaining amounts
deposited in the Pending Deposit Transfer Amount Collection Account under clause
(a)(i)(y); or (z) in the case of a Collateral Obligation which has become
subject to a Specified Amendment, the effective date set forth in such Specified
Amendment (such period described in clause (ii)(x), (y) or (z), as applicable,
being the “Substitution Period”).

 

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(iii)Each Notice of Substitution shall specify the Collateral Obligation to be
substituted, the reasons for such substitution and the Transfer Deposit Amount
with respect to the Collateral Obligation. On the last day of any Substitution
Period, any amounts previously deposited in accordance with clause (a)(i)(y)
above which relate to such Substitution Period that have not been applied to
purchase one or more Substitute Collateral Obligations or to fund the Revolver
Funding Account if necessary shall, at the direction of the Portfolio Manager,
be deemed to constitute Principal Proceeds and such amounts shall be transferred
from the Pending Transfer Deposit Amount Collection Account to the Principal
Collection Account; provided that prior to the expiration of the related
Substitution Period any such amounts shall not be deemed to be Principal
Proceeds and shall remain in the Pending Transfer Deposit Amount Collection
Account until applied to acquire Substitute Collateral Obligations or to fund
the Revolver Funding Account if necessary (which amounts shall be identified by
the Portfolio Manager to the Trustee). To the extent any cash or other property
received by the Issuer from the Transferor in connection with a Substitution
Event pursuant to this Section 12.5 exceeds the fair market value of the
replaced Collateral Obligation, such excess shall be deemed a capital
contribution from the Transferor to the Issuer.

 

(iv)The substitution of any Substitute Collateral Obligation will be subject to
the satisfaction of the Substitute Collateral Obligations Qualification
Conditions as of the related Cut-Off Date for each such Collateral Obligation
(after giving effect to such substitution). Upon satisfaction of such
conditions, the Portfolio Manager shall instruct the Issuer and the Trustee in
effecting such substitution, including the release of any Transfer Deposit
Amounts in connection therewith.

 

(v)Prior to any substitution of a Collateral Obligation, the Portfolio Manager
must provide written notice thereof to each Rating Agency.

 

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(b)Repurchases. In addition to the right to substitute for any Collateral
Obligations that become subject to a Substitution Event, the Transferor shall
have the right, but not the obligation, to repurchase from the Issuer any such
Collateral Obligation subject to the Repurchase and Substitution Limit. In the
event of such a repurchase, the Transferor shall deposit in the Collection
Account an amount equal to the Transfer Deposit Amount for such Collateral
Obligation (or applicable portion thereof) as of the date of such repurchase
(with the portion of the Transfer Deposit Amount representing the outstanding
principal balance of the repurchased Collateral Obligation being deposited into
the Principal Collection Account and the portion of the Transfer Deposit Amount
representing accrued interest being deposited into the Interest Collection
Account, regardless of whether such amounts are deemed to be capital
contributions). The Issuer and, at the written direction of the Issuer, the
Trustee shall execute and deliver such instruments, consents or other documents
and perform all acts reasonably requested by the Transferor or by the Portfolio
Manager in order to effect the transfer and release of any of the Issuer’s
interests in the Collateral Obligations (together with the Assets related
thereto) that are being repurchased and the release thereof from the lien of
this Indenture. To the extent any cash or other property received by the Issuer
from the Transferor in connection with such a repurchase exceeds the fair market
value of the repurchased Collateral Obligation, such excess shall be deemed a
capital contribution from the Transferor to the Issuer.

 

(c)Repurchase and Substitution Limit. At all times, (i) the Aggregate Principal
Balance of all Substitute Collateral Obligations owned by the Issuer at any time
since the Closing Date plus (ii) the Aggregate Principal Balance related to all
Collateral Obligations that have been repurchased by the Transferor pursuant to
its right of optional repurchase or substitution since the Closing Date and not
subsequently applied to purchase a Substitute Collateral Obligation may not
exceed an amount equal to (x) 20% of the Net Purchased Loan Balance in the
aggregate and (y) 10% of the Net Purchased Loan Balance in the case of Defaulted
Obligations or Credit Risk Obligations repurchased following a determination by
the Portfolio Manager that such Collateral Obligation would with the passage of
time become a Defaulted Obligation; provided that clause (ii) above shall not
include (A) the Principal Balance related to any Collateral Obligation that is
repurchased by the Transferor in connection with a proposed Specified Amendment
to such Collateral Obligation so long as (x) the Transferor certifies in writing
to the Portfolio Manager and the Trustee that such purchase is, in the
commercially reasonable business judgment of the Transferor, necessary or
advisable in connection with the restructuring of such Collateral Obligation and
such restructuring is expected to result in a Specified Amendment to such
Collateral Obligation, and (y) the Portfolio Manager certifies in writing to the
Trustee that the Portfolio Manager either would not be permitted to or would not
elect to enter into such Specified Amendment pursuant to the Portfolio Manager
Standard or any provision of this Indenture or the Portfolio Management
Agreement or (B) the purchase price of any Collateral Obligations or, for the
avoidance of doubt, any Equity Securities sold by and at the option of the
Issuer to the Transferor pursuant to Section 12.1(d) or Section 12.1(g). The
foregoing provisions in this paragraph constitute the “Repurchase and
Substitution Limit.”

 

(d)Third Party Beneficiaries. The Issuer, the Trustee and each Holder agree that
the Transferor shall be a third party beneficiary of this Indenture solely for
purposes of this Section 12.5, and shall be entitled to rely upon and enforce
such provisions of this Section 12.5 to the same extent as if it were a party
hereto.

 

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ARTICLE XIII
HOLDERS’ RELATIONS

 

Section 13.1.Subordination

 

(a)Anything in this Indenture or the Notes to the contrary notwithstanding, the
Holders of each Class of Notes that constitute a Junior Class agree for the
benefit of the Holders of the Notes of each Priority Class with respect to such
Junior Class that such Junior Class shall be subordinate and junior to the Notes
of each such Priority Class to the extent and in the manner set forth in this
Indenture. If an Enforcement Event has occurred and is continuing in accordance
with Article V, including as a result of an Event of Default specified in
Section 5.1(e) or (f), each Priority Class shall be paid in full in Cash or, to
the extent a Majority of such Class consents, other than in Cash, before any
further payment or distribution of any kind is made on account of any Junior
Class with respect thereto, in accordance with the Special Priority of Payments.

 

(b)In the event that, notwithstanding the provisions of this Indenture, any
Holder of Notes of any Junior Class shall have received any payment or
distribution in respect of such Notes contrary to the provisions of this
Indenture, then, unless and until all accrued and unpaid interest on and
outstanding principal of each Priority Class with respect thereto shall have
been paid in full in Cash or, to the extent a Majority of such Priority Class
consents, other than in Cash in accordance with this Indenture, such payment or
distribution shall be received and held in trust for the benefit of, and shall
forthwith be paid over and delivered to, the Trustee, which shall pay and
deliver the same to the Holders of the applicable Priority Class(es) in
accordance with this Indenture; provided that, if any such payment or
distribution is made other than in Cash, it shall be held by the Trustee as part
of the Assets and subject in all respects to the provisions of this Indenture,
including this Section 13.1.

 

(c)Each Holder of Notes of any Junior Class agrees with all Holders of the
applicable Priority Classes that such Holder of Junior Class of Notes shall not
demand, accept, or receive any payment or distribution in respect of such Notes
in violation of the provisions of this Indenture including, without limitation,
this Section 13.1; provided that, after all accrued and unpaid interest on and
outstanding principal of a Priority Class has been paid in full, the Holders of
the related Junior Class or Classes shall be fully subrogated to the rights of
the Holders of such Priority Class to receive payments or distributions until
all amounts due and payable on the Notes shall be paid in full. Nothing in this
Section 13.1 shall affect the obligation of the Issuer to pay Holders of any
Junior Class of Notes.

 

(d)In the event one or more Holders or beneficial owners of Notes causes a
Bankruptcy Filing against the Issuer in violation of the prohibition described
in this Indenture (including prior to the expiration of the period specified in
Section 5.4(d)) (each, a “Filing Holder”), each such Holder or beneficial owner
will be deemed to acknowledge and agree that (A) any claim that such Filing
Holders have against the Issuer (including under all Notes of any Class held by
such Filing Holders) or with respect to any Assets (including any proceeds
thereof) shall, notwithstanding anything to the contrary in the Priority of
Payments and notwithstanding any objection to, or rescission of, such filing, be
fully subordinate in right of payment to the claims of each Holder and
beneficial owner of any Note (and each other secured creditor of the Issuer)
that is not a Filing Holder, with such subordination being effective until each
Note held by each Holder or beneficial owner of any Note (and each claim of each
other secured creditor of the Issuer) that is not a Filing Holder is paid in
full in accordance with the Priority of Payments (after giving effect to such
subordination) (B) it will promptly return or cause all amounts received by it
following the filing of such petition to be returned to the Issuer, and (C) it
will take all necessary action to give effect to this agreement. The foregoing
agreement will constitute a “subordination agreement” within the meaning of
Section 510(a) of the Bankruptcy Code (or any successor statute). The Issuer
shall direct the Trustee to segregate payments and take other reasonable steps
to effect the foregoing. The Issuer may obtain and assign a separate CUSIP or
CUSIPs to the Notes of each Class held by such Holder(s).

 

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Section 13.2.Standard of Conduct

 

In exercising any of its or their voting rights, rights to direct and consent or
any other rights as a Holder under this Indenture, a Holder or Holders shall not
have any obligation or duty to any Person or to consider or take into account
the interests of any Person and shall not be liable to any Person for any action
taken by it or them or at its or their direction or any failure by it or them to
act or to direct that an action be taken, without regard to whether such action
or inaction benefits or adversely affects any Holder, the Issuer, or any other
Person, except for any liability to which such Holder may be subject to the
extent the same results from such Holder’s taking or directing an action, or
failing to take or direct an action, in bad faith or in violation of the express
terms of this Indenture.

 

ARTICLE XIV
MISCELLANEOUS

 

Section 14.1.Form of Documents Delivered to Trustee

 

In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Officer of the Issuer or the Portfolio Manager
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel (provided that, such counsel is a
nationally or internationally recognized and reputable law firm one or more of
the partners of which are admitted to practice before the highest court of any
State of the United States or the District of Columbia, which law firm may,
except as otherwise expressly provided in this Indenture, be counsel for the
Issuer or the Portfolio Manager), unless such Officer knows, or should know that
the certificate or opinion or representations with respect to the matters upon
which such certificate or opinion is based are erroneous. Any such certificate
of an Officer of the Issuer or the Portfolio Manager or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, the Issuer, the Portfolio Manager or any
other Person (on which the Trustee shall also be entitled to rely), unless such
Officer of the Issuer or the Portfolio Manager or such counsel knows that the
certificate or opinion or representations with respect to such matters are
erroneous. Any Opinion of Counsel may also be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Officer of the Portfolio Manager or the Issuer, unless such counsel knows that
the certificate or opinion or representations with respect to such matters are
erroneous.

 

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Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

 

Whenever in this Indenture it is provided that, the absence of the occurrence
and continuation of a Default, Event of Default or Enforcement Event is a
condition precedent to the taking of any action by the Trustee at the request or
direction of the Issuer, then notwithstanding that the satisfaction of such
condition is a condition precedent to such Issuer’s right to make such request
or direction, the Trustee shall be protected in acting in accordance with such
request or direction if it does not have knowledge of the occurrence and
continuation of such Default, Event of Default or Enforcement Event as provided
in Section 6.1(d).

 

Section 14.2.Acts of Holders

 

(a)Any request, demand, authorization, direction, notice, consent, waiver or
other action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in writing or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action or actions embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act of Holders” or
the “Act” of a specified percentage of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Section 14.2.

 

(b)The fact and date of the execution by any Person of any such instrument or
writing may be proved in any manner which the Trustee deems sufficient.

 

(c)The principal amount and registered numbers of Notes held by any Person, and
the date of such Person’s holding the same, shall be proved by the Register.

 

231 

 

(d)Any request, demand, authorization, direction, notice, consent, waiver or
other action by the Holder of any Notes shall bind the Holder (and any
transferee thereof) of such and of every Note issued upon the registration
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Trustee, the Issuer in reliance thereon,
whether or not notation of such action is made upon such Note.

 

Section 14.3.Notices, etc., to Certain Parties

 

(a)Except as otherwise expressly provided herein, any request, demand,
authorization, direction, order, request, notice, consent or waiver or other
documents provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with any of the parties indicated below shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to and mailed, by certified mail, return receipt requested, hand
delivered, sent by overnight courier service guaranteeing next day delivery or
by facsimile or email in legible form at the following address (or at any other
address provided in writing by the relevant party):

 

(i)the Trustee and the Collateral Administrator at the Corporate Trust Office;

 

(ii)the Issuer at c/o FS KKR Capital Corp., 201 Rouse Blvd., Philadelphia,
Pennsylvania 19112, Attention: William Goebel, facsimile no. (215) 339-1931,
email: FSIC_Team@fsinvestments.com; credit.notices@fsinvestments.com;
portfolio.finance@fsinvestments.com;

 

(iii)Citigroup Global Markets Inc., as Initial Purchaser and as Lead Placement
Agent, at Citigroup Global Markets Inc., 390 Greenwich Street, 4th Floor, New
York, New York 10013, Attention: Managing Director, Structured Credit Products
Group, or at any other address previously furnished in writing to the Issuer and
the Trustee by Citigroup Global Markets Inc., in its capacity as Initial
Purchaser or as Lead Placement Agent;

 

(iv)KKR Capital Markets LLC, as a Co-Placement Agent, at 9 West 57th Street,
41st Floor, Suite 4160, New York, New York 10019, or at any other address
previously furnished in writing to the Issuer and the Trustee by KKR Capital
Markets LLC;

 

(v)GreensLedge Capital Markets LLC, as a Co-Placement Agent, at 399 Park Ave,
37th Floor, New York, NY 10022, facsimile no. (212) 792-5270, Attention: CDO
Group or at any other address previously furnished in writing to the Issuer and
the Trustee by GreensLedge Capital Markets LLC;

 

(vi)the Portfolio Manager at FS KKR Capital Corp., 201 Rouse Blvd.,
Philadelphia, Pennsylvania 19112;

 

232 

 

(vii)the Rating Agencies, in accordance with Section 7.20, and promptly
thereafter in the case of (i) S&P, 55 Water Street, 41st Floor, New York, New
York, 10041-0003 or by email to CDO_Surveillance@spglobal.com; provided, that
(x) in respect of any request to S&P for a confirmation of its Initial Ratings
of each Class of Notes pursuant to Section 7.18(c), such request must be
submitted by email to CDOEffectiveDatePortfolios@spglobal.com, (y) in respect of
any application for a credit estimate by S&P in respect of a Collateral
Obligation, Information must be submitted to creditestimates@spglobal.com and
(z) in respect of any request to S&P relating to the S&P CDO Monitor, such
request must be submitted to CDOMonitor@spglobal.com and (ii) Fitch, (x) in
respect of any information related to a credit opinion or a private rating, by
email to uscor.modelbasedco@fitchratings.com and (y) for all other purposes, by
email to cdo.surveillance@fitchratings.com, Attention: Structured Credit; and

 

(viii)The CLO Information Service at any physical or electronic address provided
by the Portfolio Manager for delivery of any Monthly Report or Distribution
Report.

 

(b)The Bank (in each of its capacities) agrees to accept and act upon
instructions or directions pursuant to this Indenture or any other Transaction
Document sent by unsecured email, facsimile transmission or other similar
unsecured electronic methods; provided, however, that any Person providing such
instructions or directions shall provide to the Bank an incumbency certificate
listing Authorized Officers designated to provide such instructions or
directions, which incumbency certificate shall be amended whenever a person is
added or deleted from the listing. If such person elects to give the Bank email
or facsimile instructions (or instructions by a similar electronic method) and
the Bank in its discretion elects to act upon such instructions, the Bank’s
reasonable understanding of such instructions shall be deemed controlling. The
Bank shall not be liable for any losses, costs or expenses arising directly or
indirectly from the Bank’s reliance upon and compliance with such instructions
notwithstanding such instructions conflicting with or being inconsistent with a
subsequent written instruction. Any person providing such instructions or
directions agrees to assume all risk arising out of the use of such electronic
methods to submit instructions and directions to the Bank, including without
limitation the risk of the Bank acting on unauthorized instructions, and the
risk of interception and misuse by third parties and acknowledges and agrees
that there may be more secure methods of transmitting such instructions than the
method(s) selected by it and agrees that the security procedures (if any) to be
followed in connection with its transmission of such instructions provide to
such Person a commercially reasonable degree of protection in light of its
particular needs and circumstances.

 

(c)In the event that any provision in this Indenture calls for any notice or
document to be delivered simultaneously to the Trustee and any other person or
entity, the Trustee’s receipt of such notice or document shall entitle the
Trustee to assume that such notice or document was delivered to such other
person or entity unless otherwise expressly specified herein.

 

233 

 

(d)Notwithstanding any provision to the contrary contained herein or in any
agreement or document related thereto, any report, statement or other
information required to be provided by the Issuer or the Trustee may be provided
by providing access to the Trustee’s Website containing such information.

 

Section 14.4.Notices to Holders; Waiver

 

(a)Except as otherwise expressly provided herein, where this Indenture provides
for notice to Holders of any event,

 

(i)such notice shall be sufficiently given to Holders if in writing and mailed,
first class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Register (or, in the case of Holders
of Global Notes, emailed to DTC for distribution to each Holder affected by such
event and posted to the Trustee’s Website), not earlier than the earliest date
and not later than the latest date, prescribed for the giving of such notice;
and

 

(ii)such notice shall be in the English language.

 

Such notices will be deemed to have been given on the date of such mailing.

 

Where this Indenture provides for notice to holders of Interests, such notice
shall be sufficiently given if in writing and mailed, first class postage
prepaid, or by overnight delivery service to Issuer, or by electronic mail
transmission, at the Issuer’s address pursuant to Section 14.3 hereof with a
copy to the Portfolio Manager. The Issuer (or the Portfolio Manager on the
Issuer’s behalf) shall forward all notices received pursuant to the preceding
sentence to the holders of Interests. The Issuer (or the Portfolio Manager on
the Issuer’s behalf) shall provide notice and a consent solicitation package to
each holder of an Interest to the extent that such holder’s consent or approval
is required hereunder. The Issuer (or the Portfolio Manager on the Issuer’s
behalf) shall provide written notice to the Trustee confirming any such approval
or consent or other instructions obtained from the requisite holders of the
Interests.

 

(b)Notwithstanding clause (a) above, a Holder may give the Trustee a written
notice that it is requesting that notices to it be given by email or by
facsimile transmissions and stating the email address or facsimile number for
such transmission. Thereafter, the Trustee shall give notices to such Holder by
email or facsimile transmission, as so requested; provided that, if such notice
also requests that notices be given by mail, then such notice shall also be
given by mail in accordance with clause (a) above.

 

(c)Subject to the Trustee’s rights under Section 6.3(d), the Trustee will
deliver to the Holders any information or notice relating to this Indenture in
the possession of the Trustee and requested to be so delivered by at least 25%
of the Holders of any Class of Notes (by Aggregate Outstanding Amount), at the
expense of the Issuer; provided that, nothing herein shall be construed to
obligate the Trustee to distribute any notice that the Trustee reasonably
determines to be contrary to the terms of this Indenture or its duties and
obligations hereunder or applicable law. The Trustee may require the requesting
Holders to comply with its standard verification policies in order to confirm
Holder status. For the avoidance of doubt, such information shall not include
any Effective Date Accountants’ AUP Reports or any other Accountants’ Report.
The Trustee shall have no liability for such disclosure or, subject to the
duties and responsibilities of the Trustee set forth in this Indenture, the
accuracy thereof.

 

234 

 

(d)Neither the failure to provide any notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. In case by reason of the suspension of regular
mail service as a result of a strike, work stoppage or similar activity or by
reason of any other cause it shall be impracticable to give such notice by mail
of any event to Holders when such notice is required to be given pursuant to any
provision of this Indenture, then such notification to Holders as shall be made
with the approval of the Trustee shall constitute a sufficient notification to
such Holders for every purpose hereunder.

 

(e)Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

 

(f)The Trustee shall provide to the Issuer and the Portfolio Manager upon
request any information with respect to the identity of and contact information
for any Holder that it has within its possession or may obtain without
unreasonable effort or expense and, subject to Section 6.1(c), the Trustee shall
have no liability for any such disclosure or, subject to the duties and
responsibilities of the Trustee set forth in this Indenture, the accuracy
thereof.

 

(g)Notwithstanding any provision to the contrary in this Indenture or in any
agreement or document related hereto, any information or documents (including,
without limitation reports, notices or supplemental indentures) required to be
provided by the Trustee to Persons identified in this Section 14.4 may be
provided by providing notice of and access to the Trustee’s Website containing
such information or document.

 

Section 14.5.Effect of Headings and Table of Contents

 

The Article and Section headings herein (including those used in
cross-references herein) and the Table of Contents are for convenience only and
shall not affect the construction hereof.

 

Section 14.6.Successors and Assigns

 

All covenants and agreements in this Indenture by the Issuer shall bind its
successors and assigns, whether so expressed or not.

 

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Section 14.7.Severability

 

If any term, provision, covenant or condition of this Indenture or the Notes, or
the application thereof to any party hereto or any circumstance, is held to be
unenforceable, invalid or illegal (in whole or in part) for any reason (in any
relevant jurisdiction), the remaining terms, provisions, covenants and
conditions of this Indenture or the Notes, modified by the deletion of the
unenforceable, invalid or illegal portion (in any relevant jurisdiction), will
continue in full force and effect, and such unenforceability, invalidity, or
illegality will not otherwise affect the enforceability, validity or legality of
the remaining terms, provisions, covenants and conditions of this Indenture or
the Notes, as the case may be, so long as this Indenture or the Notes, as the
case may be, as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
deletion of such portion of this Indenture or the Notes, as the case may be,
will not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties.

 

Section 14.8.Benefits of Indenture

 

Nothing in this Indenture or in the Notes, expressed or implied, shall give to
any Person, other than the parties hereto and their successors hereunder, the
Portfolio Manager, the Collateral Administrator, the Holders any benefit or any
legal or equitable right, remedy or claim under this Indenture.

 

Section 14.9.Legal Holidays

 

In the event that the date of any Payment Date, Redemption Date or Stated
Maturity shall not be a Business Day, then notwithstanding any other provision
of the Notes or this Indenture, payment need not be made on such date, but may
be made on the next succeeding Business Day with the same force and effect as if
made on the nominal date of any such Payment Date, Redemption Date or Stated
Maturity date, as the case may be, and except as provided in the definition of
Interest Accrual Period, no interest shall accrue on such payment for the period
from and after any such nominal date.

 

Section 14.10.Governing Law

 

This Indenture and the Notes shall be construed in accordance with, and this
Indenture and the Notes, and any matters arising out of or relating in any way
whatsoever to any of the Notes or this Indenture, shall be governed by, the law
of the State of New York.

 

Section 14.11.Submission to Jurisdiction

 

With respect to any suit, action or proceedings relating to this Indenture or
any matter between the parties arising under or in connection with this
Indenture (“Proceedings”), to the fullest extent permitted by applicable law,
each party irrevocably: (i) submits to the exclusive jurisdiction of the United
States District Court for the Southern District of New York or, if such court
does not have jurisdiction, any court of the State of New York located in New
York County in any action or Proceeding arising out of or relating to this
Indenture; provided, that each party hereto consents to the jurisdiction of the
courts of Minnesota for any Proceeding brought by the Trustee under the
Minnesota trust instruction procedure statute, (ii) agrees that all claims in
respect of such action or Proceeding may be heard and determined in any such
courts and (iii) agrees not to bring any action or Proceeding arising out of or
relating to this Indenture in any other court. Each party hereto waives any
defense of inconvenient forum to the maintenance of any action or Proceeding so
brought and waives any bond, surety or other security that might be required of
any other party with respect thereto. Each party agrees that a final,
non-appealable judgment in any action or Proceeding so brought shall be
conclusive and may be enforced by suit on the judgment or in any other manner
provided by applicable law.

 

236 

 

Section 14.12.Waiver of Jury Trial

 

EACH OF THE ISSUER, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE
NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby (i) certifies
that no representative, agent or attorney of the other has represented,
expressly or otherwise, that the other would not, in the event of a Proceeding,
seek to enforce the foregoing waiver and (ii) acknowledges that it has been
induced to enter into this Indenture by, among other things, the mutual waivers
and certifications in this paragraph.

 

Section 14.13.Counterparts

 

This Indenture and the Notes (and each amendment, modification and waiver in
respect of this Indenture or the Notes) may be executed and delivered in
counterparts (including by facsimile transmission), each of which will be deemed
an original, and all of which together constitute one and the same instrument.
Delivery of an executed counterpart of this Indenture by email (PDF) or telecopy
shall be effective as delivery of a manually executed counterpart of this
Indenture.

 

Section 14.14.Acts of Issuer

 

Any request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or performed by the Issuer shall
be effective if given or performed by the Issuer or by the Portfolio Manager on
the Issuer’s behalf.

 

237 

 

Section 14.15.Confidential Information

 

(a)The Trustee, the Collateral Administrator and each Holder will maintain the
confidentiality of all Confidential Information in accordance with procedures
adopted by such Person in good faith to protect Confidential Information of
third parties delivered to such Person; provided that, such Person may deliver
or disclose Confidential Information: (i) with the prior written consent of the
Portfolio Manager, (ii) as required by law, regulation, court order or the
rules, regulations or request or order of any governmental, judiciary,
regulatory or self-regulating organization, body or official having jurisdiction
over such Person, (iii) in conjunction with the transactions described herein,
to its Affiliates, members, partners, officers, directors and employees and to
its attorneys, accountants and other professional advisers (each of whom it has
advised of the confidential nature of the Confidential Information and its
obligations to maintain the confidentiality of the Confidential Information),
(iv) such information as may be necessary or desirable in order for such Person
to prepare, publish and distribute to any Person any information relating to the
investment performance of the Assets in the aggregate, or (v) in connection with
the exercise or enforcement of such Person’s rights hereunder or in any dispute
or proceeding related hereto, including defense by the Trustee or Collateral
Administrator of any claim of liability that may be brought or charged against
it. Notwithstanding the foregoing, delivery to any Person (including Holders) by
the Trustee or the Collateral Administrator of any report, notice, document or
other information required or expressly permitted by the terms of this Indenture
or any of the other Transaction Documents to be provided to such Person or
Persons, and delivery to Holders of copies of this Indenture or any of the other
Transaction Documents, shall not be a violation of this Section 14.15. Each
Holder agrees, except as set forth in clause (ii) above, that it shall use the
Confidential Information for the sole purpose of making an investment in the
Notes or administering its investment in the Notes; and that the Trustee and the
Collateral Administrator shall neither be required nor authorized to disclose to
Holders any Confidential Information in violation of this Section 14.15. In the
event of any required disclosure of the Confidential Information by such Holder,
such Holder agrees to use reasonable efforts to protect the confidentiality of
the Confidential Information. Each Holder, by its acceptance of a Note, will be
deemed to have agreed to be bound by and to be entitled to the benefits of this
Section 14.15.

 

(b)For the purposes of this Section 14.15, “Confidential Information” means
information delivered to the Trustee, the Collateral Administrator or any Holder
by or on behalf of the Issuer in connection with and relating to the
transactions contemplated by or otherwise pursuant to this Indenture; provided
that, such term does not include information that: (i) was publicly known or
otherwise known to the Trustee, the Collateral Administrator or such Holder
prior to the time of such disclosure; (ii) subsequently becomes publicly known
through no act or omission by the Trustee, the Collateral Administrator, any
Holder or any person acting on behalf of the Trustee, the Collateral
Administrator or any Holder; (iii) otherwise is known or becomes known to the
Trustee, the Collateral Administrator or any Holder other than (x) through
disclosure by the Issuer or (y) to the knowledge of the Trustee, the Collateral
Administrator or a Holder, as the case may be, in each case after reasonable
inquiry, as a result of the breach of a fiduciary duty to the Issuer or a
contractual duty to the Issuer; or (iv) is allowed to be treated as
non-confidential by consent of the Issuer.

 

(c)Notwithstanding the foregoing, (i) each of the Trustee and the Collateral
Administrator may disclose Confidential Information (x) to each Rating Agency
and (y) as and to the extent it may reasonably deem necessary for the
performance of its duties hereunder (including the exercise of remedies pursuant
to Article V), including on a confidential basis to its agents, attorneys and
auditors in connection with the performance of its duties hereunder and the
Trustee will provide, upon delivery by a prospective purchaser of an executed
non-disclosure agreement in form approved by the Portfolio Manager in its sole
discretion, copies of this Indenture, the Portfolio Management Agreement,
Monthly Reports and Distribution Reports to a prospective purchaser of an
interest in Notes, and (ii) the Issuer may provide copies of any Monthly Report
and any Distribution Report to the CLO Information Service pursuant to and in
accordance with Section 10.7.

 

238 

 

(d)Notwithstanding anything to the contrary contained herein, each recipient may
disclose to any and all persons, without limitation of any kind, the U.S.
federal, state and local tax treatment of the Notes and the Issuer, any fact
that may be relevant to understanding the U.S. federal, state and local tax
treatment of the Notes and the Issuer, and all materials of any kind (including
opinions or other tax analyses) relating to such U.S. federal, state and local
tax treatment and that may be relevant to understanding such U.S. federal, state
and local tax treatment.

 

ARTICLE XV
ASSIGNMENT OF PORTFOLIO MANAGEMENT AGREEMENT

 

Section 15.1.Assignment of Portfolio Management Agreement

 

(a)The Issuer, in furtherance of the covenants of this Indenture and as security
for the Secured Obligations and the performance and observance of the provisions
hereof, hereby assigns, transfers, conveys and sets over to the Trustee, for the
benefit of the Secured Parties, all of the Issuer’s right, title and interest
in, to and under the Portfolio Management Agreement, including, without
limitation, (i) the right to give all notices, consents and releases thereunder,
(ii) the right to give all notices of termination and to take any legal action
upon the breach of an obligation of the Portfolio Manager thereunder, including
the commencement, conduct and consummation of proceedings at law or in equity,
(iii) the right to receive all notices, accountings, consents, releases and
statements thereunder and (iv) the right to do any and all other things
whatsoever that the Issuer is or may be entitled to do thereunder; provided,
however, that the Issuer may exercise any of its rights under the Portfolio
Management Agreement without notice to or the consent of the Trustee (except as
otherwise expressly required by this Indenture), so long as an Event of Default
has not occurred and is not continuing. From and after the occurrence and
continuance of an Event of Default, the Portfolio Manager will continue to
perform and be bound by the provisions of the Portfolio Management Agreement and
this Indenture. The Trustee will be entitled to rely and be protected in relying
upon all actions and omissions to act of the Portfolio Manager thereafter as
fully as if no Event of Default had occurred.

 

(b)The assignment made hereby is executed as collateral security, and the
execution and delivery hereof shall not in any way impair or diminish the
obligations of the Issuer under the provisions of the Portfolio Management
Agreement, nor shall any of the obligations contained in the Portfolio
Management Agreement be imposed on the Trustee. Upon the retirement of the Notes
and the release of the Assets from the lien of this Indenture, this assignment
and all rights herein assigned to the Trustee shall cease and terminate and all
of the estate, right, title and interest of the Trustee in, to and under the
Portfolio Management Agreement shall revert to the Issuer and no further
instrument or act shall be necessary to evidence such termination and reversion.

 

239 

 

(c)The Issuer hereby agrees, and hereby undertakes to obtain the agreement and
consent of the Portfolio Manager in the Portfolio Management Agreement, to the
following:

 

(i)The Portfolio Manager consents to the provisions of this assignment and
agrees to perform any provisions of this Indenture applicable to the Portfolio
Manager subject to the terms of the Portfolio Management Agreement.

 

(ii)The Portfolio Manager acknowledges that the Issuer is assigning all of its
right, title and interest (but none of its obligations) in, to and under the
Portfolio Management Agreement to the Trustee as collateral for the benefit of
the Secured Parties.

 

(iii)The Portfolio Manager shall deliver to the Trustee duplicate original
copies of all notices, statements, communications and instruments delivered or
required to be delivered to the Issuer pursuant to the Portfolio Management
Agreement.

 

(iv)Except as contemplated under the Portfolio Management Agreement, neither the
Issuer nor the Portfolio Manager will enter into any agreement amending,
modifying or terminating the Portfolio Management Agreement without (x) if the
amendment or modification pertains to a provision of the Portfolio Management
Agreement that requires satisfaction of the Global Rating Agency Condition to
effect the action contemplated therein, satisfying the Global Rating Agency
Condition, and (y) otherwise complying with the applicable provisions of the
Portfolio Management Agreement.

 

(v)Except as otherwise set forth herein and therein, the Portfolio Manager shall
continue to serve as Portfolio Manager under the Portfolio Management Agreement
notwithstanding that the Portfolio Manager shall not have received amounts due
to it under the Portfolio Management Agreement because sufficient funds were not
then available hereunder to pay such amounts in accordance with the Priority of
Payments. The Portfolio Manager agrees not to cause the filing of a petition in
bankruptcy against the Issuer for the non-payment of the Management Fees or
other amounts payable by the Issuer to the Portfolio Manager under the Portfolio
Management Agreement prior to the date which is one year (or, if longer, the
applicable preference period then in effect) plus one day after the payment in
full of all Notes issued under this Indenture; provided, however, that nothing
in this clause (v) shall preclude, or be deemed to estop, the Portfolio Manager
or the Trustee (A) from taking any action (not inconsistent with the foregoing)
prior to the expiration of the aforementioned one year and one day (or longer)
period in (x) any case or proceeding voluntarily filed or commenced by the
Issuer, or (y) any involuntary insolvency proceeding filed or commenced against
the Issuer, by a Person other than the Portfolio Manager or its Affiliates, or
(B) from commencing against the Issuer or any properties of the Issuer any legal
action which is not a bankruptcy, reorganization, arrangement, insolvency,
moratorium or liquidation proceeding.

 

240 

 

(vi)The Portfolio Manager irrevocably submits to the non-exclusive jurisdiction
of any federal or New York state court sitting in the Borough of Manhattan in
The City of New York in any action or Proceeding arising out of or relating to
the Notes or this Indenture, and the Portfolio Manager irrevocably agrees that
all claims in respect of such action or Proceeding may be heard and determined
in such federal or New York state court. The Portfolio Manager irrevocably
waives, to the fullest extent it may legally do so, the defense of an
inconvenient forum to the maintenance of such action or Proceeding. The
Portfolio Manager irrevocably consents to the service of any and all process in
any action or Proceeding by the mailing or delivery of copies of such process to
it at the office of the Portfolio Manager set forth in Section 14.3. The
Portfolio Manager agrees that a final judgment in any such action or Proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.

 

(vii)The Portfolio Manager agrees that, notwithstanding any other provision of
the Portfolio Management Agreement, the obligations of the Issuer under the
Portfolio Management Agreement are limited recourse obligations of the Issuer
payable solely from the Assets at such time and, following realization thereof
and application of the proceeds in accordance with the Priority of Payments or
otherwise as described in this Indenture, any remaining claims against the
Issuer shall be extinguished and shall not thereafter revive.

 

Section 15.2.Standard of Care Applicable to the Portfolio Manager

 

For the avoidance of doubt, the standard of care set forth in the Portfolio
Management Agreement shall apply to the Portfolio Manager with respect to those
provisions of this Indenture applicable to the Portfolio Manager.

 

- signature page follows –

 

241 

 

IN WITNESS WHEREOF, we have set our hands as of the day and year first written
above.

 

  FS KKR MM CLO 1 LLC,     as Issuer             By: FS KKR Capital Corp.,      
its designated manager             By: /s/ Stephen S. Sypherd       Name:
Stephen S. Sypherd       Title:   Secretary  

 

[Signatures continue on the following page.]

 

 

 

  U.S. BANK NATIONAL ASSOCIATION,     as Trustee             By: /s/ Elaine P.
Mah       Name: Elaine P. Mah       Title:   Senior Vice President  

 

FS KKR MM CLO 1

Indenture

 

 

 

Schedule 1

 

Schedule of Collateral Obligations

 

 

 

Schedule 2

 

S&P Industry Classifications

 

Asset Type
Code Asset Type Description 1020000 Energy Equipment and Services 1030000 Oil,
Gas and Consumable Fuels 1033403 Mortgage Real Estate Investment Trusts (REITs)
2020000 Chemicals 2030000 Construction Materials 2040000 Containers and
Packaging 2050000 Metals and Mining 2060000 Paper and Forest Products 3020000
Aerospace and Defense 3030000 Building Products 3040000 Construction &
Engineering 3050000 Electrical Equipment 3060000 Industrial Conglomerates
3070000 Machinery 3080000 Trading Companies and Distributors 3110000 Commercial
Services and Supplies 3210000 Air Freight and Logistics 3220000 Airlines 3230000
Marine 3240000 Road and Rail 3250000 Transportation Infrastructure 4011000 Auto
Components 4020000 Automobiles 4110000 Household Durables 4120000 Leisure
Products 4130000 Textiles, Apparel and Luxury Goods 4210000 Hotels, Restaurants
and Leisure 4300001 Entertainment 4300002 Interactive Media and Services 4310000
Media 4410000 Distributors 4420000 Internet and Direct Marketing Retail 4430000
Multiline Retail 4440000 Specialty Retail 5020000 Food and Staples Retailing
5110000 Beverages 5120000 Food Products

 

 

 

Asset Type
Code Asset Type Description 5130000 Tobacco 5210000 Household Products 5220000
Personal Products 6020000 Healthcare Equipment and Supplies 6030000 Healthcare
Providers and Services 6110000 Biotechnology 6120000 Pharmaceuticals 7011000
Banks 7020000 Thrifts and Mortgage Finance 7110000 Diversified Financial
Services 7120000 Consumer Finance 7130000 Capital Markets 7210000 Insurance
7310000 Real Estate Management and Development 7311000 Equity Real Estate
Investment Trusts (REITs) 8030000 IT Services 8040000 Software 8110000
Communications Equipment 8120000 Technology Hardware, Storage and Peripherals
8130000 Electronic Equipment, Instruments and Components 8210000 Semiconductors
and Semiconductor Equipment 9020000 Diversified Telecommunication Services
9030000 Wireless Telecommunication Services 9520000 Electric Utilities 9530000
Gas Utilities 9540000 Multi-Utilities 9550000 Water Utilities 9551701
Diversified Consumer Services 9551702 Independent Power and Renewable
Electricity Producers 9551727 Life Sciences Tools & Services 9551729 Health Care
Technology 9612010 Professional Services

 

PROJECT FINANCE Asset Type Description PF1 Project finance: Industrial equipment
PF2 Project finance: Leisure and gaming PF3 Project finance: Natural resources
and mining PF4 Project finance: Oil and gas

 

Schedule 2-2

 

PROJECT FINANCE Asset Type Description PF5 Project finance: Power PF6 Project
finance: Public finance and real estate PF7 Project finance: Telecommunications
PF8 Project finance: Transport

 

Schedule 2-3

 

Schedule 3

 

S&P CDO Monitor Test Definitions

 

As used for purposes of the S&P CDO Monitor Test, the following terms shall have
the meanings set forth below:

 

“S&P CDO Monitor Adjusted BDR”: The threshold value for the S&P CDO Monitor
Test, calculated as a percentage by adjusting the S&P CDO Monitor BDR for
changes in the Principal Balance of the Collateral Obligations relative to the
Target Initial Par Amount as follows:

 

S&P CDO Monitor BDR * (OP / NP) + (NP - OP) / (NP * (1 – S&P Weighted Average
Recovery Rate)), where OP = Target Initial Par Amount; NP = the sum of the
aggregate principal balances of the Collateral Obligations with an S&P Rating of
“CCC-” or higher, Principal Proceeds, plus the sum of the lower of S&P Recovery
Amount or the Market Value of each obligation with an S&P Rating below “CCC-”.

 

“S&P CDO Monitor BDR”: The value calculated using the following formula relating
to the Issuer’s portfolio: C0 + (C1 * Weighted Average Floating Spread) + (C2 *
S&P Weighted Average Recovery Rate), where: C0= 0.075778, C1= 2.702223 and C2=
1.377197.

 

“S&P CDO Monitor SDR”: The percentage derived from the following equation:
0.329915 + (1.210322 * EPDR) – (0.586627 * DRD) + (2.538684 /ODM) + (0.216729 /
IDM) + (0.0575539 / RDM) – (0.0136662 * WAL), where EPDR is the S&P Expected
Portfolio Default Rate; DRD is the S&P Default Rate Dispersion; ODM is the S&P
Obligor Diversity Measure; IDM is the S&P Industry Diversity Measure; RDM is the
S&P Regional Diversity Measure; and WAL is the S&P Weighted Average Life.

 

“S&P Default Rate”: With respect to all Collateral Obligations with an S&P
Rating of “CCC-” or higher, the default rate determined in accordance with S&P’s
default rate table (see “CDO Evaluator 7.2 Parameters Required to Calculate S&P
Global Ratings Portfolio Benchmarks,” or such other published table by S&P that
the Portfolio Manager provides to the Collateral Administrator) using such
Collateral Obligation’s S&P Rating and the number of years to maturity
(determined using linear interpolation if the number of years to maturity is not
an integer).

 

“S&P Default Rate Dispersion”: With respect to all Collateral Obligations with
an S&P Rating of “CCC-” or higher, (A) the sum of the product of (i) the
Principal Balance of each such Collateral Obligation and (ii) the absolute value
of (x) the S&P Default Rate minus (y) the S&P Expected Portfolio Default Rate
divided by (B) the Aggregate Principal Balance for all such Collateral
Obligations.

 

“S&P Effective Date Adjustments”: In connection with determining whether the S&P
CDO Monitor Test is satisfied in connection with the Effective Date, the
following adjustments shall apply: (i) in calculating the Weighted Average
Floating Spread, the Aggregate Funded Spread will be calculated by assuming that
any Floating Rate Obligation that has a LIBOR floor bears interest at a rate
equal to the stated interest rate spread over the Libor interbank offered rate
based index for such Floating Rate Obligation and (ii) in calculating the S&P
CDO Monitor Adjusted BDR, the Collateral Principal Amount will exclude Principal
Proceeds on deposit in the Ramp-Up Account and the Collection Account permitted
to be designated as Interest Proceeds prior to the second Payment Date.

 

 

 

“S&P Expected Portfolio Default Rate”: With respect to all Collateral
Obligations with an S&P Rating of “CCC-” or higher, (i) the sum of the product
of (x) the Principal Balance of each such Collateral Obligation and (y) the S&P
Default Rate divided by (ii) the Aggregate Principal Balance for all such
Collateral Obligations.

 

“S&P Industry Diversity Measure”: A measure calculated by determining the
Aggregate Principal Balance of the Collateral Obligations (with an S&P Rating of
“CCC-” or higher) within each S&P Industry Classification in the portfolio, then
dividing each of these amounts by the Aggregate Principal Balance of the
Collateral Obligations (with an S&P Rating of “CCC-” or higher) from all the S&P
Industry Classifications in the portfolio, squaring the result for each
industry, then taking the reciprocal of the sum of these squares.

 

“S&P Obligor Diversity Measure”: A measure calculated by determining the
Aggregate Principal Balance of the Collateral Obligations (with an S&P Rating of
“CCC-” or higher) from each obligor and its affiliates, then dividing each such
Aggregate Principal Balance by the Aggregate Principal Balance of Collateral
Obligations (with an S&P Rating of “CCC-” or higher) from all the obligors in
the portfolio, then squaring the result for each obligor, then taking the
reciprocal of the sum of these squares.

 

“S&P Regional Diversity Measure”: A measure calculated by determining the
Aggregate Principal Balance of the Collateral Obligations (with an S&P Rating of
“CCC-” or higher) within each S&P region set forth in S&P’s regions and
associated countries table (see “CDO Evaluator 7.2 Parameters Required to
Calculate S&P Global Ratings Portfolio Benchmarks,” or such other published
table by S&P that the Portfolio Manager provides to the Collateral
Administrator), then dividing each of these amounts by the Aggregate Principal
Balance of the Collateral Obligations (with an S&P Rating of “CCC-” or higher)
from all S&P regions in the portfolio, squaring the result for each region, then
taking the reciprocal of the sum of these squares.

 

“S&P Weighted Average Life”: On any date of determination, a number calculated
by determining the number of years between the current date and the maturity
date of each Collateral Obligation (with an S&P Rating of “CCC-”or higher),
multiplying each Collateral Obligation’s Principal Balance by its number of
years, summing the results of all Collateral Obligations in the portfolio, and
dividing such amount by the Aggregate Principal Balance of all Collateral
Obligations (with an S&P Rating of “CCC-” or higher).

 

Schedule 3-2

 

Schedule 4

 

Moody’s Rating Definitions

 

“CFR”: For purposes of this Schedule 4, with respect to an obligor of a
Collateral Obligation, if such obligor has a corporate family rating (including
pursuant to a Moody’s Credit Estimate) by Moody’s, then such corporate family
rating; provided that, if such obligor does not have a corporate family rating
by Moody’s but any entity in the obligor’s corporate family does have a
corporate family rating, then the CFR is such corporate family rating.

 

“Moody’s Credit Estimate”: With respect to any Collateral Obligation as of any
date of determination, an estimated credit rating for such Collateral Obligation
provided or confirmed by Moody’s in the previous 15 months; provided that, (a)
if Moody’s has been requested by the Issuer, the Portfolio Manager or the issuer
or obligor of such Collateral Obligation to assign or renew an estimate with
respect to such Collateral Obligation but such rating estimate has not been
received, pending receipt of such estimate, the Moody’s Rating or Moody’s
Default Probability Rating of such Collateral Obligation will be (1) “B3” if the
Portfolio Manager certifies to the Trustee and the Collateral Administrator that
the Portfolio Manager believes (such belief not to be called into question as a
result of subsequent events) that such estimate will be at least “B3” and if the
Aggregate Principal Balance of all Collateral Obligations determined pursuant to
this clause (1) does not exceed 5% of the Collateral Principal Amount or (b)
otherwise, with respect to a Collateral Obligation’s credit estimate which has
not been renewed, the Moody’s Credit Estimate will be (1) longer than 12 months
but not beyond 15 months of issuance, one subcategory lower than the estimated
rating and (2) after 15 months of issuance, “Caa3”.

 

“Moody’s Default Probability Rating”: With respect to a Collateral Obligation:

 

(a)if the Obligor of such Collateral Obligation has a CFR (including pursuant to
a Moody’s Credit Estimate), then such CFR;

 

(b)if not determined pursuant to clause (a) above, if the Obligor of such
Collateral Obligation has one or more senior unsecured obligations publicly
rated by Moody’s, then the Moody’s public rating on any such senior unsecured
obligation;

 

(c)if not determined pursuant to clause (a) or (b) above, if the Obligor of such
Collateral Obligation has one or more senior secured obligations publicly rated
by Moody’s, then the Moody’s rating that is one subcategory lower than the
Moody’s public rating on any such senior secured obligation;

 

(d)if not determined pursuant to clause (a), (b) or (c) above, the Portfolio
Manager may elect to use a Moody’s Credit Estimate;

 

(e)if not determined pursuant to clause (a), (b), (c) or (d) above and at the
election of the Portfolio Manager, the Moody’s Derived Rating, if any; or

 

(f)if not determined pursuant to any of clauses (a), (b), (c), (d) or (e) above,
the Collateral Obligation will be deemed to have a Moody’s Default Probability
Rating of “Caa3”.

 

 

 

With respect to a DIP Collateral Obligation, the rating which is one subcategory
below the facility rating (whether public or private) of such DIP Collateral
Obligation rated by Moody’s (provided that, if a point-in-time rating as
assigned by Moody’s within the last 12 months from the date of determination,
then the Moody’s Default Probability Rating will be such point-in-time rating).

 

For purposes of calculating a Moody’s Default Probability Rating, each
applicable rating on credit watch by Moody’s with positive or negative
implication at the time of calculation will be treated as having been upgraded
or downgraded by one rating subcategory, as the case may be.

 

“Moody’s Derived Rating”: With respect to a Collateral Obligation whose Moody’s
Rating or Moody’s Default Probability Rating cannot otherwise be determined
pursuant to the definitions thereof, such Moody’s Rating or Moody’s Default
Probability Rating shall be determined as set forth below:

 

(a)With respect to any DIP Collateral Obligation, one subcategory below the
facility rating (whether public or private) of such DIP Collateral Obligation
rated by Moody’s.

 

(b)If not determined pursuant to clause (a) above, then by using any one of the
methods provided below:

 

(i)(A) pursuant to the table below:

 

Type of Collateral
Obligation S&P Rating
(Public and
Monitored) Collateral Obligation Rated
by S&P Number of Subcategories
Relative to Moody’s
Equivalent of S&P Rating Not Structured Finance
Obligation ≥ “BBB-” Not a Loan or Participation
Interest in Loan -1 Not Structured Finance
Obligation ≤ “BB+” Not a Loan or Participation
Interest in Loan -2 Not Structured Finance
Obligation   Loan or Participation Interest
in Loan -2

 

(B)if such Collateral Obligation is not rated by S&P but another security or
obligation of the Obligor has a public and monitored rating by S&P (a “parallel
security”), then the rating of such parallel security will at the election of
the Portfolio Manager be determined in accordance with the table set forth in
subclause (b)(i)(A) above, and the Moody’s Derived Rating for purposes of
clauses (b)(iv) or (c)(iv) of the definition of Moody’s Rating or clause (e) of
the definition of Moody’s Default Probability Rating (as applicable) of such
Collateral Obligation will be determined in accordance with the methodology set
forth in the following table (for such purposes treating the parallel security
as if it were rated by Moody’s at the rating determined pursuant to this
subclause (b)(i)(B));

 

Schedule 4-2

 

Obligation Category of
Rated Obligation Rating of Rated Obligation Number of Subcategories
Relative to Rated Obligation
Rating Senior secured obligation ≥ B2 -1 Senior secured obligation < B2 -2
Subordinated obligation ≥ B3 +1 Subordinated obligation < B3 0

 

(C)if such Collateral Obligation is a DIP Collateral Obligation, no Moody’s
Derived Rating may be determined based on a rating by S&P or any other rating
agency; or

 

(ii)if such Collateral Obligation is not rated by Moody’s or S&P and no other
security or obligation of the issuer of such Collateral Obligation is rated by
Moody’s or S&P, and if Moody’s has been requested by the Issuer, the Portfolio
Manager or the issuer of such Collateral Obligation to assign a rating or rating
estimate with respect to such Collateral Obligation but such rating or rating
estimate has not been received, pending receipt of such estimate, the Moody’s
Derived Rating for purposes of clauses (b)(iv) or (c)(iv) of the definition of
Moody’s Rating or clause (e) of the definition of Moody’s Default Probability
Rating (as applicable) of such Collateral Obligation shall be (1) “B3” if the
Portfolio Manager certifies to the Trustee and the Collateral Administrator that
the Portfolio Manager believes (such belief not to be called into question as a
result of subsequent events) that such estimate will be at least “B3” and if the
Aggregate Principal Balance of Collateral Obligations determined pursuant to
this clause (ii) does not exceed 5% of the Collateral Principal Amount of all
Collateral Obligations or (2) otherwise, “Caa1.”

 

For purposes of calculating a Moody’s Derived Rating, each applicable rating on
credit watch by Moody’s with positive or negative implication at the time of
calculation will be treated as having been upgraded or downgraded by one rating
subcategory, as the case may be.

 

“Moody’s Rating”: With respect to any Collateral Obligation, as of any date of
determination, the rating determined in accordance with the following
methodology:

 

(a)If a rating or rating estimate has been assigned to such Collateral
Obligation by Moody’s upon the request of the Issuer, the Portfolio Manager, or
an affiliate of the Portfolio Manager pursuant to the proviso in clause (d) of
Moody’s Default Probability Rating, then such rating.

 

(b)With respect to a Collateral Obligation that is a Senior Secured Loan:

 

Schedule 4-3

 

(i)if such Collateral Obligation is publicly rated by Moody’s, such public
rating;

 

(ii)if not determined pursuant to clause (b)(i) above, if the Obligor of such
Collateral Obligation has a CFR, then the Moody’s rating that is one subcategory
higher than such CFR;

 

(iii)if not determined pursuant to clause (b)(i) or (b)(ii) above, if the
Obligor of such Collateral Obligation has one or more senior unsecured
obligations publicly rated by Moody’s, then the Moody’s public rating that is
two subcategories higher than the Moody’s public rating on any such senior
unsecured obligation; or

 

(iv)if not determined pursuant to clause (b)(i), (b)(ii) or (b)(iii) above, the
Moody’s Derived Rating.

 

(c)With respect to a Collateral Obligation that is not a Senior Secured Loan:

 

(i)if such Collateral Obligation is publicly rated by Moody’s, such public
rating;

 

(ii)if not determined pursuant to clause (c)(i) above, if the Obligor of such
Collateral Obligation has one or more senior unsecured obligations publicly
rated by Moody’s, then the Moody’s public rating on any such senior unsecured
obligation;

 

(iii)if not determined pursuant to clause (c)(i) or (c)(ii) above, if the
Obligor of such Collateral Obligation has a CFR by Moody’s, then the Moody’s
rating that is one subcategory lower than such CFR; or

 

(iv)if not determined pursuant to clause (c)(i), (c)(ii) or (c)(iii) above, the
Moody’s Derived Rating.

 

For purposes of calculating a Moody’s Rating, each applicable rating on credit
watch by Moody’s with positive or negative implication at the time of
calculation will be treated as having been upgraded or downgraded by one rating
subcategory, as the case may be.

 

Schedule 4-4

 

Schedule 5

 

FITCH RATING DEFINITIONS

 

“Fitch Rating”: As of any date of determination, the Fitch Rating of any
Collateral Obligation will be determined as follows:

 

(a)       if Fitch has issued an issuer default rating or credit opinion with
respect to the issuer of such Collateral Obligation, or the guarantor which
unconditionally and irrevocably guarantees such Collateral Obligation, then the
Fitch Rating will be such issuer default rating (regardless of whether there is
a published rating by Fitch on the Collateral Obligations of such issuer held by
the Issuer);

 

(b)       if Fitch has not issued an issuer default rating or a credit opinion
with respect to the issuer or guarantor of such Collateral Obligation but Fitch
has issued an outstanding long-term financial strength rating with respect to
such issuer, the Fitch Rating of such Collateral Obligation will be one
subcategory below such rating;

 

(c)       subject to the proviso below, if a Fitch Rating cannot be determined
pursuant to clause (a) or (b), but:

 

(i)          Fitch has issued a senior unsecured rating on any obligation or
security of the issuer of such Collateral Obligation, then the Fitch Rating of
such Collateral Obligation will equal such rating; or

 

(ii)        Fitch has not issued a senior unsecured rating on any obligation or
security of the issuer of such Collateral Obligation but Fitch has issued a
senior rating, senior secured rating or a subordinated secured rating on any
obligation or security of the issuer of such Collateral Obligation, then the
Fitch Rating of such Collateral Obligation will (x) equal such rating if such
rating is “BBB-” or higher and (y) be one subcategory below such rating if such
rating is “BB+” or lower; or

 

(iii)       Fitch has not issued a senior unsecured rating or a senior rating,
senior secured rating or a subordinated secured rating on any obligation or
security of the issuer of such Collateral Obligation but Fitch has issued a
subordinated, junior subordinated or senior subordinated rating on any
obligation or security of the issuer of such Collateral Obligation, then the
Fitch Rating of such Collateral Obligation will be (x) one subcategory above
such rating if such rating is “B+” or higher and (y) two subcategories above
such rating if such rating is “B” or lower;

 

(d)       subject to the proviso below, if a Fitch Rating cannot be determined
pursuant to clause (a), (b) or (c) and:

 

 

 

(i)         Moody’s has issued a publicly available CFR for the issuer of such
Collateral Obligation, then, subject to subclause (viii) below, the Fitch Rating
of such Collateral Obligation will be the Fitch equivalent of such Moody’s
rating;

 

(ii)        Moody’s has not issued a publicly available CFR for the issuer of
such Collateral Obligation but has issued a long-term issuer rating for such
issuer that is publicly available, then, subject to subclause (viii) below, the
Fitch Rating of such Collateral Obligation will be the Fitch equivalent of such
Moody’s rating;

 

(iii)       Moody’s has not issued a publicly available CFR for the issuer of
such Collateral Obligation but Moody’s has issued an outstanding insurance
financial strength rating for such issuer that is publicly available, then,
subject to subclause (viii) below, the Fitch Rating of such Collateral
Obligation will be one subcategory below the Fitch equivalent of such Moody’s
rating;

 

(iv)       Moody’s has not issued a publicly available CFR for the issuer of
such Collateral Obligation but has issued outstanding corporate issue ratings
for such issuer that is publicly available, then, subject to subclause (viii)
below, the Fitch Rating of such Collateral Obligation will be (x) if such
corporate issue rating relates to senior unsecured obligations of such issuer,
the Fitch equivalent of the Moody’s rating for such issue, if there is no such
corporate issue ratings relating to senior unsecured obligations of the issuer
that is publicly available then (y) if such corporate issue rating relates to
senior, senior secured or subordinated secured obligations of such issuer, (1)
one subcategory below the Fitch equivalent of such Moody’s rating if such
obligations are rated “Ba1” or above or “Ca” by Moody’s or (2) two subcategories
below the Fitch equivalent of such Moody’s rating if such obligations are rated
“Ba2” or below but above “Ca” by Moody’s, or if there is no such corporate issue
ratings relating to senior unsecured, senior, senior secured or subordinated
secured obligations of the issuer that is publicly available then (z) if such
corporate issue rating relates to subordinated, junior subordinated or senior
subordinated obligations of such issuer, (1) one subcategory above the Fitch
equivalent of such Moody’s rating if such obligations are rated “B1” or above by
Moody’s or (2) two subcategories above the Fitch equivalent of such Moody’s
rating if such obligations are rated “B2” or below by Moody’s;

 

(v)        S&P has issued a publicly available issuer credit rating for the
issuer of such Collateral Obligation, then, subject to subclause (viii) below,
the Fitch Rating of such Collateral Obligation will be the Fitch equivalent of
such S&P rating;

 

(vi)       S&P has not issued a publicly available issuer credit rating for the
issuer of such Collateral Obligation but S&P has issued an outstanding insurance
financial strength rating for such issuer that is publicly available, then,
subject to subclause (viii) below, the Fitch Rating of such Collateral
Obligation will be one subcategory below the Fitch equivalent of such S&P
rating;

 

Schedule 5-2

 

(vii)       S&P has not issued a publicly available issuer credit rating for the
issuer of such Collateral Obligation but has issued outstanding corporate issue
ratings for such issuer that is publicly available, then, subject to subclause
(viii) below, the Fitch Rating of such Collateral Obligation will be (x) if such
corporate issue rating relates to senior unsecured obligations of such issuer,
the Fitch equivalent of the S&P rating for such issue, if there is no such
corporate issue ratings relating to senior unsecured obligations of the issuer
that is publicly available then (y) if such corporate issue rating relates to
senior, senior secured or subordinated secured obligations of such issuer, (1)
the Fitch equivalent of such S&P rating if such obligations are rated “BBB-” or
above by S&P or (2) one subcategory below the Fitch equivalent of such S&P
rating if such obligations are rated “BB+” or below by S&P, or if there is no
such corporate issue ratings relating to senior unsecured, senior, senior
secured or subordinated secured obligations of the issuer that is publicly
available then (z) if such corporate issue rating relates to subordinated,
junior subordinated or senior subordinated obligations of such issuer, (1) one
subcategory above the Fitch equivalent of such S&P rating if such obligations
are rated “B+” or above by S&P or (2) two subcategories above the Fitch
equivalent of such S&P rating if such obligations are rated “B” or below by S&P;
and

 

(viii)       both Moody’s and S&P provide a public rating of the issuer of such
Collateral Obligation or a corporate issue of such issuer, then the Fitch Rating
will be the lowest of the Fitch Ratings determined pursuant to any of the
subclauses of this clause (d); and

 

(e)       if a rating cannot be determined pursuant to clauses (a) through (d)
then, (i) at the discretion of the Portfolio Manager, the Portfolio Manager on
behalf of the Issuer may apply to Fitch for a Fitch credit opinion, and the
issuer default rating provided in connection with such credit opinion will then
be the Fitch Rating, or (ii) the Issuer may assign a Fitch Rating of “CCC” or
lower to such Collateral Obligation which is not in default;

 

provided that, on the Closing Date, if any rating described above is (i) on
rating watch negative or negative credit watch, the rating will be the Fitch
Rating as determined above adjusted down by one subcategory or (ii) on rating
watch positive or positive credit watch or outlook negative, the rating will not
be adjusted; provided, further, that after the Closing Date, if any rating
described above is on rating watch negative or negative credit watch, the rating
will be adjusted down by one subcategory; provided, further, that the Fitch
Rating may be updated by Fitch from time to time as indicated in the “CLOs and
Corporate CDOs Rating Criteria” report issued by Fitch and available at
www.fitchratings.com. For the avoidance of doubt, the Fitch Rating takes into
account adjustments for assets that are on rating watch negative or negative
credit watch prior to determining the issue rating and/or in the determination
of the lower of the Moody’s and S&P public ratings.

 

Schedule 5-3

 

Fitch Equivalent Ratings

 

Fitch Rating Moody’s rating S&P rating AAA Aaa AAA AA+ Aa1 AA+ AA Aa2 AA AA- Aa3
AA- A+ A1 A+ A A2 A A- A3 A- BBB+ Baa1 BBB+ BBB Baa2 BBB BBB- Baa3 BBB- BB+ Ba1
BB+ BB Ba2 BB BB- Ba3 BB- B+ B1 B+ B B2 B B- B3 B- CCC+ Caa1 CCC+ CCC Caa2 CCC
CCC- Caa3 CCC- CC Ca CC C C C

 

Fitch IDR Equivalency Map from Corporate Ratings

 

Rating Type Rating Agency(s) Issue Rating Mapping Rule Corporate Family Rating
LT Issuer Rating Moody’s N/A 0 Issuer Credit Rating S&P N/A 0 Senior unsecured
Fitch, Moody’s, S&P Any 0 Senior, Senior secured or Subordinated secured Fitch,
S&P “BBB-“ or above 0 Fitch, S&P “BB+” or below -1 Moody’s “Ba1” or above -1
Moody’s “Ba2” or below -2 Moody’s “Ca” -1 Subordinated, Junior subordinated or
Senior subordinated Fitch, Moody’s, S&P “B+”, “B1” or above 1 Fitch, Moody’s,
S&P “B”, “B2” or below 2

 

Schedule 5-4

 

The following steps are used to calculate the Fitch IDR equivalent ratings:

 

1Public or private Fitch-issued IDR or Fitch credit opinion.

 

2If Fitch has not issued an IDR, but has an outstanding Long-Term Financial
Strength Rating, then the IDR equivalent is one rating lower.

 

3If Fitch has not issued an IDR, but has outstanding corporate issue ratings,
then the IDR equivalent is calculated using the mapping in the table above.

 

4If Fitch does not rate the issuer or any associated issuance, then determine a
Moody’s and S&P equivalent to Fitch’s IDR pursuant to steps 5 and 6.

 

5aA public Moody’s-issued Corporate Family Rating (CFR) is equivalent in
definition terms to the Fitch IDR. If Moody’s has not issued a CFR, but has an
outstanding LT issuer rating, then this is equivalent to the Fitch IDR.

 

5bIf Moody’s has not issued a CFR, but has an outstanding Insurance Financial
Strength Rating, then the Fitch IDR equivalent is one rating lower.

 

5cIf Moody’s has not issued a CFR, but has outstanding corporate issue ratings,
then the Fitch IDR equivalent is calculated using the mapping in the table
above.

 

6aA public S&P-issued Issuer Credit Rating (ICR) is equivalent in terms of
definition to the Fitch IDR.

 

6bIf S&P has not issued an ICR, but has an outstanding Insurance Financial
Strength Rating, then the Fitch IDR equivalent is one rating lower.

 

6cIf S&P has not issued an ICR, but has outstanding corporate issue ratings,
then the Fitch IDR equivalent is calculated using the mapping in the table
above.

 

7If both Moody’s and S&P provide a public rating on the issuer or an issue, the
lower of the two Fitch IDR equivalent ratings will be used in PCM. Otherwise the
sole public Fitch IDR equivalent rating from Moody’s or S&P will be applied.

 

“Fitch Recovery Rate” means, with respect to a Collateral Obligation, the
recovery rate determined in accordance with clauses (a) through (c) below or (in
any case) such other recovery rate as Fitch may notify the Portfolio Manager
from time to time:

 

(a)       if such Collateral Obligation has a public Fitch recovery rating, or a
recovery rating is assigned by Fitch in the context of provision by Fitch of a
credit opinion to the Portfolio Manager, the recovery rate corresponding to such
recovery rating in the table below (unless a specific recovery rate (expressed
as a percentage) is provided by Fitch in which case such recovery rate shall be
used):

 

Fitch recovery rating Fitch recovery rate % RR1 95

 

Schedule 5-5

 

 

Fitch recovery rating Fitch recovery rate % RR2 80 RR3 60 RR4 40 RR5 20 RR6 5

 

(b)       if such Collateral Obligation is a DIP Collateral Obligation and has
neither a public Fitch recovery rating, nor a recovery rating assigned to it by
Fitch in the context of provision by Fitch of a credit opinion, the Issuer or
the Portfolio Manager on behalf of the Issuer shall apply to Fitch for a Fitch
recovery rating; provided that, the Fitch recovery rating in respect of such DIP
Collateral Obligation shall be considered to be “RR3” pending provision by Fitch
of such Fitch recovery rating, and the recovery rate applicable to such DIP
Collateral Obligation shall be the recovery rate corresponding to such Fitch
recovery rating in the table above; and

 

(c)       if such Collateral Obligation has no public Fitch recovery rating and
no recovery rating is assigned by Fitch in the context of provision by Fitch of
a credit opinion to the Portfolio Manager, the recovery rate applicable will be
the rate determined in accordance with the table below, for purposes of which
the Collateral Obligation will be categorized as “Strong Recovery” if it is a
Senior Secured Loan, “Moderate Recovery” if it is a senior unsecured bond and
otherwise “Weak Recovery,” and will fall into the country group corresponding to
the country in which the Obligor thereof is Domiciled:

 

 

Group 1

Group 2

Group 3

Strong Recovery 80 70 35 Moderate Recovery 45 45 25 Weak
Recovery 20 20 5

 

Group 1: Australia, Bermuda, Canada, Cayman Islands, New Zealand, Puerto Rico,
United States.

 

Group 2: Austria, Barbados, Belgium, Czech Republic, Denmark, Estonia, Finland,
France, Germany, Gibraltar, Hong Kong, Iceland, Ireland, Israel, Italy, Japan,
Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Netherlands, Norway,
Poland, Portugal, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden,
Switzerland, Taiwan, United Kingdom.

 

Group 3: Albania, Argentina, Asia Others, Bahamas, Bosnia and Herzegovina,
Brazil, Bulgaria, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Dominican
Republic, Eastern Europe Others, Ecuador, Egypt, El Salvador, Greece, Guatemala,
Hungary, India, Indonesia, Iran, Jamaica, Kazakhstan, Liberia, Macedonia,
Malaysia, Malta, Marshall Islands, Mauritius, Mexico, Middle East and North
Africa Others, Moldova, Morocco, Other Central America, Other South America,
Other Sub Saharan Africa, Pakistan, Panama, Peru, Philippines, Qatar, Romania,
Russia, Saudi Arabia, Serbia and Montenegro, South Africa, Thailand, Tunisia,
Turkey, Ukraine, Uruguay, Venezuela, Vietnam.

 

Schedule 5-6

 

Fitch Test Matrix

 

Subject to the provisions provided below, on or after the Effective Date, the
Portfolio Manager will have the option to elect which of the cases set forth in
the matrix below (the “Fitch Test Matrix”) shall be applicable for purposes of
the Maximum Fitch Rating Factor Test, the Minimum Weighted Average Fitch
Recovery Rate Test and the Minimum Fitch Floating Spread Test. For any given
case:

 

(a)       the applicable value for determining satisfaction of the Maximum Fitch
Rating Factor Test will be the value set forth in the column header (or linear
interpolation between two adjacent columns, as applicable) of the row-column
combination in the Fitch Test Matrix selected by the Portfolio Manager;

 

(b)       the applicable value for determining satisfaction of the Minimum Fitch
Floating Spread Test will be the percentage set forth in the row header (or
linear interpolation between two adjacent rows as applicable) of the row-column
combination in the Fitch Test Matrix selected by the Portfolio Manager; and

 

(c)       the applicable value for determining satisfaction of the Minimum
Weighted Average Fitch Recovery Rate Test will be the value in the intersection
cell (or linear interpolation between two adjacent rows and/or two adjacent
columns, as applicable) of the row-column combination in the Fitch Test Matrix
selected by the Portfolio Manager in relation to (a) and (b) above.

 

On the Effective Date, the Portfolio Manager will be required to elect which
case shall apply initially by written notice to the Issuer and Fitch.
Thereafter, upon two Business Days’ notice to the Issuer and Fitch, the
Portfolio Manager may elect to have a different case apply; provided that, the
Maximum Fitch Rating Factor Test, the Minimum Weighted Average Fitch Recovery
Rate Test and the Minimum Fitch Floating Spread Test applicable to the case to
which the Portfolio Manager desires to change will be satisfied after giving
effect to such change or, in the case of any tests that are not satisfied, the
level of compliance with such tests is maintained or improved after giving
effect to the application of the different case.

 

Maximum Fitch Weighted Average Rating Factor Minimum
Fitch
Floating
Spread 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 2.90% 65.70% 67.40% 69.00%
70.70% 72.30% 74.00% 75.50% 76.80% 78.10% 79.40% 80.50% 81.50% 82.50% 83.40%
84.30% 3.10% 64.50% 66.20% 67.80% 69.40% 71.10% 72.80% 74.40% 75.90% 77.20%
78.50% 79.80% 80.80% 81.80% 82.80% 83.70% 3.30% 63.40% 65.00% 66.60% 68.30%
69.90% 71.60% 73.30% 75.00% 76.30% 77.70% 79.00% 80.20% 81.20% 82.20% 83.10%
3.50% 62.40% 64.00% 65.60% 67.30% 68.90% 70.50% 72.30% 73.90% 75.50% 76.80%
78.10% 79.40% 80.50% 81.50% 82.50% 3.70% 61.30% 63.00% 64.60% 66.20% 67.90%
69.50% 71.20% 72.90% 74.50% 76.00% 77.30% 78.60% 79.90% 80.90% 81.90% 3.90%
60.30% 62.00% 63.60% 65.20% 66.90% 68.50% 70.10% 71.80% 73.50% 75.10% 76.50%
77.80% 79.10% 80.30% 81.30% 4.10% 59.20% 60.90% 62.60% 64.20% 65.80% 67.50%
69.10% 70.80% 72.50% 74.10% 75.60% 77.00% 78.30% 79.60% 80.70% 4.30% 58.10%
59.90% 61.60% 63.20% 64.80% 66.40% 68.10% 69.70% 71.40% 73.10% 74.70% 76.10%
77.50% 78.70% 80.00% 4.50% 57.00% 58.90% 60.60% 62.30% 63.80% 65.40% 67.10%
68.70% 70.30% 72.00% 73.70% 75.30% 76.60% 77.90% 79.20% 4.70% 55.90% 57.80%
59.70% 61.30% 62.90% 64.50% 66.10% 67.70% 69.30% 71.00% 72.70% 74.30% 75.80%
77.10% 78.40%

 

Schedule 5-7

 

Maximum Fitch Weighted Average Rating Factor Minimum
Fitch
Floating
Spread 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 4.90% 54.80% 56.70% 58.60%
60.40% 62.00% 63.50% 65.10% 66.70% 68.40% 70.00% 71.70% 73.30% 75.00% 76.30%
77.70% 5.10% 53.60% 55.60% 57.50% 59.40% 61.00% 62.60% 64.20% 65.80% 67.40%
69.00% 70.70% 72.40% 74.00% 75.50% 76.90% 5.30% 52.50% 54.50% 56.40% 58.30%
60.10% 61.70% 63.30% 64.80% 66.50% 68.10% 69.70% 71.40% 73.10% 74.70% 76.10%
5.50% 51.30% 53.40% 55.40% 57.20% 59.10% 60.80% 62.40% 63.90% 65.50% 67.20%
68.80% 70.40% 72.10% 73.80% 75.30% 5.70% 50.10% 52.20% 54.30% 56.20% 58.10%
59.90% 61.50% 63.10% 64.60% 66.20% 67.90% 69.50% 71.10% 72.80% 74.50% 5.90%
49.00% 51.10% 53.20% 55.20% 57.10% 58.90% 60.60% 62.20% 63.80% 65.30% 67.00%
68.60% 70.20% 71.90% 73.60% 6.10% 48.00% 50.00% 52.10% 54.10% 56.00% 57.90%
59.70% 61.40% 62.90% 64.50% 66.10% 67.80% 69.40% 71.10% 72.90% 6.30% 46.90%
48.90% 51.00% 53.00% 55.00% 56.90% 58.70% 60.50% 62.20% 63.70% 65.30% 67.00%
68.70% 70.40% 72.10% 6.50% 45.80% 47.90% 49.90% 52.00% 54.00% 56.00% 57.90%
59.80% 61.40% 63.10% 64.60% 66.30% 68.00% 69.70% 71.40% 6.70% 44.70% 46.80%
48.90% 51.00% 53.10% 55.10% 57.10% 59.00% 60.70% 62.40% 64.00% 65.60% 67.30%
68.90% 70.60% 6.90% 43.80% 45.90% 48.00% 50.10% 52.20% 54.30% 56.30% 58.20%
60.00% 61.70% 63.30% 64.80% 66.60% 68.20% 69.90% 7.10% 42.80% 45.00% 47.10%
49.20% 51.30% 53.40% 55.40% 57.40% 59.20% 61.00% 62.60% 64.20% 65.80% 67.50%
69.20% 7.30% 41.90% 44.10% 46.30% 48.40% 50.40% 52.50% 54.60% 56.60% 58.50%
60.30% 61.90% 63.50% 65.10% 66.80% 68.50% 7.50% 41.00% 43.20% 45.40% 47.50%
49.60% 51.70% 53.70% 55.70% 57.70% 59.50% 61.20% 62.80% 64.40% 66.10% 67.80%
7.70% 40.00% 42.30% 44.50% 46.60% 48.70% 50.80% 52.90% 54.90% 56.80% 58.70%
60.50% 62.10% 63.70% 65.30% 67.00% 7.90% 37.50% 41.40% 43.50% 45.70% 47.80%
49.80% 51.90% 54.00% 56.00% 57.90% 59.70% 61.40% 63.00% 64.60% 66.20% 8.10%
34.90% 40.40% 42.60% 44.70% 46.90% 48.90% 51.00% 53.10% 55.10% 57.00% 58.90%
60.70% 62.30% 63.90% 65.50% 8.30% 32.30% 38.30% 41.60% 43.80% 45.90% 48.00%
50.10% 52.20% 54.20% 56.20% 58.10% 59.90% 61.60% 63.20% 64.80%                  
             

Weighted Average Fitch Recovery Rate

 

Schedule 5-8

 

Schedule 6

 

APPROVED INDEX LIST

 

1.       S&P/LSTA Leveraged Loan Indices

 

2.       CS Leveraged Loan Index (f/k/a CSFB Leveraged Loan Index)

 

3.       Deutsche Bank Leveraged Loan Index

 

4.       Goldman Sachs/Loan Pricing Corporation Liquid Leveraged Loan Index

 

5.       Banc of America Securities Leveraged Loan Index

 

 

 

Schedule 7

 

S&P RECOVERY RATE TABLES

 

(a)(i) If a Collateral Obligation has an S&P Recovery Rating, the S&P Recovery
Rate for such Collateral Obligation shall be determined as follows (taking into
account, for any Collateral Obligation with an S&P Recovery Rating of “1”
through “6”, the recovery range indicated in the S&P published report therefor):

 

S&P Recovery Rating
of a Collateral
Obligation Recovery Estimate (%)* from S&P published reports** Initial Liability
Rating     “AAA” “AA” “A” “BBB” “BB” “B” and below 1+ 100 75.00% 85.00% 88.00%
90.00% 92.00% 95.00% 1 95 70.00% 80.00% 84.00% 87.50% 91.00% 95.00% 1 90 65.00%
75.00% 80.00% 85.00% 90.00% 95.00% 2 85 62.50% 72.50% 77.50% 83.00% 88.00%
92.00% 2 80 60.00% 70.00% 75.00% 81.00% 86.00% 89.00% 2 75 55.00% 65.00% 70.50%
77.00% 82.50% 84.00% 2 70 50.00% 60.00% 66.00% 73.00% 79.00% 79.00% 3 65 45.00%
55.00% 61.00% 68.00% 73.00% 74.00% 3 60 40.00% 50.00% 56.00% 63.00% 67.00%
69.00% 3 55 35.00% 45.00% 51.00% 58.00% 63.00% 64.00% 3 50 30.00% 40.00% 46.00%
53.00% 59.00% 59.00% 4 45 28.50% 37.50% 44.00% 49.50% 53.50% 54.00% 4 40 27.00%
35.00% 42.00% 46.00% 48.00% 49.00% 4 35 23.50% 30.50% 37.50% 42.50% 43.50%
44.00% 4 30 20.00% 26.00% 33.00% 39.00% 39.00% 39.00% 5 25 17.50% 23.00% 28.50%
32.50% 33.50% 34.00% 5 20 15.00% 20.00% 24.00% 26.00% 28.00% 29.00% 5 15 10.00%
15.00% 19.50% 22.50% 23.50% 24.00% 5 10 5.00% 10.00% 15.00% 19.00% 19.00% 19.00%
6 5 3.50% 7.00% 10.50% 13.50% 14.00% 14.00% 6 0 2.00% 4.00% 6.00% 8.00% 9.00%
9.00%     Recovery rate

 

* The recovery estimate from S&P’s published reports for a given loan is rounded
down to the nearest 5%.

 

(ii)If (x) a Collateral Obligation does not have an S&P Recovery Rating and such
Collateral Obligation is a senior unsecured loan or second lien loan and (y) the
issuer of such Collateral Obligation has issued another debt instrument that is
outstanding and senior to such Collateral Obligation (a “Senior Secured Debt
Instrument”) that has an S&P Recovery Rating, the S&P Recovery Rate for such
Collateral Obligation shall be determined as follows:

 

 

 

For Collateral Obligations Domiciled in Group A

 

S&P Recovery
Rating
of the Senior
Secured
Debt Instrument Initial Liability Rating   “AAA” “AA” “A” “BBB” “BB” “B” and
below 1+ 18% 20% 23% 26% 29% 31% 1 18% 20% 23% 26% 29% 31% 2 18% 20% 23% 26% 29%
31% 3 12% 15% 18% 21% 22% 23% 4 5% 8% 11% 13% 14% 15% 5 2% 4% 6% 8% 9% 10% 6 -%
-% -% -% -% -%   Recovery rate

 

For Collateral Obligations Domiciled in Group B

 

S&P Recovery
Rating
of the Senior
Secured
Debt Instrument Initial Liability Rating   “AAA” “AA” “A” “BBB” “BB” “B” and
below 1+ 13% 16% 18% 21% 23% 25% 1 13% 16% 18% 21% 23% 25% 2 13% 16% 18% 21% 23%
25% 3 8% 11% 13% 15% 16% 17% 4 5% 5% 5% 5% 5% 5% 5 2% 2% 2% 2% 2% 2% 6 -% -% -%
-% -% -%   Recovery rate

 

For Collateral Obligations Domiciled in Group C

 

S&P Recovery
Rating
of the Senior
Secured
Debt Instrument Initial Liability Rating   “AAA” “AA” “A” “BBB” “BB” “B” and
below 1+ 10% 12% 14% 16% 18% 20% 1 10% 12% 14% 16% 18% 20% 2 10% 12% 14% 16% 18%
20% 3 5% 7% 9% 10% 11% 12% 4 2% 2% 2% 2% 2% 2% 5 -% -% -% -% -% -% 6 -% -% -% -%
-% -%   Recovery rate

 

Schedule 7-2

 

(iii)If (x) a Collateral Obligation does not have an S&P Recovery Rating and
such Collateral Obligation is a subordinated loan and (y) the issuer of such
Collateral Obligation has issued a Senior Secured Debt Instrument that has an
S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation shall
be determined as follows:

 

For Collateral Obligations Domiciled in Groups A and B

 

S&P Recovery Rating
of the Senior Secured
Debt Instrument Initial Liability Rating   “AAA” “AA” “A” “BBB” “BB” “B” and
below 1+ 8% 8% 8% 8% 8% 8% 1 8% 8% 8% 8% 8% 8% 2 8% 8% 8% 8% 8% 8% 3 5% 5% 5% 5%
5% 5% 4 2% 2% 2% 2% 2% 2% 5 -% -% -% -% -% -% 6 -% -% -% -% -% -%   Recovery
rate

 

For Collateral Obligations Domiciled in Group C

 

S&P Recovery Rating
of the Senior Secured
Debt Instrument Initial Liability Rating   “AAA” “AA” “A” “BBB” “BB” “B” and
below 1+ 5% 5% 5% 5% 5% 5% 1 5% 5% 5% 5% 5% 5% 2 5% 5% 5% 5% 5% 5% 3 2% 2% 2% 2%
2% 2% 4 -% -% -% -% -% -% 5 -% -% -% -% -% -% 6 -% -% -% -% -% -%   Recovery
rate

 

Schedule 7-3

 

(b)If a recovery rate cannot be determined using clause (a) and the Collateral
Obligation is secured solely or primarily by common stock, other equity
interests and goodwill, and the issuer of such Collateral Obligation has issued
another debt instrument that is a senior unsecured loan, then the S&P Recovery
Rate for such Collateral Obligation will be equal to the S&P Recovery Rate for
such senior unsecured loan (or such other S&P Recovery Rate as S&P may provide,
at the request of the Portfolio Manager, on a case-by-case basis).

 

(c)If a recovery rate cannot be determined using clause (a) or clause (b) and
the Collateral Obligation is secured solely or primarily by common stock, other
equity interests and goodwill, then the recovery rate shall be determined using
the table following clause (e) as if such Collateral Obligation were an
Unsecured Loan.

 

(d)If a recovery rate cannot be determined using clause (a), clause (b) or
clause (c), the recovery rate shall be determined using the following table.

 

Recovery rates for Obligors Domiciled in Group A, B or C:

 

Priority Category Initial Liability Rating   “AAA” “AA” “A” “BBB” “BB” “B” and
“CCC” Senior Secured Loans Group A 50% 55% 59% 63% 75% 79% Group B 39% 42% 46%
49% 60% 63% Group C 17% 19% 27% 29% 31% 34% Priority Category Initial Liability
Rating Senior Secured Loans (Cov-Lite Loans) Group A 41% 46% 49% 53% 63% 67%
Group B 32% 35% 39% 41% 50% 53% Group C 17% 19% 27% 29% 31% 34% Unsecured Loans,
Second Lien Loans and First Lien Last Out Loans Group A 18% 20% 23% 26% 29% 31%
Group B 13% 16% 18% 21% 23% 25% Group C 10% 12% 14% 16% 18% 20% Subordinated
loans Group A 8% 8% 8% 8% 8% 8% Group B 8% 8% 8% 8% 8% 8% Group C 5% 5% 5% 5% 5%
5%   Sovereign Debt 37 38 40 47 49 50   Recovery rate

Group A: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Hong Kong, Ireland, Israel, Japan, Luxembourg, The Netherlands, Norway, Poland,
Portugal, Singapore, Spain, Sweden, Switzerland, U.K. and United States of
America

 

Group B: Brazil, Dubai International Finance Centre, Greece, Italy, Mexico,
South Africa, Turkey and United Arab Emirates

 

Group C: India, Indonesia, Kazakhstan, Russia, Ukraine and Vietnam

 

Schedule 7-4

 

Schedule 8

 

FITCH INDUSTRY CLASSIFICATIONS

 

Sector Industry     Telecoms Media and Technology Computer and electronics  
Telecommunications   Broadcasting and Media   Cable     Industrials Aerospace
and defence   Automobiles   Building and materials   Chemicals   Industrial and
manufacturing   Metals and mining   Packaging and containers   Paper and forest
products   Real estate   Transportation and distribution     Retail Leisure and
Consumer Consumer products   Environmental services   Farming and agricultural
services   Food, beverage and tobacco   Retail food and drug   Gaming and
leisure and entertainment   Retail   Healthcare   Lodging and restaurants  
Pharmaceuticals   Textiles and furniture     Energy Energy oil and gas  
Utilities power     Banking and Finance Banking and finance     Business
Services Business services