Exhibit 10.22

 

 

CONFORMED VERSION

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

 

 

 

 

 

JMP CREDIT ADVISORS CLO V LTD.

Issuer,

 

JMP CREDIT ADVISORS CLO V LLC

Co-Issuer,

 

 

AND

 

U.S. BANK NATIONAL ASSOCIATION

Trustee

 

INDENTURE

 

Dated as of July 26, 2018

 

COLLATERALIZED LOAN OBLIGATIONS

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

 

--------------------------------------------------------------------------------

 

 

TABLE OF CONTENTS

 

Page

 

ARTICLE I DEFINITIONS

2

   

Section 1.1

Definitions.

2

Section 1.2

Rules of Construction.

69

Section 1.3

Assumptions as to Pledged Obligations.

69

   

ARTICLE II THE NOTES

72

   

Section 2.1

Forms Generally.

72

Section 2.2

Forms of Notes.

72

Section 2.3

Authorized Amount; Stated Maturity; Denominations.

74

Section 2.4

Additional Notes.

76

Section 2.5

Execution, Authentication, Delivery and Dating.

77

Section 2.6

Registration, Registration of Transfer and Exchange.

78

Section 2.7

Mutilated, Defaced, Destroyed, Lost or Stolen Note.

91

Section 2.8

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

92

Section 2.9

Persons Deemed Owners.

95

Section 2.10

Surrender of Notes; Cancellation.

95

Section 2.11

Certificated Notes.

95

Section 2.12

Notes Beneficially Owned by Persons Not QIB/QPs, IAI/QPs or AI/QPs or in
Violation of ERISA Representations.

96

Section 2.13

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

98

Section 2.14

Tax Treatment; Tax Certifications.

98

   

ARTICLE III CONDITIONS PRECEDENT

100

   

Section 3.1

Conditions to Issuance of Notes on Closing Date.

100

Section 3.2

Conditions to Issuance of Additional Notes.

103

Section 3.3

Custodianship; Delivery of Collateral Obligations and Eligible Investments.

105

   

ARTICLE IV SATISFACTION AND DISCHARGE

106

   

Section 4.1

Satisfaction and Discharge of Indenture.

106

Section 4.2

Application of Trust Money.

108

Section 4.3

Repayment of Monies Held by Paying Agent.

108

Section 4.4

Limitation on obligation to incur Administrative Expenses.

108

   

ARTICLE V REMEDIES

109

   

Section 5.1

Events of Default.

109

Section 5.2

Acceleration of Maturity; Rescission and Annulment.

111

Section 5.3

Collection of Indebtedness and Suits for Enforcement by Trustee.

112

Section 5.4

Remedies.

114

 

-i-

--------------------------------------------------------------------------------

 

 

Section 5.5

Optional Preservation of Assets.

116

Section 5.6

Trustee May Enforce Claims without Possession of Notes.

118

Section 5.7

Application of Money Collected.

118

Section 5.8

Limitation on Suits.

118

Section 5.9

Unconditional Rights of Secured Noteholders to Receive Principal and Interest.

119

Section 5.10

Restoration of Rights and Remedies.

119

Section 5.11

Rights and Remedies Cumulative.

119

Section 5.12

Delay or Omission Not Waiver.

120

Section 5.13

Control by Majority of Controlling Class.

120

Section 5.14

Waiver of Past Defaults.

120

Section 5.15

Undertaking for Costs.

121

Section 5.16

Waiver of Stay or Extension Laws.

121

Section 5.17

Sale of Assets.

121

Section 5.18

Action on the Notes.

122

   

ARTICLE VI THE TRUSTEE

123

   

Section 6.1

Certain Duties and Responsibilities.

123

Section 6.2

Notice of Default.

125

Section 6.3

Certain Rights of Trustee.

125

Section 6.4

Not Responsible for Recitals or Issuance of Notes.

128

Section 6.5

May Hold Notes.

129

Section 6.6

Money Held in Trust.

129

Section 6.7

Compensation and Reimbursement.

129

Section 6.8

Corporate Trustee Required; Eligibility.

130

Section 6.9

Resignation and Removal; Appointment of Successor.

131

Section 6.10

Acceptance of Appointment by Successor.

132

Section 6.11

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

133

Section 6.12

Co trustees.

133

Section 6.13

Certain Duties of Trustee Related to Delayed Payment of Proceeds.

134

Section 6.14

Authenticating Agents.

135

Section 6.15

Withholding.

135

Section 6.16

Representative for Secured Noteholders Only; Agent for each Hedge Counterparty
and the Holders of the Subordinated Notes.

136

Section 6.17

Representations and Warranties of the Bank.

136

Section 6.18

Communication with Rating Agencies.

136

Section 6.19

Provisions related to the Collateral Management Agreement.

137

   

ARTICLE VII COVENANTS

137

   

Section 7.1

Payment of Principal and Interest.

137

Section 7.2

Maintenance of Office or Agency.

137

Section 7.3

Money for Note Payments to Be Held in Trust.

138

Section 7.4

Existence of Co Issuers.

140

Section 7.5

Protection of Assets.

141

Section 7.6

Opinions as to Assets.

142

 

-ii-

--------------------------------------------------------------------------------

 

 

Section 7.7

Performance of Obligations.

142

Section 7.8

Negative Covenants.

143

Section 7.9

Statement as to Compliance.

146

Section 7.10

Co Issuers May Consolidate, etc. only on Certain Terms

146

Section 7.11

Successor Substituted.

148

Section 7.12

No Other Business.

148

Section 7.13

Annual Rating Review.

148

Section 7.14

Reporting.

148

Section 7.15

Calculation Agent.

149

Section 7.16

Certain Tax Matters.

150

Section 7.17

Ramp Up Period; Purchase of Additional Collateral Obligations.

157

Section 7.18

Representations Relating to Security Interests in the Assets.

160

Section 7.19

Acknowledgement of Collateral Manager Standard of Care.

162

Section 7.20

[Reserved].

162

Section 7.21

Section 3(c)(7) Procedures.

162

   

ARTICLE VIII SUPPLEMENTAL INDENTURES

163

   

Section 8.1

Supplemental Indentures without Consent of Holders of Notes.

163

Section 8.2

Supplemental Indentures with Consent of Holders of Notes.

168

Section 8.3

Supplemental Indentures with consent of the Section 13 Banking Entities.

172

Section 8.4

Execution of Supplemental Indentures.

172

Section 8.5

Effect of Supplemental Indentures.

173

Section 8.6

Reference in Notes to Supplemental Indentures.

173

   

ARTICLE IX REDEMPTION OF NOTES

173

   

Section 9.1

Mandatory Redemption.

173

Section 9.2

Optional Redemption.

173

Section 9.3

Partial Redemption by Refinancing.

176

Section 9.4

Tax Redemption.

177

Section 9.5

Redemption Procedures.

177

Section 9.6

Notes Payable on Redemption Date.

179

Section 9.7

Special Redemption.

180

Section 9.8

Clean-Up Call Redemption.

180

   

ARTICLE X ACCOUNTS, ACCOUNTINGS AND RELEASES

182

   

Section 10.1

Collection of Money.

182

Section 10.2

Collection Accounts.

182

Section 10.3

Payment Account; Custodial Account; Ramp Up Account; Expense Reserve Account;
Interest Reserve Account; Unfunded Exposure Account.

184

Section 10.4

Hedge Counterparty Collateral Account.

187

Section 10.5

Reinvestment of Funds in Accounts; Reports by Trustee.

188

Section 10.6

Accountings.

190

Section 10.7

Release of Securities.

198

Section 10.8

Reports by Independent Accountants.

199

 

-iii-

--------------------------------------------------------------------------------

 

 

Section 10.9

Reports to Rating Agencies.

201

Section 10.10

Procedures Relating to the Establishment of Accounts Controlled by the Trustee.

201

   

ARTICLE XI APPLICATION OF MONIES

201

   

Section 11.1

Disbursements of Monies from Payment Account.

201

   

ARTICLE XII SALE OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL
OBLIGATIONS

209

   

Section 12.1

Sales of Collateral Obligations.

209

Section 12.2

Purchase of Additional Collateral Obligations.

211

Section 12.3

Disposition of Illiquid Assets.

217

Section 12.4

Conditions Applicable to All Sale and Purchase Transactions.

218

   

ARTICLE XIII NOTEHOLDERS' RELATIONS

219

   

Section 13.1

Subordination.

219

Section 13.2

Standard of Conduct.

220

Section 13.3

Provision of Information.

220

   

ARTICLE XIV MISCELLANEOUS

220

   

Section 14.1

Form of Documents Delivered to Trustee.

220

Section 14.2

Acts of Holders.

221

Section 14.3

Notices, etc., to Trustee, the Co Issuers, the Collateral Administrator, the
Collateral Manager, the Hedge Counterparty, the Paying Agent, the Administrator
and the Rating Agencies

222

Section 14.4

Notices to Holders; Waiver.

224

Section 14.5

Effect of Headings and Table of Contents.

225

Section 14.6

Successors and Assigns.

225

Section 14.7

Separability.

225

Section 14.8

Benefits of Indenture.

225

Section 14.9

Intentionally Omitted.

225

Section 14.10

Governing Law.

225

Section 14.11

Submission to Jurisdiction.

226

Section 14.12

Counterparts.

226

Section 14.13

Acts of Issuer.

226

Section 14.14

Confidential Information.

227

Section 14.15

Liability of Co Issuers.

228

Section 14.16

17g-5 Information.

228

Section 14.17

Moody's Rating Condition.

231

Section 14.18

Waiver of Jury Trial.

231

Section 14.19

Escheat.

231

Section 14.20

Records.

232

   

ARTICLE XV ASSIGNMENT OF COLLATERAL MANAGEMENT AGREEMENT

232

   

Section 15.1

Assignment of Collateral Management Agreement.

232

   

ARTICLE XVI HEDGE AGREEMENTS

233

   

Section 16.1

Hedge Agreements.

233

 

-iv-

--------------------------------------------------------------------------------

 

 

Schedule 1 – Moody's Industry Classification Group List

Schedule 2–

S&P Industry Classifications

Schedule 3–

Diversity Score Calculation

Schedule 4–

Moody's Rating Definitions

Schedule 5– Fitch Rating Definitions

 

Exhibit A   –     Forms of Notes

A1

–

Form of Class A Note

A2

–

Form of Class B Note

A3

–

Form of Class C Note

A4

–

Form of Class D Note

A5

–

Form of Class E Note

A6

–

Form of Senior Subordinated Note

A7

–

Form of Junior Subordinated Note

 

Exhibit B   –     Forms of Transfer and Exchange Certificates

B1

–

Form of Transferor Certificate for Transfer of Rule 144A Global Notes or
Certificated Notes to Regulation S Global Notes

B2A

–

Form of Transferor Certificate for Transfer of Regulation S Global Notes to Rule
144A Global Notes or Certificated Notes

B2B

–

Form of Transferor Certificate for Transfer of Certificated Notes to Rule 144A
Global Notes

B3

–

Form of Transferee Certificate for Transfer of Regulation S Global Notes or
Certificated Notes to Rule 144A Global Notes

B4

–

Form of Transferee Certificate for Transfer of Rule 144A Global Notes,
Regulation S Global Notes or Certificated Notes to Certificated Notes

B5

–

Form of Transferee Certificate for Transfer of Rule 144A Global Notes or
Certificated Notes to Regulation S Global Notes

B6

–

Form of ERISA Subscription Agreement

 

Exhibit C   –    Calculation of LIBOR

Exhibit D   –    Form of Note Owner Certificate

Exhibit E   –    Form of NRSRO Certification

Exhibit F   –    Form of Banking Entity Notice

 

 

--------------------------------------------------------------------------------

 

 

INDENTURE, dated as of July 26, 2018, among JMP Credit Advisors CLO V Ltd., an
exempted company incorporated with limited liability under the laws of the
Cayman Islands (the "Issuer"), JMP Credit Advisors CLO V LLC, a limited
liability company formed under the laws of the State of Delaware (the
"Co-Issuer" and, together with the Issuer, the "Co-Issuers"), 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 Co-Issuers are 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 Co-Issuers
herein are for the benefit and security of the Secured Parties. The Co-Issuers
are entering into this Indenture, and the Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.

 

All things necessary to make this Indenture a valid agreement of the Co-Issuers
in accordance with the agreement's terms have been done.

 

GRANTING CLAUSE

 

The Issuer hereby Grants to the Trustee, for the benefit and security of the
Holders of the Secured Notes, the Trustee, the Bank (in all of its capacities
hereunder), the Collateral Administrator, the Collateral Manager, the
Administrator and each Hedge Counterparty (collectively, the "Secured Parties"),
all of its right, title and interest in, to and under the following property, in
each case, whether now owned or existing, or hereafter acquired or arising, and
wherever located, (a) the Collateral Obligations and all payments thereon or
with respect thereto, (b) each of the Accounts, to the extent permitted by the
applicable Hedge Agreement, each Hedge Counterparty Collateral Account, any
Eligible Investments purchased with funds on deposit therein, and all income
from the investment of funds therein, (c) the equity interest in any Issuer
Subsidiary and Equity Securities and all payments and rights thereunder, (d) the
Issuer's right under the Collateral Management Agreement as set forth in
Article XV hereof, the Hedge Agreements (provided that there is no such Grant to
the Trustee on behalf of any Hedge Counterparty in respect of its related Hedge
Agreement), the Collateral Administration Agreement and the Administration
Agreement, (e) all Cash or Money delivered to the Trustee (or its bailee) for
the benefit of the Secured Parties, (f) all accounts, chattel paper, deposit
accounts, financial assets, general intangibles, payment intangibles,
instruments, investment property and supporting obligations (as such terms are
defined in the UCC), (g) any other property otherwise delivered to the Trustee
by or on behalf of the Issuer (whether or not constituting Collateral
Obligations, Equity Securities or Eligible Investments), and (h) all proceeds
(as defined in the UCC) and products, in each case, with respect to the
foregoing (the assets referred to in (a) through (h) are collectively referred
to as the "Assets"); provided that such Grant shall not include (i) the U.S.$250
transaction fee paid to the Issuer in consideration of the issuance of the
Secured Notes and Subordinated Notes, (ii) the funds attributable to the
issuance and allotment of the Issuer's ordinary shares, (iii) the bank account
in the Cayman Islands in which such funds are deposited (or any interest
thereon), and (iv) the membership interests of the Co-Issuer (the assets
referred to in (i) through (iv), collectively, the "Excepted Property").

 

 

--------------------------------------------------------------------------------

 

 

The above Grant is made in trust to secure the Secured Notes and the Issuer's
obligations to the Secured Parties under this Indenture and each Hedge Agreement
(together, the "Secured Obligations"). Except as set forth in the Priority of
Payments and Article XIII of this Indenture, the Secured Notes are secured
equally and ratably without prejudice, priority or distinction between any
Secured Note and any other Secured Note by reason of difference in 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,
(i) the payment of all amounts due on the Secured Notes in accordance with their
terms, (ii) the payment of all other sums payable under this Indenture and all
amounts payable under each Hedge Agreement, and (iii) compliance with the
provisions of this Indenture and each Hedge Agreement, all as provided in this
Indenture and each Hedge Agreement, respectively. The foregoing Grant shall, for
the purpose of determining the property subject to the lien of this Indenture,
be deemed to include any securities and any investments granted to the Trustee
by or on behalf of the Issuer, whether or not such securities or investments
satisfy the criteria set forth in the definitions of "Collateral Obligation" or
"Eligible Investments," as the case may be.

 

The Trustee acknowledges such Grant, accepts the trusts hereunder in accordance
with the provisions hereof, and agrees to perform its duties expressly stated
herein in accordance with the provisions hereof.

 

ARTICLE I

DEFINITIONS

 

Section 1.1     Definitions. Except as otherwise specified herein or as the
context may otherwise require, the following terms shall have the respective
meanings set forth below for all purposes of this Indenture:

 

"17g-5 Information": The meaning specified in Section 14.16.

 

"17g-5 Website": A password-protected internet website which shall initially be
located at https://www. structuredfn.com. Any change of the 17g-5 Website shall
only occur after notice has been delivered by the Issuer to the Information
Agent, the Trustee, the Collateral Administrator, the Collateral Manager, the
Initial Purchaser, and the Rating Agencies setting the date of change and new
location of the 17g-5 Website.

 

"Accountants' Report": A certificate of the firm or firms appointed by the
Issuer pursuant to Section 3.2(a)(vi) or Section 10.8(a), as applicable.

 

"Accounts": Each of (i) the Payment Account, (ii) the Collection Account,
(iii) the Ramp-Up Account, (iv) the Expense Reserve Account, (v) the Interest
Reserve Account, (vi) the Custodial Account, (vii) the Unfunded Exposure Account
and (viii) each Hedge Counterparty Collateral Account (if any).

 

-2-

--------------------------------------------------------------------------------

 

 

"Accredited Investor" or "AI": An accredited investor as defined in Regulation D
under the Securities Act.

 

"Act" and "Act of Holders": The respective meanings specified in Section 14.2.

 

"Additional Notes": Any Notes issued pursuant to Section 2.4.

 

"Additional Notes Closing Date": The closing date for the issuance of any
Additional Notes pursuant to Section 2.4 as set forth in an indenture
supplemental to this Indenture pursuant to Section 8.1(viii).

 

"Adjusted Collateral Principal Amount": As of any date of determination, (a) the
Aggregate Principal Balance of the Collateral Obligations (excluding Defaulted
Obligations, Deferring Obligations and Discount Obligations), plus (b) without
duplication, the amounts on deposit in the Accounts (including Eligible
Investments therein) representing Principal Proceeds, plus (c) the sum of (i)
with respect to each Defaulted Obligation or Deferring Obligation that has been
a Defaulted Obligation or Deferring Obligation for 30 days or less, the product
of (A) the Moody's Recovery Rate for such Defaulted Obligation or Deferring
Obligation and (B) the principal amount of such Defaulted Obligation or
Deferring Obligation, (ii) with respect to each Defaulted Obligation or
Deferring Obligation that has been a Defaulted Obligation or Deferring
Obligation for more than 30 days but less than three years, the Moody's
Collateral Value of such Defaulted Obligation or Deferring Obligation and (iii)
with respect to each Defaulted Obligation or Deferring Obligation that has been
a Defaulted Obligation or Deferring Obligation for three years or more, zero,
plus (d) with respect to each Discount Obligation, the product (expressed as a
dollar amount) of (i) the purchase price of such Discount Obligation (excluding
accrued interest and any syndication or upfront fees paid to the Issuer, but
including, at the discretion of the Collateral Manager, the amount of any
assignment fees paid by the Issuer to the seller of the Collateral Obligation or
its agent) expressed as a percentage of par multiplied by (ii) the Principal
Balance of such Discount Obligation, excluding accrued interest, minus (e) the
Excess CCC/Caa Adjustment Amount, plus (f) unpaid Principal Financed Accrued
Interest (other than with respect to Defaulted Obligations); provided that with
respect to any Collateral Obligation that satisfies more than one of the
definitions of Defaulted Obligation, Discount Obligation, Deferring Obligations
or any asset that falls into the Excess CCC/Caa Adjustment Amount, such
Collateral Obligation will, for the purposes of this definition, be treated as
belonging to the category of Collateral Obligations which results in the lowest
Adjusted Collateral Principal Amount on any date of determination.

 

"Administration Agreement": An agreement dated as of the Closing Date between
the Administrator (as administrator and share owner) and the Issuer relating to
the various corporate management functions the Administrator will perform on
behalf of the Issuer, including communications with shareholders and the general
public, and the provision of certain clerical, administrative and other
corporate services in the Cayman Islands, as such agreement may be amended,
supplemented or varied from time to time.

 

-3-

--------------------------------------------------------------------------------

 

 

"Administrative Expense Cap": An amount equal on any Payment Date (when taken
together with any Administrative Expenses paid during the period since the
preceding Payment Date or, in the case of the first Payment Date, the Closing
Date) to the sum of (a) 0.03% 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 Maximum Investment Amount on the Determination Date related to
the immediately preceding Payment Date (or, for purposes of calculating this
clause (a) in connection with the first Payment Date, on the Closing 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, if the amount of Administrative Expenses paid pursuant to
Section 11.1(a)(i)(A), Section 11.1(a)(ii)(A) or Section 11.1(a)(iii)(A)
(including any excess applied in accordance with this proviso) on the three
immediately preceding Payment Dates or during the related Collection Periods is
less than the aggregate of the stated Administrative Expense Caps (without
regard to any excess amounts applied in accordance with this proviso) for such
three preceding Payment Dates, then the amounts by which such aggregated
Administrative Expense Caps exceed such aggregated Administration Expenses may
be applied to increase the Administrative Expense Cap with respect to the
then-current Payment Date; provided, further, that in respect of each of the
first three Payment Dates from the Closing Date, such excess amount shall be
calculated based on the Payment Dates, if any, preceding such Payment Date.

 

"Administrative Expenses": The fees, expenses (including indemnities as set
forth below) 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 or the Co-Issuer: first, to the Trustee and the Bank (including
indemnities) in each of its capacities pursuant to this Indenture and the other
Transaction Documents (including as financial reporting agent), second, to the
Collateral Administrator for its fees and expenses (including indemnities) under
the Collateral Administration Agreement, third, to make any capital contribution
to an Issuer Subsidiary necessary to pay any taxes, registered office or
governmental fees owing by such Issuer Subsidiary, and then fourth, on a pro
rata basis (including indemnities) to (i) the Independent accountants, agents
(other than the Collateral Manager) and counsel of the Co-Issuers for fees and
expenses; (ii) the Rating Agencies for fees and expenses (including amendment
and surveillance fees) in connection with any rating of the Secured Notes or in
connection with the rating of (or provision of credit estimates in respect of)
any Collateral Obligations; (iii) the Collateral Manager for fees, costs,
expenses and indemnities under this Indenture and the Collateral Management
Agreement, but excluding the Management Fees; (iv) the Administrator for fees
and expenses pursuant to the Administration Agreement; (v) the independent
manager of the Co-Issuer for fees and expenses; and (vi) 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 setting up and administering Issuer
Subsidiaries, any expenses related to FATCA compliance or compliance with any
non-U.S. law that is similar to FATCA, the payment of facility rating fees, fees
associated with attempted or executed Refinancings, issuances of Additional
Notes or redemptions (including any original issue or other discounts in respect
of a Refinancing or a reserve established for a future Refinancing) 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 any Excepted Advances) and the Notes,
including but not limited to, amounts owed to the Co-Issuer pursuant to
Section 7.1, any amounts due in respect of the listing of the Notes on any stock
exchange or trading system and any costs associated with producing Certificated
Notes; provided that (x) amounts due in respect of actions taken on or before
the Closing Date shall not be payable as Administrative Expenses but shall be
payable only from the Expense Reserve Account pursuant to Section 10.3(d), (y)
for the avoidance of doubt, amounts that are specified as payable under the
Priority of Payments that are not specifically identified therein as
Administrative Expenses (including, without limitation, interest and principal
in respect of the Notes and amounts owing to Hedge Counterparties) shall not
constitute Administrative Expenses and (z) the Collateral 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 above, if, in the Collateral Manager's commercially reasonable judgment
such payments are necessary to avoid the withdrawal of any currently assigned
rating on any Outstanding Class of Secured Notes.

 

-4-

--------------------------------------------------------------------------------

 

 

"Administrator": Estera Trust (Cayman) Limited and any successor thereto.

 

"Affected Class": Any Class of Secured 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 Payment
Date.

 

"Affiliate" or "Affiliated": With respect to a Person, (a) any other Person who,
directly or indirectly, is in control of, or controlled by, or is under common
control with, such Person or (b) any other Person who is a director, officer or
employee (i) of such Person, (ii) of any subsidiary or parent company of such
Person or (iii) of any Person described in clause (a) above; provided that
neither the Administrator nor any special purpose entity for which it acts as
share trustee or administrator shall be deemed to be an Affiliate of the Issuer
or the Co-Issuer solely because the Administrator or any of its Affiliates
serves as administrator or share trustee for the Issuer or the Co-Issuer. 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 entity to which the Administrator
provides shares trustee and/or administration services, including the provision
of directors, will be considered to be an Affiliate of the Issuer solely by
reason thereof.

 

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

 

"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 Pledged Obligations, the sum of the Principal
Balances of all or of such portion of the Collateral Obligations or Pledged
Obligations, respectively.

 

"Aggregate Ramp-Up Par Amount": An amount equal to U.S.$400,000,000.

 

-5-

--------------------------------------------------------------------------------

 

 

"Aggregate Ramp-Up Par Condition": A condition satisfied as of the end of the
Ramp-Up Period if the Aggregate Principal Balance of the Collateral Obligations
that the Issuer has purchased, or entered into binding commitments to purchase,
including Collateral Obligations acquired by the Issuer on or prior to the
Closing Date, together with the amount of any proceeds of prepayments,
maturities or redemptions of Collateral Obligations purchased by the Issuer
prior to such date (other than any proceeds that have been reinvested in
Collateral Obligations held by the Issuer as of the end of the Ramp-Up Period),
equals or exceeds the Aggregate Ramp-Up Par Amount; provided that the Principal
Balance of any Defaulted Obligation shall be its Moody's Collateral Value.

 

"AI/QP": Any Person that, at the time of its acquisition, purported acquisition
or proposed acquisition of Notes is both (a) an Accredited Investor and (b) a
Qualified Purchaser or a Knowledgeable Employee with respect to the Issuer or an
entity owned exclusively by Qualified Purchasers and/or Knowledgeable Employees.

 

"Alternative Base Rate": The meaning specified in Section 8.1(xxviii).

 

"Applicable Issuer" or "Applicable Issuers": With respect to the Secured Notes
of any Class, the Issuer or each of the Co-Issuers, as specified in Section 2.3
and with respect to the Subordinated Notes, the Issuer only.

 

"Approved Index": Any of Merrill Lynch High Yield Master II Constrained Index,
the CSFB High Yield II Index or such other nationally recognized index as the
Collateral Manager selects and provides notice of to the Rating Agencies.

 

"ARRC": The Alternative Reference Rates Committee of the Federal Reserve Bank of
New York, or any successor thereto.

 

"Asset Quality Matrix": The following chart is used to determine which of the
"row/column combinations" (or the linear interpolation between two adjacent rows
and/or two adjacent columns, as applicable) are applicable for purposes of
determining compliance with the Moody's Diversity Test, the Maximum Moody's
Rating Factor Test and the Minimum Floating Spread Test, as set forth in
Section 7.17(e).

 

 

Minimum
Weighted

Minimum Diversity Score

Average
Spread

40

45

50

55

60

65

70

75

80

85

90

95

100

2.10%

1710

1733

1752

1773

1785

1800

1812

1822

1832

1837

1843

1851

1857

2.20%

1805

1830

1846

1864

1880

1890

1901

1913

1920

1927

1933

1939

1945

2.30%

1890

1910

1925

1940

1950

1964

1982

1997

2009

2013

2018

2029

2038

2.40%

1969

1983

2020

2038

2054

2066

2076

2085

2093

2101

2106

2115

2130

2.50%

2037

2071

2101

2114

2129

2146

2155

2166

2174

2188

2206

2211

2217

2.60%

2078

2138

2181

2206

2222

2233

2245

2259

2266

2273

2287

2296

2303

2.70%

2126

2176

2228

2269

2291

2304

2316

2331

2349

2362

2380

2390

2396

2.80%

2162

2221

2271

2309

2350

2378

2399

2417

2433

2448

2461

2472

2482

2.90%

2204

2266

2311

2357

2390

2426

2453

2473

2488

2503

2516

2528

2540

3.00%

2248

2304

2356

2395

2436

2467

2497

2523

2544

2559

2573

2585

2595

3.10%

2290

2347

2396

2441

2476

2511

2539

2566

2589

2611

2628

2641

2653

3.20%

2325

2390

2437

2479

2520

2550

2582

2608

2632

2653

2673

2691

2707

3.30%

2370

2425

2480

2521

2559

2594

2622

2650

2673

2695

2715

2733

2750

3.40%

2410

2466

2518

2564

2600

2633

2664

2689

2714

2737

2756

2775

2793

3.50%

2445

2512

2559

2601

2641

2674

2704

2731

2756

2777

2798

2817

2833

3.60%

2483

2545

2599

2643

2679

2714

2745

2771

2796

2819

2840

2857

2875

 

-6-

--------------------------------------------------------------------------------

 

 

3.70%

2527

2584

2635

2682

2721

2754

2785

2813

2838

2859

2879

2899

2916

3.80%

2564

2627

2677

2720

2760

2794

2826

2853

2877

2900

2921

2940

2957

3.90%

2598

2661

2715

2761

2800

2834

2865

2893

2918

2940

2960

2980

2997

4.00%

2638

2698

2752

2798

2839

2873

2904

2932

2957

2980

3000

3019

3036

4.10%

2678

2739

2792

2837

2877

2912

2943

2971

2996

3019

3039

3058

3076

4.20%

2712

2776

2830

2876

2915

2950

2980

3009

3034

3057

3078

3097

3114

4.30%

2744

2811

2866

2913

2953

2989

3020

3047

3072

3095

3116

3135

3151

4.40%

2776

2849

2903

2949

2988

3025

3056

3083

3109

3132

3153

3171

3190

4.50%

2809

2883

2940

2986

3026

3062

3093

3121

3147

3167

3190

3209

3227

4.60%

2842

2910

2972

3023

3063

3099

3130

3158

3183

3205

3227

3246

3264

4.70%

2869

2939

3003

3056

3098

3135

3166

3195

3220

3240

3264

3282

3300

4.80%

2896

2972

3033

3085

3130

3170

3203

3230

3255

3278

3299

3317

3336

4.90%

2924

3002

3062

3112

3160

3200

3235

3265

3291

3313

3333

3353

3369

5.00%

2958

3031

3091

3141

3190

3227

3266

3296

3325

3348

3369

3387

3404

5.10%

2989

3056

3119

3172

3217

3259

3296

3326

3354

3380

3401

3420

3437

5.20%

3016

3085

3151

3201

3248

3290

3324

3357

3384

3410

3432

3450

3470

5.30%

3043

3116

3177

3232

3279

3318

3353

3385

3414

3440

3462

3483

3501

5.40%

3068

3145

3208

3261

3308

3347

3383

3414

3443

3469

3491

3515

3535

5.50%

3098

3173

3236

3291

3335

3377

3410

3443

3471

3498

3523

3546

3566

5.60%

3131

3202

3266

3319

3363

3404

3440

3471

3500

3530

3554

3577

3597

5.70%

3157

3230

3295

3346

3394

3431

3469

3500

3532

3561

3587

3610

3627

5.80%

3185

3257

3320

3373

3420

3460

3496

3531

3562

3591

3616

3638

3659

5.90%

3207

3287

3345

3400

3444

3485

3524

3558

3589

3619

3644

3667

3687

6.00%

3233

3310

3369

3425

3470

3510

3551

3585

3616

3645

3671

3695

3715

 

Maximum Moody's Weighted Average Rating Factor

   

 

"Assets": The meaning assigned in the Granting Clause hereof.

 

"Assigned Moody's Rating": The monitored publicly available rating or the
estimated rating expressly assigned to a debt obligation (or facility) by
Moody's that addresses the full amount of the principal and interest promised.

 

"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) minus 0.50% per annum; provided, that the Assumed
Reinvestment Rate shall not be less than 0%.

 

"Authenticating Agent": With respect to the Notes, the Person designated by the
Trustee to authenticate such Notes on behalf of the Trustee pursuant to
Section 6.14.

 

"Authorized Integrals": The meaning specified in Section 2.3.

 

"Authorized Officer": With respect to the Issuer or the Co-Issuer, any Officer
or any other Person who is authorized to act for the Issuer or the Co-Issuer, as
applicable, in matters relating to, and binding upon, the Issuer or the
Co-Issuer. With respect to the Collateral Manager, any Officer, employee, member
or agent of the Collateral Manager who is authorized to act for the Collateral
Manager in matters relating to, and binding upon, the Collateral 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 Trust
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 (which shall include the email address, if
available, of each authorized person) 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.

 

-7-

--------------------------------------------------------------------------------

 

 

"Average Life": 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.

 

"Balance": On any date, with respect to Cash or Eligible Investments in any
Account, the aggregate (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, and any successor thereto.

 

"Bankruptcy Law": The federal Bankruptcy Code, Title 11 of the United States
Code, as amended from time to time, and any successor statute or any other
applicable federal or state bankruptcy law or similar law, including, without
limitation, Part V of the Companies Law (2018 Revision) of the Cayman Islands
and the Companies Winding Up Rules, 2018 of the Cayman Islands, each as amended
from time to time, and any bankruptcy, insolvency, winding-up, reorganization or
similar law enacted under the laws of the Cayman Islands or any other applicable
jurisdiction, each as amended from time to time.

 

"Bankruptcy Subordination Agreement": The meaning specified in Section
5.4(d)(ii).

 

"Base Rate Amendment": The meaning specified in Section 8.1(xxviii).

 

"Base Rate Modifier": A modifier applied to a reference or base rate in order to
cause such rate to be comparable to three month LIBOR, that (i) with respect to
a Designated Base Rate recognized or acknowledged by the LSTA, is equal to the
corresponding modifier recognized or acknowledged by LSTA, (ii) with respect to
a Designated Base Rate recognized or acknowledged by the ARRC, is equal to the
corresponding modifier recognized or acknowledged by the ARRC, (iii) with
respect to a Market Replacement Rate that uses Market Replacement Rate (x), is
consistent with the modifier used by at least 50% (by principal amount) of the
Collateral Obligations for such quarterly floating rate assets, (iv) with
respect to a Market Replacement Rate that uses Market Replacement Rate (y), is
consistent with the modifier used by at least 50% (by principal amount) of the
quarterly pay floating rate securities issued in the new-issue collateralized
loan obligation market in the prior three months that bear interest based on a
base rate other than LIBOR, or (v) with respect to any other Alternative Base
Rate, such modifier selected by the Collateral Manager and consented to by a
Majority of the Controlling Class, and, in each of the foregoing cases, which
modifier may include an addition or subtraction to the unadjusted reference or
base rate; provided that if no such modifier is capable of being determined (as
determined by the Collateral Manager, in its sole discretion), the Base Rate
Modifier shall be deemed to be zero. For the avoidance of doubt, if a court of
competent jurisdiction is appointed to determine the Alternative Base Rate,
references in this definition to the Collateral Manager shall be deemed to refer
to such court and no consents of any Holders shall be required.

 

-8-

--------------------------------------------------------------------------------

 

 

"Benefit Plan Investor": (a) Any "employee benefit plan" (as defined in
Section 3(3) of Title I of ERISA) that is subject to the fiduciary
responsibility provisions of Title I of ERISA, (b) any "plan" as defined in
Section 4975(e) of the Code that is subject to Section 4975 of the Code, or (c)
any entity whose underlying assets include "plan assets" (within the meaning of
29 C.F.R. §2510.3-101 as modified by Section 3(42) of ERISA) by reason of any
such employee benefit plan's or plan's investment in the entity.

 

"BNPP": BNP Paribas Securities Corp.

 

"Board of Directors": With respect to the Issuer, the board of directors of the
Issuer appointed pursuant to the current articles of association of the Issuer,
and with respect to the Co-Issuer, the managers of the Co-Issuer duly appointed
by the members of the Co-Issuer.

 

"Board Resolution": With respect to the Issuer, a resolution of the Board of
Directors of the Issuer passed in accordance with the current articles of
association of the Issuer and, with respect to the Co-Issuer, an action in
writing by the sole member of the Co-Issuer.

 

"Bridge Loan": Any obligation or debt security incurred or issued in connection
with a merger, acquisition, consolidation, sale of all or substantially all of
the assets of a Person, restructuring or similar transaction, which obligation
or security 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 has 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 one year 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.

 

-9-

--------------------------------------------------------------------------------

 

 

"Caa Collateral Obligation": A Collateral Obligation (other than a Defaulted
Obligation or a Deferring Obligation) with a Moody's Default Probability Rating
of "Caa1" or lower.

 

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

 

"CCC/Caa Collateral Obligations": The CCC Collateral Obligations and/or the Caa
Collateral Obligations, as the context requires.

 

"CCC/Caa Excess": The amount equal to the greater of: (i) the excess, if any, of
(x) the Aggregate Principal Balance of all CCC Collateral Obligations over (y)
7.5% of the Collateral Principal Amount as of the most recent Measurement Date
and (ii) the excess, if any, of (x) the Aggregate Principal Balance of all Caa
Collateral Obligations over (y) 7.5% of the Collateral Principal Amount as of
the most recent Measurement Date; provided that in determining which of the
Collateral Obligations shall be included in the CCC/Caa Excess, the Collateral
Obligations with the lowest Market Value (expressed as a percentage of par)
shall be deemed to constitute such CCC/Caa Excess.

 

"Calculation Agent": The meaning specified in Section 7.15.

 

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

 

"Cayman FATCA Legislation": The Cayman Islands Tax Information Authority Law
(2017 Revision) and the OECD Standard for Automatic Exchange of Financial
Account Information – Common Reporting Standard (each as amended) (including any
implementing legislation, rules, regulations and guidance notes with respect to
such laws). For purposes of this definition, "OECD" means the Organisation for
Economic Co-operation and Development.

 

"CEA": The Commodity Exchange Act of 1936, as amended.

 

"Certificate of Authentication": The meaning specified in Section 2.1.

 

"Certificated Notes": Collectively, the Certificated Secured Notes and the
Certificated Subordinated Notes.

 

"Certificated Secured Note": The meaning specified in Section 2.2(b).

 

"Certificated Securities": The meaning specified in Section 8.1-102(a)(4) of the
UCC.

 

"Certificated Subordinated Note": The meaning specified in Section 2.2(b).

 

"Certificated Subordinated Note Subscription Agreement": The meaning specified
in Section 2.6(c).

 

-10-

--------------------------------------------------------------------------------

 

 

"Class": In the case of (x) the Secured Notes, all of the Secured Notes having
the same Note Interest Rate, Stated Maturity and designation and (y) the
Subordinated Notes, all of the Subordinated Notes having the same designation.

 

"Class A Notes": The Class A Senior Secured Floating Rate Notes issued pursuant
to this Indenture and having the characteristics specified in Section 2.3.

 

"Class A/B Coverage Tests": The Par Value Ratio Test and the Interest Coverage
Test, each as applied with respect to the Class A Notes and the Class B Notes
collectively.

 

"Class B Notes": The Class B Senior Secured Floating Rate Notes issued pursuant
to this Indenture and having the characteristics specified in Section 2.3.

 

"Class C Coverage Tests": The Par Value Ratio Test and the Interest Coverage
Test, each as applied with respect to the Class C Notes.

 

"Class C Notes": The Class C Mezzanine Secured Deferrable Floating Rate Notes
issued pursuant to this Indenture and having the characteristics specified in
Section 2.3.

 

"Class D Coverage Tests": The Par Value Ratio Test and the Interest Coverage
Test, each as applied with respect to the Class D Notes.

 

"Class D Notes": The Class D Mezzanine Secured Deferrable Floating Rate Notes
issued pursuant to this Indenture and having the characteristics specified in
Section 2.3.

 

"Class E Coverage Tests": The Par Value Ratio Test and the Interest Coverage
Test, each as applied with respect to the Class E Notes.

 

"Class E Notes": The Class E Mezzanine Secured Deferrable Floating Rate Notes
issued pursuant to this Indenture and having the characteristics specified in
Section 2.3.

 

"Clean-Up Call Purchase Price": The meaning specified in Section 9.8(c).

 

"Clean-Up Call Redemption": The meaning specified in Section 9.8(a).

 

"Clean-Up Call Redemption Date": The meaning specified in Section 9.8(b).

 

"Clean-Up Call Rescission": The meaning specified in Section 9.8(a).

 

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

 

"Clearing Corporation": Each of (i) Clearstream, (ii) DTC, (iii) Euroclear and
(iv) any entity included within the meaning of "clearing corporation" under
Section 8-102(a)(5) of the UCC.

 

"Clearing Corporation Security": Securities which 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.

 

-11-

--------------------------------------------------------------------------------

 

 

"Clearstream": Clearstream Banking, société anonyme, a corporation organized
under the laws of the Duchy of Luxembourg (formerly known as Cedelbank, société
anonyme).

 

"Closing Date": July 26, 2018.

 

"Code": The United States Internal Revenue Code of 1986, as amended from time to
time, and the Treasury regulations promulgated thereunder.

 

"Co-Issuer": JMP Credit Advisors CLO V LLC, until a successor Person shall have
become the Co-Issuer pursuant to the applicable provisions of this Indenture,
and thereafter "Co-Issuer" shall mean such successor Person.

 

"Co-Issuers": The Issuer and the Co-Issuer.

 

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

 

"Collateral Administrator": U.S. Bank National Association, in its capacity as
such under the Collateral Administration Agreement, and any successor thereto.

 

"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 or Deferrable Obligations, but including
Interest Proceeds actually received from Defaulted Obligations or Deferrable
Obligations (each in accordance with the definition of "Interest Proceeds")), in
each case during the Collection Period in which such date of determination
occurs (or after such Collection Period but on or prior to the fifth Business
Day prior to the related Payment Date if such Interest Proceeds would be treated
as Interest Proceeds with respect to such Collection Period).

 

"Collateral Management Agreement": The Collateral Management Agreement, dated as
of the Closing Date, between the Issuer and the Collateral Manager relating to
the management of the Collateral Obligations and the other Assets and the
performance of certain other advisory functions by the Collateral Manager on
behalf of the Issuer, as amended from time to time in accordance with the terms
hereof and thereof.

 

"Collateral Manager": JMP Credit Advisors LLC, a Delaware limited liability
company, until a successor Person shall have become the Collateral Manager
pursuant to the provisions of the Collateral Management Agreement, and
thereafter "Collateral Manager" shall mean such successor Person.

 

"Collateral Manager Securities": Any Notes owned by the Collateral Manager, an
Affiliate thereof, or any account, fund, client or portfolio established and
controlled by the Collateral Manager or an Affiliate thereof or for which the
Collateral Manager or an Affiliate thereof acts as the investment adviser or
with respect to which the Collateral Manager or an Affiliate thereof exercises
discretionary control thereover.

 

-12-

--------------------------------------------------------------------------------

 

 

"Collateral Obligation": Any loan, specifically, interests in bank loans,
acquired by way of a purchase or assignment) or Participation Interest that as
of the date of acquisition by the Issuer (or the date the Issuer commits to
acquire):

 

(i)      is a Secured Loan Obligation or Senior Unsecured Loan;

 

(ii)     is U.S. Dollar denominated and is not convertible by (a) the Issuer or
(b) the Obligor of such Collateral Obligation into, nor payable in, any other
currency, with any payments under such Collateral Obligation to be made only in
U.S. Dollars;

 

(iii)    is not a Defaulted Obligation or a Credit Impaired Obligation;

 

(iv)    is not a Letter of Credit and does not support a Letter of Credit;

 

(v)     is not a lease;

 

(vi)    is not a Structured Finance Obligation;

 

(vii)   is not a Deferrable Obligation or a Deferring Obligation;

 

(viii)  provides for a fixed amount of principal payable 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;

 

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

 

(x)     does not constitute Margin Stock;

 

(xi)    has only payments that do not and will not subject the Issuer or the
relevant Issuer Subsidiary to withholding tax or other similar tax (other than
withholding on commitment fees, amendment fees, consent fees, extension fees and
similar fees or fees that by their nature are letter of credit or commitment
fees or similar fees) unless the related Obligor is required to make "gross-up"
payments that ensure that the net amount actually received by the Issuer or the
relevant Issuer Subsidiary after payment of all taxes, whether imposed on such
Obligor, the Issuer or the relevant Issuer Subsidiary will equal the full amount
that the Issuer or the relevant Issuer Subsidiary would have received had no
such taxes been imposed;

 

(xii)    has an S&P Rating of at least "CCC-" or a Moody's Default Probability
Rating of at least "Caa3";

 

(xiii)   is not a debt obligation whose repayment is subject to substantial
non-credit related risk as determined by the Collateral Manager;

 

-13-

--------------------------------------------------------------------------------

 

 

(xiv)   does not have an "sf" subscript assigned by Moody's;

 

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

 

(xvi)    is not subject to a tender offer, voluntary redemption, exchange offer,
conversion or other similar action for a price less than its outstanding
principal balance plus all accrued and unpaid interest;

 

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

 

(xviii)  is not issued by an obligor in the tobacco industry;

 

(xix)     is not a Zero-Coupon Security or a Step-Up Obligation;

 

(xx)      is not a Synthetic Security;

 

(xxi)     (A) is not (1) an Equity Security, (2) by its terms convertible into
or exchangeable for an Equity Security or (3) a warrant and (B) does not (1)
have Equity Securities attached thereto as part of a "unit" or (2) otherwise
include a warrant to purchase Equity Securities;

 

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

 

(xxiii)   is not issued by a sovereign, or by a corporate Obligor located in a
country, which sovereign or country on the date on which such 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)    the purchase price of such obligation shall be at least 50% of such
obligation's par amount;

 

(xxv)     is not a Related Obligation;

 

(xxvi)    is Registered;

 

(xxvii)   is able to be pledged to the Trustee pursuant to its Underlying
Instruments and is not subject to any securities lending agreement;

 

(xxviii)  does not mature after the shortest Stated Maturity of any of the
Secured Notes still Outstanding; and

 

(xxix)     is not (A) a bond, (B) a Senior Secured Note, (C) a commodity forward
contract or (D) any other debt security not constituting a loan.

 

-14-

--------------------------------------------------------------------------------

 

 

"Collateral Principal Amount": As of any date of determination, the sum of (a)
the Aggregate Principal Balance of the Collateral Obligations and (b) without
duplication, the amounts on deposit in the (i) Collection Account (including
Eligible Investments therein) representing Principal Proceeds and (ii) the
Ramp-Up Account (including Eligible Investments therein).

 

"Collection Account": Collectively, the Interest Collection Subaccount and the
Principal Collection Subaccount.

 

"Collection Period": With respect to any Payment Date, the period commencing
immediately following the prior Collection Period (or on the Closing Date, in
the case of the Collection Period relating to the first Payment Date) and ending
on the day that is eight (8) Business Days prior to (but excluding) the Payment
Date; provided that (i) the final Collection Period preceding the latest Stated
Maturity of any Class of Notes shall commence immediately following the prior
Collection Period and end on the day preceding such Stated Maturity, (ii) the
final Collection Period preceding a Redemption by Liquidation, Tax Redemption or
Clean-Up Call Redemption in whole of the Notes shall commence immediately
following the prior Collection Period and end on such Redemption Date, and (iii)
the final Collection Period preceding the Redemption by Refinancing and Partial
Redemption by Refinancing of any Class of Notes shall commence immediately
following the prior Collection Period and end seven (7) Business Days prior to
the Redemption Date; provided, further, that with respect to any Payment Date
and any amounts payable to the Issuer under a Hedge Agreement, the Collection
Period will commence on the day after the prior Payment Date and end on such
Payment Date.

 

"Concentration Limitations": Limitations satisfied, if as of any date of
determination at or subsequent to, the end of the Ramp-Up Period, 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, calculated in each case as
required by Section 1.2 (or, if not in compliance at the time of reinvestment,
the relevant requirements must be maintained or improved).

 

(i)     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

20.0%

 

all countries (in the aggregate) other than the United States;

15.0%

 

Canada;

10.0%

 

the United Kingdom;

10.0%

 

all countries (in the aggregate) other than the United States, Canada and the
United Kingdom;

15.0%

 

all Group I Countries in the aggregate;

10.0%

 

any individual Group I Country;

10.0%

 

all Group II Countries in the aggregate;

7.5%

 

any individual Group II Country;

7.5%

 

all Group III Countries in the aggregate;

5.0%

 

any individual Group III Country;

0%

 

all Group IV Countries in the aggregate;

0%

 

any individual Group IV Country;

5.0%

 

all Tax Advantaged Jurisdictions in the aggregate;

3.0%

 

any individual Tax Advantaged Jurisdiction;

0.0%

 

Greece, Ireland, Italy, Portugal and Spain in the aggregate; and

0.0%

 

any individual country other than the United States, the United Kingdom, Canada,
any Group I Country, any Group II Country, any Group III Country or any Group IV
Country or any Tax Advantaged Jurisdiction;

 

-15-

--------------------------------------------------------------------------------

 

 

(ii)     with respect to any Participation Interest, the Moody's Counterparty
Criteria are met;

 

(iii)     not less than 90.0% of the Collateral Principal Amount may consist of
Collateral Obligations that are Senior Secured Loans and Eligible Investments
representing Principal Proceeds;

 

(iv)     not more than 10.0% of the Collateral Principal Amount may consist of
Collateral Obligations that are Second Lien Loans, First Lien Last Out Loans and
Senior Unsecured Loans;

 

(v)      not more than 2.5% of the Collateral Principal Amount may consist of
Current Pay Obligations;

 

(vi)     not more than 2.5% of the Collateral Principal Amount may consist of
fixed rate Collateral Obligations;

 

(vii)    not more than 10.0% of the Collateral Principal Amount may consist of
Participation Interests;

 

(viii)   not more than 7.5% of the Collateral Principal Amount may consist of
DIP Collateral Obligations;

 

(ix)     not more than 2.0% of the Collateral Principal Amount may consist of
Collateral Obligations issued by a single Obligor, except that Collateral
Obligations issued by up to five (5) Obligors may each constitute up to 2.5% of
the Collateral Principal Amount; provided that for each such single Obligor not
more than 1.0% of the Collateral Principal Amount may consist of Collateral
Obligations that are not Senior Secured Loans, except that for up to one (1)
single Obligor Collateral Obligations that are not Senior Secured Loans may
constitute up to 1.5% of the Collateral Principal Amount; provided further, that
one Obligor shall not be considered an affiliate of another Obligor solely
because they are controlled by the same financial sponsor;

 

(x)     not more than 10.0% of the Collateral Principal Amount may consist of
Collateral Obligations that are issued by Obligors that belong to any single
Moody's Industry Classification, except that one (1) Moody's Industry
Classification may represent up to 15.0% of the Collateral Principal Amount and
three (3) Moody's Industry Classifications may each represent up to 12.0% of the
Collateral Principal Amount;

 

-16-

--------------------------------------------------------------------------------

 

 

(xi)     not more than 10.0% 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 one (1) S&P Industry Classification may
represent up to 15.0% of the Collateral Principal Amount and three (3) S&P
Industry Classifications may each represent up to 12.0% of the Collateral
Principal Amount;

 

(xii)     not more than 7.5% of the Collateral Principal Amount may consist of
Caa Collateral Obligations;

 

(xiii)    not more than 7.5% of the Collateral Principal Amount may consist of
CCC Collateral Obligations;

 

(xiv)     not more than 3.0% of the Collateral Principal Amount may consist of
Collateral Obligations that are required to pay interest less frequently than
quarterly;

 

(xv)      not more than 65.0% of the Collateral Principal Amount may consist of
Cov-Lite Loans;

 

(xvi)     no portion of the Collateral Principal Amount may consist of Step-Down
Obligations;

 

(xvii)    not more than 10.0% of the Collateral Principal Amount may consist of
Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations;

 

(xviii)   no portion of the Collateral Principal Amount may consist of Bridge
Loans;

 

(xix)     no portion of the Collateral Principal Amount may consist of Small
Obligor Loans;

 

(xx)      not more than 2.5% of the Collateral Principal Amount may consist of
Collateral Obligations that are issued by obligors organized in Ireland, but not
Domiciled in Ireland due to the application of clause (c) of the definition of
"Domicile";

 

(xxi)     not more than 10.0% of the Collateral Principal Amount may consist of
Collateral Obligations with a purchase price of between 50% and 65% of each such
obligation's par amount; and

 

(xxii)    not more than 20.0% of the Collateral Principal Amount may consist of
Discount Obligations.

 

"Confidential Information": The meaning specified in Section 14.14(b).

 

"Controlling Class": The Class A Notes so long as any Class A Notes are
Outstanding; then the Class B Notes so long as any Class B Notes are
Outstanding; then the Class C Notes so long as any Class C Notes are
Outstanding; then the Class D Notes so long as any Class D Notes are
Outstanding; then the Class E Notes so long as any Class E Notes are
Outstanding; then the Senior Subordinated Notes if no Secured Notes are
Outstanding; and then the Junior Subordinated Notes if no Secured Notes and
Senior Subordinated Notes are Outstanding.

 

-17-

--------------------------------------------------------------------------------

 

 

"Controlling Person": A Person (other than a Benefit Plan Investor) who 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 any affiliate of such a Person. For purposes of this
definition of Controlling Person only, 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 and "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.

 

"Corporate Trust Office": The designated corporate trust office of the Trustee,
currently located at: (a) for Note transfer purposes and presentment of the
Notes for final payment thereon, 111 Fillmore Avenue East, St. Paul, Minnesota
55107-2292, Attention: Global Corporate Trust Services – JMP Credit Advisors CLO
V Ltd.; (b) for all other purposes, 190 S. LaSalle Street, 8th Floor, Chicago,
Illinois 60603, Attention: Global Corporate Trust Services – JMP Credit Advisors
CLO V Ltd., or (c) the principal corporate trust office of any successor
Trustee. It is understood that the Trustee may designate another address from
time to time by giving notice to the Holders, the Collateral Manager, any Hedge
Counterparty, the Issuer and the Rating Agencies.

 

"Cov-Lite Loan": A loan that does not contain any financial covenants; provided
that a loan that (a) requires the underlying Obligor to comply with one or more
Maintenance Covenants (regardless of whether compliance with one or more
Incurrence Covenants is otherwise required by the Underlying Instruments) or (b)
contains a cross-default provision to, or is pari passu with, another loan of
the underlying obligor forming part of the same loan facility that requires the
underlying obligor to comply with one or more financial covenants or Maintenance
Covenants shall be deemed not to be a Cov-Lite Loan.

 

"CR Assessment": The counterparty risk assessment published by Moody’s.

 

"Credit Amendment": Any Maturity Amendment that, in the Collateral Manager's
judgment exercised in accordance with the Collateral Management Agreement, is
necessary with respect to the related Collateral Obligation (a "Credit Amendment
Obligation") (i) to prevent such Credit Amendment Obligation from becoming a
Defaulted Obligation or (ii), due to the materially adverse financial condition
of the related obligor, to minimize material losses on such Credit Amendment
Obligation.

 

"Coverage Tests": The Class A/B Coverage Tests, the Class C Coverage Tests, the
Class D Coverage Tests and the Class E Coverage Tests.

 

-18-

--------------------------------------------------------------------------------

 

 

"Credit Impaired Obligation": Any Collateral Obligation that in the Collateral
Manager's judgment exercised in accordance with the Collateral Management
Agreement has a significant risk of declining in credit quality and, with a
lapse of time, becoming a Defaulted Obligation and, provided that, at any time a
Restricted Trading Period is in effect a Collateral Obligation will be a Credit
Impaired Obligation only if, in addition to the foregoing:

 

(a)     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;

 

(b)     if such Collateral Obligation is a fixed rate obligation, there has been
an increase in the difference between its yield compared to the yield on the
relevant U.S. Treasury security of the same duration of more than 7.5% of its
yield since the date of purchase;

 

(c)     if the obligor of such Collateral Obligation has a projected cash flow
interest coverage ratio (earnings before interest and taxes divided by cash
interest expense as determined by the Collateral Manager) that is less than 1.00
or expected to be less than 0.85 times the current year's projected cash flow
interest coverage ratio;

 

(d)     the Market Value of such Collateral Obligation has decreased by at least
1.00% of the price paid by the Issuer for such Collateral Obligation due to a
deterioration in the related obligor's financial ratios or financial results in
accordance with the Underlying Instruments relating to such Collateral
Obligation;

 

(e)     if such Collateral Obligation is a loan, the price of such loan 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 an average price of any Approved Index as determined by
the Collateral Manager over the same period; or

 

(f)     with respect to which a Majority of the Controlling Class consents to
treat such Collateral Obligation as a Credit Impaired Obligation.

 

"Credit Improved Obligation":

 

(a)       So long as a Restricted Trading Period is not in effect, any
Collateral Obligation that in the Collateral Manager's judgment exercised in
accordance with the Collateral Management Agreement has significantly improved
in credit quality after it was acquired by the Issuer, which improvement may
(but need not) be evidenced by one of the following:

 

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

 

(ii)     if such Collateral Obligation is a fixed rate obligation, there has
been a decrease in the difference between its yield compared to the yield on the
U.S. Treasury security of the same duration more than 7.5% of its yield since
the date of purchase;

 

-19-

--------------------------------------------------------------------------------

 

 

(iii)    if the obligor of such Collateral Obligation has a projected cash flow
interest coverage ratio (earnings before interest and taxes divided by cash
interest expense as determined by the Collateral Manager) that is expected to be
more than 1.15 times the current year's projected cash flow interest coverage
ratio;

 

(iv)    if the Market Value of such Collateral Obligation has increased since
the date of its acquisition by at least 1.0% of the original purchase price at
which such Collateral Obligation was acquired by the Issuer; or

 

(v)     if such Collateral Obligation is a loan, the price of such loan 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 Approved Index over the same period.

 

(b)       If a Restricted Trading Period is in effect, in addition to the
foregoing, a Collateral Obligation will qualify as a Credit Improved Obligation
only if:

 

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

 

(ii)      if such Collateral Obligation is a fixed rate obligation, there has
been a decrease in the difference between its yield compared to the yield on the
U.S. Treasury security of the same duration more than 7.5% of its yield since
the date of purchase;

 

(iii)     if the obligor of such Collateral Obligation has a projected cash flow
interest coverage ratio (earnings before interest and taxes divided by cash
interest expense as determined by the Collateral Manager) that is expected to be
more than 1.15 times the current year's projected cash flow interest coverage
ratio;

 

(iv)     if the Market Value of such Collateral Obligation has increased since
the date of its acquisition by at least 1.0% of the original purchase price at
which such Collateral Obligation was acquired by the Issuer;

 

(v)     if such Collateral Obligation is a loan, the price of such loan 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 Approved Index over the same period; or

 

(vi)     with respect to which a Majority of the Controlling Class votes to
treat such Collateral Obligation as a Credit Improved Obligation.

 

-20-

--------------------------------------------------------------------------------

 

 

"Current Pay Obligation": Any Collateral Obligation (other than a DIP Collateral
Obligation) that:

 

(i)     would otherwise be a Defaulted Obligation but for the exclusion of
Current Pay Obligations from the definition of Defaulted Obligation pursuant to
the proviso at the end of such definition;

 

(ii)     (a) if the issuer of such Collateral Obligation is subject to a
bankruptcy proceeding, the relevant court has authorized the issuer to make
payments of principal and interest on such Collateral Obligation and no such
authorized payments that are due and payable are unpaid and (b) otherwise, no
payments that are contractually due and payable on such Collateral Obligation
pursuant to its Underlying Instruments are unpaid (provided that for each of (a)
and (b) any forbearance or grace period in excess of 90 days shall be
disregarded with respect to any payment that is unpaid but would be due and
payable but for such forbearance or grace period); and

 

(iii)     for so long as Moody's is a Rating Agency in respect of any Class of
Secured Notes, such Collateral Obligation has a facility rating from Moody's of
either (A) at least "Caa1" (and if "Caa1," not on watch for downgrade) and its
Market Value is at least 80% of its par value or (B) at least "Caa2" (and if
"Caa2," not on watch for downgrade) and its Market Value is at least 85% of its
par value (provided that for purposes of this definition, with respect to a
Collateral Obligation already owned by the Issuer whose facility rating from
Moody's is withdrawn, the facility rating shall be the last outstanding facility
rating before the withdrawal);

 

provided that to the extent the Principal Balance of all Collateral Obligations
that would otherwise be Current Pay Obligations exceeds 2.5% of the Collateral
Principal Amount, such excess over 2.5% will constitute Defaulted Obligations;
provided, further, that in determining which of the Collateral Obligations will
be included in such excess, the Collateral Obligations with the lowest Market
Value expressed as a percentage will be deemed to constitute such excess;
provided, further, that each such Collateral Obligation included in such excess
will be treated as a Defaulted Obligation for all purposes until such time as
the Aggregate Principal Balance of Collateral Obligations that would otherwise
be Current Pay Obligations would not exceed, on a pro forma basis including such
Defaulted Obligation, 2.5% of the Collateral Principal Amount; provided even
further, that each such Collateral Obligation for which the Market Value thereof
is not determined in accordance with the provisions of clauses (i) or (ii) of
the definition of "Market Value" shall not be a Current Pay Obligation.

 

"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.

 

-21-

--------------------------------------------------------------------------------

 

 

"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 shall
constitute a "Defaulted Obligation" if:

 

(a)     there has occurred and is continuing a default with respect to the
payment of interest or principal with respect to such Collateral Obligation,
without regard to any grace period, waiver or forbearance thereof except as set
forth in this clause (a); provided that such default shall have not been cured;
provided, further, that any such default shall be subject to a grace period of
the lesser of (i) five Business Days (or seven calendar days, whichever is
greater) and (ii) the grace period specified in the applicable Underlying
Instruments, in each case measured from the date of such default if the
Collateral Manager has certified to the Trustee in writing that the payment
failure is not due to credit-related reasons;

 

(b)     a default known to the Collateral 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, waiver or forbearance thereof
except as set forth in this clause (b) (provided that both the Collateral
Obligation and the other debt obligation are full recourse obligations and
secured by the same collateral and the default with respect to such other debt
obligation shall not have been cured); provided, further, that any such default
shall be subject to a grace period of the lesser of (i) five Business Days (or
seven calendar days, whichever is greater) and (ii) the grace period specified
in the applicable Underlying Instruments, in each case measured from the date of
such default if the Collateral Manager has certified to the Trustee in writing
that the payment failure is not due to credit-related reasons;

 

(c)     the issuer or others have instituted proceedings to have the issuer
adjudicated as bankrupt or insolvent or placed into receivership and such
proceedings have not been stayed or dismissed or such issuer has filed for
protection under Chapter 11 of the United States Bankruptcy Code;

 

(d)     such Collateral Obligation has a Moody's probability of default rating
(as published by Moody's) of "D" or "LD" or had such rating before such rating
was withdrawn, such Collateral Obligation has a Fitch Rating of "D" or had such
rating before such rating was withdrawn or such Collateral Obligation has an S&P
Rating of "D" or had such rating before such rating was withdrawn;

 

(e)     such Collateral Obligation is pari passu or junior in right of payment
as to the payment of principal and/or interest to another debt obligation of the
same issuer which has a Fitch Rating of "D", an S&P Rating of "D" or a Moody's
probability of default rating (as published by Moody's) of "D" or "LD", and in
each case such other debt obligation remains outstanding (provided that both the
Collateral Obligation and such other debt obligation are full recourse
obligations of the applicable issuer);

 

-22-

--------------------------------------------------------------------------------

 

 

(f)     the Collateral Manager has received written notice or has actual
knowledge that a default has occurred under the Underlying Instruments and any
applicable grace period has expired such that the holders of such Collateral
Obligation have accelerated the repayment of such Collateral Obligation (but
only until such default is cured or waived) in the manner provided in the
Underlying Instruments;

 

(g)     the Collateral 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 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);

 

(i)     such Collateral Obligation is a Participation Interest in a loan that
would, if such loan were a Collateral Obligation, constitute a "Defaulted
Obligation" (other than under this clause (i)) or with respect to which the
Selling Institution has a Moody's probability of default rating (as published by
Moody's) of "D" or "LD", and in each case such other debt obligation remains
outstanding; or

 

(j)     a Distressed Exchange has occurred in connection with such Collateral
Obligation;

 

provided, that a Collateral Obligation will not constitute a Defaulted
Obligation pursuant to clauses (a) through (e), (i) and (j) above if: (x) in the
case of clauses (a), (b), (c), (d), (e), (i) and (j), such Collateral Obligation
is a Current Pay Obligation (provided that, in the case of clause (i) above, the
applicable Selling Institution shall also be required to continue to make
current payments to the Issuer under the Participation Interest), or (y) in the
case of clauses (b), (c) and (e), such Collateral Obligation is a DIP Collateral
Obligation.

 

"Deferrable Obligation": A Collateral Obligation that by its terms permits the
deferral or capitalization of payment of accrued, unpaid interest.

 

"Deferred Interest": With respect to any specified Class of Deferred Interest
Notes, the meaning specified in Section 2.8(a).

 

"Deferred Interest Notes": The Notes specified as such in Section 2.3.

 

"Deferred Subordinated Management Fee": The meaning specified in Section
11.1(f).

 

"Deferred Subordinated Management Fee Interest": The meaning specified in
Section 11.1(f).

 

-23-

--------------------------------------------------------------------------------

 

 

"Deferring Obligation": A Deferrable Obligation that is deferring the payment of
interest due thereon and has been so deferring the payment of interest due
thereon (i) with respect to Collateral Obligations that have a Moody's Rating of
at least "Baa3," for the shorter of two consecutive accrual periods or one year,
and (ii) with respect to Collateral Obligations that have a Moody's Rating of
"Ba1" 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 Deferrable 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, including
all deferred amounts, and (c) commences payment of all current interest in cash.

 

"Delayed Drawdown Collateral Obligation": Any Asset 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 reduced to zero.

 

"Deliver" or "Delivered" or "Delivery": The taking of the following steps:

 

(i)     in the case of each Certificated Security (other than a Clearing
Corporation Security), Instrument or Participation Interest in which the
underlying loan is represented by an Instrument,

 

(1)     causing the delivery of such Certificated Security or Instrument to the
Custodian by registering the same in the name of the Custodian or its affiliated
nominee or by endorsing the same to the Custodian or in blank;

 

(2)     causing the Custodian to continuously indicate on its books and records
that such Certificated Security or Instrument is credited to the applicable
Account; and

 

(3)     causing the Custodian to maintain continuous possession of such
Certificated Security or Instrument;

 

(ii)     in the case of each Uncertificated Security (other than a Clearing
Corporation Security),

 

(1)     causing such Uncertificated Security to be continuously registered on
the books of the issuer thereof to the Custodian; and

 

(2)     causing the Custodian to continuously indicate on its books and records
that such Uncertificated Security is credited to the applicable Account;

 

-24-

--------------------------------------------------------------------------------

 

 

(iii)     in the case of each Clearing Corporation Security,

 

(1)     causing the relevant Clearing Corporation to credit such Clearing
Corporation Security to the securities account of the Custodian, and

 

(2)     causing the Custodian to continuously indicate on its books and records
that such Clearing Corporation Security is credited to the applicable Account;

 

(iv)     in the case of each security issued or guaranteed by the United States
of America or agency or instrumentality thereof and that is maintained in book
entry records of a Federal Reserve Bank ("FRB") (each such security, a
"Government Security"),

 

(1)     causing the creation of a Security Entitlement to such Government
Security by the credit of such Government Security to the securities account of
the Custodian at such FRB, and

 

(2)     causing the Custodian to continuously indicate on its books and records
that such Government Security is credited to the applicable Account;

 

(v)     in the case of each Security Entitlement not governed by clauses (i)
through (iv) above,

 

(1)     causing a Securities Intermediary (x) to indicate on its books and
records that the underlying Financial Asset has been credited to the Custodian's
securities account, (y) to receive a Financial Asset from a Securities
Intermediary or acquiring the underlying Financial Asset for a Securities
Intermediary, and in either case, accepting it for credit to the Custodian's
securities account or (z) to become obligated under other law, regulation or
rule to credit the underlying Financial Asset to a Securities Intermediary's
securities account,

 

(2)     causing such Securities Intermediary to make entries on its books and
records continuously identifying such Security Entitlement as belonging to the
Custodian and continuously indicating on its books and records that such
Security Entitlement is credited to one of the Custodian's Accounts, which shall
at all times be securities accounts, and

 

(3)     causing the Custodian to continuously indicate on its books and records
that such Security Entitlement (or all rights and property of the Custodian
representing such Security Entitlement) is credited to the applicable Account;

 

-25-

--------------------------------------------------------------------------------

 

 

(vi)     in the case of Cash or Money,

 

(1)     causing the delivery of such Cash or Money to the Trustee for credit to
the applicable Account or to the Custodian,

 

(2)     if delivered to the Custodian, causing the Custodian to treat such Cash
or Money as a Financial Asset maintained by such Custodian for credit to the
applicable Account in accordance with the provisions of Article 8 of the UCC or
causing the Custodian to deposit such Cash or Money to a deposit account over
which the Custodian has control (within the meaning of Section 9-104 of the
UCC), and

 

(3)     causing the Custodian to continuously indicate on its books and records
that such Cash or Money so held is credited to the applicable Account; and

 

(vii)     in the case of each general intangible (including any Participation
Interest in which the Participation Interest is not represented by an
Instrument),

 

(1)     causing the filing of a Financing Statement in the office of the
Recorder of Deeds of the District of Columbia, Washington, D.C., and

 

(2)     causing the registration of the security interests granted by this
Indenture in the register of mortgages and charges of the Issuer maintained at
the Issuer's registered office in the Cayman Islands.

 

In addition, the Collateral Manager on behalf of the Issuer will obtain any and
all consents required by the Underlying Instruments relating to any such general
intangibles for the transfer of ownership and/or pledge hereunder (except to the
extent that the requirement for such consent is rendered ineffective under
Section 9-406 of the UCC).

 

"Designated Base Rate": The reference or base rate recognized or acknowledged as
being the industry standard for leveraged loans (which recognition may be in the
form of a press release, a member announcement, a member advice, letter,
protocol, publication of standard terms or otherwise) by the LSTA or the ARRC,
which shall include a Base Rate Modifier recognized or acknowledged by either of
such organizations.

 

"Designated Principal Proceeds": The meaning specified in Section 10.2(a).

 

"Designated Proceeds": Any Designated Principal Proceeds or Designated Unused
Proceeds.

 

"Designated Proceeds Cap": As of any date, (x) 1.0% of the Aggregate Ramp-Up Par
Amount minus (y) the aggregate amount of all Designated Proceeds deposited into
the Interest Collection Subaccount on or prior to such date.

 

"Designated Proceeds Period": The meaning specified in Section 10.3(c).

 

-26-

--------------------------------------------------------------------------------

 

 

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

 

"Determination Date": The last day of each Collection Period.

 

"DIP Collateral Obligation": Any interest in a loan or financing facility that
has a public or private facility rating from Moody's and is purchased directly
or by way of assignment (a) which is an obligation of (i) a debtor-in-possession
as described in §1107 of the Bankruptcy Code or (ii) a trustee if appointment of
such trustee has been ordered pursuant to §1104 of the Bankruptcy Code (in
either such case, a "Debtor") organized under the laws of the United States or
any state therein, or (b) on which the related Obligor is required to pay
interest on a current basis and, with respect to either clause (a) or (b) above,
the terms of which have been approved by an order of the United States
Bankruptcy Court, the United States District Court, or any other court of
competent jurisdiction, the enforceability of which order is not subject to any
pending contested matter or proceeding (as such terms are defined in the Federal
Rules of Bankruptcy Procedure) and which order provides that: (i) (A) such DIP
Collateral Obligation is fully secured by liens on the Debtor's otherwise
unencumbered assets pursuant to §364(c)(2) of the Bankruptcy Code or (B) such
DIP Collateral Obligation is secured by liens of equal or senior priority on
property of the Debtor's estate that is otherwise subject to a lien pursuant to
§364(d) of the Bankruptcy Code and (ii) such DIP Collateral Obligation is fully
secured based upon a current valuation or appraisal report. Notwithstanding the
foregoing, such a loan will not be deemed to be a DIP Collateral Obligation
following the emergence of the related debtor-in-possession from bankruptcy
protection under Chapter 11 of the Bankruptcy Code.

 

"Discount Obligation": Any Collateral Obligation forming part of the Assets that
is a loan acquired by the Issuer with respect to which, if such Collateral
Obligation as determined by the Collateral Manager (i) has a Moody's Rating
below "B3", the purchase price thereof is less than 85% of its Principal Balance
(or, in the case of a Revolving Collateral Obligation, 80% of its Principal
Balance) or (ii) has a Moody's Rating "B3" or higher, the purchase price thereof
is less than 80% of its Principal Balance (or, in the case of a Revolving
Collateral Obligation, 75% of its Principal Balance), in each case until the
Market Value of the Collateral Obligation for any period of 30 consecutive days
equals or exceeds 90% of its Principal Balance (or, in the case of a Revolving
Collateral Obligation, 85% of its Principal Balance), in which case such
Collateral Obligation shall cease to be a Discount Obligation.

 

Any Collateral Obligation that would otherwise be considered a Discount
Obligation but that is purchased with the proceeds of a sale of a Collateral
Obligation that was not a Discount Obligation at the time of its purchase and
was sold at a price (i) below 85% if such Collateral Obligation has a Moody's
Rating lower than "B3" (or, in the case of a Revolving Collateral Obligation,
80%) or (ii) below 80% (or, in the case of a Revolving Collateral Obligation,
75%) if such Collateral Obligation has a Moody's Rating "B3" or higher will not
be considered a Discount Obligation, so long as such purchased Collateral
Obligation: (x) has a Moody's Rating no lower than the Moody's Rating of the
previously sold Collateral Obligation, (y) is purchased or committed to be
purchased within ten Business Days of such sale, (z) when included in the
aggregate Principal Balance of all Collateral Obligations not considered
Discount Obligations due to this paragraph, does not cause such aggregate
Principal Balance to exceed 10% of the Aggregate Ramp-Up Par Amount at any time
and (aa) is purchased at a purchase price that equals or exceeds both (1) the
sale price of the sold Collateral Obligation and (2) 60% of its Principal
Balance; provided that to the extent the Aggregate Principal Balance of
Collateral Obligations purchased since the Closing Date under this paragraph
exceeds 15% of the Aggregate Ramp-Up Par Amount, such excess shall be considered
Discount Obligations; provided, further, that such Collateral Obligation shall
cease to be a Discount Obligation at such time as the Market Value of the
Collateral Obligation for any period of 30 consecutive days equals or exceeds
90% of its Principal Balance (or, in the case of a Revolving Collateral
Obligation, 85% of its Principal Balance).

 

-27-

--------------------------------------------------------------------------------

 

 

"Distressed Exchange": In connection with any Collateral Obligation, a
distressed exchange or other debt restructuring has occurred, as reasonably
determined by the Collateral 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 package of securities or obligations that, in the
sole judgment of the Collateral 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 meet the definition of
"Collateral Obligation".

 

"Distribution Report": The meaning specified in Section 10.6(b).

 

"Diversity Score": A single number that indicates collateral concentration in
terms of both issuer and industry concentration, calculated as set forth in
Schedule 2.

 

"Domicile" or "Domiciled": With respect to any issuer of or Obligor with respect
to a Collateral Obligation: (a) except as provided in clauses (b), (c) and (d)
below, its country of organization; (b) if it is organized in a Tax Advantaged
Jurisdiction, each of such jurisdiction and the country in which, in the
Collateral 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; (c) if it is organized
in Ireland, its "Domicile" shall be deemed to be the country in which, in the
Collateral 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; or (d) if its payment
obligations in respect of such Collateral Obligation are guaranteed by a person
or entity (in a guarantee agreement with such person or entity, which guarantee
agreement complies with Moody's then-current public guidelines with respect to
guarantees) that is organized in the United States, then the United States.

 

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

 

"Due Date": Each date on which any payment is due on a Pledged Obligation in
accordance with its terms.

 

-28-

--------------------------------------------------------------------------------

 

 

"Effective Spread": With respect to any floating rate Collateral Obligation, the
current per annum rate at which it pays interest minus LIBOR or, if such
floating rate Collateral Obligation bears interest based on a floating rate
index other than a London interbank offered rate-based index, the Effective
Spread shall be the then-current base rate applicable to such floating rate
Collateral Obligation plus the rate at which such floating rate Collateral
Obligation pays interest in excess of such base rate minus three-month LIBOR;
provided that (i) with respect to any unfunded commitment of any Revolving
Collateral Obligation or Delayed Drawdown Collateral Obligation, the Effective
Spread means the commitment fee payable with respect to such unfunded
commitment, (ii) with respect to the funded portion of any commitment under any
Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, the
Effective Spread means the current per annum rate at which it pays interest
minus LIBOR or, if such funded portion bears interest based on a floating rate
index other than a London interbank offered rate-based index, the Effective
Spread will be the then-current base rate applicable to such funded portion plus
the rate at which such funded portion pays interest in excess of such base rate
minus three-month LIBOR and (iii) with respect to any LIBOR Floor Obligation,
the stated interest rate spread on such Collateral Obligation above the
applicable index shall be deemed to be equal to the sum of (A) the stated
interest rate spread over the applicable index and (B) the excess, if any, of
the specified "floor" rate relating to such Collateral Obligation over the LIBOR
rate applicable to the Secured Notes on the immediately preceding Interest
Determination Date; provided, further, that the Effective Spread of any floating
rate Collateral Obligation shall (i) be deemed to be zero to the extent that the
Issuer or the Collateral Manager has actual knowledge that no payment of cash
interest on such floating rate Collateral Obligation will be made by the Obligor
thereof during the applicable due period and (ii) not include any non-cash
interest; provided, further, that the Effective Spread of any Letter of Credit
shall not include any amounts that the Issuer or the Collateral Manager have
actual knowledge are being withheld by the related agent bank or will be
deposited into a Letter of Credit Reserve Account. Notwithstanding the
foregoing, if a Base Rate Amendment has been adopted and the Alternative Base
Rate specified in the Base Rate Amendment is the same benchmark rate currently
in effect for determining interest on a floating rate Collateral Obligation,
references to "London interbank offered rate-based index" in this definition of
Effective Spread with respect to such floating rate Collateral Obligation shall
be deemed to be a reference to such benchmark rate that is the same as the
Alternative Base Rate.

 

"Eligible Investment Required Ratings": (a) If such obligation or security
(i) has both a long term and a short term credit rating from Moody's, such
ratings are "Aa3" or higher (not on credit watch for possible downgrade) and
"P-1" (not on credit watch for possible downgrade), respectively, (ii) has only
a long term credit rating from Moody's, such rating is at least equal to or
higher than the current Moody's long term ratings of the U.S. government, and
(iii) has only a short term credit rating from Moody's, such rating is "P-1"
(not on credit watch for possible downgrade) and (b) so long as any Class A Note
is rated by Fitch, from Fitch (i) for obligations or securities with remaining
maturities up to 30 days, a short-term credit rating of at least "F1" and a
long-term credit rating of at least "A" (if such long-term rating exists) or
(ii) for obligations or securities with remaining maturities of more than 30
days but not in excess of 60 days, a short-term rating of "F1+" and a long-term
credit rating of at least "AA-" (if such long-term rating exists).

 

-29-

--------------------------------------------------------------------------------

 

 

"Eligible Investments": (a) Cash or (b) any United States 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:

 

(i)     direct obligations of, and 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.

 

(ii)     demand and time deposits in, certificates of deposit of, trust accounts
with, bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company incorporated under the laws of the United States of
America (including the Bank and any 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 at the time of such investment or contractual commitment providing
for such investment have the Eligible Investment Required Ratings;

 

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

 

(iv)     registered money market funds domiciled outside of the United States
which funds have credit ratings of (x) "Aaa-mf" by Moody's and (y) "AAAmmf" by
Fitch or equivalent ratings at that time by Moody's and Fitch;

 

provided that 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 (iv) above, as mature (or are putable at par to the issuer
thereof) no later than the earlier of 60 days and the Business Day prior to the
next Payment Date; provided, further, that none of the foregoing obligations or
securities shall constitute Eligible Investments if (a) all, or substantially
all, of the remaining amounts payable thereunder consist of interest and not
principal payments, (b) such obligation or security is subject to withholding
tax unless the issuer of the security 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, (c)
such obligation or security is secured by real property, (d) such obligation or
security is purchased at a price greater than 100% of the principal or face
amount thereof or (e) in the Collateral Manager's sole judgment, such obligation
or security is subject to material non-credit related risks. Eligible
Investments may include, without limitation, those investments for which the
Trustee or an Affiliate of the Trustee is the obligor or depository institution,
or provides services and receives compensation.

 

-30-

--------------------------------------------------------------------------------

 

 

Notwithstanding the foregoing clauses (b)(i) through (iv) or any other criteria
set forth in this definition of Eligible Investments, Eligible Investments may
only include obligations or securities that constitute "cash equivalents" for
purposes of Section _10.(c)(8)(iii)(A) of the regulations implementing the
Volcker Rule. Any direction given by the Collateral Manager to the Trustee to
invest in an Eligible Investment shall be deemed to be a confirmation from the
Collateral Manager to the Trustee that such Eligible Investment complies with
the requirements of the foregoing sentence.

 

"Eligible Post-Reinvestment Principal Proceeds": As of any date of determination
(and on a cumulative basis), 50% of the aggregate amount of Principal Proceeds
(whether received in the current Collection Period or in any prior Collection
Period (or portion thereof), in each case, after the end of the Reinvestment
Period) actually received by the Issuer after the end of the Reinvestment Period
in respect of (i) sales of Credit Improved Obligations and Credit Impaired
Obligations and (ii) Unscheduled Principal Payments, in each case, as of such
date of determination.

 

"Entitlement Holder": The meaning specified in Section 8-102(a)(7) of the UCC.

 

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

 

"Equity Security": Any security or debt obligation which at the time of
acquisition, conversion or exchange does not satisfy one or more of the
requirements of the definition of "Collateral Obligation" (other than clause
(xxi)) and is not an Eligible Investment; it being understood that Equity
Securities may not be purchased by the Issuer but may be received by the Issuer
in exchange for a Collateral Obligation or a portion thereof in connection with
an insolvency, bankruptcy, reorganization, debt restructuring or workout of the
issuer thereof, such that the Equity Security would be considered "received in
lieu of debts previously contracted" with respect to the Collateral Obligations
under the Volcker Rule.

 

"ERISA": The United States Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

"ERISA Subscription Agreement": A subscription agreement containing
ERISA-related representations, warranties and covenants substantially in the
form set forth in Exhibit B6 hereto.

 

"Euroclear": Euroclear Bank S.A./N.V. as operator of the Euroclear System.

 

"Event of Default": The meaning specified in Section 5.1.

 

"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 pursuant to the Underlying Instruments.

 

"Excepted Property": The meaning specified in the Granting Clause.

 

"Excess CCC/Caa Adjustment Amount": As of any date of determination, an amount
equal to the product of (i) the Aggregate Principal Balance of all Collateral
Obligations included in the CCC/Caa Excess multiplied by (ii) 1 minus the
weighted average Market Value (expressed as a percentage of the par amount of
each such Collateral Obligation) of all Collateral Obligations included in the
CCC/Caa Excess.

 

-31-

--------------------------------------------------------------------------------

 

 

"Excess Weighted Average Fixed Coupon": As of any Measurement Date, a percentage
equal to the product obtained by multiplying (a) the greater of zero and the
excess, if any, of the Weighted Average Fixed Coupon over the Minimum Weighted
Average Fixed Coupon by (b) the number obtained by dividing the Aggregate
Principal Balance of all fixed rate Collateral Obligations (excluding any
Defaulted Obligation and, to the extent of any non-cash interest, any Deferrable
Obligation) by the Aggregate Principal Balance of all floating rate Collateral
Obligations (excluding any Defaulted Obligation and, to the extent of any
non-cash interest, any Deferrable Obligation).

 

"Excess Weighted Average Floating Spread": As of any Measurement Date, an amount
equal to the product obtained by multiplying (a) the greater of zero and the
excess, if any, of the Weighted Average Floating Spread over the Minimum
Floating Spread by (b) the number obtained by dividing the Aggregate Principal
Balance of all floating rate Collateral Obligations (excluding any Defaulted
Obligation and, to the extent of any non-cash interest, any Deferrable
Obligation) by the Aggregate Principal Balance of all fixed rate Collateral
Obligations (excluding any Defaulted Obligation and, to the extent of any
non-cash interest, any Deferrable Obligation).

 

"Exchange Act": The United States Securities Exchange Act of 1934, as amended
from time to time.

 

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

 

"FATCA": Sections 1471 through 1474 of the Code, any current or future
regulations or official interpretations thereof, any agreement entered into
pursuant to Section 1471(b) of the Code, or any U.S. or non-U.S. fiscal or
regulatory legislation, rules, guidance notes or practices adopted pursuant to
any intergovernmental agreement entered into in connection with the
implementation of such Sections of the Code or analogous provisions of non-U.S.
law.

 

"Federal Reserve Board": The Board of Governors of the Federal Reserve System.

 

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

 

"Financing Statements": The meaning specified in Section 9-102(a)(39) of the
UCC.

 

"First Lien Last Out Loan": A loan that would otherwise be a Senior Secured
Loan, but which can by its terms become subordinate in right of payment to
another obligation of the Obligor of the loan with respect to liquidation.

 

"Fitch": Fitch Ratings, Inc., and any successor in interest, provided that if
Fitch is no longer rating the Class A Notes at the request of the Issuer,
references to it hereunder and under and for all purposes of this Indenture and
the other Transaction Documents shall be inapplicable and shall have no force or
effect.

 

-32-

--------------------------------------------------------------------------------

 

 

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

 

"Fitch Rating" has the meaning specified in Schedule 4 hereto.

 

"GAAP": The meaning specified in Section 6.3(j).

 

"Global Notes": Any Regulation S Global Notes or Rule 144A Global Notes.

 

"Global Rating Agency Condition": With respect to any action taken or to be
taken by or on behalf of the Issuer, satisfaction of the Moody's Rating
Condition (to the extent applicable) and the delivery of prior written notice of
such action to Fitch.

 

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

 

"Group Country": Any Group I Country, Group II Country, Group III Country or
Group IV Country.

 

"Group I Country": Australia, The Netherlands, The United Kingdom and New
Zealand.

 

"Group II Country": Germany, Sweden and Switzerland.

 

"Group III Country": Austria, Belgium, Denmark, Finland, France, Iceland,
Liechtenstein, Luxembourg and Norway.

 

"Group IV Country": Greece, Italy, Portugal and Japan.

 

"Hedge Agreements": Any interest rate swap, floor and/or cap agreements, between
the Issuer and any Hedge Counterparty, as amended from time to time, and any
replacement agreement entered into pursuant to Section 16.1.

 

"Hedge Counterparty": Any one or more institutions entering into or guaranteeing
a Hedge Agreement with the Issuer that satisfies the Required Hedge Counterparty
Rating that has entered into a Hedge Agreement with the Issuer, including any
permitted assignee or successor under the Hedge Agreements.

 

-33-

--------------------------------------------------------------------------------

 

 

"Hedge Counterparty Collateral Account": Each account established pursuant to
Section 10.4.

 

"Hedge Counterparty Credit Support": As of any date of determination, any cash
or cash equivalents on deposit in, or otherwise to the credit of, the Hedge
Counterparty Collateral Account in an amount required to satisfy the
then-current Rating Agency criteria.

 

"Holder": With respect to any Note, the Person whose name appears on the
Register as the registered holder of such Note or the holder of a beneficial
interest in (i.e. a beneficial owner of) such Note, except as otherwise provided
for in this Indenture.

 

"IAI": An institutional Accredited Investor as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D of the Securities Act.

 

"IAI/QP": Any Person that, at the time of its acquisition, purported acquisition
or proposed acquisition of Notes is both (a) an IAI and (b) a Qualified
Purchaser or an entity owned exclusively by Qualified Purchasers.

 

"Illiquid Asset": The meaning specified in Section 12.3.

 

"Incentive Management Fee": The fee payable to the Collateral Manager on each
Payment Date on and after which the Incentive Management Fee Threshold has been
met, pursuant to Section 8(a) of the Collateral Management Agreement and the
Priority of Payments, in an amount equal to 20% of any remaining Interest
Proceeds and Principal Proceeds, as applicable, on such Payment Date.

 

"Incentive Management Fee Threshold": The threshold that will be satisfied on
any Payment Date if the Holders of the Junior Subordinated Notes have received
an annualized internal rate of return (computed using the "XIRR" function in
Microsoft® Excel or an equivalent function in another software package and based
on the respective dates of issuance and an aggregate purchase price of
$26,216,294 for the Junior Subordinated Notes) of at least 12% on the
outstanding investment in the Junior Subordinated Notes as of such Payment Date
after giving effect to all payments made or to be made on such Payment Date.

 

"Incurrence Covenant": A covenant by the underlying Obligor under a loan to
comply with one or more financial covenants only upon the occurrence of certain
actions of the underlying Obligor or certain events relating to the underlying
Obligor, including, but not limited to, 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.

 

-34-

--------------------------------------------------------------------------------

 

 

"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.
"Independent" when used with respect to any accountant 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. For purposes of this definition, no
manager or director of any Person will fail to be Independent of such Person
solely because such manager or director acts as an independent manager or
independent director thereof or of any affiliates of such Person.

 

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 and the Collateral Manager.

 

"Independent Fiduciary": The meaning specified in Section 2.6(c)(iv).

 

"Index Maturity": With respect to any Class of Notes, the period indicated with
respect to such Class in Section 2.3.

 

"Information": S&P's "Credit Estimate Information Requirements" dated
August 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 14.16.

 

"Initial Purchaser": BNPP, in its capacity as the initial purchaser under the
Purchase Agreement.

 

"Initial Rating": With respect to any Class of Secured Notes, the rating or
ratings, if any, indicated in Section 2.3.

 

"Instrument": The meaning specified in Section 9-102(a)(47) of the UCC.

 

"Interest Accrual Period": (i) With respect to the initial Payment Date (or, in
the case of a Class that is subject to Refinancing, the first Payment Date
following the Refinancing), the period from and including the Closing Date (or,
in the case of a Refinancing, the date of issuance of the Replacement Notes), 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.

 

-35-

--------------------------------------------------------------------------------

 

 

"Interest Collection Subaccount": The meaning specified in Section 10.2(a).

 

"Interest Coverage Ratio": With respect to any designated Class or Classes of
Secured Notes, as of any date of determination, on or after the Determination
Date immediately preceding the third Payment Date, the percentage derived by
dividing:

 

(a)     the sum of (i) the Collateral Interest Amount as of such date of
determination minus (ii) amounts payable (or expected as of the date of
determination to be payable) on the following Payment Date as set forth in
clauses (A), (B) and (C) of Section 11.1(a)(i); by

 

(b)     interest due and payable on the Secured Notes of such Class or Classes
and each Priority Class of Secured Notes on such Payment Date (excluding
Deferred Interest and any interest on the Deferred Interest with respect to any
such Class or Classes).

 

"Interest Coverage Test": A test that is satisfied with respect to any specified
Class or Classes of Secured Notes, if as of the Determination Date immediately
preceding the third Payment Date, and at any date of determination occurring
thereafter (i) the Interest Coverage Ratio for such Class or Classes is at least
equal to the applicable Required Coverage Ratio for such Class or Classes, or
(ii) such Class or Classes is no longer outstanding.

 

"Interest Determination Date": (i) With respect to the first Interest Accrual
Period, the second London Banking Day preceding the Closing Date and (ii) for
each Interest Accrual Period after the first Interest Accrual Period, the second
London Banking Day preceding the first day of each Interest Accrual Period.

 

-36-

--------------------------------------------------------------------------------

 

 

"Interest Proceeds": With respect to any Collection Period or Determination
Date, without duplication, the sum of: (i) all payments of interest and other
income (including delayed compensation but excluding any interest due on any
Deferrable Obligation that has been deferred or capitalized at the time of
acquisition) received 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) all amendment and waiver fees, late payment fees, ticking fees and other
fees received by the Issuer during the related Collection Period, except for
those in connection with (a) the lengthening of the maturity of the related
Collateral Obligation or (b) the reduction of the par amount of the related
Collateral Obligation as determined by the Collateral Manager at its discretion
(with notice to the Trustee and the Collateral Administrator); (iv) any payment
received with respect to any Hedge Agreement other than (a) an upfront payment
received upon entering into such Hedge Agreement or (b) a payment received as a
result of the termination of any Hedge Agreement to the extent not used by the
Issuer to enter into a new or replacement Hedge Agreement (for purposes of this
subclause (iv), any such payment received or to be received on or before the
last day of the Collection Period in respect of such Payment Date will be deemed
received in respect of the preceding Collection Period and included in the
calculation of Interest Proceeds received in such Collection Period); (v) any
payments received as repayment for Excepted Advances; (vi) any amounts deposited
in the Interest Collection Subaccount from the Principal Collection Subaccount
pursuant to Section 10.2(a) and/or the Expense Reserve Account and/or the
Ramp-Up Account pursuant to Section 10.3, in each case, during such Collection
Period or in respect of the related Determination Date; (vii) any proceeds from
an Issuer Subsidiary Asset characterized as "Interest Proceeds" received by the
Issuer from any Issuer Subsidiary; and (viii) commitment fees, letter of credit
fees and other similar fees received by the Issuer during such Collection Period
in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral
Obligations; provided that except as set forth in clause (vi) above, any amounts
received in respect of (1) any Defaulted Obligation or (2) from an Issuer
Subsidiary, in respect of an Issuer Subsidiary Asset that was acquired or
received in connection with a workout or restructuring of such Defaulted
Obligation will constitute (A) Principal Proceeds (and not Interest Proceeds)
until the aggregate of all recoveries in respect of such Defaulted Obligation
(including any such proceeds from such Issuer Subsidiary, in respect of such
Issuer Subsidiary Asset) since immediately before it became a Defaulted
Obligation equals the outstanding Principal Balance (excluding any unfunded
commitment on any Revolving Collateral Obligation or Delayed Drawdown Collateral
Obligation) of such Collateral Obligation immediately before it became a
Defaulted Obligation, and then (B) Interest Proceeds thereafter; provided,
further, that amounts described in clause (i) of the definition of Principal
Financed Accrued Interest may be designated by the Collateral Manager as
Interest Proceeds as long as the Aggregate Principal Balance on the date of such
designation of the (a) Collateral Obligations and (b) Eligible Investments
representing Principal Proceeds equals or exceeds the Aggregate Ramp-Up Par
Amount (on a pro forma basis); provided, further, that amounts that would
otherwise constitute Interest Proceeds may be designated as Principal Proceeds
pursuant to Section 7.17(c) with notice to the Collateral Administrator;
provided, further, that all payments (interest, principal and otherwise) from
any Credit Amendment that does not satisfy the Weighted Average Life Test shall
be designated as Principal Proceeds. Notwithstanding the foregoing, in the
Collateral Manager's sole discretion (to be exercised on or before the related
Determination Date), on any date after the first Payment Date, Interest Proceeds
in any Collection Period may be deemed to be Principal Proceeds so long as no
such designation would result in an interest deferral on any Class of Secured
Notes. Under no circumstances shall Interest Proceeds include the Excepted
Property or any interest earned thereon.

 

"Interest Reserve Account": The trust account established pursuant to
Section 10.3(e).

 

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

 

"Investment Company Act": The Investment Company Act of 1940, as amended from
time to time.

 

"Investment Criteria": The criteria specified in Section 12.2.

 

-37-

--------------------------------------------------------------------------------

 

 

"Investment Criteria Adjusted Balance": With respect to any Asset, the Principal
Balance of such Asset; provided that for all purposes the Investment Criteria
Adjusted Balance of any: (i) Deferring Obligation shall be the Moody's
Collateral Value of such Deferring Obligation, (ii) Discount Obligation shall be
the purchase price (expressed as a dollar amount) of such Discount Obligation;
and (iii) CCC/Caa Collateral Obligation included in the CCC/Caa Excess shall be
the Market Value of such Collateral Obligation; 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 is included in the CCC/Caa Excess shall be the lowest amount
determined pursuant to clauses (i), (ii) or (iii).

 

"Issuer": JMP Credit Advisors CLO V Ltd., 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 Order": A written order dated and signed in the name of the Issuer or
the Co-Issuer (which written order may be a standing order) by an Authorized
Officer of the Issuer or the Co-Issuer, as applicable, or, to the extent
permitted herein or in the Collateral Management Agreement, by the Collateral
Manager by an Authorized Officer thereof, on behalf of the Issuer. For the
avoidance of doubt, an order or request provided in an email or other electronic
communication acceptable to the Trustee sent by an Authorized Officer of the
Issuer or Co-Issuer or by an Authorized Officer of the Collateral Manager on
behalf of the Issuer or the Co-Issuer shall constitute an Issuer Order, in each
case except to the extent that the Trustee requests otherwise.

 

"Issuer Request": A written request dated and signed in the name of the Issuer
or the Co-Issuer (which written request may be a standing request) by an
Authorized Officer of the Issuer or the Co-Issuer, as applicable, or, to the
extent permitted herein or in the Collateral Management Agreement, by the
Collateral Manager by an Authorized Officer thereof, on behalf of the Issuer.

 

"Issuer Subsidiary": The meaning specified in Section 7.16(e).

 

"Issuer Subsidiary Asset": The meaning specified in Section 7.16(g).

 

"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.

 

"Junior Subordinated Notes": The junior subordinated notes issued pursuant to
this Indenture and having the characteristics specified in Section 2.3.

 

"Knowledgeable Employee": The meaning specified in Rule 3c-5 under the
Investment Company Act.

 

"Letter of Credit": A facility whereby (i) a fronting bank ("LOC Agent Bank")
issues or will issue a letter of credit ("LC") for or on behalf of a borrower
pursuant to an underlying instrument, (ii) in the event that the LC 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 it receives for
providing the LC to the lender/participant.

 

-38-

--------------------------------------------------------------------------------

 

 

"Letter of Credit Reserve Account": The meaning specified in Section 7.16(h).

 

"LIBOR": (i) With respect to the Secured Notes and the Senior Subordinated
Notes, the meaning set forth in Exhibit C and (ii) with respect to a Collateral
Obligation, the "Libor" rate determined in accordance with the terms of such
Collateral Obligation. Notwithstanding the foregoing, (i) from and after the
first Interest Accrual Period to begin after the execution and effectiveness of
a Base Rate Amendment or selection of an Alternative Base Rate by a court of
competent jurisdiction, "LIBOR" with respect to the Secured Notes and the Senior
Subordinated Notes will be calculated by reference to the Alternative Base Rate
specified in such Base Rate Amendment or as selected by such court and (ii)
LIBOR (or, if a Base Rate Amendment or selection of an Alternative Base Rate by
a court of competent jurisdiction has occurred, the relevant Alternative Base
Rate) for any Interest Accrual Period will equal the greater of (x) LIBOR as
determined pursuant to this definition or such Alternative Base Rate and (y)
0.00% per annum.

 

"Libor": The London interbank offered rates.

 

"LIBOR Floor Obligation": As of any date, a floating rate Collateral Obligation
(a) for which the related Underlying Instruments allow a Libor rate option, (b)
that provides that such Libor rate is (in effect) calculated as the greater of
(i) a specified "floor" rate per annum and (ii) the London interbank offered
rate for the applicable interest period for such Collateral Obligation and (c)
that, as of such date, bears interest based on such Libor rate option, but only
if as of such date the London interbank offered rate for the applicable interest
period is less than such floor rate.

 

"Listed Notes": The Notes specified as such in Section 2.3.

 

"LOC Agent Bank": The meaning specified in the definition of "Letter of Credit"
in this Section 1.1.

 

"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.

 

"LSTA" means the Loan Syndication and Trading Association, or any successor
thereto.

 

"Maintenance Covenant": As of any date of determination, a covenant by the
underlying Obligor of a loan to comply with one or more financial covenants
during each reporting period applicable to such loan, whether or not any action
by, or event relating to, the underlying Obligor occurs after such date of
determination.

 

"Majority": With respect to any Class of Notes, the Holders of more than 50% of
the Aggregate Outstanding Amount of the Notes of such Class.

 

-39-

--------------------------------------------------------------------------------

 

 

"Management Fee Interest": Collectively, the Subordinated Management Fee
Interest and the Deferred Subordinated Management Fee Interest.

 

"Management Fees": Collectively, the Senior Management Fee, the Subordinated
Management Fee and the Incentive Management Fee.

 

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

 

"Market Replacement Rate": The base rate, other than LIBOR, that is used on at
least (x) 50% (by principal amount) of the Collateral Obligations; provided that
such rate is a quarterly floating rate or (y) 50% (by principal amount) of the
quarterly pay floating rate securities issued in the new-issue collateralized
loan obligation market in the prior three months, which in each case shall
include a Base Rate Modifier that corresponds to the selected rate.

 

"Market Value": With respect to any loans or other assets, the amount
(determined by the Collateral Manager) equal to the product of the principal
amount thereof and the price determined in the following manner:

 

(i)       the quote determined by any of Loan Pricing Corporation, MarkIt
Partners, or any other nationally recognized loan pricing service selected by
the Collateral Manager, or

 

(ii)      if such quote described in clause (i) is not available, the average of
the bid-side quotes determined by three broker-dealers active in the trading of
such asset that are Independent (with respect to each other and the Collateral
Manager); or

 

(A)     if only two such bids can be obtained, the lower of the bid-side quotes
of such two bids; or

 

(B)     with respect to determining Market Value in connection with calculating
the Adjusted Collateral Principal Amount only, if only one such bid can be
obtained, such bid; provided that this subclause (B) shall not apply at any time
at which the Collateral Manager is not a registered investment adviser under the
Investment Advisers Act; or

 

(iii)     if such quote or bid described in clause (i) or (ii) is not available,
then the Market Value of such Collateral Obligation shall be the lower of
(x) the Market Value determined by the Collateral Manager, consistent with the
manner in which it would determine the market value of an asset for purposes of
other funds or accounts managed by it and (y) the purchase price of such
Collateral Obligation; provided that, if the Collateral Manager is not a
registered investment adviser under the Investment Advisers Act, the Market
Value of any such asset may not be determined in accordance with this clause
(iii) for more than thirty days; or

 

-40-

--------------------------------------------------------------------------------

 

 

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

 

provided that, for purposes of determining the Market Value of any CCC/Caa
Collateral Obligation included in the Excess CCC/Caa Adjustment Amount, such
Market Value may not exceed the principal amount 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.

 

"Maximum Investment Amount": As of any date of determination, the sum of,
without duplication, (a) the Collateral Principal Amount, (b) the outstanding
principal amount of all Defaulted Obligations that have been Defaulted
Obligations for longer than three years and (c) the aggregate amount of all
Principal Financed Accrued Interest.

 

"Maximum Moody's Rating Factor Test": A test that will be satisfied on any date
of determination if the Moody's Adjusted Weighted Average Rating Factor of the
Collateral Obligations is less than or equal to the lesser of (i) the sum of (a)
the number set forth in the applicable column entitled "Maximum Moody's Weighted
Average Rating Factor" in the Asset Quality Matrix, based upon the applicable
"row/column combination" chosen by the Collateral Manager with notice to the
Collateral Administrator (or the linear interpolation between two adjacent rows
and/or two adjacent columns, as applicable) in accordance with Section 7.17(e),
plus (b) the Moody's Weighted Average Recovery Adjustment and (ii) 3250.

 

"Measurement Date": (i) Any day on which the Issuer purchases, or enters into a
commitment to purchase, a Collateral Obligation or promptly after an Officer of
the Collateral Manager becomes aware that a default of a Collateral Obligation
has occurred, (ii) any Determination Date, (iii) the date as of which the
information in any Monthly Report or Distribution Report is calculated, (iv)
with five (5) Business Days prior written notice, any Business Day requested by
the Rating Agencies and (v) the last day of the Ramp-Up Period; provided that in
the case of (i) through (iv), no "Measurement Date" can occur prior to the last
day of the Ramp-Up Period.

 

"Memorandum and Articles": The Issuer's Memorandum and Articles of Association,
as they may be amended, revised or restated from time to time.

 

"Merging Entity": The meaning specified in Section 7.10.

 

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

 

"Minimum Floating Spread": The number set forth in the column entitled "Minimum
Weighted Average Spread" in the Asset Quality Matrix based upon the applicable
"row/column combination" chosen by the Collateral Manager with notice to the
Trustee and the Collateral Administrator (or the linear interpolation between
two adjacent rows and/or two adjacent columns, as applicable) in accordance with
Section 7.17(e), reduced by the Moody's Weighted Average Recovery Adjustment;
provided that the Minimum Floating Spread shall not be lower than 2.10%.

 

-41-

--------------------------------------------------------------------------------

 

 

"Minimum Floating Spread Test": The test that is satisfied on any date of
determination if the Weighted Average Floating Spread plus the Excess Weighted
Average Fixed Coupon equals or exceeds the Minimum Floating Spread.

 

"Minimum Weighted Average Fixed Coupon" means (i) if any of the Collateral
Obligations are fixed rate obligations, 7.00% and (ii) otherwise 0.00%.

 

"Money": The meaning specified in Section 1.1-201(24) of the UCC.

 

"Monthly Report": The meaning specified in Section 10.6(a).

 

"Monthly Report Determination Date": The meaning specified in Section 10.6(a).

 

"Moody's": Moody's Investors Service, Inc. and any successor thereto.

 

"Moody's Adjusted Weighted Average Rating Factor": As of any date of
determination, a number equal to the Moody's Weighted Average Rating Factor
determined in the following manner: for purposes of determining a Moody's
Default Probability Rating, Moody's Rating or Moody's Derived Rating in
connection with determining the Moody's Weighted Average Rating Factor for
purposes of this definition, the last paragraph of the definition of "Moody's
Default Probability Rating" and "Moody's Derived Rating" and the penultimate
paragraph of the definition of "Moody's Rating" shall each be disregarded, and
instead each applicable rating on credit watch by Moody's that is on (a)
positive watch will be treated as having been upgraded by one rating
subcategory, (b) negative watch will be treated as having been downgraded by two
rating subcategories, (c) positive outlook will be treated with no change to the
rating subcategory, and (d) negative outlook will be treated as having been
downgraded by one rating subcategory.

 

"Moody's Collateral Value": As of any date of determination, with respect to any
Defaulted Obligation or Deferring Obligation, the lesser of (i) the Moody's
Recovery Amount of such Defaulted Obligation or Deferring Obligation as of such
date and (ii) the Market Value of such Defaulted Obligation or Deferring
Obligation as of such date.

 

-42-

--------------------------------------------------------------------------------

 

 

"Moody's Counterparty Criteria": With respect to any Participation Interest
proposed to be acquired by the Issuer, criteria that will be met if immediately
after giving effect to such acquisition, (x) the percentage of the Collateral
Principal Amount that consists in the aggregate of Participation Interests with
Selling Institutions that have the same or a lower Moody's credit rating does
not exceed the "Aggregate Percentage Limit" set forth below for such Moody's
credit rating and (y) the percentage of the Collateral Principal Amount that
consists in the aggregate of Participation Interests with any single Selling
Institution that has the Moody's credit rating set forth below or a lower credit
rating does not exceed the "Individual Percentage Limit" set forth below for
such Moody's credit rating:

 

Moody's credit rating of

Selling Institution
(at or below)

 

Aggregate
Percentage
Limit

 

Individual
Percentage
Limit

Aaa

 

20.0%

 

20.0%

Aa1

 

20.0%

 

10.0%

Aa2

 

20.0%

 

10.0%

Aa3

 

15.0%

 

10.0%

A1

 

10.0%

 

5.0%

A2 and "P-1"

 

5.0%

 

5.0%

A3

 

0%

 

0%

 

 

"Moody's Default Probability Rating": With respect to any Collateral Obligation,
the rating determined pursuant to Schedule 3.

 

"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 3.

 

"Moody's Diversity Test": A test that will be satisfied on any date of
determination if the Diversity Score (rounded to the nearest whole number)
equals or exceeds the number set forth in the column entitled "Minimum Diversity
Score" in the Asset Quality Matrix based upon the applicable "row/column
combination" chosen by the Collateral Manager with notice to the Trustee and the
Collateral Administrator (or the linear interpolation between two adjacent rows
and/or two adjacent columns, as applicable) in accordance with Section 7.17(e).

 

"Moody's Industry Classification": The industry classifications set forth in
Schedule 1, as such industry classifications shall be updated at the sole option
of the Collateral Manager (with notice to the Trustee and the Collateral
Administrator) if Moody's publishes revised industry classifications.

 

"Moody's Minimum Weighted Average Recovery Rate Test": The test that will be
satisfied on any date of determination if the Moody's Weighted Average Recovery
Rate equals or exceeds 44%.

 

"Moody's Non-Senior Secured Loan": Any assignment of or Participation Interest
in or other interest in a loan that is not a Moody's Senior Secured Loan.

 

"Moody's Ramp-Up Condition": A condition that will be satisfied if the Issuer or
the Collateral Manager, as the case may be, has provided to Moody's both (1) a
Ramp-Up Period Report that shows that the Aggregate Ramp-Up Par Condition was
satisfied, each Par Value Ratio Test was satisfied, the Concentration
Limitations were complied with and the Portfolio Quality Test was satisfied and
(2) the Ramp-Up Period Issuer Certificate that (i) indicates the Issuer has
received a Ramp-Up Period Accountants' Report that recalculates information set
forth on the Ramp-Up Period Report, (ii) certifies, based on the information in
such Ramp-Up Period Accountants' Report and the comparisons performed by the
Trustee and the Collateral Manager in accordance with Section 7.17(b), that the
information in the Ramp-Up Period Report is accurate in all material respects
and (iii) attributes such conclusions from the foregoing review to the Issuer.
For the avoidance of doubt, neither the Ramp-Up Period Report nor the Ramp-Up
Period Issuer Certificate will include the Ramp-Up Period Accountants' Report.

 

-43-

--------------------------------------------------------------------------------

 

 

"Moody's Ramp-Up Failure": The meaning specified in Section 7.17(c).

 

"Moody's Rating": With respect to any Collateral Obligation, as of any date of
determination, the rating determined in accordance with the following
methodology:

 

(i)     With respect to a Collateral Obligation (A) that is publicly rated by
Moody's, such public rating (B) that is not publicly rated by Moody's but for
which a rating or rating estimate has been assigned by Moody's upon the request
of the Issuer or the Collateral Manager, such rating or, in the case of a rating
estimate, the applicable rating estimate for such obligation or (C) for which
neither clause (A) nor (B) applies but that has a private point-in-time rating
assigned to it by Moody's within the preceding 12 months, such private
point-in-time rating;

 

(ii)    With respect to a Collateral Obligation that is a Moody's Senior Secured
Loan or Participation Interest in a Moody's Senior Secured Loan, if not
determined pursuant to clause (i) above, if the obligor of such Collateral
Obligation has a corporate family rating by Moody's, then the Moody's rating
that is one subcategory higher than such corporate family rating;

 

(iii)    With respect to a Collateral Obligation, if not determined pursuant to
clause (i) or (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 on any such obligation (or, if such Collateral Obligation is a
Moody's Senior Secured Loan, the Moody's rating that is two subcategories higher
than the Moody's public rating on any such senior unsecured obligation) as
selected by the Collateral Manager in its sole discretion;

 

(iv)     With respect to a Collateral Obligation (other than a Moody's Senior
Secured Loan or Participation Interest in a Moody's Senior Secured Loan), if not
determined pursuant to clause (i) through (iii) above, if the obligor of such
Collateral Obligation has a corporate family rating by Moody's, then the Moody's
rating that is one subcategory lower than such corporate family rating;

 

(v)      With respect to a Collateral Obligation (other than a Moody's Senior
Secured Loan or Participation Interest in a Moody's Senior Secured Loan), if not
determined pursuant to clause (i) through (iv) above, if the obligor of such
Collateral Obligation has one or more subordinated obligations publicly rated by
Moody's, then the Moody's rating that is one subcategory higher than the Moody's
public rating on any such obligation as selected by the Collateral Manager in
its sole discretion;

 

-44-

--------------------------------------------------------------------------------

 

 

(vi)     With respect to a Collateral Obligation, if not determined pursuant to
clause (i) through (v) above, the Moody's Derived Rating; and

 

(vii)    With respect to a Collateral Obligation, if not determined pursuant to
clause (i) through (vi) above, "Caa3".

 

For purposes of calculating a Moody's Rating, each applicable rating, at the
time of calculation, (i) on credit watch by Moody's with positive implications
will be treated as having been upgraded by one rating subcategory, (ii) on
credit watch by Moody's with negative implications will be treated as having
been downgraded by one rating subcategory and (iii) on either negative outlook
or positive outlook by Moody's will not be treated as having been downgraded or
upgraded by any rating subcategories.

 

With respect to any credit estimate assigned by Moody's to a Collateral
Obligation hereunder, the Issuer (or the Collateral Manager on the Issuer's
behalf) shall send to Moody's the related Obligor's updated financial
information upon receipt thereof from such Obligor and will use commercially
reasonable efforts to obtain such information at least (x) annually and (y) upon
any significant change in the financial condition of such Obligor or any
Specified Amendment (in each case, as determined by the Collateral Manager in
its commercially reasonable business judgment) but (in each case) only to the
extent such Obligor is required to provide it pursuant to the Underlying
Instruments.

 

In the case of a request for a renewal of an estimate assigned by Moody's to a
Collateral Obligation hereunder following any significant change in the
financial condition of such Obligor or a Specified Amendment, the Issuer (or the
Collateral Manager on the Issuer's behalf) will continue using the previous
estimated rating assigned by Moody's until such time as (x) Moody's renews such
estimated rating or assigns a new estimated rating for such Collateral
Obligation or (y) the criteria in connection with an annual request for a
renewal of a rating estimate becomes applicable in respect of such Collateral
Obligation.

 

"Moody's Rating Condition": For so long as Moody's is a Rating Agency, a
condition that is satisfied if:

 

(i)     with respect to the end of the Ramp-Up Period rating confirmation
procedure described in Sections 7.17(a) through (d), Moody's provides written
confirmation (including by means of electronic message, facsimile transmission,
press release, posting to its internet website, or other means then considered
industry standard) that Moody's will not downgrade or withdraw its Initial
Rating of the Secured Notes of each Class; or

 

(ii)     with respect to any other event or action, Moody's has, upon request of
the Collateral Manager or the Issuer, confirmed in writing (including by means
of electronic message, facsimile transmission, press release, posting to its
internet website, or other means then considered industry standard) to the
Issuer, the Trustee, the Collateral Administrator and the Collateral Manager
that no immediate withdrawal or reduction with respect to its then-current
rating by Moody's of the Secured Notes of each Class will occur as a result of
such event or action; provided that the Moody's Rating Condition will not be
applicable if no Secured Notes remain Outstanding;

 

-45-

--------------------------------------------------------------------------------

 

 

provided further that if Moody's (a) makes a public announcement or informs the
Issuer, the Collateral Manager or the Trustee that (i) it believes the Moody's
Rating Condition is not required with respect to an action or (ii) its practice
is to not give such confirmations, or (b) it no longer constitutes a Rating
Agency under this Indenture, the Moody's Rating Condition will not apply.

 

"Moody's Rating Factor": For each Collateral Obligation, the number set forth in
the table below opposite the Moody's Default Probability Rating of such
Collateral Obligation.

 

Moody's Default

Probability Rating

 

Moody's Rating

Factor

 

Moody's Default

Probability Rating

 

Moody's Rating

Factor

Aaa

   

1

 

Ba1

   

940

Aa1

   

10

 

Ba2

   

1,350

Aa2

   

20

 

Ba3

   

1,766

Aa3

   

40

 

B1

   

2,220

A1

   

70

 

B2

   

2,720

A2

   

120

 

B3

   

3,490

A3

   

180

 

Caa1

   

4,770

Baa1

   

260

 

Caa2

   

6,500

Baa2

   

360

 

Caa3

   

8,070

Baa3

   

610

 

Ca or lower

   

10,000

 

"Moody's Recovery Amount": With respect to any Collateral Obligation, an amount
equal to the product of (i) the applicable Moody's Recovery Rate and (ii) the
Principal Balance of such Collateral Obligation.

 

"Moody's Recovery Rate": With respect to any Collateral Obligation, as of any
date of determination, the recovery rate determined in accordance with the
following, in the following order of priority:

 

(i)      if the Collateral Obligation has been specifically assigned a recovery
rate by Moody's (for example, in connection with the assignment by Moody's of an
estimated rating), such recovery rate;

 

-46-

--------------------------------------------------------------------------------

 

 

(ii)     if the preceding clause does not apply to the Collateral Obligation,
and the Collateral Obligation is a Moody's Senior Secured Loan or a Moody's
Non-Senior Secured Loan (in each case other than a DIP Collateral Obligation),
the rate determined pursuant to the table below based on the number of rating
subcategories difference between the Collateral Obligation's Moody's Rating and
its Moody's Default Probability Rating (for purposes of clarification, if the
Moody's Rating is higher than the Moody's Default Probability Rating, the rating
subcategories difference will be positive and if it is lower, negative):

 

Number of
Moody's Ratings

Subcategories

Difference Between

the Moody's Rating

and the Moody's

Default Probability

Rating

 

Moody's Senior

Secured Loans

 

Second Lien Loans

and First Lien Last

Out Loans (provided

that such Collateral

Obligations must

have both a

corporate family

rating and an

instrument rating

assigned by

Moody's)

 

Unsecured Loans

and all other

Collateral

Obligations that do

not fall under the

previous two

columns

+2 or more

 

60.0%

 

55.0%

 

45.0%

+1

 

50.0%

 

45.0%

 

35.0%

0

 

45.0%

 

35.0%

 

30.0%

-1

 

40.0%

 

25.0%

 

25.0%

-2

 

30.0%

 

15.0%

 

15.0%

-3 or less

 

20.0%

 

5.0%

 

5.0%

or

           

 

(iii)     if the Collateral Obligation is a DIP Collateral Obligation (other
than a DIP Collateral Obligation which has been specifically assigned a recovery
rate by Moody's), 50%.

 

"Moody's Senior Secured Loan": The meaning specified in Schedule 3.

 

"Moody's Weighted Average Rating Factor": The number (rounded up to the nearest
whole number) determined by the following calculation:

 

The Principal Balance of each Collateral Obligation (excluding any Current Pay
Obligation and Defaulted Obligation)

X

The Moody's Rating Factor of such Collateral Obligation (as described above)

 

divided by

 

The Aggregate Principal Balance of all such Collateral Obligations.

 

-47-

--------------------------------------------------------------------------------

 

 

"Moody's Weighted Average Recovery Adjustment": As of any date of determination,
the greater of (a) zero and (b) the product of (i)(A) the Moody's Weighted
Average Recovery Rate as of such date of determination multiplied by 100 minus
(B) 44 and (ii) (A) with respect to the adjustment of the Maximum Moody's Rating
Factor Test, the number set forth in the applicable column entitled "Moody's
Recovery Rate Modifier" in the Recovery Rate Modifier Matrix, based on the
applicable "row/column combination" then in effect as determined in accordance
with this Indenture, and (B) with respect to the adjustment of the Minimum
Floating Spread, the number set forth in the column entitled "Spread Modifier"
in the Recovery Rate Modifier Matrix, based on the applicable "row/column
combination" then in effect as determined in accordance with this Indenture;
provided that if the Weighted Average Moody's Recovery Rate for purposes of
determining the Moody's Weighted Average Recovery Adjustment is greater than
60%, then such Weighted Average Moody's Recovery Rate will equal 60% unless the
Moody's Rating Condition is satisfied; provided, further, that the amount
specified in clause (b)(i) above may only be allocated once on any date of
determination and the Collateral Manager shall designate to the Collateral
Administrator in writing on each such date the portion of such amount that shall
be allocated to clause (b)(ii)(A) and the portion of such amount that shall be
allocated to clause (b)(ii)(B) (it being understood that, absent an express
designation by the Collateral Manager, all such amounts shall be allocated to
clause (b)(ii)(A)).

 

"Moody's Weighted Average Recovery Rate": As of any date of determination, the
number, expressed as a percentage, obtained by summing the product of the
Moody's Recovery Rate on such Measurement Date 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 up to the first decimal place.

 

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

 

"Non-Emerging Market Obligor": An Obligor that is Domiciled in (x) any country
that has a country ceiling for foreign currency bonds of at least "Aa2" by
Moody's or (y) without duplication, the United States.

 

"Non-Permitted ERISA Holder": The meaning specified in Section 2.12(d).

 

"Non-Permitted Holder": The meaning specified in Section 2.12(b).

 

"Note Interest Amount": With respect to any specified Class of Secured Notes and
any Payment Date, the amount of interest for the next Interest Accrual Period
payable in respect of each U.S.$100,000 Outstanding principal amount of such
Class of Secured Notes.

 

"Note Interest Rate": With respect to any specified Class of Secured Notes, the
per annum interest rate payable on the Secured Notes of such Class with respect
to each Interest Accrual Period equal to LIBOR for such Interest Accrual Period
plus the spread specified in Section 2.3 with respect to such Secured Notes.

 

"Noteholder" or "Noteholders": With respect to any Note, the Person(s) whose
name(s) appear(s) on the Register as the registered holder(s) of such Note.

 

"Notes": Collectively, the Secured Notes and the Subordinated Notes authorized
by, and authenticated and delivered under, this Indenture (as specified in
Section 2.3) or any supplemental indenture (and including any Additional Notes
issued hereunder pursuant to Section 2.4).

 

"NRSRO": Any nationally recognized statistical rating organization, other than
the Rating Agencies.

 

-48-

--------------------------------------------------------------------------------

 

 

"NRSRO Certification": A certification substantially in the form of Exhibit E
executed by a NRSRO in favor of the Issuer and the Information Agent that states
that such NRSRO has provided the Issuer with the appropriate certifications
under Exchange Act Rule 17g-5(a)(3)(iii)(B) and that such NRSRO has access to
the 17g-5 Website.

 

"Obligor": The obligor or guarantor under a loan.

 

"Offer": The meaning specified in Section 10.7(c)

 

"Offering": The offering of the Notes pursuant to the Offering Circular.

 

"Offering Circular": The offering circular, dated July 23, 2018 relating to the
Notes, including any supplements thereto.

 

"Officer": With respect to the Issuer, the Co-Issuer and any corporation or
limited liability company, any director, manager, 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 shall, for the avoidance of doubt, include any
duly appointed attorney-in-fact of the Issuer; with respect to any partnership,
any general partner thereof or any Person authorized by such entity; with
respect to a limited liability company, any member thereof or any Person
authorized by such entity; and with respect to the Trustee, any Trust Officer.

 

"offshore transaction": The meaning specified in Regulation S.

 

"Opinion of Counsel": A written opinion addressed to the Trustee and, if
required by the terms hereof, the Rating Agencies, in form and substance
reasonably satisfactory to the Trustee (and if so addressed, the Rating
Agencies), of a nationally or internationally recognized law firm or an attorney
admitted to practice (or law firm, one or more of the partners of which are
admitted to practice) before the highest court of any State of the United States
or the District of Columbia (or the Cayman Islands, in the case of an opinion
relating to the laws of the Cayman Islands) in the relevant jurisdiction, which
attorney (or law firm) may, except as otherwise expressly provided in this
Indenture, be counsel for the Issuer or the Co-Issuer, as the case may be, and
which firm or attorney, as the case may be, shall be reasonably satisfactory to
the Trustee. Whenever an Opinion of Counsel is required hereunder, such Opinion
of Counsel may rely on opinions of other counsel who are so admitted and so
satisfactory, which opinions of other counsel shall accompany such Opinion of
Counsel and shall either be addressed to the Trustee (and, if required by the
terms hereof, the Rating Agencies) or shall state that the Trustee (and, if
required by the terms hereof, the Rating Agencies) shall be entitled to rely
thereon.

 

"Optional Redemption": A redemption of the Notes in accordance with Section 9.2.

 

"Other Plan Law": Any other federal, state, local or non-U.S. law, regulation or
other legal restriction that is substantially similar to the prohibited
transaction provisions contained in Section 406 of ERISA or Section 4975 of the
Code.

 

-49-

--------------------------------------------------------------------------------

 

 

"Outstanding": With respect to 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;

 

(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)(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;

 

(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;

 

(iv)     Notes alleged to have been mutilated, defaced, destroyed, lost or
stolen for which replacement Notes have been issued as provided in Section 2.7;

 

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 or under the Collateral Management
Agreement, (I)(x) any Notes owned by the Issuer, the Co-Issuer, or any other
obligor upon the Notes or any Affiliate thereof or (y) only in the case of a
vote on (i) the removal of the Collateral Manager for "cause" upon the
occurrence of the events specified in Section 12(c) of the Collateral Management
Agreement, (ii) any objection rights with regard to the replacement of any Key
Persons (as defined in the Collateral Management Agreement) and (iii) the waiver
of any event constituting "cause" under Section 12(c) of the Collateral
Management Agreement, Collateral Manager Securities, shall each be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes a Trust Officer
of the Trustee has actual knowledge (or has been provided written notice of) to
be so owned shall be so disregarded, (II) Notes so owned that have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
reasonable satisfaction of the Trustee the pledgee's right so to act with
respect to such Notes and that the pledgee is not the Issuer, the Co-Issuer, any
other obligor upon the Notes or any Affiliate of the Issuer, the Co-Issuer, or
such other obligor (or the Collateral Manager, any Affiliate of the Collateral
Manager or any account or investment fund over which the Collateral Manager or
any Affiliate has discretionary voting authority) and (III) for purposes of the
procedures described under Section 12 of the Collateral Management Agreement, if
any Section 13 Banking Entity delivers a notice in the form set forth in Exhibit
F (a "Banking Entity Notice") to the Issuer, the Collateral Manager and the
Trustee (including via e-mail) then, effective on the date on which such Banking
Entity Notice is delivered, the Notes held by such Section 13 Banking Entity
shall be disregarded and deemed not to be outstanding so long as such Notes are
held by such Section 13 Banking Entity with respect to any vote, consent,
waiver, objection or similar action in connection with any matter described
under Section 12 of the Collateral Management Agreement. Such Notes shall be
deemed outstanding and such Section 13 Banking Entity may vote, consent, waive,
object or take any similar action in connection with any other matters under the
Collateral Management Agreement or under any other Transaction Document. For the
avoidance of doubt, (i) no subsequent notice or other action by a Section 13
Banking Entity purporting to modify, amend or rescind a Banking Entity Notice
shall be effective and shall be void ab initio, (ii) no Holder or beneficial
owner of Notes shall be required to provide a Banking Entity Notice (regardless
of whether such Holder or beneficial owner is or is not a Section 13 Banking
Entity) and (iii) whether a Banking Entity Notice shall bind any subsequent
transferee of a holder or beneficial owner delivering such Banking Entity Notice
will be specified in the Banking Entity Notice, and the Section 13 Banking
Entity, by delivering such notice, will be deemed to have agreed to inform any
Person to whom it transfers its Notes if such notice is binding on transferees
(unless such transferee also delivers a Banking Entity Notice) and, if not
binding, any vote, consent, waiver, objection or similar action of such
transferee shall be effective for all purposes described under Section 12 of the
Collateral Management Agreement.

 

-50-

--------------------------------------------------------------------------------

 

 

"Pari Passu Class": With respect to each Class of Notes, each Class of Notes
that ranks pari passu with such Class, as indicated in Section 2.3.

 

"Partial Redemption by Refinancing": The meaning specified in Section 9.3.

 

"Par Value Ratio": With respect to any specified Class or Classes of Secured
Notes as of the last day of the Ramp-Up Period or any Measurement Date
thereafter, the percentage derived from dividing: (a) the Adjusted Collateral
Principal Amount by (b) the sum of (i) the Aggregate Outstanding Amounts of the
Secured Notes of such Class or Classes and each Priority Class of Secured Notes,
plus (ii) Deferred Interest with respect to such Class or Classes and each
Priority Class of Secured Notes.

 

"Par Value Ratio Test": A test that is satisfied with respect to any Class or
Classes of Secured Notes as of any date of determination at, or subsequent to,
the last day of the Ramp-Up Period, if (i) the Par Value Ratio for such Class or
Classes is at least equal to the applicable Required Coverage Ratio for such
Class or Classes or (ii) such Class or Classes of Secured Notes is no longer
Outstanding.

 

"Participation Interest": A participation interest in a loan that, at the time
of acquisition, or the Issuer's commitment to acquire the same, satisfies each
of the following criteria: (i) such loan would constitute a Collateral
Obligation were it acquired directly, (ii) the seller of the participation
interest is the lender on the loan, (iii) the aggregate participation interests
in the loan does not exceed the principal amount or commitment of such loan,
(iv) such participation interest does not grant, in the aggregate, to the
participant in such participation interest a greater interest than the seller
holds in the loan or commitment that is the subject of the participation
interest, (v) the entire purchase price for such participation interest is paid
in full (without the benefit of financing from the Selling Institution or its
affiliates) at the time of its acquisition (or, in the case of a participation
interest in a Revolving Collateral Obligation or Delayed Drawdown Collateral
Obligation, at the time of the funding of such loan), (vi) the participation
interest 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 interest is documented under a Loan
Syndications and Trading Association, Loan Market Association or similar
agreement standard for loan participation transactions among institutional
participants. For the avoidance of doubt, a Participation Interest shall not
include a sub-participation interest in any loan.

 

-51-

--------------------------------------------------------------------------------

 

 

"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.

 

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

 

"Payment Date": The 17th 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 2018; provided that following the redemption or repayment
in full of the Secured Notes, Holders of Subordinated Notes may receive payments
(including in respect of an Optional Redemption of the Subordinated Notes) on
any dates designated by the Collateral Manager (which dates may or may not be
the dates stated above) upon eight (8) Business Days prior written notice to the
Trustee and the Collateral Administrator (which notice the Trustee shall
promptly forward to the Holders of the Subordinated Notes) and such dates shall
thereafter constitute "Payment Dates"; provided, further, that each Redemption
Date shall be deemed to be a "Payment Date."

 

"PBGC": The United States Pension Benefit Guaranty Corporation.

 

"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.

 

"Pledged Obligations": As of any date of determination, the Collateral
Obligations, the Eligible Investments and any Equity Security which forms part
of the Assets that have been Granted to the Trustee.

 

"Portfolio Quality Test": A test satisfied if, as of any date on which a
determination is required hereunder at, or subsequent to, the end of the Ramp-Up
Period, 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, unless otherwise
explicitly provided for in Section 12.2(a), if any such test is not satisfied,
the results of such test are maintained or improved), calculated in each case as
required by Section 1.2:

 

(i)       the Minimum Fixed Coupon Test;

 

(ii)      the Minimum Floating Spread Test;

 

(iii)     the Maximum Moody's Rating Factor Test;

 

(iv)     the Moody's Diversity Test;

 

(v)      the Moody's Minimum Weighted Average Recovery Rate Test; and

 

(vi)     the Weighted Average Life Test.

 

-52-

--------------------------------------------------------------------------------

 

 

"Post-Acceleration Payment Date": Any Payment Date after the principal of the
Secured Notes has been declared to be or has otherwise become immediately due
and payable pursuant to Section 5.2; provided that such declaration has not been
rescinded or annulled.

 

"Post-Reinvestment Period Settlement Obligation": The meaning set forth in
Section 12.2(f).

 

"Principal Balance": Subject to Section 1.2, with respect to (a) any Pledged
Obligation (other than a Revolving Collateral Obligation or Delayed Drawdown
Collateral Obligation) as of any date of determination, the outstanding
principal amount of such Pledged Obligation 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, plus (except as expressly
set forth in this Indenture) any undrawn commitments that have not been
irrevocably reduced with respect to such Revolving Collateral Obligation or
Delayed Drawdown Collateral Obligation; provided that for all purposes (i) the
Principal Balance of any Equity Security or Collateral Obligation that has been
a Defaulted Obligation for three years or more shall be deemed to be zero, (ii)
the Principal Balance of any Collateral Obligation that, at the time of its
purchase by the Issuer, was subject to an Offer for a price of less than its par
amount, shall be, until the expiration of such Offer in accordance with its
terms, the Offer price (expressed as a dollar amount) of such Collateral
Obligation, (iii) the Principal Balance of a Deferrable Obligation (x) shall not
include any deferred interest that has been added to principal since its
acquisition and remains unpaid and (y) shall only include interest that has been
deferred or capitalized at the time of acquisition if (1) in the Collateral
Manager's commercially reasonable business judgment, such interest remains
unpaid for any reason other than due to the related Obligor's ability to repay
such amounts and (2) such Deferrable Obligation has a Moody's Default
Probability Rating of "B3" or better (and, for the avoidance of doubt, such
interest shall constitute Principal Proceeds upon receipt thereof by the
Issuer), (iv) the Principal Balance of a Deferring Obligation shall not include
any deferred or capitalized interest referred to in clause (iii)(y) above and
(v) the Principal Balance of a Zero-Coupon Security which, by its terms, does
not at any time pay cash interest thereon shall be deemed to be the accreted
value of such Collateral Obligation (other than a Defaulted Obligation) or
Eligible Investment as of the date of determination; provided further, that for
the purposes of determining any of the Coverage Tests or any of the Portfolio
Quality Tests, the Principal Balance of any Pledged Obligation or any other
security or debt obligation that forms part of the Assets, in each case, that
matures after the shortest Stated Maturity of any of the Secured Notes still
Outstanding shall be deemed to be zero.

 

"Principal Collection Subaccount": The meaning specified in Section 10.2(a).

 

-53-

--------------------------------------------------------------------------------

 

 

"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 that 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;" provided, further, that once any
Principal Financed Accrued Interest is actually received by the Issuer, it shall
no longer constitute Principal Financed Accrued Interest hereunder.

 

"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 and any other amounts that have been
designated as Principal Proceeds pursuant to the terms of this Indenture;
provided that for the avoidance of doubt, under no circumstances shall Principal
Proceeds include the Excepted Property.

 

"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.

 

"Priority Hedge Termination Event": The occurrence of (a) the Issuer's failure
to make required payments or deliveries pursuant to a Hedge Agreement with
respect to which the Issuer is the sole Defaulting Party (as defined in the
relevant Hedge Agreement), (b) the occurrence of certain events of bankruptcy,
dissolution or insolvency with respect to the Issuer with respect to which the
Issuer is the sole Defaulting Party (as defined in the relevant Hedge
Agreement), (c) the liquidation of the Assets due to an Event of Default under
this Indenture, (d) a change in law after the Closing Date which makes it
unlawful for either the Issuer or a Hedge Counterparty to perform its
obligations under a Hedge Agreement or (e) any termination of a Hedge Agreement
as a result of actions taken by the Trustee in response to a reduction in the
Collateral Principal Amount with respect to which the Issuer is the sole
Defaulting Party or Affected Party (as defined in the relevant Hedge Agreement).

 

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

 

"Proceeding": Any suit in equity, action at law or other judicial or
non-judicial enforcement or administrative proceeding.

 

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

 

"Purchase Agreement": The agreement dated as of July 26, 2018 by and among the
Co-Issuers and the Initial Purchaser relating to the initial purchase of the
Notes purchased by the Initial Purchaser, as amended from time to time.

 

"QEF": The meaning specified in Section 7.16(b).

 

"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.

 

-54-

--------------------------------------------------------------------------------

 

 

"Qualified Institutional Buyer": The meaning specified in Rule 144A under the
Securities Act.

 

"Qualified Purchaser": The meaning specified in Section 2(a)(51) of the
Investment Company Act and Rule 2a51-2 under the Investment Company Act.

 

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

 

"Ramp-Up Period": The period commencing on the Closing Date and ending upon the
earlier of (a) 30 days prior to the Determination Date relating to the second
Payment Date and (b) any date selected by the Collateral Manager in its sole
discretion on or after which the Aggregate Ramp-Up Par Condition has been
satisfied.

 

"Ramp-Up Period Accountants' Report": The meaning specified in Section 7.17(b).

 

"Ramp-Up Period Issuer Certificate": The meaning specified in Section 7.17(b).

 

"Ramp-Up Period Report": The meaning specified in Section 7.17(b).

 

"Ramp-Up Period Special Redemption": The meaning specified in Section 9.7.

 

"Rating Agency": Each of Moody's and Fitch, only for so long as Notes rated by
such entity on the Closing Date are Outstanding and rated by such entity.

 

"Record Date": As to any applicable Payment Date, the 15th day (whether or not a
Business Day) prior to such Payment Date.

 

"Recovery Rate Modifier Matrix" means the following chart, used to determine
which of the "row/column combinations" (or the linear interpolation between two
adjacent rows and/or two adjacent columns, as applicable) are applicable for
purposes of determining the Moody's Weighted Average Recovery Adjustment (for
the avoidance of doubt, the option chosen or interpolated by the Collateral
Manager with respect to the Recovery Rate Modifier Matrix will be consistent
with the option chosen or interpolated by the Collateral Manager with respect to
the Asset Quality Matrix):

 

Minimum
Weighted

Minimum Diversity Score

Spread

Modifier

Average
Spread

40

45

50

55

60

65

70

75

80

85

90

95

100

 

2.10%

49

48

47

43

44

45

45

45

43

45

45

45

44

0.0500%

2.20%

44

43

46

45

47

49

49

46

46

47

47

47

49

0.0500%

2.30%

47

47

53

51

50

52

51

52

49

50

50

50

48

0.0400%

2.40%

52

54

48

53

51

49

48

53

53

52

52

53

50

0.0500%

2.50%

51

56

53

55

57

58

60

60

60

57

53

56

56

0.0500%

2.60%

54

52

54

56

54

55

55

52

55

58

56

54

54

0.0550%

2.70%

53

54

54

54

59

61

61

61

61

60

57

57

59

0.0600%

2.80%

54

56

54

56

55

56

59

60

60

60

60

61

61

0.0625%

2.90%

55

54

56

55

57

56

56

58

61

61

62

62

61

0.0700%

3.00%

56

56

55

58

56

57

57

57

58

60

62

63

63

0.0750%

3.10%

55

57

57

56

57

57

57

57

58

58

59

61

62

0.0825%

3.20%

57

56

58

59

57

58

58

58

58

59

59

59

59

0.0875%

 

-55-

--------------------------------------------------------------------------------

 

 

3.30%

57

58

57

58

59

58

59

59

59

59

59

59

60

0.0950%

3.40%

57

59

59

58

59

59

59

60

60

60

60

60

60

0.0975%

3.50%

58

56

58

60

60

60

60

60

60

61

60

60

60

0.1100%

3.60%

59

59

58

59

61

61

61

61

61

60

60

61

61

0.1200%

3.70%

59

61

61

61

61

61

61

61

61

61

61

61

61

0.1275%

3.80%

59

59

61

62

62

62

61

61

62

61

61

61

61

0.1300%

3.90%

61

61

61

61

61

62

62

62

62

62

62

62

62

0.1400%

4.00%

61

62

62

62

62

62

62

62

62

62

62

62

62

0.1450%

4.10%

61

62

62

62

63

62

62

62

62

62

62

62

62

0.1500%

4.20%

62

62

62

62

63

63

63

63

63

63

62

62

62

0.1500%

4.30%

62

62

63

63

63

63

63

63

62

62

62

62

62

0.1500%

4.40%

62

62

63

63

64

63

63

63

63

63

63

63

63

0.1500%

4.50%

62

61

63

63

64

65

66

65

65

65

65

64

65

0.1500%

4.60%

62

63

63

63

64

64

65

65

65

65

65

65

65

0.1500%

4.70%

62

63

63

62

65

64

64

64

65

65

65

65

65

0.1500%

4.80%

64

63

63

63

64

64

64

64

64

64

65

65

66

0.1500%

4.90%

63

63

63

64

64

64

64

65

63

64

64

65

66

0.1500%

5.00%

63

63

63

64

64

65

65

64

64

64

64

64

65

0.1500%

5.10%

63

63

64

64

65

65

64

64

65

65

65

65

65

0.1500%

5.20%

64

63

64

64

65

65

64

65

65

66

65

66

66

0.1500%

5.30%

64

64

64

64

65

65

65

66

66

66

67

66

67

0.1500%

5.40%

65

66

65

66

65

65

66

66

67

67

67

67

68

0.1500%

5.50%

65

66

66

66

65

66

66

67

67

68

68

68

68

0.1700%

5.60%

65

66

66

66

66

67

67

67

68

68

68

68

68

0.1700%

5.70%

66

65

66

66

67

68

68

69

68

69

68

68

68

0.2000%

5.80%

67

66

66

67

67

68

68

68

68

68

69

68

68

0.2000%

5.90%

67

66

65

67

67

67

68

68

68

67

67

67

66

0.2000%

6.00%

65

66

66

66

67

67

67

68

67

67

67

67

67

0.2000%

 

Moody's Recovery Rate Modifier

     

 

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

 

"Redemption by Refinancing": The meaning specified in Section 9.2(a).

 

"Redemption Price": When used with respect to (i) any Class of Secured Notes (a)
an amount equal to 100% (or such lesser amount as agreed in writing by the
applicable Holder) of the Aggregate Outstanding Amount thereof plus (b) accrued
and unpaid interest thereon (including, but not limited to, Deferred Interest),
to the Redemption Date, and (ii) any Subordinated Note, its proportional share
allocated in accordance with the Priority of Payments (based on the Aggregate
Outstanding Amount of such Subordinated Notes) of the amount of the proceeds of
the Assets (including proceeds created when the lien of this Indenture is
released) remaining after giving effect to the redemption of the Secured Notes
in full and payment in full of (and/or creation of a reserve for) all expenses
of the Co-Issuers; provided that solely with respect to a Tax Redemption or
Optional Redemption of the Secured Notes in whole, Holders of 100% of the
Aggregate Outstanding Amount of any Class of Secured Notes may elect, by written
notice to the Issuer, the Trustee, the Paying Agent and the Collateral Manager,
to receive less than 100% of the Redemption Price that would otherwise be
payable to the Holders of such Class of Secured Notes, in which case such
reduced price shall be the "Redemption Price" for such Note.

 

"Reference Banks": The meaning specified in Exhibit C.

 

-56-

--------------------------------------------------------------------------------

 

 

"Refinancing": The meaning specified in Section 9.2(a).

 

"Refinancing Proceeds": With respect to any Refinancing, the Cash proceeds
received by the Issuer therefrom.

 

"Register" and "Registrar": The respective meanings specified in Section 2.6(a).

 

"Registered": In registered form for U.S. federal income tax purposes and issued
after July 18, 1984.

 

"Regulation D": Regulation D, as amended, under the Securities Act.

 

"Regulation S": Regulation S, as amended, under the Securities Act.

 

"Regulation S Global Note": Collectively, the Regulation S Global Secured Notes
and the Regulation S Global Subordinated Notes.

 

"Regulation S Global Secured Note": The meaning specified in Section 2.2(b)(i).

 

"Regulation S Global Subordinated Note": The meaning specified in
Section 2.2(b)(i).

 

"Reinvestment Diversion Test": A test that shall be satisfied as of any
Measurement Date during the Reinvestment Period (but on or after the last day of
the Ramp-Up Period) on which Class E Notes remain outstanding, if the Par Value
Ratio with respect to the Class E Notes as of such Measurement Date is at least
equal to 105.70%.

 

"Reinvestment Period": The period from and including the Closing Date to and
including the earliest of (i) the Payment Date in July 2022, (ii) the date of
the acceleration of the Maturity of any Class of Secured Notes pursuant to
Section 5.2 (subject to reinstatement upon the rescission, if any, of the
related declaration of acceleration), and (iii) the date on which the Collateral
Manager reasonably determines and notifies the Issuer, the Rating Agencies, the
Trustee and the Collateral Administrator that it can no longer reinvest in
additional Collateral Obligations in accordance with Section 12.2 or the
Collateral Management Agreement; provided that in the case of clause (iii), (a)
the Collateral Manager notifies the Issuer, the Trustee (who shall notify the
Holders of Notes) and the Collateral Administrator thereof in writing at least
one Business Day prior to such date and (b) if the Collateral Manager notifies
the Issuer, the Trustee (who shall notify the holders of Notes) and the
Collateral Administrator thereof in writing that it is withdrawing such notice,
then the Reinvestment Period shall be reinstated within one Business Day after
the date of such notification. The Collateral Manager shall provide Fitch with
notice of any such reinstatement of the Reinvestment Period.

 

Once terminated, the Reinvestment Period cannot be reinstated without the
consent of the Collateral Manager and, in the case of termination under clause
(ii), without the acceleration having been rescinded, no other events that would
terminate the Reinvestment Period having occurred and continuing to occur and,
if the default giving rise to such termination has occurred as a result of an
Event of Default under clause (f) or (g) of the definition thereof, a Majority
of the Controlling Class having consented to such reinstatement.

 

-57-

--------------------------------------------------------------------------------

 

 

"Reinvestment Period Settlement Condition": The meaning specified in
Section 12.2(f).

 

"Reinvestment Period Special Redemption": The meaning specified in Section 9.7.

 

"Reinvestment Target Par Balance": The Aggregate Ramp-Up Par Amount minus (A)
any reduction in the Aggregate Outstanding Amount of the Notes through the
payment of Principal Proceeds or Interest Proceeds plus (B) the aggregate amount
of Principal Proceeds that result from the issuance of any Additional Notes
(after giving effect to such issuance of any Additional Notes).

 

"Related Obligation": An obligation issued by the Collateral Manager, any of its
Affiliates that are collateralized debt obligation funds or any other Person
that is a collateralized debt obligation fund whose investments are primarily
managed by the Collateral Manager or any of its Affiliates.

 

"Replacement Notes": The meaning specified in Section 9.2(a) hereof.

 

"Report Date": The meaning specified in Section 9.8(a).

 

"Requesting Party": The meaning specified in Section 14.17.

 

"Required Coverage Ratio": With respect to a specified Class of Secured Notes
and the related Interest Coverage Test or Par Value Ratio Test as the case may
be, as of any date of determination, the applicable percentage indicated below
opposite such specified Class:

 

Class

 

Required Par Value Ratio

A/B

 

121.58%

C

 

114.70%

D

 

108.94%

E

 

104.70%

 

Class

 

Required Interest Coverage Ratio

A/B

 

120.00%

C

 

115.00%

D

 

110.00%

E

 

105.00%

 

"Required Hedge Counterparty Rating": With respect to any Hedge Counterparty (or
its guarantor under a guarantee satisfying the then-current Rating Agency
criteria with respect to guarantees), the ratings required by the criteria of
each Rating Agency in effect at the time of execution of the related Hedge
Agreement as determined by the Collateral Manager (except to the extent that
such Rating Agency indicates in writing that any such criteria need not be
satisfied with respect to such Hedge Counterparty).

 

-58-

--------------------------------------------------------------------------------

 

 

"Reset Amendment": The meaning specified in Section 8.2(a).

 

"Restricted Trading Period": Each day during which (1)(A) the Fitch rating of
the Class A Notes or the Moody's rating of the Class A Notes or Class B Notes is
withdrawn (and not reinstated) or is one or more sub-categories below its rating
on the Closing Date or (B) the Moody's rating of the Class C Notes, Class D
Notes or Class E Notes is withdrawn (and not reinstated) or is two or more
sub-categories below its rating on the Closing Date and (2) after giving effect
to any sale or purchase of the relevant Collateral Obligation, (A) as a result
of the use of "Restricted Trading Period" pursuant to Section 12.2(b), any of
the Par Value Ratio Tests will not be satisfied and (B) as a result of the use
of "Restricted Trading Period" pursuant to any other provision, the Adjusted
Collateral Principal Amount of Collateral Obligations (excluding the Collateral
Obligations being sold) and Eligible Investments constituting Principal Proceeds
(including, without duplication, the anticipated net Sale Proceeds of such sale)
will be less than the Reinvestment Target Par Balance; provided that such period
will not be a Restricted Trading Period upon the direction of a Majority of the
Controlling Class, which direction by the Majority of the Controlling Class
shall remain in effect until the earlier of (i) a subsequent direction by a
Majority of the Controlling Class to declare the beginning of a Restricted
Trading Period or (ii) a further downgrade or withdrawal of any Class of Notes
that notwithstanding such direction would cause the conditions set forth in
clauses (1)(A) or (1)(B) to be true. No Restricted Trading Period shall restrict
any sale of a Collateral Obligation entered into by the Issuer at the time when
a Restricted Trading Period is not in effect, regardless of whether such sale
has settled.

 

"Reuters Screen": The rates for deposits in dollars which appear on the Reuters
Screen LIBOR 01 Page (or such other page that may replace that page on such
service for the purpose of displaying comparable rates) on the Bloomberg
Financial Markets Commodities News as of 11:00 a.m., London time, on the
Interest Determination Date.

 

"Revolving Collateral Obligation": Any Asset (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
shall 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 any Class of Notes for
purposes of enabling the Collateral Manager to comply with the U.S. Risk
Retention Rules as determined by the Collateral Manager in its commercially
reasonable judgment (based on the written advice of a nationally recognized
counsel experienced in such matters).

 

"Rule 17g-5": The meaning specified in Section 14.16.

 

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

 

"Rule 144A Global Notes": Collectively, the Rule 144A Global Secured Notes and
the Rule 144A Global Subordinated Notes.

 

"Rule 144A Global Secured Note": The meaning specified in Section 2.2(b)(ii).

 

-59-

--------------------------------------------------------------------------------

 

 

"Rule 144A Global Subordinated Note": The meaning specified in
Section 2.2(b)(ii).

 

"Rule 144A Information": The meaning specified in Section 7.14.

 

"S&P": Standard & Poor's Global Ratings, an S&P Global business, and any
successor thereto.

 

"S&P Industry Classification": The industry classifications set forth in
Schedule 2, as such industry classifications shall be updated at the option of
the Collateral Manager (with notice to the Trustee and the Collateral
Administrator) if S&P publishes revised industry classifications.

 

"S&P Rating": With respect to any Collateral Obligation, as of any date of
determination, the rating determined in accordance with the following
methodology:

 

(a)     with respect to a Collateral Obligation that is not a DIP Collateral
Obligation (i) 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 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),
(ii) if there is no issuer credit rating of the issuer by S&P but (A) if 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; (B) if 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; and (C) if 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 if such rating is higher than "BB+," and shall be
two subcategories above such rating if such rating is "BB+" or lower or (iii) if
the above clauses are not applicable and such Collateral Obligation has a
Moody's rating, then the S&P Rating of such Collateral Obligation shall be the
S&P equivalent of the rating assigned by Moody's;

 

(b)     with respect to any Collateral Obligation that is a DIP Collateral
Obligation, the S&P Rating thereof shall be the credit rating assigned to such
issue by S&P (provided, that if any such Collateral Obligation that is a DIP
Collateral Obligation is newly issued and the Collateral Manager expects an S&P
credit rating within 90 days, the S&P Rating of such Collateral Obligation shall
be "B-" until such credit rating is obtained from S&P);

 

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 shall be treated as being one subcategory
above such assigned rating, (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
shall be treated as being one subcategory below such assigned rating and (z) any
reference to the S&P rating in this definition shall mean the public S&P rating
and shall not include any private or confidential S&P rating unless (1) the
Obligor and any other relevant party has provided written consent to S&P for the
use of such rating; and (2) such rating is subject to continuous monitoring by
S&P.

 

-60-

--------------------------------------------------------------------------------

 

 

"Sale": The meaning specified in Section 5.17.

 

"Sale Proceeds": All proceeds (excluding accrued interest, if any) received with
respect to Assets as a result of sales of such Assets less any reasonable
expenses incurred by the Collateral Manager, the Collateral Administrator or the
Trustee (other than amounts payable as Administrative Expenses) in connection
with such sales.

 

"Scheduled Distribution": With respect to any Pledged Obligation, for each Due
Date, the scheduled payment of principal and/or interest due on such Due Date
with respect to such Pledged Obligation, determined in accordance with the
assumptions specified in Section 1.3.

 

"Second Lien Loan": (A) Any assignment of or Participation Interest in or other
interest in a loan that (i) is not (and that by its terms is not permitted to
become) subordinate in right of payment to any other obligation of the Obligor
of the loan other than a Senior Secured Loan with respect to the liquidation of
such Obligor or the collateral for such loan and other than with respect to
liquidation, trade claims, capitalized leases or similar obligations, and (ii)
is secured by a valid second priority perfected security interest or lien to or
on specified collateral securing the Obligor's obligations under the loan, which
security interest or lien is not subordinate to the security interest or lien
securing any other debt for borrowed money other than a Senior Secured Loan on
such specified collateral (subject to customary exemptions for permitted liens,
including, without limitation, any tax liens) or (B) any First Lien Last Out
Loan.

 

"Section 13 Banking Entity": An entity that (i) is defined as a "banking entity"
under the Volcker Rule regulations (Section __.2(c)), (ii) provides written
certification thereof to the Issuer and the Trustee, and (iii) identifies the
Class or Classes of Notes held by such entity and the outstanding principal
amount thereof.

 

"Secured Loan Obligation": Any Senior Secured Loan or Second Lien Loan.

 

"Secured Notes": The Class A Notes, the Class B Notes, the Class C Notes, the
Class D Notes and the Class E Notes.

 

"Secured Parties": The meaning specified in the Granting Clause.

 

"Securities Account Control Agreement": An agreement dated as of the Closing
Date among the Issuer, the Trustee and the Bank, as securities intermediary, as
amended from time to time.

 

"Securities Act": The United States Securities Act of 1933, as amended from time
to time.

 

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

 

-61-

--------------------------------------------------------------------------------

 

 

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

 

"Selling Institution": The entity obligated to make payments to the Issuer under
the terms of a Participation Interest.

 

"Senior Management Fee": The fee payable to the Collateral Manager in arrears on
each Payment Date (prorated for the related Interest Accrual Period), including
any Redemption Date, pursuant to Section 8(a) of the Collateral Management
Agreement and Section 11.1, in an amount equal to 0.15% per annum (calculated on
the basis of a 360-day year and the actual number of days elapsed during the
related Collection Period) of the Maximum Investment Amount at the beginning of
the Collection Period relating to such Payment Date.

 

"Senior Secured Loan": Any assignment of, Participation Interest in or other
interest in a loan that (i) is secured by a first priority perfected security
interest or lien on specified collateral (subject to customary exemptions for
permitted liens, including, without limitation, any tax liens), (ii) has the
most senior pre-petition priority (including pari passu with other obligations
of the Obligor) in any bankruptcy, reorganization, arrangement, insolvency,
moratorium or liquidation proceedings, (iii) the value of the collateral
securing the loan at the time of its purchase by the Issuer together with the
attributes of the Obligor (including, without limitation, its general financial
condition, ability to generate cash flow available for debt service and other
demands for such cash flow) is adequate (in the commercially reasonable judgment
of the Collateral Manager) to repay or refinance the loan in accordance with the
terms of its Underlying Instruments and to repay all other loans of equal
seniority secured by a first priority perfected security interest or lien on the
same collateral and (iv) by its terms is not permitted to become subordinate in
right of payment to any other obligation of the Obligor thereof (other than with
respect to trade claims, capitalized leases or similar obligations).

 

"Senior Secured Note": Any assignment of or Participation Interest in or other
interest in a senior secured note issued pursuant to an indenture or equivalent
document by a corporation, partnership, limited liability company, trust or
other person that is secured by a first or second priority perfected security
interest or lien in or on specified collateral securing the issuer's obligations
under such note.

 

"Senior Subordinated Note Amount": With respect to the Senior Subordinated
Notes, the amount accrued during the related Interest Accrual Period at a per
annum rate of the Senior Subordinated Note Rate on the Outstanding Senior
Subordinated Notes as of the first day of such Interest Accrual Period.

 

"Senior Subordinated Note Rate": LIBOR plus 6.90%.

 

"Senior Subordinated Notes": The senior subordinated floating rate notes issued
pursuant to this Indenture and having the characteristics specified in
Section 2.3.

 

"Senior Unsecured Loan": Any assignment of or Participation Interest in or other
interest in an Unsecured Loan that is not subordinated to any other unsecured
indebtedness of the Obligor (other than with respect to liquidation, trade
claims, capitalized leases or similar obligations).

 

-62-

--------------------------------------------------------------------------------

 

 

"Sequential Note Redemption": 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 principal of (including any defaulted interest on)
the Class A Notes until such amount has been paid in full (or, with respect to
any Class A Note, has been paid in such lesser amount as the Holder of such
Class A Note elects to receive);

 

(ii)      to the payment of principal of (including any defaulted interest) the
Class B Notes until such amount has been paid in full (or, with respect to any
Class B Note, has been paid in such lesser amount as the Holder of such Class B
Note elects to receive);

 

(iii)     to the payment of accrued and unpaid interest (including any defaulted
interest) and any Deferred Interest on the Class C Notes until such amounts have
been paid in full;

 

(iv)     to the payment of principal of the Class C Notes until such amount has
been paid in full (or, with respect to any Class C Note, has been paid in such
lesser amount as the Holder of such Class C Note elects to receive);

 

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

 

(vi)      to the payment of principal of the Class D Notes until such amount has
been paid in full (or, with respect to any Class D Note, has been paid in such
lesser amount as the Holder of such Class D Note elects to receive);

 

(vii)     to the payment of accrued and unpaid interest (including any defaulted
interest) and any Deferred Interest on the Class E Notes until such amounts have
been paid in full; and

 

(viii)    to the payment of principal of the Class E Notes until such amount has
been paid in full (or, with respect to any Class E Note, has been paid in such
lesser amount as the Holder of such Class E Note elects to receive).

 

"Similar Law": Any state, local, non-U.S. or other law, regulation or other
legal restriction that could cause the underlying assets of the Issuer to be
treated as assets of the investor by virtue of its interest in such Notes and
thereby subject the Issuer or the Collateral Manager (or other persons
responsible for the investment and operation of the Issuer's assets) to any
Other Plan Law.

 

"Small Obligor Loan": Any obligation made pursuant to Underlying Instruments
governing the issuance of indebtedness having an aggregate principal amount
(whether drawn or undrawn) of less than U.S. $200,000,000.

 

"Special Redemption": The meaning specified in Section 9.7.

 

-63-

--------------------------------------------------------------------------------

 

 

"Special Redemption Amount": The meaning specified in Section 9.7.

 

"Special Redemption Date": The meaning specified in Section 9.7.

 

"Specified Amendment": With respect to any Collateral Obligation that is the
subject of a rating estimate or is a private or confidential rating by Moody's,
any waiver, modification, amendment or variance that 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) 20% and (y) $250,000;

 

(B)     postpones any Scheduled Distribution by more than two payment periods or
eliminates a Scheduled Distribution; or

 

(C)     causes the Weighted Average Life of the applicable Collateral Obligation
to increase by more than 10%;

 

(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);

 

(iii)    extend the stated maturity date of such Collateral Obligation by more
than 24 months; provided that (x) any such extension shall be deemed not to have
been made until the Business Day following the original stated maturity date of
such Collateral Obligation and (y) such extension shall not cause the Weighted
Average Life of such Collateral Obligation to increase by more than 25%;

 

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

 

(v)      reduce the principal amount thereof; or

 

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

 

"STAMP": The meaning specified in Section 2.6(a).

 

"Standby Directed Investment": The meaning specified in Section 10.5.

 

"Stated Maturity": With respect to any security, the maturity date specified in
such security or applicable Underlying Instrument; and with respect to the Notes
of any Class, the date specified as such in Section 2.3.

 

-64-

--------------------------------------------------------------------------------

 

 

"Step-Down Obligation": Any Collateral Obligation (other than a LIBOR Floor
Obligation) the Underlying Instruments of which contractually mandate decreases
in coupon payments or spread over time (in each case other than decreases that
are conditioned upon an improvement in the creditworthiness of the Obligor or
changes in a pricing grid or based on improvements in financial ratios or other
similar coupon or spread-reset features); provided, that a Collateral Obligation
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.

 

"Step-Up Obligation": Any Collateral Obligation which by the terms of the
related Underlying Instruments provides for an increase, in the case of a
Collateral Obligation which bears interest at a fixed rate, in the per annum
interest rate on such Collateral Obligation or, in the case of a Collateral
Obligation which bears interest at a floating rate, in the spread over that
applicable index or benchmark rate, solely as a function of the passage of time;
provided, that a Collateral Obligation 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 obligation of a special purpose vehicle
secured directly by, referenced to, or representing ownership of, a pool of
receivables or other assets, including collateralized debt obligations and
mortgage-backed securities.

 

"Subordinated Management Fee": The fee payable to the Collateral Manager in
arrears on each Payment Date (prorated for the related Interest Accrual Period),
including any Redemption Date, pursuant to Section 8(a) of the Collateral
Management Agreement and Section 11.1, in an amount equal to 0.35% per annum
(calculated on the basis of a 360-day year and the actual number of days elapsed
during the related Collection Period) of the Maximum Investment Amount at the
beginning of the Collection Period relating to such Payment Date.

 

"Subordinated Management Fee Interest": Interest on any accrued and unpaid
Subordinated Management Fee (other than any Deferred Subordinated Management
Fee), which shall accrue at the rate of three-month LIBOR in effect at such
periods plus 3.00% for the period from (and including) the date on which such
Subordinated Management Fee shall be payable through (but excluding) the date of
payment thereof (calculated on the basis of a 360 day year and the actual number
of days elapsed).

 

"Subordinated Notes": Collectively, the Senior Subordinated Notes and the Junior
Subordinated Notes.

 

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

 

"Supermajority": With respect to any Class of Notes, the Holders of at least
66⅔% of the Aggregate Outstanding Amount of the Notes of such Class.

 

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

 

"Tax": Any tax, levy, impost, duty, charge, assessment, deduction, withholding
or fee of any nature (including interest, penalties and additions thereto) that
is imposed by any government or other taxing authority other than a stamp,
registration, documentation or similar tax.

 

-65-

--------------------------------------------------------------------------------

 

 

"Tax Advantaged Jurisdiction": The Bahamas, Bermuda, the British Virgin Islands,
the Cayman Islands, the Channel Islands, the Netherlands Antilles or Singapore
and any other tax advantaged jurisdiction that satisfies the Moody's Rating
Condition.

 

"Tax Event": (i) Any portion of any payment due from any Obligor under any
Collateral Obligation becoming subject to the imposition of U.S. or foreign
withholding tax (other than a withholding tax on letter of credit fees or
commitment fees, to the extent that such withholding tax does not exceed 30% of
the amount of such fees), which withholding tax is not compensated for by a
"gross-up" provision under the terms of such Collateral Obligation, (ii) any
jurisdiction's imposing net income, profits or similar tax on the Issuer, (iii)
any portion of any payment due under a Hedge Agreement by the Issuer becoming
subject to the imposition of U.S. or foreign withholding tax, which withholding
tax is compensated for by a "gross-up" provision under the terms of the Hedge
Agreement or (iv) any portion of any payment due under a Hedge Agreement by a
Hedge Counterparty becoming subject to the imposition of U.S. or foreign
withholding tax, which withholding tax is not compensated for by a "gross-up"
provision under the terms of the Hedge Agreement; provided that the total amount
of (A) the tax or taxes imposed on the Issuer as described in clause (ii) of
this definition, (B) the total amount withheld from payments to the Issuer which
is not compensated for by a "gross-up" provision as described in clauses (i) and
(iv) of this definition and (C) the total amount of any tax "gross-up" payments
that are required to be made by the Issuer as described in clause (iii) of this
definition are determined to be in excess of either (1) 5.0% of the aggregate
interest due and payable on the Collateral Obligations during the related
Collection Period or (2) more than $1,000,000 during the related Collection
Period.

 

"Tax Guidelines": The provisions set forth in Annex A to the Collateral
Management Agreement.

 

"Trading Plan": The meaning specified in Section 12.2(d).

 

"Trading Plan Period": The meaning specified in Section 12.2(d).

 

"Transaction Documents": This Indenture, the Securities Account Control
Agreement, the Collateral Management Agreement, the Collateral Administration
Agreement, the Purchase Agreement and the Administration Agreement.

 

"Transaction Parties": The meaning specified in Section 2.6(c)(iv).

 

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

 

"Trust Officer": When used with respect to the Trustee or the Bank in any other
capacity hereunder, any officer within the Corporate Trust Office (or any
successor group of the Trustee) including any director, vice president,
assistant vice president, associate or other officer of the Trustee customarily
performing functions similar to those performed by the persons who at the time
shall be such officers, respectively, or 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 Indenture.

 

-66-

--------------------------------------------------------------------------------

 

 

"Trustee": As defined in the first sentence of this Indenture and any successor
thereto.

 

"UCC": The Uniform Commercial Code as in effect in the State of New York or, if
different, the political subdivision of the United States that governs the
perfection of the relevant security interest as amended from time to time.

 

"Uncertificated Security": The meaning specified in Section 8-102(a)(18) of the
UCC.

 

"Underlying Instrument": The indenture or other agreement pursuant to which a
Pledged Obligation has been issued or created and each other agreement that
governs the terms of or secures the obligations represented by such Pledged
Obligation or of which the holders of such Pledged Obligation are the
beneficiaries.

 

"Unfunded Exposure Account": The trust account established pursuant to
Section 10.3(f).

 

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

 

"Unscheduled Principal Payments": All Principal Proceeds received as a result of
prepayments, redemptions, exchange offers, tender offers or other unscheduled
payments (but not sales) with respect to a Collateral Obligation (including
unscheduled mandatory prepayments); provided that, the term "Unscheduled
Principal Payments" shall also include any amounts transferred from the Unfunded
Exposure Account to the Principal Collection Subaccount for treatment as
Unscheduled Principal Payments upon the unscheduled termination or reduction of
the Issuer's funding commitment with respect to a Delayed Drawdown Collateral
Obligation or a Revolving Collateral Obligation.

 

"Unsecured Loan": Any assignment of or other interest in an unsecured loan that
is not subordinated to any other unsecured indebtedness of the Obligor.

 

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

 

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

 

"U.S. Person": The meaning specified in Section 7701(a)(30) of the Code.

 

"U.S. person": The meaning specified in Regulation S.

 

"U.S. Risk Retention Rules": The final rules implementing the credit risk
retention requirements of Section 941 of the Dodd-Frank Act.

 

-67-

--------------------------------------------------------------------------------

 

 

"Volcker Rule": Section 13 of the U.S. Bank Holding Company Act of 1956, as
amended, and the applicable rules and regulations promulgated thereunder.

 

"Weighted Average Fixed Coupon": As of any Measurement Date, an amount equal to
the number, expressed as a percentage, obtained by dividing:

 

(a)     in the case of each fixed rate Collateral Obligation (excluding any
Deferrable Obligation to the extent of any non-cash interest), the product of
(1) the stated interest coupon on such Collateral Obligation and (2) the
Principal Balance of such Collateral Obligation (excluding the unfunded portion
of any Delayed Drawdown Collateral Obligation or Revolving Collateral
Obligation); by

 

(b)     an amount equal to the lesser of (i) the product of (A) the Aggregate
Ramp-Up Par Amount and (B) a fraction, the numerator of which is equal to the
Aggregate Principal Balance of fixed rate Collateral Obligations and the
denominator of which is equal to the Aggregate Principal Balance of all
Collateral Obligations as of such Measurement Date (in each case excluding (1)
any Deferrable 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 is a fixed rate Collateral Obligation) and (ii) the
Aggregate Principal Balance of the fixed rate Collateral Obligations as of such
Measurement Date (excluding (1) any Deferrable 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 is a fixed rate
Collateral Obligation);

 

provided that in the case of each of the foregoing clauses (a) and (b), in
calculating the Weighted Average Fixed Coupon in respect of (i) any Step-Down
Obligation, the coupon of such Collateral Obligation shall be the lowest
permissible coupon pursuant to the Underlying Instruments of the Obligor of such
Step-Down Obligation and (ii) any Letter of Credit, the coupon of such
Collateral Obligation shall not include any amounts that the Issuer or the
Collateral Manager have actual knowledge are being withheld by the related agent
bank or will be deposited into a Letter of Credit Reserve Account.

 

"Weighted Average Floating Spread": As of any Measurement Date, a fraction
(expressed as a percentage) obtained by (i)(A) multiplying the Principal Balance
of each floating rate Collateral Obligation (including the unfunded portions of
all Revolving Collateral Obligations and Delayed Drawdown Collateral
Obligations) held by the Issuer as of such Measurement Date by its Effective
Spread and (B) multiplying (1) the amount equal to LIBOR applicable to the
Secured Notes during the Interest Accrual Period in which such Measurement Date
occurs by (2) the excess (if any) of the Aggregate Principal Balance (including
for this purpose, for any Collateral Obligation that is neither a Defaulted
Obligation nor a Deferring Obligation, any capitalized interest) of the
Collateral Obligations as of such Measurement Date minus the Reinvestment Target
Par Balance, (ii) summing the amounts determined pursuant to clause (i), and
(iii) dividing the sum determined pursuant to clause (ii) by the Aggregate
Principal Balance of all floating rate Collateral Obligations plus the unfunded
portions of all Revolving Collateral Obligations and Delayed Drawdown Collateral
Obligations held by the Issuer as of such Measurement Date; provided that
Defaulted Obligations shall not be included in the calculation of the Weighted
Average Floating Spread; provided, further, that in calculating the Weighted
Average Floating Spread in respect of any Step Down Obligation, the Effective
Spread of such Collateral Obligation shall be the lowest permissible Effective
Spread pursuant to the Underlying Instruments of the Obligor of such Step Down
Obligation.

 

-68-

--------------------------------------------------------------------------------

 

 

"Weighted Average Life": As of any Measurement Date, with respect to each
Collateral Obligation (other than any 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
(excluding any Defaulted Obligations).

 

"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 the number of years (rounded to the nearest one hundredth thereof) during
the period from such date of determination to July 26, 2026.

 

"Zero Coupon Security": Any Collateral Obligation that at the time of purchase
does not by its terms provide for the payment of cash interest; provided that
if, after such purchase such Collateral Obligation provides for the payment of
cash interest, it will cease to be a Zero-Coupon Security.

 

Section 1.2     Rules of Construction. Except as otherwise specified herein or
as the context may otherwise require, the definitions of the terms defined in
Section 1.1 are equally applicable both to the singular and plural forms of such
terms and to the masculine, feminine and neuter genders of such terms. The word
"including" shall mean "including without limitation." 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. 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.

 

Section 1.3     Assumptions as to Pledged Obligations. Unless otherwise
specified, the assumptions described below shall be applied in connection with
all calculations required to be made pursuant to this Indenture with respect to
Scheduled Distributions on any Pledged Obligation, 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 Pledged Obligations and on any other amounts
that may be received for deposit in the Collection Account.

 

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

 

-69-

--------------------------------------------------------------------------------

 

 

(b)     For purposes of calculating the Coverage Tests and the Reinvestment
Diversion Test, except as otherwise specified in the Coverage Tests and the
Reinvestment Diversion Test, as applicable, such calculations shall not include
scheduled interest and principal payments on Defaulted Obligations unless or
until such payments are actually made.

 

(c)     For each Collection Period and as of any date of determination, the
Scheduled Distribution on any Pledged Obligation (other than a Defaulted
Obligation to the extent required to be treated as Principal Proceeds, which
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 Pledged Obligation (including the proceeds
of the sale of such Pledged Obligation 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 paid as scheduled, shall be available in the Collection
Account at the end of the Collection Period and (ii) any such amounts received
by the Issuer in prior Collection Periods that were not disbursed on a previous
Payment Date.

 

(d)     Each Scheduled Distribution receivable with respect to a Pledged
Obligation 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 of principal of or interest on the
Notes or other amounts payable pursuant to this Indenture. For the avoidance of
doubt, all amounts calculated pursuant to this Section 1.3(d) are estimates and
may differ from the actual amounts available to make distributions hereunder,
and no party shall have any obligation to make any payment hereunder due to the
assumed amounts calculated under this Section 1.3(d) being greater than the
actual amounts available. For purposes of the applicable determinations required
by Section 10.6(b)(iv), Article XII and the definition of "Interest Coverage
Ratio," the expected interest on Secured Notes and floating rate Collateral
Obligations shall 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 the purposes of calculating the Moody's Weighted Average Rating
Factor, any Collateral Obligation that is a Current Pay Obligation which has a
Moody's Rating of "D" or "LD" or a Defaulted Obligation shall be excluded.

 

(g)     For the purposes of calculating the Incentive Management Fee Threshold,
the purchase price of the Subordinated Notes issued on the Closing Date shall be
deemed to be 87.9004%.

 

(h)     Except as otherwise provided herein, Defaulted Obligations shall not be
included in the calculation of the Portfolio Quality Test.

 

-70-

--------------------------------------------------------------------------------

 

 

(i)     For purposes of calculating all Concentration Limitations, in both the
numerator and the denominator of any component of the Concentration Limitations,
Defaulted Obligations shall be treated as having a principal balance equal to
zero.

 

(j)     For purposes of calculating compliance with the Investment Criteria,
upon the direction of the Collateral Manager by notice to the Trustee and the
Collateral Administrator, any Eligible Investment representing Principal
Proceeds received upon the maturity, redemption, sale or other disposition of
Collateral Obligations shall be deemed to have the characteristics of such
Collateral Obligations until reinvested in additional Collateral Obligations.
Such calculations shall be based upon the principal amount of such Collateral
Obligations, except in the case of Defaulted Obligations and Credit Impaired
Obligations, in which case the calculations shall be based upon the Principal
Proceeds received on the disposition or sale of such Defaulted Obligations or
Credit Impaired Obligations.

 

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

 

(l)     For purposes of calculating clause (iii) of the definition of
Concentration Limitations, without duplication, 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 Collateral Obligation that is a Senior Secured Loan.

 

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

 

(n)     Unless otherwise specified, any reference to the fee payable under
Section 11.1 to an amount calculated with respect to a period at per annum rate
shall be computed on the basis of a 360-day year and the actual number of days
elapsed. Any fees applicable to periods shorter than or longer than a calendar
quarter shall be prorated to the actual number of days within such period.

 

(o)     Unless otherwise specified, test calculations that evaluate to a
percentage shall be rounded to the nearest ten-thousandth and test calculations
that evaluate to a number shall be rounded to the nearest one-hundredth.
However, for purposes of calculating compliance with each of the Concentration
Limitations, all calculations will be rounded to the nearest 0.1%.

 

(p)     Unless otherwise specifically provided herein, all calculations required
to be made and all reports which are to be prepared pursuant to this Indenture
shall be made on the basis of the trade date unless the Issuer or the Collateral
Manager on behalf of the Issuer notifies the Trustee and the Collateral
Administrator in writing, on or prior to the Determination Date, that such
calculations shall be made on the basis of the settlement date.

 

(q)     Determination of the purchase price of a Collateral Obligation shall be
made independently each time such Collateral Obligation is purchased by the
Issuer and pledged to the Trustee, without giving effect to whether the Issuer
has previously purchased such Collateral Obligation (or an obligation of the
related borrower or issuer).

 

-71-

--------------------------------------------------------------------------------

 

 

(r)     When calculating the results of any vote, consent or other action by
Holders of Notes hereunder, the Trustee shall consider only the registered owner
of each Note except to the extent that (in connection with such vote, consent or
other action) any Person has certified to the Trustee in writing substantially
in the form of Exhibit D to this Indenture that it is the owner of a beneficial
interest in such Global Note.

 

(s)     The equity interest in any Issuer Subsidiary permitted under Section
7.16 and each asset of any such Issuer Subsidiary shall be deemed to constitute
an Asset and be deemed to be a Collateral Obligation (or, if such asset would
constitute an Equity Security if acquired and held by the Issuer, an Equity
Security) for all purposes of this Indenture and each reference to Assets,
Collateral Obligations and Equity Securities herein shall be construed
accordingly. Any future anticipated tax liabilities of an Issuer Subsidiary
related to an Issuer Subsidiary Asset held by such Issuer Subsidiary shall be
excluded from the calculation of the Weighted Average Floating Spread and
Weighted Average Coupon (which exclusion, for the avoidance of doubt, may result
in such Issuer Subsidiary Asset having a negative interest rate spread or coupon
for purposes of such calculations) and the Interest Coverage Ratio with respect
to any specified Class or Classes of Secured Notes.

 

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,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon, as may be consistent herewith, determined by the Authorized Officers of
the Applicable Issuers executing such Notes as evidenced by their execution of
such Notes. Any portion of the text of any Note may be set forth on the reverse
thereof, with an appropriate reference thereto on the face of the Note.

 

Section 2.2     Forms of Notes. (a) The forms of the Notes, including the forms
of Certificated Secured Notes, Certificated Subordinated Notes, Regulation S
Global Secured Notes, Regulation S Global Subordinated Notes and Rule 144A
Global Secured Notes, shall be as set forth in the applicable part of Exhibit A
hereto.

 

(b)     Regulation S Global Notes, Rule 144A Global Notes and Certificated
Notes. (i) The Secured Notes of each Class sold to persons who are not U.S.
persons in offshore transactions in reliance on Regulation S and the
Subordinated Notes sold to persons who are not U.S. persons in offshore
transactions in reliance on Regulation S (except to the extent that (x) such
person elects to acquire a Certificated Note as provided below and (y) in the
case of Subordinated Notes, the Issuer elects that a Subordinated Note be
evidenced by a Certificated Subordinated Note) shall each be issued initially in
the form of one permanent global note per Class in definitive, fully registered
form without interest coupons substantially in the applicable form of Exhibit
A1, A2, A3, A4 or A5 hereto, in the case of the Secured Notes (each, a
"Regulation S Global Secured Note"), and in the form of Exhibit A6 hereto, in
the case of the Subordinated Notes (each, a "Regulation S Global Subordinated
Note"), and shall be deposited with the Trustee as custodian for, and registered
in the name of a nominee of, DTC for the respective accounts of Euroclear and
Clearstream, duly executed by the Applicable Issuers and authenticated by the
Trustee as hereinafter provided.

 

-72-

--------------------------------------------------------------------------------

 

 

(i)     The Secured Notes of each Class and the Subordinated Notes sold to
persons that are QIB/QPs (except (x) to the extent that any such QIB/QP elects
to acquire a Certificated Secured Note as provided below, (y) with respect to
the Class E Notes, to the extent provided below and (z) in the case of
Subordinated Notes, the Issuer elects that a Subordinated Note be evidenced by a
Certificated Subordinated Note) shall each be issued initially in the form of
one permanent global note per Class in definitive, fully registered form without
interest coupons substantially in the applicable form of Exhibit A1, A2, A3, A4
or A5 hereto, in the case of the Secured Notes (each, a "Rule 144A Global
Secured Note"), and in the form of Exhibit A6 hereto, in the case of the
Subordinated Notes (each, a "Rule 144A Global Subordinated Note") which shall be
deposited with the Trustee as custodian for, and registered in the name of a
nominee of, DTC, duly executed by the Applicable Issuers and authenticated by
the Trustee as hereinafter provided. Any Secured Notes sold to persons that are
IAI/QPs or AI/QPs and any Secured Notes sold to a QIB/QP or a non-U.S. person in
reliance on Regulation S that so elects and notifies the Issuer and the Initial
Purchaser and, except with respect to purchases from the Issuer or the Initial
Purchaser on the Closing Date, any Class E Notes sold to purchasers acquiring
such Notes on behalf of or with the assets of a Benefit Plan Investor or a
Controlling Person, shall be issued in the form of definitive, fully registered
notes without interest coupons substantially in the applicable form of
Exhibit A1, A2, A3, A4 or A5 hereto (each, a "Certificated Secured Note"), which
shall be registered in the name of the beneficial owner or a nominee thereof,
duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided. The Subordinated Notes sold to persons that are (A) AI/QPs or (B)
Benefit Plan Investors or Controlling Persons and any Subordinated Notes sold to
a QIB/QP or a non-U.S. person in reliance on Regulation S that so elects and
notifies the Issuer and Initial Purchaser, shall be issued in the form of
definitive, fully registered notes without coupons substantially in the form of
Exhibit A6 hereto (each, a "Certificated Subordinated Note"), in each case which
shall be registered in the name of the beneficial owner or a nominee thereof,
duly executed by the Issuer and authenticated by the Trustee as hereinafter
provided.

 

(ii)     The aggregate principal amount of the Regulation S Global Notes and the
Rule 144A Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee or DTC or its nominee, as the
case may be, as hereinafter provided.

 

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

 

Agent Members and owners of beneficial interests in Global Notes shall have no
rights under this Indenture with respect to any Global Notes held by the
Trustee, as custodian for DTC and DTC may be treated by the Co-Issuers, the
Trustee, and any agent of the Co-Issuers or the Trustee as the absolute owner of
such Note for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Co-Issuers, the Trustee, or any agent of the Co-Issuers
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.

 

-73-

--------------------------------------------------------------------------------

 

 

(d)     Certificated Securities. Following the Closing Date and except as
provided in Section 2.6(a) and Section 2.11, owners of beneficial interests in
Global Notes shall not be entitled to receive physical delivery of Certificated
Notes.

 

Section 2.3     Authorized Amount; Stated Maturity; Denominations. The aggregate
principal amount of the Secured Notes and the Subordinated Notes that may be
authenticated and delivered under this Indenture is limited to U.S.$407,825,000
aggregate principal amount of Notes, Additional Notes issued pursuant to
Section 2.4 and Notes issued pursuant to supplemental indentures in accordance
with Article VIII.

 

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

 

Notes

 

Class Designation

 

A

 

B

 

C

 

D

Original Principal Amount

 

$256,000,000

 

$48,000,000

 

$22,000,000

 

$22,000,000

Stated Maturity

 

Payment Date in
July 2030

 

Payment Date in
July 2030

 

Payment Date in
July 2030

 

Payment Date in
July 2030

Index

 

LIBOR

 

LIBOR

 

LIBOR

 

LIBOR

Index Maturity

 

3 month

 

3 month

 

3 month

 

3 month

Spread or Rate 

 

LIBOR(1) + 1.19%

 

LIBOR(1) + 1.90%

 

LIBOR(1) + 2.35%

 

LIBOR(1) + 3.35%

Initial Rating(s):

               

Fitch

 

AAAsf

 

N/A

 

N/A

 

N/A

Moody's

 

Aaa(sf)

 

Aa2(sf)

 

A2(sf)

 

Baa3(sf)

Ranking:

               

Priority Classes

 

None

 

A

 

A, B

 

A, B, C

Pari Passu Classes

 

None

 

None

 

None

 

None

Junior Classes

 

B, C, D, E, Subordinated

 

C, D, E, Subordinated

 

D, E, Subordinated

 

E, Subordinated

Listed Notes

 

No

 

No

 

No

 

No

Deferred Interest Notes

 

No

 

No

 

Yes

 

Yes

ERISA Restricted Notes

 

No

 

No

 

No

 

No

Applicable Issuer(s)

 

Co-Issuers

 

Co-Issuers

 

Co-Issuers

 

Co-Issuers

 

-74-

--------------------------------------------------------------------------------

 

 

Class Designation

 

E

 

Senior Subordinated

 

Junior Subordinated

Original Principal Amount

 

$20,000,000

 

$10,000,000

 

$29,825,000

Stated Maturity

 

Payment Date in
July 2030

 

Payment Date in
July 2030

 

Payment Date in
July 2030

Index

 

LIBOR

 

LIBOR(1)

 

N/A

Index Maturity

 

3 month

 

3 month

 

N/A

Spread or Rate (1)

 

LIBOR(1) + 6.32%

 

Senior Subordinated Note Rate(2)

 

N/A

Initial Rating(s):

           

Fitch

 

N/A

 

N/A

 

N/A

Moody's

 

Ba3(sf)

 

N/A

 

N/A

Ranking:

           

Priority Classes

 

A, B, C, D

 

A, B, C, D, E

 

A, B, C, D, E, Senior Subordinated

Pari Passu Classes

 

None

 

None

 

None

Junior Classes

 

Subordinated

 

Junior Subordinated

 

None

Listed Notes

 

No

 

No

 

No

Deferred Interest Notes

 

Yes

 

Yes

 

N/A

ERISA Restricted Notes

 

Yes*

 

Yes*

 

Yes*

Applicable Issuer(s)

 

Co-Issuers

 

Issuer

 

Issuer

 

*

Each of (i) the Class E Notes issued in the form of Certificated Secured Notes
and (ii) Certificated Subordinated Notes, subject to certain limitations, shall
be available to Benefit Plan Investors and Controlling Persons; provided, that
Benefit Plan Investors and Controlling Persons may purchase interests in the
Class E Notes and Subordinated Notes from the Issuer or the Initial Purchaser on
the Closing Date in the form of Global Notes.

 

(1)

In the event of a Base Rate Amendment or the selection of an Alternative Base
Rate by a court of competent jurisdiction as provided in this Indenture, LIBOR
may be changed to the Alternative Base Rate in respect of such Base Rate
Amendment or as selected by such court, as applicable, and, from and after any
such amendment, all references to "LIBOR" in respect of determining the Interest
Rate on the Secured Notes and the Senior Subordinated Notes will be deemed to be
that Alternative Base Rate.

 

(2)

On each Payment Date, the Senior Subordinated Notes will be entitled to receive
the Senior Subordinated Note Amount and 55% of all remaining Interest Proceeds
and all remaining Principal Proceeds prior to any distributions on the Junior
Subordinated Notes on such Payment Date. To the extent that on any Payment Date
there are insufficient funds available to pay the Senior Subordinated Note
Amount, the unpaid Senior Subordinated Note Amount on such Payment Date will be
deferred and be payable as Deferred Interest in accordance with the Priority of
Payments; provided that failure to pay the Senior Subordinated Note Amount on
any Payment Date due to the unavailability of funds in respect thereof shall not
constitute an Event of Default.

 

The Secured Notes and the Subordinated Notes shall be issued in minimum
denominations of U.S.$250,000 (provided, that the minimum denomination will be
U.S.$25,000 for (a) AIs that are also Knowledgeable Employees with respect to
the Issuer and (b) transferees purchasing a Note that was originally issued in a
denomination of less than U.S.$250,000 to an AI that is also a Knowledgeable
Employee with respect to the Issuer) and integral multiples of U.S.$1.00 in
excess thereof (the "Authorized Integrals").

 

-75-

--------------------------------------------------------------------------------

 

 

Section 2.4     Additional Notes. (a) At any time within the Reinvestment Period
(or, in the case of an issuance of additional Subordinated Notes or a Risk
Retention Issuance only, at any time), subject to the written approval of the
Collateral Manager and, except in connection with a Risk Retention Issuance, a
Majority of the Junior Subordinated Notes, the Applicable Issuers may, pursuant
to a supplemental indenture in accordance with Section 8.1 hereof, (x) issue
Additional Notes of any one or more new classes of notes that are subordinated
to the existing Secured Notes (or to the most junior class of securities of the
Applicable Issuer (other than the Subordinated Notes) issued pursuant to this
Indenture, if any class of securities issued pursuant to this Indenture other
than the Secured Notes and the Subordinated Notes is then Outstanding), (y)
issue and sell additional Subordinated Notes only and/or (z) issue and sell
Additional Notes of each existing Class (on a pro rata basis with respect to
each Class of Notes or on a pro rata basis for all Classes that are subordinate
to the Controlling Class, except, in each case, that a larger proportion of
Subordinated Notes may be issued) up to an aggregate maximum amount of
Additional Notes not to exceed, except in the case of a Risk Retention Issuance,
100% of the original principal amount of each such Class of Notes; provided,
further, that:

 

(i) the Applicable Issuers shall comply with the requirements of Sections 2.6,
3.2, 7.9 and 8.1;

 

(ii) unless only additional Subordinated Notes are being issued or other than in
respect of a Risk Retention Issuance, the Global Rating Agency Condition shall
have been satisfied with respect to such additional issuance;

 

(iii) such Additional Notes (other than Subordinated Notes or other than in
respect of a Risk Retention Issuance) must be issued at a cash sales price equal
to or greater than the principal amount thereof;

 

(iv) unless only additional Subordinated Notes are being issued or other than in
respect 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 such Coverage Test is maintained or
improved immediately after giving effect to such issuance and the application of
the proceeds thereof;

 

(v) the proceeds of any Additional Notes (net of fees and expenses incurred in
connection with such issuance) shall be treated as Principal Proceeds or used to
purchase additional Collateral Obligations subject to the restrictions in
Section 12.2;

 

(vi) unless only additional Subordinated Notes are being issued or other than in
respect of a Risk Retention Issuance, the prior written consent of a Majority of
the Controlling Class shall have been obtained;

 

(vii) the Additional Notes will be issued in a manner that allows the Issuer to
provide the tax information relating to the original issue discount that this
Indenture requires the Issuer to provide to Holders and beneficial owners of
Secured Notes (including the additional notes);

 

(viii) other than in respect of a Risk Retention Issuance, an opinion of tax
counsel of nationally recognized standing in the United States experienced in
such matters shall be delivered to the Trustee, in form and substance
satisfactory to the Collateral Manager, to the effect that (A) such new Secured
Notes would have the same U.S. federal income tax characterization as debt as
any Secured Notes Outstanding immediately after such Refinancing that are pari
passu with such new Secured Notes and (B) any additional Class A Notes, Class B
Notes, Class C Notes or Class D Notes will be treated, and any additional Class
E Notes should be treated, as indebtedness for U.S. federal income tax purposes,
provided, however, that the opinion of tax counsel described in this clause (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
were issued on the Closing Date and are Outstanding at the time of the
additional issuance;

 

-76-

--------------------------------------------------------------------------------

 

 

(ix) no Event of Default has occurred and is continuing at the time of such
additional issuance; and

 

(x) other than in respect of a Risk Retention Issuance, no more than three
additional issuances have occurred at the time of such proposed additional
issuance (including such additional issuance); provided that with the consent of
a Majority of the Controlling Class clauses (iii), (iv), (ix) and (x) may be
waived.

 

(b)      The terms and conditions of the Additional Notes of each Class issued
pursuant to this Section 2.4 shall be identical to those of the initial Notes of
that Class (except that the interest due on the Additional Notes that are
Secured Notes shall accrue from the issue date of such Additional Notes and the
interest rate and price of such Additional Notes do not have to be identical to
those of the initial Notes of that Class; provided, that the interest rate on
such Notes shall not exceed the interest rate on the corresponding Class of such
Notes). Interest on the Additional Notes that are Secured Notes or Senior
Subordinated Notes shall be payable commencing on the first Payment Date
following the issue date of such Additional Notes (if issued prior to the
applicable Record Date). The Additional Notes shall rank pari passu in all
respects with the initial Notes of that Class.

 

(c)      Except in respect of a Risk Retention Issuance, any Additional Notes of
each Class issued pursuant to this Section 2.4 shall, be offered first to
Noteholders of that Class in such amounts as are necessary to preserve their pro
rata holdings of Notes of such Class.

 

Section 2.5     Execution, Authentication, Delivery and Dating. The Notes shall
be executed on behalf of each of the Applicable Issuers by one of their
respective Authorized Officers. The signature of such Authorized Officer on the
Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signatures of individuals who were at any
time the Authorized Officers of the Issuer or the Co-Issuer, as applicable,
shall bind the Issuer and the Co-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 and the Co-Issuer may deliver Notes executed by the
Applicable Issuers to the Trustee or the Authenticating Agent for authentication
and the Trustee or the Authenticating Agent, upon Issuer Order, shall
authenticate and deliver such Notes as provided in this Indenture and not
otherwise.

 

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 after the Closing Date for any other purpose
under this Indenture shall be dated the date of their authentication.

 

-77-

--------------------------------------------------------------------------------

 

 

Notes issued upon transfer, exchange or replacement of other Notes shall be
issued in Authorized Integrals reflecting the original Aggregate Outstanding
Amount of the Notes so transferred, exchanged or replaced, but shall represent
only the current Outstanding principal 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 (or
original aggregate face amount, as applicable) of such subsequently issued
Notes.

 

No Note shall be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Note a Certificate of
Authentication, substantially in the form provided for herein, executed by the
Trustee or by the Authenticating Agent by the manual signature of one of their
Authorized 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.

 

Section 2.6     Registration, Registration of Transfer and Exchange. (a)  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" for the purpose of registering
Notes and transfers of such Notes with respect to the Register maintained in the
United States as herein provided. Upon any resignation or removal of the
Registrar, the Issuer shall promptly appoint a successor.

 

If a Person other than the Trustee is appointed by the Issuer as Registrar, the
Issuer shall give the Trustee prompt written notice 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 of the Notes and the principal or face
amounts and numbers of such Notes. Upon request at any time the Registrar shall
provide to the Issuer, the Collateral Manager, the Initial Purchaser or any
Holder a current list of Holders as reflected in the Register and a copy of each
certification in the form of Exhibit D that it has received. In addition and
upon request at any time, the Registrar shall obtain (at the Issuer's expense)
and provide to the Issuer, the Collateral Manager and the Initial Purchaser a
copy of the securities position report from DTC.

 

Subject to this Section 2.6, upon surrender for registration of transfer of any
Notes at the office or agency of the Co-Issuers to be maintained as provided in
Section 7.2, the Applicable Issuers 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 Authorized Denomination and of a like
aggregate principal or face amount. At any time, the Initial Purchaser may
request a list of Holders from the Trustee and the Trustee shall provide such a
list of Holders to the extent such information is available to the Trustee.

 

-78-

--------------------------------------------------------------------------------

 

 

At the option of the Holder, Notes may be exchanged for Notes of like terms, in
any Authorized Integrals and of like aggregate principal or face amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Note is surrendered for exchange, the Applicable Issuers shall execute, and the
Trustee shall authenticate and deliver, the Notes that the Holder making the
exchange is entitled to receive.

 

All Notes issued and authenticated upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer and, solely in the case of
the Secured Notes, the Co-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.

 

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 satisfactory to the Registrar duly executed by the Holder thereof or his
attorney duly authorized in writing.

 

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 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.

 

No service charge shall be made to a Holder for any registration of transfer or
exchange of Notes, but 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 Trustee and the Registrar shall be permitted to request such
evidence reasonably satisfactory to it documenting the identity and/or signature
of the transferor and the transferee.

 

(b)     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 Co-Issuers to become subject to the requirement that it register as an
investment company under the Investment Company Act.

 

(c)     (i) Each purchaser and transferee (and if the purchaser or transferee is
a Benefit Plan Investor or a governmental plan, certain church plans or a
non-U.S. plan or other plan, or entity holding the assets of any such plan, its
fiduciary) of Class A Notes, Class B Notes, Class C Notes and Class D Notes or
any interest in such Notes shall be deemed (or, in certain cases, will be
required) on each day from the date on which such beneficial owner acquires its
interest in any such Notes through and including the date on which such
beneficial owner disposes of its interest in such Notes to represent and agree
that either (1) it is not, and is not directly or indirectly acquiring such
Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan
Investor, or a governmental, church, non-U.S. or other plan, or an entity
holding the assets of such plans, that is subject to Other Plan Law or (2) its
acquisition, holding and disposition of any such Note (or interest therein) does
not and will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or a violation of Other
Plan Law.

 

-79-

--------------------------------------------------------------------------------

 

 

(ii)     Each purchaser and transferee of (A) Class E Notes issued in the form
of Certificated Secured Notes or (B) Certificated Subordinated Notes shall have
completed and delivered to the Issuer an ERISA Subscription Agreement. Each
purchaser of Class E Notes and Subordinated Notes in the form of Global Notes
that is a Benefit Plan Investor or a Controlling Person, purchasing such Notes
from the Issuer or the Initial Purchaser on the Closing Date, shall have
completed and delivered to the Issuer an ERISA Subscription Agreement.

 

(iii)     Except with respect to purchases by Benefit Plan Investors or
Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date
as provided in Section 2.6(c)(ii), each purchaser from the Issuer of Class E
Notes issued in the form of Global Secured Notes shall be required to represent
and agree, and each transferee of Class E Notes issued in the form of Global
Secured Notes will be deemed to represent, on each day from the date on which
such beneficial owner acquires its interest in such Notes through and including
the date on which such beneficial owner disposes of its interest in such Notes
to represent and agree that (1) it is not, and is not directly or indirectly
acquiring such Notes (or any interest therein) on behalf of, or with assets of,
a Benefit Plan Investor or a Controlling Person and (2) if it is, or is directly
or indirectly acquiring or holding such Notes (or any interest therein) on
behalf of or with assets of, a governmental, church, non-U.S. or other plan, or
entity holding assets of such plans, (A) its acquisition, holding and
disposition of such Notes (or any interest therein) does not and will not
constitute or result in a violation of Other Plan Law and (B) it is not subject
to Similar Law.

 

(iv)     If a purchaser or transferee of Class A Notes, Class B Notes, Class C
Notes, Class D Notes, Class E Notes, Subordinated Notes or any interest in such
Notes is a Benefit Plan Investor then, at any time when regulation 29 C.F.R.
Section 2510.3-21, as modified in 2016, is applicable, the independent fiduciary
(as defined in (b) below) making the decision to invest in any Note or interest
therein on its behalf (the "Independent Fiduciary") acknowledges and agrees that
(i) it has been informed that none of the Issuer, the Co-Issuer, the Collateral
Manager, the Trustee, the Collateral Administrator, the Administrator or the
Initial Purchaser (the "Transaction Parties") or financial intermediaries or
other persons that provide marketing services, nor any of their affiliates has
provided, and none of them will provide, investment advice (impartial or
otherwise) and they are not giving any advice in a fiduciary capacity, in
connection with its acquisition of such Notes, and the Transaction Parties have
so confirmed; and (ii) that it has received and understands the disclosure of
the existence and nature of the Transaction Parties’ financial interests
contained in the offering circular and any related materials. Further, the
Independent Fiduciary represents and warrants that it (a) is a bank, insurance
carrier, registered investment adviser, broker-dealer or other person with
financial expertise, in each case as described in 29 C.F.R. Section
2510.3-21(c)(1)(i); (b) is a "fiduciary" as defined in Section 3(21) of ERISA
with respect to the Benefit Plan Investor that is an independent plan fiduciary
within the meaning of 29 C.F.R. Section 2510.3-21; (c) is capable of evaluating
investment risks independently, both in general and with regard to particular
transactions and investment strategies; (d) is responsible for exercising
independent judgment in evaluating the transaction; and (e) neither it nor the
Independent Fiduciary is paying or has paid any fee or other compensation to any
of the Transaction Parties for investment advice (as opposed to other services)
in connection with its acquisition or holding of such Notes.

 

-80-

--------------------------------------------------------------------------------

 

 

(v)     Except with respect to purchases by Benefit Plan Investors or
Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date
as provided in Section 2.6(c)(ii), or except as otherwise agreed in writing by
the Issuer and the Collateral Manager, each purchaser and transferee of
Subordinated Notes or any interest in such a Subordinated Note from the Issuer
shall be required (or, in the case of a transferee of Subordinated Notes in the
form of Rule 144A Global Subordinated Notes or Regulation S Global Subordinated
Notes, deemed) to represent and agree that on each day from the date on which
such beneficial owner acquires its interest in any such Subordinated Notes
through and including the date on which such beneficial owner disposes of its
interest in such Subordinated Notes, (1) it is not, and is not directly or
indirectly acquiring such Notes (or any interest therein) on behalf of, or with
assets of, a Benefit Plan Investor or a Controlling Person and (2) if it is, or
is directly or indirectly acquiring or holding such Notes (or any interest
therein) on behalf of or with assets of, a governmental, church, non-U.S. or
other plan, or entity holding assets of such plans, (A) its acquisition, holding
and disposition of such Subordinated Notes (or any interest therein) does not
and will not constitute or result in a violation of Other Plan Law and (B) it is
not subject to Similar Law.

 

(d)     The Trustee shall not be responsible for ascertaining whether any
transfer complies with, or for otherwise monitoring or determining compliance
with, the requirements or terms of the Securities Act, applicable state
securities laws, ERISA, the Code or the Investment Company Act; except that if a
certificate is specifically required by the terms of this Section 2.6 to be
provided to the Trustee by a prospective transferor or transferee, the Trustee
shall be under a duty to receive and examine the same to determine whether it
conforms substantially on its face to the applicable requirements of this
Section 2.6. Notwithstanding the foregoing, the Trustee, relying solely on
representations made or deemed to have been made by Holders of the Class E
Notes, Holders of the Senior Subordinated Notes and Holders of the Junior
Subordinated Notes, shall not permit any transfer of Class E Notes, Senior
Subordinated Notes or Junior Subordinated Notes, as applicable, if such transfer
would result in 25% or more of the Aggregate Outstanding Amount of the Class E
Notes, the Senior Subordinated Notes or the Junior Subordinated Notes, as
applicable, being held by Benefit Plan Investors, as calculated pursuant to
29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA.

 

(e)     For so long as any of the Notes are Outstanding, the Issuer shall not
issue or permit the transfer of any shares of the Issuer to U.S. Persons and the
Co-Issuer shall not issue or permit the transfer of any membership interests of
the Co-Issuer to U.S. Persons.

 

(f)     So long as a Global Note remains Outstanding and is held by or on behalf
of DTC, transfers of such Global Note, in whole or in part, shall only be made
in accordance with Section 2.2(b) and this Section 2.6(f).

 

-81-

--------------------------------------------------------------------------------

 

 

(i)     Subject to clauses (ii) and (iii) of this Section 2.6(f), transfers of a
Global Note shall be limited to transfers of such Global Note in whole, but not
in part, to nominees of DTC or to a successor of DTC or such successor's
nominee.

 

(ii)     Rule 144A Global Notes or Certificated Notes to Regulation S Global
Notes. If a holder of a beneficial interest in a Rule 144A Global Note deposited
with DTC or a Holder of a Certificated Note wishes at any time to exchange its
interest in such Rule 144A Global Note or Certificated Note for an interest in
the corresponding Regulation S Global Note, or to transfer its interest in such
Rule 144A Global Note or Certificated 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 such holder or, in the case of a transfer,
the transferee 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 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 or
Certificated Note to be exchanged or transferred, and in the case of a transfer
of Certificated Notes, such Holder's Certificated Notes properly endorsed for
assignment to the transferee, (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, (C) in
the case of a transfer of Certificated Notes, a Holder's Certificated Note
properly endorsed for assignment to the transferee, (D) a certificate in the
form of Exhibit B1 attached hereto given by the holder of such beneficial
interest stating that the exchange or transfer of such interest has been made in
compliance with the transfer restrictions applicable to the Rule 144A Global
Notes or the Certificated Notes including that the holder or the transferee, as
applicable, is not a U.S. person, and in an offshore transaction pursuant to and
in accordance with Regulation S and (E) a written certification in the form of
Exhibit B5 attached hereto given by the transferee in respect of such beneficial
interest stating, among other things, that such transferee is a non-U.S. person
purchasing such beneficial interest in an offshore transaction pursuant to
Regulation S, then the Trustee or the Registrar shall approve the instructions
at DTC to reduce the principal amount of the Rule 144A Global Note (or, in the
case of a transfer of Certificated Notes, the Trustee or the Registrar shall
cancel such Notes) 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 or Certificated 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 (or, in the case of a cancellation of Certificated Notes,
equal to the principal amount of Notes so cancelled).

 

-82-

--------------------------------------------------------------------------------

 

 

(iii)     Regulation S Global Notes to Rule 144A Global Notes or Certificated
Notes. 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 for a Certificated 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 or for a Certificated 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 or for
a Certificated Note. Upon receipt by the Trustee or the Registrar of (A) if the
transferee is taking a beneficial interest in a Rule 144A Global Note,
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, (B) a certificate in the form of Exhibit
B2A attached hereto given by the holder of such beneficial interest and stating,
among other things, that, in the case of a transfer, either (x) the Person
transferring such interest in such Regulation S Global Note reasonably believes
that the Person acquiring such interest in a Rule 144A Global Note is a
Qualified Institutional Buyer, is obtaining such beneficial interest in a
transaction meeting the requirements of Rule 144A and in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction, or (y) the Person transferring such interest in such Regulation S
Global Note is transferring to an IAI or an Accredited Investor (in the case of
a Secured Note) or an Accredited Investor (in the case of a Subordinated Note)
in a transaction exempt from registration under the Securities Act and in
accordance with any applicable securities laws of any state of the United States
or any other jurisdiction and (C) a written certification in the form of Exhibit
B3 attached hereto given by the transferee in respect of such beneficial
interest stating, among other things, that such transferee is a QIB/QP or, in
the case of a transfer of Certificated Notes, a written certification in the
form of Exhibit B4 attached hereto given by the transferee, stating, among other
things, that such transferee is an IAI/QP or AI/QP (in the case of Secured Notes
only), an AI/QP (in the case of Subordinated Notes only), or a QIB/QP, then the
Registrar shall either (x) if the transferee is taking a beneficial interest in
a Rule 144A Global Note, approve the instructions at DTC to reduce, or cause to
be reduced, the Regulation S Global Note or Regulation S Global Note by the
aggregate principal amount of the beneficial interest in the 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 the Regulation S Global Note or (y) if the transferee is
taking an interest in a Certificated Note, the Registrar shall record the
transfer in the Register in accordance with Section 2.6(a) and, upon execution
by the Applicable Issuers, the Trustee shall authenticate and the Registrar
shall deliver one or more Certificated Notes, as applicable, registered in the
names specified in the instructions described above, in principal amounts
designated by the transferee (the aggregate of such principal amounts being
equal to the aggregate principal amount of the interest in the Regulation S
Global Note transferred by the transferor), and in Authorized Integrals.

 

-83-

--------------------------------------------------------------------------------

 

 

(iv)     Transfer and Exchange of Certificated Notes to Certificated Notes. If a
holder of a Certificated Note wishes at any time to exchange such Certificated
Note for one or more Certificated Notes or transfer such Certificated Note to a
transferee who wishes to take delivery thereof in the form of a Certificated
Note, such holder may effect such exchange or transfer in accordance with this
Section 2.6(f)(iv). Upon receipt by the Trustee or the Registrar of (A) a
Holder's Certificated Note properly endorsed for assignment to the transferee,
and (B) certificates in the form of Exhibit B4, then the Trustee or the
Registrar shall cancel such Certificated Note in accordance with Section 2.10,
record the transfer in the Register in accordance with Section 2.6(a) and, upon
execution by the Applicable Issuers, the Trustee shall authenticate and the
Registrar shall 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 Authorized Integrals.

 

(v)     Transfer of Rule 144A Global Notes to Certificated Notes. 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 a
Certificated 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 a Certificated Note,
such holder 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 a Certificated Note. Upon receipt by the Trustee or the
Registrar of (A) a certificate substantially in the form of Exhibit B4 and (B)
appropriate instructions from DTC, if required, the Trustee or the Registrar
shall approve the instructions at DTC to reduce, or cause to be reduced, the
Rule 144A Global Note by the aggregate principal amount of the beneficial
interest in the Rule 144A Global Note to be transferred or exchanged, record the
transfer in the Register in accordance with Section 2.6(a) and upon execution by
the Applicable Issuers authenticate and deliver one or more Certificated Notes,
registered in the names specified in the instructions described in clause (B)
above, in principal amounts designated by the transferee (the aggregate of such
principal amounts being equal to the aggregate principal amount of the interest
in the Rule 144A Global Note transferred by the transferor), and in Authorized
Integrals.

 

-84-

--------------------------------------------------------------------------------

 

 

(vi)     Transfer of Certificated Notes to Rule 144A Global Notes. If a holder
of a Certificated Note wishes at any time to exchange its interest in such
Certificated Note for a beneficial interest in a Rule 144A Global Note or to
transfer such Certificated Note to a Person who wishes to take delivery thereof
in the form of a beneficial interest in a Rule 144A Global Note, such holder
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
Certificated Note for beneficial interest in a Rule 144A Global Note (provided
that no IAI or Accredited Investor may hold an interest in a Rule 144A Global
Note). Upon receipt by the Trustee or the Registrar of (A) a Holder's
Certificated Note properly endorsed for assignment to the transferee; (B) a
certificate substantially in the form of Exhibit B2B attached hereto executed by
the transferor and certificates substantially in the forms of Exhibit B3
(provided that no such transferor or transferee certificate shall be required if
a holder of a Certificated Note on the Closing Date that has provided all
required certifications to the Issuer upon acquisition thereof wishes to
exchange a Certificated Note for a Rule 144A Global Note); (C) instructions
given in accordance with DTC's procedures from an Agent Member to instruct DTC
to cause to be credited a beneficial interest in the Rule 144A Global Notes in
an amount equal to the Certificated Notes to be transferred or exchanged; and
(D) a written order given in accordance with DTC's procedures containing
information regarding the participant's account of DTC to be credited with such
increase, the Trustee or the Registrar shall cancel such Certificated Note in
accordance with Section 2.10, record the transfer in the Register in accordance
with Section 2.6(a) and approve the instructions at 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 the corresponding
Rule 144A Global Note equal to the principal amount of the Certificated Note
transferred or exchanged.

 

(vii)    Other Exchanges. In the event that a Global Note is exchanged for Notes
in definitive registered form without interest coupons pursuant to Section 2.11,
such Global Notes may be exchanged for one another only in accordance with such
procedures as are substantially consistent with the provisions above (including
certification requirements intended to insure that such transfers are made only
to Holders who are Qualified Purchasers in transactions exempt from registration
under the Securities Act or are to persons who are not U.S. persons who are
non-U.S. residents (as determined for purposes of the Investment Company Act),
and otherwise comply with Regulation S under the Securities Act, as the case may
be), and as may be from time to time adopted by the Co-Issuers and the Trustee.

 

(g)     [Reserved].

 

(h)     If Notes are issued upon the transfer, exchange or replacement of Notes
bearing the applicable legends set forth in the applicable part of 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 Applicable Issuers such satisfactory evidence, which may include
an Opinion of Counsel acceptable to them, as may be reasonably required by the
Applicable Issuers (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 Applicable Issuers
shall, after due execution by the Applicable Issuers authenticate and deliver
Notes that do not bear such applicable legend.

 

-85-

--------------------------------------------------------------------------------

 

 

(i)          Each Person who becomes a beneficial owner of Secured Notes of a
Class represented by an interest in a Global Note shall be deemed to have
represented and agreed as follows:

 

(i)     In connection with the purchase of such Notes: (A) none of the
Co-Issuers, the Collateral Manager, the Initial Purchaser, the Trustee, the
Collateral Administrator, the Administrator or any of their respective
Affiliates is acting as a fiduciary or financial or investment advisor 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 Co-Issuers, the Collateral
Manager, the Trustee, the Collateral Administrator, the Administrator, the
Initial Purchaser, 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 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
Co-Issuers, the Collateral Manager, the Trustee, the Collateral Administrator,
the Administrator, the Initial Purchaser, or any of their respective Affiliates;
(D) such beneficial owner is either (1) in the case of a beneficial owner of an
interest in a Rule 144A Global Note both (x) a Qualified Institutional Buyer
that is not a broker-dealer which owns and invests on a discretionary basis less
than U.S.$25 million 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 or a trust fund referred to in paragraph (a)(1)(i)(F)
of Rule 144A that holds the assets of such a plan, if investment decisions with
respect to the plan are made by beneficiaries, and not the fiduciary, trustee or
sponsor of the plan and (y) a Qualified Purchaser (within the meaning of
Section 2(a)(51) of the Investment Company Act and the rules thereunder) or an
entity owned exclusively by Qualified Purchasers or (2) not a "U.S. person" as
defined in Regulation S and is acquiring such 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 (except when each beneficial owner of such
Person is a Qualified Purchaser); (G) such beneficial owner understands that the
Issuer 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 has had access to such financial and other information concerning the
Issuer and the Notes as it has deemed necessary or appropriate in order to make
an informed investment decision with respect to its purchase of the Notes,
including an opportunity to ask questions of and request information from the
Issuer and the Collateral Manager and (J) such beneficial owner shall provide
notice of the relevant transfer restrictions to subsequent transferees.

 

-86-

--------------------------------------------------------------------------------

 

 

(ii)     In the case of the Class A Notes, the Class B Notes, the Class C Notes
and the Class D Notes on each day from the date on which such beneficial owner
acquires its interest in any such Secured Notes through and including the date
on which such beneficial owner disposes of its interest in such Secured Notes
either that (A) it is not, and is not directly or indirectly acquiring such
Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan
Investor, or a governmental, church, non-U.S. or other plan, or entities holding
the assets of such plans or (B) its acquisition, holding and disposition of such
Note (or interest therein) does not and will not constitute or result in a
non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code or a violation of Other Plan Law.

 

(iii)     Except with respect to purchases by Benefit Plan Investors or
Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date
as provided in Section 2.6(c)(ii), in the case of the Class E Notes issued in
the form of Global Notes, on each day from the date on which such beneficial
owner acquires its interest in such Class E Notes through and including the date
on which such beneficial owner disposes of its interest in such Class E Notes,
that (A) such beneficial owner is not, and is not directly or indirectly
acquiring such Notes (or any interest therein) on behalf of, or with assets of,
a Benefit Plan Investor or a Controlling Person and (B) if it is, or is directly
or indirectly acquiring or holding such Notes (or any interest therein) on
behalf of or with assets of, a governmental, church, non-U.S. or other plan, or
entity holding assets of such plans, (1) its acquisition, holding and
disposition of such Class E Notes (or any interest therein) does not and will
not constitute or result in a violation of Other Plan Law and (2) it is not
subject to Similar Law.

 

(iv)     Such beneficial owner will be bound by the provisions of Section 2.14.

 

(v)     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 or the securities laws of any state or other
jurisdiction, 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 none of the
Co-Issuers or the pool of Assets has been or will be registered under the
Investment Company Act, and that the Co-Issuers are exempt from registration as
such by virtue of Section 3(c)(7) of the Investment Company Act.

 

(vi)     It 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 Regulation S Global Notes, and that beneficial interests therein may be
held only through DTC for the respective accounts of Euroclear or Clearstream.

 

-87-

--------------------------------------------------------------------------------

 

 

(vii)     It 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 Section 2.6, including the Exhibits referenced herein.

 

(viii)     It agrees not to seek to commence in respect of the Issuer or the
Co-Issuer, or cause the Issuer or Co-Issuer to commence, a bankruptcy proceeding
before a year and a day, or, if longer, the applicable preference period then in
effect plus one day, has elapsed since the payment in full to the holders of the
Notes issued pursuant to this Indenture.

 

(ix)     Such purchaser or transferee understands that the Issuer has the right
under this Indenture to compel any Non-Permitted Holder to sell its interest in
the Notes or may sell such interest in the Notes on behalf of such Non-Permitted
Holder.

 

(x)     It is not a member of the public in the Cayman Islands

 

(j)          Each Person who becomes a beneficial owner of Subordinated Notes
represented by a Global Subordinated Note shall be deemed to have made the
following representations and agreements:

 

(i)     In connection with the purchase of such Subordinated Note: (A) none of
the Co-Issuers, the Collateral Manager, the Initial Purchaser, the Trustee, the
Collateral Administrator, the Administrator or any of their respective
Affiliates is acting as a fiduciary or financial or investment advisor 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 Co-Issuers, the Collateral
Manager, the Trustee, the Collateral Administrator, the Administrator, the
Initial Purchaser, 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 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
Co-Issuers, the Collateral Manager, the Trustee, the Collateral Administrator,
the Administrator, the Initial Purchaser, or any of their respective Affiliates;
(D) such beneficial owner is either (1) (in the case of a beneficial owner of an
interest in a Rule 144A Global Note) both (x) a Qualified Institutional Buyer
that is not a broker-dealer which owns and invests on a discretionary basis less
than U.S.$25 million 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 or a trust fund referred to in paragraph (a)(1)(i)(F)
of Rule 144A that holds the assets of such a plan, if investment decisions with
respect to the plan are made by beneficiaries, and not the fiduciary, trustee or
sponsor of the plan and (y) a Qualified Purchaser (within the meaning of
Section 2(a)(51) of the Investment Company Act and the rules thereunder) or an
entity owned exclusively by Qualified Purchasers or (2) not a "U.S. person" as
defined in Regulation S and is acquiring the Subordinated Notes in an offshore
transaction in reliance on the exemption from registration provided by
Regulation S; (E) such beneficial owner is acquiring its interest in such
Subordinated Notes for its own account; (F) such beneficial owner was not formed
for the purpose of investing in such Subordinated Notes (except when each
beneficial owner of such Person is a Qualified Purchaser); (G) such beneficial
owner understands that the Issuer may receive a list of participants holding
interests in the Subordinated Notes from one or more book entry depositories;
(H) such beneficial owner shall hold and transfer at least the minimum
denomination of such Subordinated Notes; (I) such beneficial owner is a
sophisticated investor and is purchasing the Subordinated Notes with a full
understanding of all of the terms, conditions and risks thereof, and is capable
of assuming and willing to assume those risks; (J) such beneficial owner has had
access to such financial and other information concerning the Issuer and the
Notes as it has deemed necessary or appropriate in order to make an informed
investment decision with respect to its purchase of the Notes, including an
opportunity to ask questions of and request information from the Issuer and the
Collateral Manager; and (K) such beneficial owner will provide notice of the
relevant transfer restrictions to subsequent transferees.

 

-88-

--------------------------------------------------------------------------------

 

 

(ii)     That, except with respect to purchases by Benefit Plan Investors or
Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date
as provided in Section 2.6(c)(ii), on each day from the date on which it
acquires its interest in the Subordinated Notes through and including the date
on which it disposes of its interest in such Subordinated Notes that (1) it is
not, and is not directly or indirectly acquiring such Notes (or any interest
therein) on behalf of, or with assets of, a Benefit Plan Investor or a
Controlling Person, or (2) if it is, or is directly or indirectly acquiring or
holding such Notes (or any interest therein) on behalf of or with assets of, a
governmental, church, non-U.S. or other plan, or entity holding assets of such
plans, (A) its acquisition, holding and disposition of such Subordinated Notes
(or any interest therein) does not and will not constitute or result in a
violation of such Other Plan Law, and (B) it is not subject to Similar Law.

 

(iii)     Such beneficial owner will be bound by the provisions of Section 2.14.

 

(iv)     Such beneficial owner understands that such Subordinated 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 Subordinated Notes
have not been and shall not be registered under the Securities Act, and, if in
the future such beneficial owner decides to offer, resell, pledge or otherwise
transfer such Subordinated Notes, such Subordinated Notes may be offered,
resold, pledged or otherwise transferred only in accordance with the provisions
of this Indenture and the legend on such Subordinated 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 the Subordinated Notes. Such beneficial owner understands that
neither of the Co-Issuers has been registered under the Investment Company Act,
and that the Co-Issuers are exempt from registration as such by virtue of
Section 3(c)(7) of the Investment Company Act.

 

-89-

--------------------------------------------------------------------------------

 

 

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

 

(vi)     Such beneficial owner will provide notice to each Person to whom it
proposes to transfer any interest in the Subordinated Notes of the restrictions
and representations set forth in this Section 2.6, including the Exhibits
referenced herein.

 

(vii)    Such beneficial owner agrees not to seek to commence in respect of the
Issuer or the Co-Issuer, or cause the Issuer or Co-Issuer to commence, a
bankruptcy proceeding before a year and a day, or, if longer, the applicable
preference period then in effect plus one day, has elapsed since the payment in
full to the holders of the Notes issued pursuant to this Indenture.

 

(viii)    Such purchaser or transferee understands that the Issuer has the right
under this Indenture to compel any Non-Permitted Holder to sell its interest in
the Notes or may sell such interest in the Notes on behalf of such Non-Permitted
Holder.

 

(ix)      It is not a member of the public in the Cayman Islands.

 

(k)     Each Person who becomes an owner of Certificated Subordinated Notes
shall be required to make the representations and agreements set forth in
Exhibit B4 in a subscription agreement or representation letter with the Issuer.
Subject to Section 2.2(b)(ii), an IAI who is also a QIB may acquire an interest
in a Rule 144A Global Note. No U.S. person may at any time acquire an interest
in a Regulation S Global Note.

 

(l)       Any purported transfer of a Note not in accordance with this
Section 2.6 shall be null and void and shall not be given effect for any purpose
whatsoever.

 

(m)    To the extent required by the Issuer, as determined by the Issuer (or the
Collateral Manager on behalf of the Issuer), the Issuer may, upon written notice
to the Trustee, impose additional transfer restrictions on the Subordinated
Notes to comply with the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and
any other laws or regulations in the United States, the Cayman Islands or
otherwise, including, without limitation, requiring each transferee of a
Subordinated Note to make representations to the Issuer in connection with such
compliance.

 

(n)     The Registrar, the Trustee and the Issuer shall be entitled to
conclusively rely on any transfer certificate delivered pursuant to this
Section 2.6 and shall be able to presume conclusively the continuing accuracy
thereof, in each case without further inquiry or investigation.

 

-90-

--------------------------------------------------------------------------------

 

 

Section 2.7     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 Applicable Issuers, 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 Applicable Issuers, the
Trustee and such Transfer Agent, and any agent of the Applicable Issuers, the
Trustee and 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
Applicable Issuers, the Trustee or such Transfer Agent that such Note has been
acquired by a Protected Purchaser, the Applicable Issuers shall execute and,
upon Issuer Order (which Issuer Order shall be deemed to have been provided upon
delivery of an executed Note to the Trustee), the Trustee shall authenticate and
deliver, 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
Applicable Issuers, 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 Applicable Issuers, 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 Applicable Issuers in their 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 2.7, the Applicable
Issuers, 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 2.7 in lieu of any mutilated,
defaced, destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Applicable Issuers and such new Note shall be
entitled, subject to the second paragraph of this Section 2.7, 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 2.7 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.

 

-91-

--------------------------------------------------------------------------------

 

 

Section 2.8     Payment of Principal and Interest and Other Amounts; Principal
and Interest Rights Preserved. (a) The Secured Notes of each Class shall accrue
interest during each Interest Accrual Period at the applicable Note Interest
Rate and such interest shall be payable in arrears on each Payment Date in the
case of the Secured Notes, 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). Payment of interest on each Class
of Secured Notes (and payments of the Senior Subordinated Note Amount to the
Holders of the Senior Subordinated Notes and payments of available Interest
Proceeds to the Holders of the Senior Subordinated Notes and the Junior
Subordinated Notes) shall be subordinated to the payments of interest on the
related Priority Classes as provided in Section 11.1. So long as any Priority
Classes are Outstanding with respect to any Class of Deferred Interest Notes,
any payment of interest due on such Class of Deferred Interest Notes (including,
with respect to the Senior Subordinated Notes, any payment of Senior
Subordinated Notes Amount due on the Senior Subordinated Notes) which is not
available to be paid in accordance with the Priority of Payments on any Payment
Date, if such interest is not paid in order to satisfy the Coverage Tests
("Deferred Interest" with respect thereto), shall not be considered "due and
payable" for the purposes of Section 5.1(a) (and the failure to pay such
interest (including, with respect to the Senior Subordinated Notes, such Senior
Subordinated Note Amount) shall not be an Event of Default) until the earliest
of the Payment Date (i) on which such interest (including, with respect to the
Senior Subordinated Notes, such Senior Subordinated Note Amount) is available to
be paid in accordance with the Priority of Payments, (ii) which is a Redemption
Date with respect to such Class of Deferred Interest Notes, and (iii) which is
the Stated Maturity of such Class of Deferred Interest Notes. Deferred Interest
on any Class of Deferred Interest Notes shall not be added to the principal
balance of such Class. For the avoidance of doubt, the failure to pay the Senior
Subordinated Note Amount on any Payment Date due to the unavailability of funds
in respect thereof will not constitute an Event of Default. 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 Payment Date (i) which is the Redemption
Date with respect to such Class of Deferred Interest Notes, and (ii) which is
the Stated Maturity of such Class of Deferred Interest Notes. Interest shall
cease to accrue on each Secured Note, or in the case of a partial repayment, on
such part, from the date of repayment or the respective Stated Maturity unless
payment of principal is improperly withheld or unless default is otherwise made
with respect to such payments of principal. To the extent lawful and
enforceable, (x) interest on Deferred Interest with respect to the Class C
Notes, the Class D Notes or the Class E Notes shall accrue at the Note Interest
Rate for such Class until paid as provided herein and (y) interest on the
interest on any Class A Note or any Class B Note or, if no Class A Notes or
Class B Notes are Outstanding, any Class C Note, or, if no Class A Notes, Class
B Notes or Class C Notes are Outstanding, any Class D Note, or, if no Class A
Notes, Class B Notes, Class C Notes or Class D Notes are Outstanding, any Class
E Note, that is not paid when due shall accrue at the Note Interest Rate for
such Class until paid as provided herein. On each Payment Date, the Senior
Subordinated Notes will be entitled to receive the Senior Subordinated Note
Amount and 55% of all remaining Interest Proceeds and all remaining Principal
Proceeds prior to any distributions on the Junior Subordinated Notes on such
Payment Date in accordance with the Priority of Payments. To the extent lawful
and enforceable, interest on any Deferred Interest on the Senior Subordinated
Notes shall accrue at the same per annum rate as the then current Senior
Subordinated Note Rate.

 

-92-

--------------------------------------------------------------------------------

 

 

(b)     The principal of each Secured Note of each Class matures at par and is
due and payable on the Payment Date which is the Stated Maturity for such Class
of Secured Notes, unless such principal has been previously repaid or unless the
unpaid principal of such Secured Note becomes due and payable at an earlier date
by declaration of acceleration, call for redemption or otherwise.
Notwithstanding the foregoing, the payment of principal of each Class of Secured
Notes (and payments of Principal Proceeds to the Holders of the Subordinated
Notes) may only occur after principal and interest on each Class of Notes that
constitutes a Priority Class with respect to such Class has been paid in full
and is subordinated to the payment on each Payment Date of the principal and
interest due and payable on such Priority Class(es), and other amounts in
accordance with the Priority of Payments, and any payment of principal of any
Class of Secured Notes and distributions of Principal Proceeds to Holders of
Subordinated Notes, which are not paid, in accordance with the Priority of
Payments, on any Payment Date (other than the Payment Date which is the Stated
Maturity of such Class or any Redemption Date), shall not be considered "due and
payable" for purposes of Section 5.1(a) until the Payment Date on which such
principal may be paid in accordance with the Priority of Payments or all of the
Priority Classes with respect to such Class have been paid in full.

 

(c)     Principal payments on the Notes shall be made in accordance with the
Priority of Payments and Section 9.1.

 

(d)     As a condition to the payment of principal of and interest on any
Secured Note or any payment on any Subordinated Note, the Trustee and any Paying
Agent shall require certification acceptable to it to enable the Issuer, the
Co-Issuer, the Trustee and any Paying Agent to determine their duties and
liabilities with respect to any taxes or other charges that they may be required
to deduct or withhold from payments in respect of such Note under any present or
future law or regulation of the United States and any other applicable
jurisdiction, or any present or future law or regulation of any political
subdivision thereof or taxing authority therein or to comply with any reporting
or other requirements under any such law or regulation. The Co-Issuers shall not
be obligated to pay any additional amounts to the Holders of 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.

 

(e)     Payments in respect of interest on and principal of any Secured Note and
any payment with respect to any Subordinated Note shall be made by the Trustee
or by a Paying Agent in United States dollars to DTC or its designee 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 United States dollar account, as the case may be,
maintained by DTC or its nominee with respect to a Global Note, and to the
Holder or its designee with respect to a Certificated Note, provided that 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; provided, further, that 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 Maturity of a
Note, the Holder thereof shall present and surrender such Note at the Corporate
Trust Office of the Trustee on or prior to such Maturity; provided that if the
Trustee and the Applicable Issuers shall have been furnished such security or
indemnity as may be required by them to save each of them harmless and an
undertaking thereafter to surrender such certificate, then, in the absence of
notice to the Applicable Issuers or the Trustee that the applicable Note has
been acquired by a bona fide purchaser, such final payment shall be made without
presentation or surrender. Neither the Co-Issuers, the Trustee, the Collateral
Manager, nor any Paying Agent shall 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 Secured Note (other than on the Stated Maturity
thereof) or any final payment is to be made on any Subordinated Note (other than
on the Stated Maturity thereof), the Trustee, in the name and at the expense of
the Applicable Issuers shall, not more than 30 nor less than 10 days prior to
the date on which such payment is to be made, mail (by first class mail, postage
prepaid) to the Persons entitled thereto at their addresses appearing on the
Register a notice which shall specify the date on which such payment shall be
made, the amount of such payment per U.S.$100,000 original principal amount of
Secured Notes and original principal amount of Subordinated Notes and the place
where such Notes may be presented and surrendered for such payment.

 

-93-

--------------------------------------------------------------------------------

 

 

(f)     Payments of principal to Holders of the Secured Notes of each Class
shall be made in the proportion that the Aggregate Outstanding Amount of the
Secured 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 Secured
Notes of such Class on such Record Date. Payments to the Holders of the
Subordinated Notes of each Class from Interest Proceeds and Principal Proceeds
shall be made in the proportion that the Aggregate Outstanding Amount of the
Subordinated 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
Subordinated Notes of such Class on such Record Date.

 

(g)     Interest accrued with respect to the Secured 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 and Co-Issuer under the Notes and the Transaction Documents are
limited recourse or non-recourse obligations of the Issuer and Co-Issuer, as
applicable, payable solely from the Assets 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 Co-Issuers 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, member, manager, partner, shareholder or incorporator of either the
Co-Issuers, the Collateral Manager or their respective successors or assigns for
any amounts payable under the Notes or (except as otherwise provided herein or
in the Collateral Management Agreement) in the Transaction Documents. It is
understood that the foregoing provisions of this paragraph (i) shall not (x)
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 (y) 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 or the Co-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. The Subordinated Notes are not
secured hereunder.

 

-94-

--------------------------------------------------------------------------------

 

 

(j)     Subject to the foregoing provisions of this Section 2.8, each Note
delivered under this Indenture and upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights of unpaid
interest and principal (or other applicable amount) that were carried by such
other Note.

 

Section 2.9     Persons Deemed Owners. The Issuer, the Co-Issuer, the Trustee,
and any agent of the Co-Issuers or the Trustee may treat as the owner of such
Note the Person in whose name any Note is registered on the Register on the
applicable Record Date for the purpose of receiving payments of principal of and
interest on such Note and on any other date for all other purposes whatsoever
(whether or not such Note is overdue), and neither the Issuer, the Co-Issuers
nor the Trustee nor any agent of the Issuer, the Co-Issuers or the Trustee shall
be affected by notice to the contrary.

 

Section 2.10    Surrender of Notes; Cancellation. (a)  Notwithstanding anything
herein to the contrary, no Note may be surrendered (including any surrender in
connection with any abandonment, donation, gift, contribution or other event or
circumstance) except for payments, registration of transfer, exchange,
redemption in accordance with Article IX or for replacement in connection with
any Note that is deemed lost or stolen.

 

(b)     All Notes that are surrendered for payment, registration of transfer,
exchange, redemption or for cancellation, or mutilated, defaced or deemed lost
or stolen, shall be promptly cancelled by the Trustee and may not be reissued or
resold. Any such Notes shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee. No Notes shall be authenticated in lieu of
or in exchange for any Notes canceled as provided in this Section 2.10, except
as expressly permitted by this Indenture. All canceled Notes held by the Trustee
shall be destroyed by the Trustee in accordance with its standard policy, unless
the Co-Issuers shall direct by an Issuer Order received prior to destruction
that they be returned to it.

 

(c)     The Issuer may not acquire any of the Notes (including any Notes that
are surrendered, cancelled or abandoned). The preceding sentence shall not limit
an optional or mandatory redemption of the Notes pursuant to the terms of this
Indenture.

 

Section 2.11    Certificated Notes. (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 only if such transfer
complies with Section 2.6 and either (i) DTC notifies the Co-Issuers that it is
unwilling or unable to continue as depository for such Global Note or (ii) at
any time DTC ceases to be a Clearing Agency registered under the Exchange Act
and, in each case, a successor depository is not appointed by the Co-Issuers
within 90 days after such notice. In addition, the owner of a beneficial
interest in a Global Note shall be entitled to receive a Certificated Note in
exchange for such interest if an Event of Default has occurred and is continuing
and such transfer is requested by the Holder of such Global Note.

 

-95-

--------------------------------------------------------------------------------

 

 

(b)     Any Global Note that is transferable in the form of a Certificated Note
to the beneficial owners thereof pursuant to this Section 2.11 shall be
surrendered by DTC to the Trustee's designated office located in the United
States to be so transferred, in whole or from time to time in part, without
charge, and the Applicable Issuers 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 definitive physical certificates
(pursuant to the instructions of DTC) in Authorized Integrals. Any Certificated
Note delivered in exchange for an interest in a Global Note shall, except as
otherwise provided by Section 2.6(h) and (i), bear the legends set forth in the
applicable Exhibit A and shall be subject to the transfer restrictions referred
to in such legends.

 

(c)     Subject to the provisions of paragraph (b) of this Section 2.11, 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 a 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
subclauses (i) and (ii) of subsection (a) of this Section 2.11, the Co-Issuers
shall promptly make available to the Trustee a reasonable supply of Certificated
Notes in definitive, fully registered form without interest coupons.

 

The Certificated Notes shall be in substantially the same form as the
corresponding Global Notes with such changes therein as the Issuer and Trustee
shall agree. 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
Section 2.11(a), the Issuer expressly acknowledges that the beneficial owners
shall be entitled to pursue any remedy that the Holder of a Global Note would be
entitled to pursue in accordance with Article V of this Indenture (but only to
the extent of such beneficial owner's interest in the Global Note) as if
Certificated Notes had been issued. Neither the Trustee nor the Registrar shall
be liable for any delay in the delivery of directions from the Depository and
may conclusively rely on, and shall be fully protected in relying on, such
direction as to the names of beneficial owners in whose names such Certificated
Notes shall be registered or as to delivery instructions for such Certificated
Notes.

 

Section 2.12     Notes Beneficially Owned by Persons Not QIB/QPs, IAI/QPs or
AI/QPs or in Violation of ERISA Representations. (a) Notwithstanding anything to
the contrary elsewhere in this Indenture, any transfer of (x) a beneficial
interest in any Note to a U.S. person that is not (i) in the case of a Rule 144A
Global Note, a QIB/QP (ii) in the case of a Certificated Secured Note, an
IAI/QP, AI/QP or a QIB/QP, or (y) in the case of a Certificated Subordinated
Note, a QIB/QP or an AI/QP, 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, the
Co-Issuer or the Trustee shall have notice may be disregarded by the Issuer, the
Co-Issuer and the Trustee for all purposes.

 

-96-

--------------------------------------------------------------------------------

 

 

(b)     If (i) any U.S. person that is not a QIB/QP (in the case of a Rule 144A
Global Secured Note) or an IAI/QP, AI/QP or QIB/QP (in the case of a
Certificated Secured Note) shall become the beneficial owner of an interest in
any Secured Note, (ii) any U.S. person that is not a QIB/QP (in the case of a
Rule 144A Global Subordinated Note) or an AI/QP or QIB/QP (in the case of a
Certificated Subordinated Note) that does not have an exemption available under
the Securities Act and the Investment Company Act shall become the beneficial
owner of an interest in any Subordinated Note, or (iii) any U.S. person becomes
the beneficial owner of an interest in any Regulation S Global Secured Note or
Regulation S Global Subordinated Note (any such person a "Non-Permitted
Holder"), the Issuer shall, promptly after discovery that such person is a
Non-Permitted Holder by the Issuer, the Co-Issuer or the Trustee (and notice to
the Issuer by the Trustee if a Trust Officer of the Trustee obtains actual
knowledge or by the Co-Issuer if it makes the discovery), send notice to such
Non-Permitted Holder demanding that such Non-Permitted Holder transfer its
interest in the Notes held by such person to a Person that is not a
Non-Permitted Holder within 30 days of the date of such notice. If such
Non-Permitted Holder fails to so transfer such Notes, the Issuer shall have the
right, without further notice to the Non-Permitted Holder, to sell such Notes or
interest in such Notes to a purchaser selected by the Issuer that is a not a
Non-Permitted Holder on such terms as the Issuer may choose. The Issuer, or the
Collateral Manager (on its own or acting through an investment bank selected by
the Collateral 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. However, 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
Collateral 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 subsection shall be determined in the sole
discretion of the Issuer, and the Issuer shall not 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.

 

(c)     Notwithstanding anything to the contrary elsewhere in this Indenture,
any transfer of a beneficial interest in any Note to a Person who has made or is
deemed to have made an ERISA-related representation required by Section 2.6 that
is subsequently shown to be false or misleading shall be null and void and any
such purported transfer of which the Issuer, the Co-Issuer or the Trustee shall
have notice may be disregarded by the Issuer, the Co-Issuer and the Trustee for
all purposes.

 

-97-

--------------------------------------------------------------------------------

 

 

(d)     If any Person 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, Similar Law or Other Plan Law
representation required by Section 2.6 that is subsequently shown to be false or
misleading or whose beneficial ownership otherwise causes 25% or more of the
Aggregate Outstanding Amount of the Class E Notes, the Senior Subordinated Notes
or the Junior Subordinated Notes being held by Benefit Plan Investors, as
calculated pursuant to 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of
ERISA (any such person a "Non-Permitted ERISA Holder"), the Issuer and/or the
Co-Issuer shall, promptly after discovery that such person is a Non-Permitted
ERISA Holder by the Issuer, the Co-Issuer or the Trustee (and notice to the
Issuer or the Co-Issuer, as applicable, by the Trustee if a Trust Officer of the
Trustee obtains actual knowledge or by the Issuer or the Co-Issuer if it makes
the discovery), send notice to such Non-Permitted ERISA Holder demanding that
such Non-Permitted ERISA Holder transfer its interest in the Notes held by such
person to a Person that is not a Non-Permitted ERISA Holder within 10 days of
the date of such notice. If such Non-Permitted ERISA Holder fails to so transfer
such Notes, the Issuer or the Co-Issuer, as applicable, shall have the right,
without further notice to the Non-Permitted ERISA Holder, to sell such Notes or
interest in such Notes to a purchaser selected by the Issuer or the Co-Issuer,
as applicable, that is a not a Non-Permitted ERISA Holder on such terms as the
Issuer may choose. The Issuer or the Co-Issuer, as applicable, 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. However, the Issuer or the
Co-Issuer, as applicable, may select a purchaser by any other means determined
by it in its sole discretion. The Holder of each Note, the Non-Permitted ERISA
Holder and each other Person in the chain of title from the Holder to the
Non-Permitted ERISA Holder, by its acceptance of an interest in the Notes,
agrees to cooperate with the Issuer or the Co-Issuer, as applicable, 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 ERISA Holder. The terms and conditions of any sale
under this subsection shall be determined in the sole discretion of the Issuer
or the Co-Issuer, as applicable, and the Issuer and the Co-Issuer shall not 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.

 

Section 2.13     Deduction or Withholding from Payments on Notes; No Gross Up.
If the Issuer is required to deduct or withhold 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 authority such amount. Without
limiting the generality of the foregoing, 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.

 

Section 2.14     Tax Treatment; Tax Certifications.

 

(a)     Each Holder (including, for purposes of this Section 2.14, any
beneficial owner of Notes) will treat the Issuer, the Co-Issuer, and the Notes
as described under the heading "Certain U.S. Federal Income Tax Considerations"
in the Offering Circular for U.S. federal, state and local income tax purposes
and will take no action inconsistent with such treatment unless required by law.

 

-98-

--------------------------------------------------------------------------------

 

 

(b)     Each Holder will timely furnish the Issuer, the Trustee or any agent of
the Issuer (including any Paying Agent) any U.S. federal income tax forms or
certifications (such as an applicable IRS Form W-8 (together with appropriate
attachments), IRS Form W-9, or any successors to such IRS forms) that the Issuer
or its agents (including any Paying Agent) may reasonably request, and any
documentation, agreements, information, or certifications that are reasonably
requested by the Issuer or tis agents (including any Paying Agent) (A) to permit
the Issuer or its agents to make payments to it without, or at a reduced rate
of, deduction or withholding, (B) to enable the Issuer or its agents to qualify
for a reduced rate of withholding or deduction in any jurisdiction from or
through which it receives payments, and (C) to enable the Issuer or its agents
to satisfy reporting and other obligations under the Code and Treasury
regulations, and will update or replace such documentation, agreements,
information, or certifications as appropriate or in accordance with their terms
or subsequent amendments, and acknowledges that the failure to provide, update
or replace any such documentation, agreements, information, or certifications
may result in the imposition of withholding or back-up withholding upon payments
to such Holder. Amounts withheld pursuant to applicable tax laws will be treated
as having been paid to a Holder by the Issuer.

 

(c)     Each Holder will provide the Issuer, the Trustee or any other agent of
the Issuer with any correct, complete and accurate information and will take any
other actions that may be required for the Issuer to comply with FATCA and the
Cayman FATCA Legislation and to prevent the imposition of U.S. federal
withholding tax under FATCA on any payment to or for the benefit of the Issuer.
In the event the Holder fails to provide such information or take such actions,
or to the extent that the Holder's ownership of Notes would otherwise cause the
Issuer to be subject to any tax under FATCA, (A) the Issuer (and any agent
acting on its behalf including any Paying Agent) is authorized to withhold
amounts otherwise distributable to such Holder as compensation for any amounts
withheld from payments to or for the benefit of the Issuer as a result of such
failure or the Holder's ownership, and (B) to the extent necessary to avoid an
adverse effect on the Issuer or the Noteholders as a result of such failure or
the Holder's ownership, the Issuer will have the right to compel the Holder to
sell its Notes, and, if such Holder does not sell its Notes within 10 Business
Days after notice from the Issuer, to sell such Notes at a public or private
sale called and conducted in any manner permitted by law, and to remit the net
proceeds of such sale (taking into account any taxes incurred by the Issuer in
connection with such sale) to the Holder as payment in full for such Notes. The
Issuer may also assign each such Note a separate CUSIP or CUSIPs in the Issuer's
sole discretion. Each Holder agrees that the Issuer, the Trustee or their agents
or representatives may (1) provide any information and documentation concerning
its investment in its Notes to the Cayman Islands Tax Information Authority, the
U.S. Internal Revenue Service and any other relevant tax authority and (2) take
such other steps as they deem necessary or helpful to ensure that the Issuer
complies with FATCA and the Cayman FATCA Legislation.

 

(d)      Each Holder of Class E Notes, Senior Subordinated Notes or Junior
Subordinated Notes, if it is not a "United States person" (as defined in Section
7701(a)(30) of the Code), represents that either:

 

(i)       It is not a bank (within the meaning of Section 881(c)(3)(A)) or an
affiliate of a bank;

 

(ii)     If it is a bank (within the meaning of Section 881(c)(3)(A)), then
after giving effect to its purchase of Notes, it (x) will not directly or
indirectly own more than 33-1/3%, by number or value, of the aggregate of the
Notes within such Class and will not otherwise be related to the Issuer (within
the meaning of Section 267(b) of the Code) and (y) has not purchased the Notes
in whole or in part to avoid any U.S. federal tax liability (including, without
limitation, any U.S. withholding tax that would be imposed on the Notes with
respect to the Collateral Obligations if held directly by the Holder) within the
meaning of Treasury Regulation 1.881-3; or

 

-99-

--------------------------------------------------------------------------------

 

 

(iii)     It has provided an IRS Form W-8ECI representing that all payments
received or to be received by it from the Issuer are effectively connected with
the conduct of a trade or business in the United States and includible in its
gross income or has provided an Internal Revenue Service Form W-8BEN or W-8BEN-E
representing that 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.

 

(e)     Each Holder of Class E Notes, Senior Subordinated Notes or Junior
Subordinated Notes will not treat any income with respect to its Class E Notes,
Senior Subordinated Notes or Junior Subordinated Notes as derived in connection
with the Issuer's active conduct of a banking, financing, insurance, or other
similar business for purposes of Section 954(h)(2) of the Code.

 

(f)     Each Holder must provide the Issuer with any documentation reasonably
requested by the Issuer to permit the Issuer to (i) make payments to the
investor without, or at a reduced rate of, deduction or withholding, (ii)
qualify for a reduced rate of withholding or deduction in any jurisdiction from
or through which the Issuer receives payments on its assets and (iii) satisfy
its tax reporting and other obligations.  Moreover, each Holder will indemnify
the Issuer and other Holders for all damages, costs and expenses (including any
amount of taxes, fees, interest, additions to tax, or penalties) resulting from
the failure by such Holder to provide information (or from such Holder providing
incorrect or incomplete information).  The indemnification will continue with
respect to any period during which the Holder held Notes (and any interest
therein), notwithstanding the Holder ceasing to be a Holder of the Notes.

 

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 executed by the
Applicable Issuers 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)     Officers' Certificates of the Co-Issuers Regarding Corporate Matters. An
Officer's certificate of each of the Co-Issuers (A) evidencing the authorization
by Board Resolution of the execution and delivery of this Indenture, the
Purchase Agreement, and, in the case of the Issuer, the Collateral Management
Agreement, the Collateral Administration Agreement, any Hedge Agreements and
related transaction documents and in each case the execution, authentication and
delivery of the Notes applied for by it and specifying the Stated Maturity,
principal amount and Note Interest Rate of each Class of Secured Notes to be
authenticated and delivered, and the Stated Maturity, Senior Subordinated Note
Rate (with respect to the Senior Subordinated Notes) and principal amount of
each Class of Subordinated Notes to be authenticated and delivered and (B)
certifying that (1) the attached copy of the Board Resolution is a true and
complete copy thereof, (2) such resolutions have not been rescinded and are in
full force and effect on and as of the Closing Date and (3) the Officers
authorized to execute and deliver such documents hold the offices and have the
signatures indicated thereon.

 

-100-

--------------------------------------------------------------------------------

 

 

(ii)     Governmental Approvals. From each of the Co-Issuers either (A) a
certificate of the Applicable 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 Applicable Issuer to the effect that no other authorization,
approval or consent of any governmental body is required for the valid issuance
of the Notes, or (B) an Opinion of Counsel of the Applicable Issuer to the
effect that no such authorization, approval or consent of any governmental body
is required for the valid issuance of such Notes except as have been given
(provided that the opinions delivered pursuant to Section 3.1(a)(iii) and
Section 3.1(a)(iv) may satisfy the requirement).

 

(iii)     U.S. Counsel Opinions. Opinions of Allen & Overy LLP, special U.S.
counsel to the Co-Issuers and the Initial Purchaser, Katten Muchin Rosenman LLP,
special U.S. counsel to the Collateral Manager and Alston & Bird LLP, counsel to
the Trustee and the Collateral Administrator, in each case dated the Closing
Date, in form and substance satisfactory to the Issuer.

 

(iv)     Cayman Counsel Opinion. An opinion of Appleby (Cayman) Ltd., Cayman
Islands counsel to the Issuer, dated the Closing Date, in form and substance
satisfactory to the Issuer.

 

(v)     Officers' Certificates of Co-Issuers Regarding Indenture. An Officer's
certificate of each of the Co-Issuers stating that the Applicable Issuer is not
in default under this Indenture and that the issuance of the Notes applied for
by it shall 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 applied for by it have
been complied with; and that all expenses due or accrued with respect to the
Offering or relating to actions taken on or in connection with the Closing Date
have been paid or reserves therefor have been made. The Officer's certificate of
the Issuer shall also state that all of its representations and warranties
contained herein are true and correct as of the Closing Date.

 

(vi)     Hedge Agreements. Executed copies of any Hedge Agreement entered into
by the Issuer, if any.

 

-101-

--------------------------------------------------------------------------------

 

 

(vii)      Transaction Documents. An executed counterpart of each Transaction
Document.

 

(viii)     Certificate of the Collateral Manager. An Officer's certificate of
the Collateral Manager, dated as of the Closing Date, to the effect that, to the
best knowledge of the Collateral Manager, in the case of each Collateral
Obligation (1) pledged to the Trustee for inclusion in the Assets, as the case
may be, on the Closing Date and immediately before the Delivery of such
Collateral Obligation on the Closing Date, or (2) with respect to which the
Collateral Manager has entered into a binding commitment to purchase or enter
into on behalf of the Issuer as of the Closing Date, as the case may be:

 

(A)     the Issuer already owns or has entered into binding agreements to
purchase or enter into, as the case may be, Collateral Obligations with an
aggregate par amount of at least U.S.$398,000,000 as of the Closing Date.

 

(B)     such Collateral Obligation satisfies the requirements of the definition
of "Collateral Obligation" and of Section 3.1(a)(x)(B).

 

(ix)      Grant of Collateral Obligations. The Grant pursuant to the Granting
Clause of this Indenture of all of the Issuer's right, title and interest in and
to the Collateral Obligations on the Closing Date and Delivery of such
Collateral Obligations (including any promissory note and all other Underlying
Instruments related thereto to the extent received by the Issuer) as
contemplated by Section 3.3.

 

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

 

(A)     upon Delivery of each such Collateral Obligation, the Issuer will be 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 prior to Delivery of such Collateral Obligation and (ii) those Granted
pursuant to this Indenture;

 

(B)     the Issuer has acquired or has entered into a binding commitment to
acquire its ownership in such Collateral Obligation in good faith without notice
of any adverse claim (as such term is defined in Section 8 102(a)(1) of the
UCC), except as described in paragraph (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 or is being
released on the Closing Date) other than interests Granted pursuant to this
Indenture;

 

-102-

--------------------------------------------------------------------------------

 

 

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

 

(E)     based in part on the certificate of the Collateral Manager delivered
pursuant to Section 3.1(a)(viii), each Collateral Obligation included in the
Assets satisfies the requirements of the definition of "Collateral Obligation"
and of Section 3.1(a)(x); and

 

(F)     upon Grant by the Issuer, the Trustee has a first priority perfected
security interest in the Collateral Obligations and other Assets, except as
permitted by this Indenture.

 

(xi)       Rating Letters. A letter signed by each Rating Agency, as applicable,
confirming that each Class of Secured Notes has been assigned the applicable
Initial Rating and that such ratings are in effect on the Closing Date.

 

(xii)      Accounts. Evidence of the establishment of each of the Accounts.

 

(xiii)     Other Documents. Such other documents as the Trustee may reasonably
require; provided that nothing in this clause (xiii) shall imply or impose a
duty on the part of the Trustee to require any other documents.

 

(b)        The Issuer (or the Information Agent on the Issuer's behalf and at
the Issuer's request) shall post copies of the documents specified in
Section 3.1(a) (other than the rating letters specified in clause (xi) thereof)
on the 17g-5 Website as soon as practicable after the Closing Date.

 

Section 3.2     Conditions to Issuance of Additional Notes. (a) Additional Notes
to be issued on an Additional Notes Closing Date pursuant to Section 2.4 may be
executed by the Applicable Issuers and delivered to the Trustee for
authentication and thereupon the same shall be authenticated and delivered to
the Issuer by the Trustee upon Issuer Order, upon compliance with clauses (ix)
and (x) of Section 3.1(a) (with all references therein to the Closing Date being
deemed to be the applicable Additional Notes Closing Date) and upon receipt by
the Trustee of the following:

 

(i)      Officers' Certificates of the Co-Issuers Regarding Corporate Matters.
An Officer's certificate of each of the Co-Issuers (1) evidencing the
authorization by Board Resolution of the execution and delivery of a
supplemental indenture pursuant to Section 8.2(b) and the execution,
authentication and delivery of the Additional Notes applied for by it and
specifying the Stated Maturity, the principal amount and Note Interest Rate of
each Class of such Additional Notes that are Secured Notes and the Stated
Maturity, Senior Subordinated Note Rate (with respect to the Senior Subordinated
Notes) and principal amount of each Class of the Subordinated Notes to be
authenticated and delivered, and (2) certifying that (a) the attached copy of
such Board Resolution is a true and complete copy thereof, (b) such resolutions
have not been rescinded and are in full force and effect on and as of the
Additional Notes Closing Date and (c) the Officers authorized to execute and
deliver such documents hold the offices and have the signatures indicated
thereon.

 

-103-

--------------------------------------------------------------------------------

 

 

(ii)     Governmental Approvals. From each of the Co-Issuers either (A) a
certificate of the Applicable 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 Applicable Issuer to the effect that no other authorization,
approval or consent of any governmental body is required for the valid issuance
of such Additional Notes, or (B) an Opinion of Counsel of the Applicable Issuer
to the effect that no such authorization, approval or consent of any
governmental body is required for the valid issuance of such Additional Notes
except as have been given (provided that the opinions delivered pursuant to
Section 3.2(a)(iii) or Section 3.2(a)(iv) may satisfy the requirement).

 

(iii)     U.S. Counsel Opinions. Opinions of Allen & Overy LLP, special U.S.
counsel to the Co-Issuers, Katten Muchin Rosenman LLP, special U.S. counsel to
the Collateral Manager or other counsel acceptable to the Trustee, dated the
Additional Notes Closing Date, in form and substance satisfactory to the Issuer
and the Trustee.

 

(iv)     Cayman Counsel Opinion. An opinion of Appleby (Cayman) Ltd., Cayman
Islands counsel to the Issuer, or other counsel acceptable to the Trustee, dated
the Additional Notes Closing Date, in form and substance satisfactory to the
Issuer.

 

(v)      Officers' Certificates of Co-Issuers Regarding Indenture. An Officer's
certificate of each Co-Issuer stating that the Applicable Issuer is not in
default under this Indenture and that the issuance of the Additional Notes
applied for by it shall 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 and the supplemental indenture pursuant to Section 8.2(b) relating to
the authentication and delivery of the Additional Notes applied for have been
complied with and that the authentication and delivery of the Additional Notes
is authorized or permitted under this Indenture and the supplemental indenture
entered into in connection with such Additional Notes; and that all expenses due
or accrued with respect to the Offering of the Additional Notes or relating to
actions taken on or in connection with the Additional Notes Closing Date have
been paid or reserved. The Officer's certificate of the Issuer shall also state
that all of its representations and warranties contained herein are true and
correct as of the Additional Notes Closing Date.

 

(vi)     Accountants' Report. An Accountants' Report in form and content
satisfactory to the Issuer (A) if applicable, comparing and agreeing the issuer,
Principal Balance, coupon/spread, Stated Maturity, Moody's Default Probability
Rating, Moody's Rating and country of Domicile with respect to each Collateral
Obligation pledged in connection with the issuance of such Additional Notes and
the information provided by the Issuer with respect to every other asset
included in the Assets, by reference to such sources as shall be specified
therein, if additional Assets are pledged directly in accordance with such
Additional Notes issuance and (B) specifying the procedures undertaken by them
to recalculate and compare data and computations relating to the foregoing
statement; provided that if only additional Subordinated Notes are being issued,
no such Accountants' Report shall be required.

 

-104-

--------------------------------------------------------------------------------

 

 

(vii)     Other Documents. Such other documents as the Trustee may reasonably
require; provided that nothing in this clause (viii) shall imply or impose a
duty on the Trustee to so require any other documents.

 

Prior to any Additional Notes Closing Date, the Trustee shall provide to the
Holders notice of such issuance of Additional Notes as soon as reasonably
practicable but in no case less than 15 days prior to the Additional Notes
Closing Date; provided that the Trustee shall receive such notice at least two
Business Days prior to the 15th day prior to such Additional Notes Closing Date.
On or prior to any Additional Notes Closing Date, the Trustee shall provide to
the Holders copies of any supplemental indentures executed as part of such
issuance.

 

Section 3.3     Custodianship; Delivery of Collateral Obligations and Eligible
Investments. (a) The Collateral Manager, on behalf of the Issuer, shall use
commercially reasonable efforts to deliver or cause to be delivered to a
custodian appointed by the Issuer, which shall be a Securities Intermediary (the
"Custodian"), all Assets in accordance with the definition of "Deliver".
Initially, the Custodian shall be the Trustee. The Custodian hereby represents
and warrants that (i) in the case of any non-Cash holding Accounts, such
Accounts are segregated trust accounts held with the corporate trust department
of a federal or state-chartered depository institution subject to regulations
regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal
Regulation Section 9.10(b) and such depository institution has (I) a long-term
CR Assessment of at least "Baa3(cr)" by Moody's (or if such institution has no
CR Assessment, a long-term senior unsecured debt rating of at least "Baa3" by
Moody's) and (II) a long-term debt rating of at least "A+" by Fitch (if there is
no short-term debt rating by Fitch) or a long-term debt rating of at least "A"
by Fitch and a short-term debt rating of at least "F1" by Fitch and (ii) in the
case of any Cash holding Accounts, it has (I) a long-term debt rating of at
least "A+" by Fitch (if there is no short-term debt rating by Fitch) or a
long-term debt rating of at least "A" by Fitch and a short-term debt rating of
at least "F1" by Fitch and (II) a long-term senior unsecured debt rating of at
least "A2" or a short-term debt rating of at least "P-1" by Moody's. The
Custodian also has capital and surplus of at least U.S.$200,000,000. If at any
time the Custodian fails to satisfy these requirements, the Trustee shall
appoint a successor Custodian within 30 calendar days that is able to satisfy
such requirements. Any successor Custodian shall, in addition to satisfying the
above requirements, be a state or national bank or trust company that is not an
Affiliate of the Issuer or the Co-Issuer and a Securities Intermediary. Subject
to the limited right to relocate Pledged Obligations 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 Securities Account Control Agreement with the Custodian providing,
inter alia, that the establishment and maintenance of such Account shall be
governed by a law of a jurisdiction satisfactory to the Issuer and the Trustee.

 

-105-

--------------------------------------------------------------------------------

 

 

(b)     Subject to the limited right to relocate Pledged Obligations 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 Securities Account Control Agreement with the Custodian providing,
inter alia, that the establishment and maintenance of such Account shall be
governed by a law of a jurisdiction satisfactory to the Issuer and the Trustee.

 

(c)     Each time that the Collateral Manager on behalf of the Issuer directs or
causes the acquisition of any Collateral Obligation, Eligible Investment, or
other investments, the Collateral 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, use
commercially reasonable efforts to 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 to any contracts related
to and proceeds of the Collateral Obligations, Eligible Investments, or other
investments.

 

ARTICLE IV

SATISFACTION AND DISCHARGE

 

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 thereon, (iv) the rights, protections,
indemnities and immunities of the Trustee and the specific obligations set forth
below, (v) the rights, obligations and immunities of the Collateral Manager
hereunder, under the Collateral Management Agreement and under the Collateral
Administration Agreement, (vi) the rights, protections, indemnities and
immunities of the Collateral Administrator hereunder and under the Collateral
Administration Agreement and (vii) the rights of Holders as beneficiaries hereof
with respect to the property deposited with the Trustee and payable to all or
any of them (and the Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture) when:

 

(a)     either:

 

(i)     all Notes theretofore authenticated and delivered 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 2.7 and (B) Notes for
whose payment Money has theretofore irrevocably been deposited in trust and
thereafter repaid to the Issuer or discharged from such trust, as provided in
Section 7.3, have been delivered to the Trustee for cancellation;

 

-106-

--------------------------------------------------------------------------------

 

 

(ii)     all Notes not theretofore delivered to the Trustee for cancellation (A)
have become due and payable, or (B) shall 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 Applicable Issuers pursuant to Section 9.5 and
either (1) 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 Moody's and "AAA" by S&P, in an amount
sufficient, as recalculated and compared by a firm of Independent certified
public accountants which are nationally recognized, to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the Trustee for
cancellation, for principal and interest to the date of such deposit (in the
case of Notes which have become due and payable), or to the respective Stated
Maturity or the respective Redemption Date, as the case may be, and shall have
Granted to the Trustee a valid perfected security interest in such Eligible
Investment that is of first priority or free of any adverse claim, as
applicable, and shall have furnished an Opinion of Counsel with respect thereto
or (2) in the event all of the Assets are liquidated following the satisfaction
of the conditions specified in Section 5.5(a), the Issuer shall have paid or
caused to be paid all proceeds of such liquidation of the Assets in accordance
with the Priority of Payments; or

 

(iii)     all of the Assets have been disposed of and the Issuer shall have paid
or caused to be paid all proceeds of such disposition of Assets in accordance
with the Priority of Payments;

 

(b)     with respect to clauses (a)(i) or (a)(ii) above:

 

(i)     the Issuer has paid or caused to be paid all other sums then due and
payable hereunder (including any amounts then due and payable pursuant to the
Hedge Agreements, the Collateral Administration Agreement and the Collateral
Management Agreement without regard to the Administrative Expense Cap) by the
Issuer and no other amounts are scheduled to be due and payable by the Issuer
(it being understood that the requirements of this clause (b) may be deemed
satisfied as set forth in Section 5.7); and

 

(ii)     all Assets of the Issuer that are subject to the lien of this Indenture
have been released and the proceeds thereof have been distributed, in each case
in accordance with this Indenture, and the Accounts have been closed; and

 

(c)     the Co-Issuers have delivered to the Trustee, Officer's certificates
(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 and any paid or unpaid obligations
of the Co-Issuers of which the Trustee has received written notice) and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with.

 

-107-

--------------------------------------------------------------------------------

 

 

Notwithstanding the satisfaction and discharge of this Indenture, the rights and
obligations of the Co-Issuers, the Trustee, the Collateral Manager and, if
applicable, the Holders, as the case may be, under Sections 2.8, 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.

 

Section 4.2     Application of Trust Money. All Monies deposited with the
Trustee pursuant to Section 4.1 shall be held in trust and applied by it in
accordance with the provisions of the Notes and this Indenture, including,
without limitation, the Priority of Payments, to the payment of principal and
interest (or other amounts with respect to the Subordinated Notes), either
directly or through any Paying Agent, as the Trustee may determine; and such
Money shall be held in a segregated account identified as being held in trust
for the benefit of the Secured Parties in accordance with the requirements of
Section 6.8.

 

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 Co-Issuers, be paid to the Trustee
to be held and applied pursuant to Section 7.3 hereof 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     Limitation on obligation to incur Administrative Expenses. If at
any time when this Indenture is eligible to be discharged pursuant to Section
4.1 (i) the sum of (A) Eligible Investments (including Cash) and (B) amounts
reasonably expected to be received by the Issuer in Cash during the current
Collection Period (as certified by the Collateral Manager in its reasonable
judgment) is less than (ii) the sum of (A) an amount not to exceed the greater
of (x) U.S.$30,000 and (y) the amount (if any) reasonably certified by the
Collateral Manager or the Issuer, including but not limited to fees and expenses
incurred by the Trustee and reported to the Collateral 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
Co-Issuers and (B) any accrued and unpaid Administrative 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 amounts owed the Trustee, the
Collateral Administrator (or any other capacity in which the Bank is acting
pursuant to the Transaction Documents), the Administrator and their respective
Affiliates, including for opinions of counsel in connection with supplemental
indentures pursuant to Article VIII, any annual opinions required hereunder,
services of accountants and fees of the Rating Agencies, in each case as
required under this Indenture and failure to pay such amounts or provide or
obtain such opinions, reports or services shall not constitute a default under
this Indenture, 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 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.

 

-108-

--------------------------------------------------------------------------------

 

 

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 Note or any Class B Note or, if there are no Class A Notes or Class
B Notes Outstanding, any Class C Note or, if there are no Class A Notes, Class B
Notes or Class C Notes Outstanding, any Class D Note, or, if there are no Class
A Notes, Class B Notes, Class C Notes or Class D Notes Outstanding, any Class E
Note, and, in each case, the continuation of any such default for five (5)
Business Days, or (ii) any principal, interest, or Deferred Interest on, or any
Redemption Price in respect of, any Secured Note at its Stated Maturity or any
Redemption Date, and, in each case, the continuation of such default for five
(5) Business Days; provided that in the case of a default in payment resulting
solely from an administrative error or omission by the Collateral Manager, the
Administrator, the Trustee, any Paying Agent or the Registrar, such default
continues for a period of seven (7) or more Business Days after the Trustee
receives written notice or a Trust Officer has actual knowledge of the
occurrence of such administrative error or omission; provided, further, that, in
the case of any default on any Redemption Date, only to the extent that such
default continues for a period of five (5) or more Business Days; provided,
further, that the failure to effect any Optional Redemption or Tax Redemption
for which notice is withdrawn by the Issuer in accordance with Section 9.5(b),
or with respect to a failed Refinancing, shall not constitute an Event of
Default.

 

(b)     the failure on any Payment Date to disburse amounts in excess of
U.S.$1,000 available in the Payment Account (other than a default in payment
described in clause (a) above) in accordance with the Priority of Payments and
continuation of such failure for a period of five (5) Business Days (provided
that if such failure results solely from an administrative error or omission by
the Collateral Manager, the Administrator, the Trustee, any Paying Agent or the
Registrar or due to another non-credit related reason, such default continues
for a period of seven (7) or more Business Days after the Trustee receives
written notice or a Trust Officer has actual knowledge of such administrative
error, omission or other non-credit related reason);

 

(c)     either of the Co-Issuers 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 forty-five (45) days;

 

-109-

--------------------------------------------------------------------------------

 

 

(d)     except as otherwise provided in this Section 5.1, a default, in the
performance, or breach, of any other covenant or other agreement of the Issuer
or the Co-Issuer in this Indenture (it being understood, without limiting the
generality of the foregoing, that any failure to meet any Concentration
Limitation, Portfolio Quality Test, Coverage Test or the Reinvestment Diversion
Test is not an Event of Default and any failure to satisfy the requirements
described under Section 7.17 is not an Event of Default (excluding, with respect
to any failure to satisfy the requirements described under Section 7.17, the
Collateral Manager, on behalf of the Issuer, acting in bad faith in its actions
thereunder)), or the failure of any representation or warranty of the Issuer or
the Co-Issuer made in this Indenture or in any certificate or other writing
delivered pursuant hereto or in connection herewith to be correct when the same
shall have been made and such default, breach or failure, as applicable, has a
material adverse effect on the Holders of any Class of Notes and the
continuation of such default, breach or failure for a period of thirty (30) days
after either notice (i) to the Collateral Manager by registered or certified
mail or overnight courier from the Trustee or the Applicable Issuers or (ii) to
the Applicable Issuers, the Collateral Manager and the Trustee by the Holders of
a Majority of the Controlling Class, specifying such default, breach or failure
and requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder;

 

(e)     on any Measurement Date so long as any Class A Notes are Outstanding,
the failure of the quotient of (i) the sum of (A) the Collateral Principal
Amount (excluding Defaulted Obligations), plus (B) the Market Value of each
Defaulted Obligation, divided by (ii) the Aggregate Outstanding Amount of the
Class A Notes, to equal or exceed 102.5%.

 

(f)     the entry of a decree or order by a court having competent jurisdiction
adjudging the Issuer or the Co-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 or the Co-Issuer under the Bankruptcy
Law or any other applicable law, or appointing a receiver, liquidator, assignee,
or sequestrator (or other similar official) of the Issuer or the Co-Issuer or of
any substantial part of its property, respectively, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days;

 

(g)     the institution by the shareholders of the Issuer or the members of the
Co-Issuer of Proceedings to have the Issuer or the Co-Issuer, as the case may
be, adjudicated as bankrupt or insolvent, or the consent by the shareholders of
the Issuer or the members of the Co-Issuer to the institution of bankruptcy or
insolvency Proceedings against the Issuer or the Co-Issuer, as the case may be,
or the filing by the Issuer or the Co-Issuer of a petition or answer or consent
seeking reorganization or relief under the Bankruptcy Law or any other similar
applicable law, or the consent by the Issuer or the Co-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 the Co-Issuer or of any substantial part of its property,
respectively, or the making by the Issuer or the Co-Issuer of an assignment for
the benefit of creditors, or the admission by the Issuer or the Co-Issuer in
writing of its inability to pay its debts generally as they become due, or the
taking of any action by the Issuer or the Co-Issuer in furtherance of any such
action; or

 

For the avoidance of doubt, the failure to pay the Senior Subordinated Note
Amount on any Payment Date due to the unavailability of funds in respect thereof
will not constitute an Event of Default.

 

-110-

--------------------------------------------------------------------------------

 

 

Upon obtaining knowledge of the occurrence of an Event of Default, each of
(i) the Co-Issuers, (ii) the Trustee and (iii) the Collateral Manager shall
notify each other in writing and the Trustee shall provide the notices of
Default required under Section 6.2.

 

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(f) or (g)), the Trustee shall, upon the written
direction of a Majority of the Controlling Class, by notice to the Applicable
Issuers and the Rating Agencies, declare the principal of all the Secured Notes
to be immediately due and payable, and upon any such declaration such principal,
together with all accrued and unpaid interest thereon, and other amounts payable
hereunder, shall become immediately due and payable and the Reinvestment Period
shall terminate (subject to reinstatement upon the rescission of the related
declaration of acceleration pursuant to Section 5.2(b)). If an Event of Default
specified in Section 5.1(f) or (g) occurs, all unpaid principal, together with
all accrued and unpaid interest thereon, of all the Secured 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
Noteholder.

 

(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 and the Trustee, may
rescind and annul such declaration and its consequences if:

 

(i)          The Issuer or the Co-Issuer has paid or deposited with the Trustee
a sum sufficient to pay:

 

(A)     all unpaid installments of interest and principal then due on the
Secured Notes (other than any principal amounts due to the occurrence of an
acceleration);

 

(B)     to the extent that the payment of such interest is lawful, interest upon
any Deferred Interest at the applicable Note Interest Rates; and

 

(C)     all unpaid taxes and Administrative Expenses of the Co-Issuers and other
sums paid, incurred or advanced by the Trustee hereunder and any other amounts
then payable by the Co-Issuers hereunder prior to such Administrative Expenses;
and

 

(ii)         if it has been determined that all Events of Default, other than
the nonpayment of the interest on or principal of the Secured Notes, have (A)
been cured, and a Majority of the Controlling Class by written notice to the
Trustee 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 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. The Trustee
shall provide Fitch with notice of any rescission pursuant to this Section
5.2(b).

 

-111-

--------------------------------------------------------------------------------

 

 

(c)     Notwithstanding anything in this Section 5.2 to the contrary, the
Secured Notes shall not be subject to acceleration by the Trustee or a Majority
of the Controlling Class solely as a result of the failure to pay any amount due
on Notes that are not of the Controlling Class.

 

Section 5.3     Collection of Indebtedness and Suits for Enforcement by Trustee.
The Applicable Issuers covenant that if a default shall occur in respect of the
payment of any principal of or interest when due and payable on any Secured
Note, the Applicable Issuers shall, upon demand of the Trustee, pay to the
Trustee, for the benefit of the Holder of such Secured Note, the whole amount,
if any, then due and payable on such Secured Note for principal and interest
with interest upon the overdue principal, at the applicable Note 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 or the Co-Issuer fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
upon written direction of a Majority 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
Applicable Issuers or any other obligor upon the Secured Notes and collect the
Monies adjudged or decreed to be payable in the manner provided by law out of
the Assets (subject, in each case, to the Trustee's rights hereunder, including
Section 6.1(c)(iv)).

 

If an Event of Default occurs and is continuing, the Trustee shall upon written
direction of the Majority 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 Majority 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
(subject, in each case, to the Trustee's rights hereunder, including
Section 6.1(c)(iv)).

 

In case there shall be pending Proceedings relative to the Issuer or the
Co-Issuer or any other obligor upon the Secured Notes under the Bankruptcy Law
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, the Co-Issuer or their respective property or such
other obligor or its property, or in case of any other comparable Proceedings
relative to the Issuer, the Co-Issuer or other obligor upon the Secured Notes,
or the creditors or property of the Issuer, the Co-Issuer or such other obligor,
the Trustee, regardless of whether the principal of any Secured 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:

 

-112-

--------------------------------------------------------------------------------

 

 

(a)     to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Secured Notes, as applicable,
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
Secured Noteholders or Holders allowed in any Proceedings relative to the
Issuer, the Co-Issuer or other obligor upon the Secured Notes or to the
creditors or property of the Issuer, the Co-Issuer or such other obligor;

 

(b)     unless prohibited by applicable law and regulations, to vote on behalf
of the Holders of the Secured Notes upon the direction of such Holders, 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 Noteholders 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 Secured Noteholders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Secured Noteholders 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.

 

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 Secured
Noteholder, any plan of reorganization, arrangement, adjustment or composition
affecting the Secured Notes or any Holder thereof, or to authorize the Trustee
to vote in respect of the claim of any Secured Noteholder 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
Secured 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 Secured 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).

 

-113-

--------------------------------------------------------------------------------

 

 

Section 5.4     Remedies. (a) If an Event of Default shall have occurred and be
continuing, and the Secured Notes have been declared due and payable and such
declaration and its consequences have not been rescinded and annulled, the
Co-Issuers agree that the Trustee shall, upon written direction of both (x) a
Supermajority of the Controlling Class and (y) a Supermajority of each other
Class of Secured Notes (voting separately by Class), provided that the Par Value
Ratio applicable to the Class of Secured Notes ranking immediately senior to
such Class of Secured Notes is greater than 100%, exercise one or more of the
following rights, privileges and remedies to the extent permitted by applicable
law (subject, in each case, to the Trustee's rights hereunder, including
Section 6.1(c)(iv)):

 

(i)       institute Proceedings for the collection of all amounts then payable
on the Secured 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 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 Secured Notes hereunder (including, without
limitation, exercising all rights of the Trustee under the Securities Account
Control Agreement); and

 

(v)      exercise any other rights and remedies that may be available at law or
in equity;

 

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 specified in Section 5.5(a).

 

The Trustee may, but need not, obtain (as an Administrative Expense of the
Co-Issuers) and rely upon an opinion of an Independent investment banking firm
of national reputation, or other appropriate advisor concerning the matter,
which may (but need not) be the Initial Purchaser, 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 Secured
Notes, which opinion 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) hereof shall have
occurred and be continuing the Trustee may, and at the written direction of the
Holders of a Majority of the Aggregate Outstanding Amount of the Controlling
Class shall, 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, and enforce any equitable
decree or order arising from such Proceeding (subject to the Trustee's rights
hereunder, including Section 6.1(c)(iv)).

 

-114-

--------------------------------------------------------------------------------

 

 

(c)     Upon any sale, whether made under the power of sale hereby given or by
virtue of judicial Proceedings, any Secured Party 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; and any purchaser at any such sale of Assets may,
in paying the purchase Money, deliver to the Trustee for cancellation any of the
Class A Notes in lieu of Cash equal to the amount which shall, upon distribution
of the net proceeds of such sale, be payable on the Class A Notes so delivered
by such Holder (taking into account the Priority of Payments and Article XIII).
Said Notes, in case the amounts payable thereon shall be less than the amount
due thereon, shall be returned to the Holders thereof after proper notation has
been made thereon to show partial payment.

 

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

 

Any such sale, whether under any power of sale hereby given or by virtue of
judicial Proceedings, shall bind the Co-Issuers, the Trustee and the Holders of
the Secured 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)     (i)     Notwithstanding any other provision of this Indenture, none of
the Noteholders, the Trustee or the other Secured Parties may, prior to the date
which is one year and one day (or if longer, any applicable preference period
plus one day) after the payment in full of all Notes, institute against, or join
any other Person in instituting against, the Issuer, the Co-Issuer or any Issuer
Subsidiary any bankruptcy, reorganization, arrangement, insolvency, moratorium
or liquidation Proceedings, or other Proceedings under Cayman Islands, U.S.
federal or State bankruptcy or similar laws. Nothing in this Section 5.4 shall
preclude, or be deemed to stop, the Trustee (i) from taking any action prior to
the expiration of the aforementioned period in (A) any case or Proceeding
voluntarily filed or commenced by the Issuer or the Co-Issuer or (B) any
involuntary insolvency Proceeding filed or commenced by a Person other than the
Trustee, or (ii) from commencing against the Issuer or the Co-Issuer or any of
its properties any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation Proceeding.

 

-115-

--------------------------------------------------------------------------------

 

 

(ii)     In the event one or more Holders or beneficial owners of Notes
institutes, or joins in the institution of, a proceeding described in clause (i)
above against the Issuer, the Co-Issuer or any Issuer Subsidiary in violation of
the prohibition described above, such Holder(s) or beneficial owner(s) shall be
deemed to acknowledge and agree that any claim that such Holder(s) or beneficial
owner(s) have against the Issuer, the Co-Issuer or any Issuer Subsidiary, as
applicable, or with respect to any Assets (including any proceeds thereof)
shall, notwithstanding anything to the contrary in the Priority of Payments, be
fully subordinate in right of payment to the claims of each Holder and
beneficial owner of any Secured Note that does not seek to cause any such
filing, with such subordination being effective until each Secured Note held by
each Holder or beneficial owners of any Secured Note that does not seek to cause
any such filing is paid in full in accordance with the Priority of Payments
(after giving effect to such subordination). The terms described in the
immediately preceding sentence are referred to herein as the "Bankruptcy
Subordination Agreement." The Bankruptcy Subordination Agreement is intended to
constitute a "subordination agreement" within the meaning of Section 510(a) of
the U.S. Bankruptcy Code (Title 11 of the United States Code, as amended from
time to time (or any successor statute)). The Trustee shall be entitled to rely
upon an Issuer Order with respect to the payment of any amounts payable to
Holders, which amounts are subordinated pursuant to this Section 5.4(d)(ii). In
order to give effect to the foregoing, the Issuer will, to the extent necessary,
obtain and assign a separate CUSIP or CUSIPs to the Notes of each Class held by
such Holders.

 

(e)     The Issuer or the Co-Issuer, as applicable, shall, so long as any Notes
remain Outstanding and for a year and a day thereafter, and subject to the
proviso below, timely file an answer and any other appropriate pleading
objecting to (i) the institution of any Proceeding to have the Issuer or the
Co-Issuer, as the case may be, adjudicated as bankrupt or insolvent or (ii) the
filing of any petition seeking relief, reorganization, arrangement, adjustment
or composition of or in respect of the Issuer or the Co-Issuer, as the case may
be, under Bankruptcy Law or any other applicable law; provided, that the
obligations set forth in clauses (i) and (ii) above shall be subject to the
availability of funds therefor under the Priority of Payments. The reasonable
fees, costs, charges and expenses incurred by the Issuer or Co-Issuer (including
reasonable attorneys' fees and expenses) in connection with taking any such
action shall be paid as Administrative Expenses.

 

Section 5.5     Optional Preservation of Assets. (a) Notwithstanding anything to
the contrary herein, if an Event of Default shall have occurred and be
continuing, the Trustee shall retain the Assets securing the Secured Notes
intact (except as otherwise permitted or required by Sections 7.8(d), 7.8(e),
7.16, 10.7 and Article XII), 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(d), determines that the anticipated
proceeds of a sale or liquidation of all or any portion of the Assets (after
deducting the reasonable expenses of 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 Secured Notes for principal and interest
(including accrued and unpaid Deferred Interest) and all amounts payable prior
to payment of principal on such Secured Notes (including (x) amounts due and
owing as Administrative Expenses (without regard to the Administrative Expense
Cap), (y) amounts payable to the Collateral Manager as Senior Management Fees,
and (z) amounts payable to any Hedge Counterparty upon liquidation of all or any
portion of the Assets) and a Majority of the Controlling Class agrees with such
determination; or

 

-116-

--------------------------------------------------------------------------------

 

 

(ii)     (A) with respect to an Event of Default specified in Section 5.1(a) or
(e) (without regard to the occurrence of any other Event of Default prior or
subsequent to the occurrence of such Event of Default, unless such Event of
Default occurred solely as a result of acceleration), the Holders of at least a
Supermajority of the Controlling Class direct the sale and liquidation of the
Assets or (B) with respect to any other Event of Default, Holders of at least
(a) a Supermajority of the Controlling Class and (b) a Supermajority of each
other Class of Secured Notes (voting separately by Class) with respect to which
the Par Value Ratio applicable to the Class of Secured Notes ranking immediately
senior to such Class of Secured Notes is greater than 100%, direct the sale and
liquidation of the Assets.

 

The Trustee shall give written notice of the retention of the Assets to the
Issuer with a copy to the Co-Issuer and the Collateral Manager. So long as such
Event of Default is continuing, any such retention pursuant to this
Section 5.5(a) may be rescinded at any time when the conditions specified in
clause (i) or (ii) exist.

 

In the event a liquidation of all or any portion of the Assets is commenced in
accordance with this Section 5.5, all unpaid principal, together with all
accrued and unpaid interest thereon, of all the Secured Notes, and other amounts
payable under this Indenture, shall automatically become due and payable without
any declaration or other act on the part of the Trustee or any Noteholder.

 

(b)     Prior to the sale of any Collateral Obligation in connection with a sale
or liquidation of all or any portion of the Assets pursuant to Section 5.5(a),
the Trustee will notify the Collateral Manager of the highest bid price and the
Collateral Manager or an Affiliate thereof shall have the right to purchase such
Collateral Obligation at a price equal to the highest bid price received by the
Trustee in connection with any such sale and liquidation.

 

(c)     Nothing contained in Section 5.5(a) shall be construed to require the
Trustee to sell the Assets securing the Secured Notes if the conditions set
forth in clause (i) or (ii) 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.

 

(d)     In determining whether the condition specified in Section 5.5(a)(i)
exists, the Trustee shall, with the written consent of the Majority of the
Controlling Class, request bid prices with respect to each security contained in
the Assets from two nationally recognized dealers at the time making a market in
such securities (as identified by the Collateral Manager to the Trustee in
writing) 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, with the cooperation of the Collateral Manager, is only able
to obtain bid prices with respect to a security contained in the Assets from one
nationally recognized dealer at the time making a market in such securities, the
Trustee shall compute the anticipated proceeds of sale or liquidation on the
basis of such one bid price for such security. For the purposes of making the
determinations required pursuant to Section 5.5(a)(i), the Trustee shall apply
the standards set forth in Section 6.3(c)(i) or (ii). In addition, for the
purposes of determining issues relating to the execution of a sale or
liquidation of all or any portion 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
conclusively rely without limitation on an opinion of an Independent investment
banking firm of national reputation or other appropriate advisor concerning the
matter (the cost of which shall be payable as an Administrative Expense).

 

-117-

--------------------------------------------------------------------------------

 

 

The Trustee shall deliver to the Noteholders and the Collateral Manager a report
stating the results of any determination required pursuant to Section 5.5(a)(i)
no later than ten (10) days after such determination is made. Unless a Majority
of the Controlling Class has not consented to the Trustee making a determination
pursuant to Section 5.5(d), the Trustee shall make the determinations required
by Section 5.5(a)(i) at the request of a Majority of the Controlling Class at
any time, but not more frequently than once in any calendar quarter, during
which the Trustee retains the Assets pursuant to Section 5.5(a). The Trustee
shall provide Fitch with notice of any direction to liquidate or any 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 Secured
Notes may be prosecuted and enforced by the Trustee without the possession of
any of the Secured 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 of an express trust, and any
recovery of judgment shall be applied as set forth in Section 5.7.

 

Section 5.7     Application of Money Collected. Any Money collected by the
Trustee (after payment of costs of collection, liquidation and enforcement) 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 provisions
of Section 11.1(a)(iii), at the date or dates fixed by the Trustee (each such
date to be deemed a Payment Date). Upon the final distribution of all proceeds
of any liquidation effected hereunder, the provisions of Section 4.1(a) and (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, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:

 

(a)     such Holder has previously given to the Trustee written notice of an
Event of Default;

 

(b)     the Holders of a Majority of the then Aggregate Outstanding Amount of
the Notes of the Controlling Class shall have made written request to 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
security or indemnity 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, 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 Majority of the Controlling Class;

 

-118-

--------------------------------------------------------------------------------

 

 

it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of 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 from two or more groups of Holders of the Controlling Class, each
representing less than a Majority of the Controlling Class, pursuant to this
Section 5.8, 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 the 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 Secured Noteholders to Receive Principal
and Interest. Subject to Sections 2.8(i), 2.13, 5.14, 6.15 and 13.1, but
notwithstanding any other provision in this Indenture, the Holder of any Secured
Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Secured Note as such principal
and interest becomes due and payable in accordance with the Priority of Payments
and Section 13.1, and, subject to the provisions of Section 5.4(d) 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 Secured 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 Secured Note ranking senior to such Secured 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.

 

Section 5.10     Restoration of Rights and Remedies. If the Trustee or any
Noteholder 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 Noteholder,
then and in every such case the Co-Issuers, the Trustee and the Noteholder
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 Noteholder 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 Noteholders 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.

 

-119-

--------------------------------------------------------------------------------

 

 

Section 5.12     Delay or Omission Not Waiver. No delay or omission of the
Trustee or any Holder of Secured Notes to exercise any right or remedy accruing
upon any Event of Default shall impair any such right or remedy or constitute a
waiver of any such Event of Default or an acquiescence therein or of a
subsequent Event of Default. Every right and remedy given by this Article V or
by law to the Trustee or to the Holders of the Secured 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 Secured Notes.

 

Section 5.13     Control by Majority of Controlling Class. Notwithstanding any
other provision of this Indenture, but subject to Section 5.5(a)(ii), a Majority
of the Controlling Class shall have the right following the occurrence, and
during the continuance of, an Event of Default to cause the institution of and
direct the time, method and place of conducting any Proceeding for any remedy
available to the Trustee, and to direct the exercise of any trust, right, remedy
or power conferred upon the Trustee; 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 or expense (unless the Trustee has received the indemnity as set forth
in (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 of the Assets shall be by the Holders of Notes secured thereby
representing the requisite percentage of the Aggregate Outstanding Amount of
Notes specified in Section 5.5(a).

 

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 or prior to the
acceleration of the Secured Notes, as provided in this Article V, a Majority of
the Controlling Class may on behalf of the Holders of all the Notes waive any
past Default and its consequences, except a Default:

 

(a)     in the payment of the principal of any Secured Note (which may be waived
with the consent of each Holder of such Secured Note);

 

(b)     in the payment of interest on the Class A Notes and the Class B Notes or
the Notes of the Controlling Class (which may be waived with the consent of the
Holders of 100% of the Class A Notes and the Class B Notes or the Notes of the
Controlling Class, as applicable);

 

(c)     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 with the consent of each such Holder); or

 

-120-

--------------------------------------------------------------------------------

 

 

(d)     in respect of a representation contained in Section 7.18 (which may be
waived by a Majority of the Controlling Class if the Moody's Rating Condition is
satisfied).

 

In the case of any such waiver, the Co-Issuers, the Trustee and the Holders of
the Notes shall be restored to their former positions and rights hereunder,
respectively, but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereto. The Trustee shall promptly give written
notice of any such waiver to Moody's, Fitch the Collateral Manager and each
Holder.

 

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

 

Section 5.15     Undertaking for Costs. All parties to this Indenture agree, and
each Holder of any Note by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee, Collateral Administrator or Collateral Manager for any action
taken, or omitted by it as Trustee, Collateral Administrator or Collateral
Manager, as applicable, 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 Noteholder, or group of Noteholders,
holding in the aggregate more than 10% in Aggregate Outstanding Amount of the
Controlling Class, or to any suit instituted by any Noteholder 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).

 

Section 5.16     Waiver of Stay or Extension Laws. The Co-Issuers covenant (to
the extent that they may lawfully do so) that they shall 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 Co-Issuers (to the extent that
they may lawfully do so) hereby expressly waive all benefit or advantage of any
such law or rights, and covenant that they shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall 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
all or any portion of the Assets pursuant to Section 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 provided as soon as reasonably practicable to the Noteholders, and
shall, upon direction of the Holders of Notes representing the requisite
percentage of the Aggregate Outstanding Amount of Notes having the power to
direct such Sale, from time to time postpone any Sale by public announcement
made at the time and place of such Sale pursuant to Section 5.5. The Trustee
hereby expressly waives its rights to any amount fixed by law as compensation
for any Sale; provided that the Trustee and the Collateral 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.

 

-121-

--------------------------------------------------------------------------------

 

 

(b)     The Trustee or the Collateral Manager 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 Secured
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 Secured 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 written 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.

 

(e)     The Trustee shall provide notice as soon as reasonably practicable of
any public Sale to the Holders of the Subordinated Notes, and the Holders of the
Subordinated Notes shall be permitted to participate in any such public Sale to
the extent such Holders 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 Noteholders 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 or the Co-Issuer.

 

-122-

--------------------------------------------------------------------------------

 

 

ARTICLE VI

THE TRUSTEE

 

Section 6.1      Certain Duties and Responsibilities. (a) Except during the
continuance 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 on their
face 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 Collateral 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 fifteen days after such notice from the Trustee, the
Trustee shall so notify the Noteholders (with a copy to the Collateral Manager).

 

(b)        In case 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 of the Controlling Class or such other percentage of Holders as
required by this Indenture, exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in its exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.

 

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

 

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

 

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

 

(iii)     the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Issuer or the Co-Issuer or the Collateral 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;

 

-123-

--------------------------------------------------------------------------------

 

 

(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 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 mailing of
notices under Article V, under this Indenture (and it is hereby expressly
acknowledged and agreed, without implied limitation, that the enforcement or
exercise of rights and remedies under Article V, and/or the commencement of or
participation in any legal proceeding does not constitute "ordinary services");

 

(v)       in no event shall the Trustee be liable for special, indirect,
punitive or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits) even if the Trustee has been advised of the
likelihood of such damages and regardless of the form of such action;

 

(vi)      the Trustee shall have no obligation to determine or notify if the
U.S. Risk Retention Rules have been satisfied; and

 

(vii)    the Trustee shall have no liability or responsibility for the selection
of an Alternative Base Rate or designation thereof (including, without
limitation, whether the conditions for the designation of such rate have been
satisfied or whether such Alternative Base Rate constitutes a Designated Base
Rate);

 

(viii)    the Trustee is authorized at the request of the Collateral Manager, to
accept direction to otherwise enter into agreements regarding the remittance of
fees owing to the Collateral Manager; and

 

(ix)      the Trustee shall have no duty to monitor or verify whether any Holder
(or beneficial owner) is a Section 13 Banking Entity or whether any such
beneficial owner has transferred its Notes.

 

(d)        For all purposes under this Indenture, the Trustee shall not be
deemed to have notice or knowledge of any Default or Event of Default described
in Sections 5.1(c), (d), (f), or (g) or any other matter unless a Trust Officer
assigned to and working in the Corporate Trust Office has actual knowledge
thereof or unless written notice of any event which is in fact such an Event of
Default or Default or other matter, as the case may be, is received by the
Trustee at the Corporate Trust Office, and such notice references the Notes
generally, the Issuer, the Co-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.

 

-124-

--------------------------------------------------------------------------------

 

 

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

 

(f)     In addition to its other obligations set forth herein, the Trustee, at
the expense of the Issuer, shall provide any information actually in its
possession and readily available to the Collateral Manager promptly after the
Collateral Manager's reasonable request therefor provided that the Trustee shall
not be obligated to provide any information that it may be restricted from doing
so by legal, regulatory or contractual reasons.

 

(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.

 

Section 6.2     Notice of Default. As soon as reasonably practicable (and in no
event later than two Business Days) after the occurrence of any Default actually
known to a Trust Officer of the Trustee or after any declaration of acceleration
has been made or delivered to the Trustee pursuant to Section 5.2, the Trustee
shall give notice to the Co-Issuers, the Collateral Manager, DTC, the Rating
Agencies, each Hedge Counterparty, each Paying Agent and all Holders, as their
names and addresses appear on the Register, of all Defaults hereunder actually
known to the Trust Officer of the Trustee, unless such Default shall have been
cured or waived.

 

Section 6.3     Certain Rights of Trustee. Except as otherwise provided in
Section 6.1:

 

(a)     the Trustee may conclusively rely and shall be fully protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report (including any accountants' 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;

 

(b)     any request or direction of the Issuer or the Co-Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or an Issuer Order;

 

(c)     whenever in the administration of this Indenture the Trustee shall (i)
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officer's certificate or 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, 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;

 

-125-

--------------------------------------------------------------------------------

 

 

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

 

(e)     the Trustee shall be under no obligation to exercise, enforce 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;

 

(f)     the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, note or other paper
or document, but the Trustee, in its discretion, may, and upon the written
direction of a Majority of the Controlling Class or of a Rating Agency 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 to the Co-Issuers and the Collateral
Manager, to examine the books and records relating to the Notes and the Assets,
personally or by agent or attorney, during the Co-Issuers' or the Collateral
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 by any regulatory, administrative or
governmental authority and (ii) to the extent that the Trustee, in its sole
judgment, may determine that such disclosure is consistent with its obligations
hereunder; provided, further, that the Trustee may disclose on a confidential
basis any such information to its agents, attorneys and auditors in connection
with the performance of its responsibilities hereunder;

 

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

 

(h)     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;

 

(i)     nothing herein shall be construed to impose an obligation on the part of
the Trustee to recalculate, evaluate, verify or independently determine the
accuracy of any report, certificate or information received from the Issuer or
Collateral Manager (except to the extent otherwise expressly set forth herein);

 

-126-

--------------------------------------------------------------------------------

 

 

(j)     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 conclusively rely upon) instruction from the Issuer 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;

 

(k)     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;

 

(l)     the Trustee shall not be deemed to have notice or knowledge of any
matter unless a Trust 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, the Co-Issuer or this
Indenture;

 

(m)     the permissive rights of the Trustee to take or refrain from taking any
actions enumerated in this Indenture shall not be construed as a duty;

 

(n)     the Trustee shall not be responsible for delays or failures in
performance resulting from acts 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 communication
services) and shall not be responsible or liable for any inaccuracies in the
books and records of the Collateral Manager, any Clearing Agency, Euroclear,
Clearstream or any other intermediary (other than the Bank in its individual or
other capacities hereunder), or for the actions or omissions of any such Person
hereunder (including compliance with the procedures relating to compliance with
Rule 17g-5 in accordance with and to the extent set forth in Section 14.16) or
under any document executed in connection herewith;

 

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

 

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

 

(q)     in order to comply with laws, rules, regulations and executive orders in
effect from time to time applicable to banking institutions, including those
relating to the funding of terrorist activities and money laundering
("Applicable Law"), the Trustee is required to obtain, verify and record certain
information relating to individuals and entities which maintain a business
relationship with the Trustee. Accordingly, each of the parties agrees to
provide to the Trustee upon its request from time to time such identifying
information and documentation as may be available for such party or its agents
in order to enable the Trustee to comply with Applicable Law. In accordance with
the U.S. Unlawful Internet Gambling Act (the "Gambling Act"), the Issuer may not
use the Accounts or other Bank facilities in the United States to process
"restricted transactions" as such term is defined in U.S. 31 CFR
Section 132.2(y). Therefore, neither the Issuer nor any person who has an
ownership interest in or control over the Accounts may use it to process or
facilitate payments for prohibited internet gambling transactions;

 

-127-

--------------------------------------------------------------------------------

 

 

(r)     the Trustee shall not be liable for the actions or omissions of the
Collateral Manager, the Issuer, the Co-Issuer, DTC, Euroclear, Clearstream or
any other clearing agency or depository, any Paying Agent (other than the
Trustee) or any Authenticating 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 Collateral Manager with the terms
hereof or the Collateral Management Agreement, or to verify or independently
determine the accuracy of information received by it from the Collateral Manager
(or from any selling institution, agent bank, trustee or similar source) with
respect to the Collateral;

 

(s)     the Trustee and the Collateral Administrator shall be entitled to
conclusively rely on the Collateral Manager with respect to whether or not a
Collateral Obligation meets the criteria specified in the definition thereof and
for the characterization, classification, designation or categorization of each
Collateral Obligation to the extent such characterization, classification,
designation or categorization is subjective or judgmental in nature or based on
information not readily available to the Trustee and Collateral Administrator;

 

(t)     in the event the Bank is also acting in the capacity of Paying Agent,
Registrar, Transfer Agent, financial reporting agent, Custodian, Calculation
Agent or Securities Intermediary, 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 Securities Account Control
Agreement or any other document to which the Bank in such capacity is a party;

 

(u)     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;

 

(v)     the Collateral Administrator shall have the same rights, privileges and
indemnities afforded to the Trustee in Sections 6.3, 6.4 and 6.5; provided that
such rights, immunities and indemnities shall be in addition to, and not in
limitation of, any rights, immunities and indemnities provided in the Collateral
Administration Agreement and that, in connection therewith, references in such
Sections to "Trust Officer" shall mean an officer of the Collateral
Administrator.

 

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
thereon, shall be taken as the statements of the Applicable Issuers; 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 Co-Issuers of the Notes or the proceeds thereof or
any Money paid to the Co-Issuers pursuant to the provisions hereof.

 

-128-

--------------------------------------------------------------------------------

 

 

Section 6.5     May Hold Notes. The Trustee, any Paying Agent, the Registrar or
any other agent of the Co-Issuers, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with the Co-Issuers
or any of their 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 in its
capacity as the Bank 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 dated on or before the Closing Date between the
Trustee and the Issuer 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 the other Transaction Documents (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 Sections
5.4, 5.5, 10.7 or any other term of this Indenture, 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 Collateral
Manager in writing;

 

(iii)     to indemnify the Trustee and its officers, directors, employees and
agents for, and to hold them harmless against, any loss, liability or expense
incurred without negligence, willful misconduct or bad faith on their part, and
arising out of or in connection with the acceptance or administration of this
Indenture and the transactions contemplated thereby and the documents related
hereto, including the costs and expenses of defending themselves (including
reasonable attorney's fees and costs) against any claim or liability in
connection with the exercise or performance of any of their powers or duties
hereunder and under any other transaction document related hereto; and

 

-129-

--------------------------------------------------------------------------------

 

 

(iv)     to pay the Trustee reasonable additional compensation together with its
expenses (including reasonable counsel fees) for any collection action taken
pursuant to Section 6.13 or the exercise or enforcement of remedies pursuant to
Article V.

 

(b)     The Trustee shall receive amounts pursuant to this Section 6.7 in
accordance with the Priority of Payments but 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 Noteholders 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 not so paid shall be
deferred and payable on such later date on which a fee shall be payable and
sufficient funds are available therefor. The Issuer's obligations under this
Section 6.7 shall survive the termination of this Indenture and the resignation
or removal of the Trustee pursuant to Section 6.9.

 

(c)     The Trustee hereby agrees not to cause the filing of a petition in
bankruptcy for the non-payment to the Trustee of any amounts provided by this
Section 6.7 until at least one year and one day, or if longer the applicable
preference period then in effect plus one day, after the payment in full of all
Notes issued under this Indenture. When the Trustee incurs expenses after the
occurrence of a Default or an Event of Default under Section 5.1(f) or (g), such
expenses are intended to constitute expenses of administration under Bankruptcy
law or any other applicable federal or state bankruptcy, insolvency or similar
law.

 

(d)     The Issuer's payment obligations to the Trustee under this Section 6.7
shall be secured by the lien of this Indenture payable in accordance with the
Priority of Payments, and shall survive the discharge of this Indenture and the
resignation or removal of the Trustee. To the extent that the entity acting as
Trustee is acting as Registrar, Calculation Agent, Paying Agent, Authenticating
Agent, Securities Intermediary or Custodian, the rights, privileges, immunities
and indemnities set forth in this Article VI shall also apply to it acting in
each such capacity.

 

Section 6.8     Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee hereunder which shall be an 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 long-term
debt rating of at least "Baa1" by Moody's and, if rated by Fitch, a long-term
credit rating of at least "A" by Fitch and a short-term credit rating of at
least "F1" by Fitch, and having an office within the United States. 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. 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.

 

-130-

--------------------------------------------------------------------------------

 

 

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 written notice thereof to
the Co-Issuers, the Collateral Manager, the Holders of the Notes and the Rating
Agencies not less than 60 days prior to such resignation. Upon receiving such
notice of resignation, the Co-Issuers 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 and an Authorized
Officer of the Co-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 Collateral Manager; provided that the Issuer shall
provide prior written notice to the Rating Agencies of any such appointment;
provided, further, that the Issuer shall not appoint such successor trustee or
trustees without the consent of a Majority of the Secured Notes of each Class
voting as a single class (or, at any time when an Event of Default shall have
occurred and be continuing or when a successor Trustee has been appointed
pursuant to Section 6.9(e), by an Act of a Majority of the Controlling Class)
unless (i) the Issuer gives ten days' prior written notice to the Holders of
such amendment and (ii) a Majority of the Secured Notes (or, at any time when an
Event of Default shall have occurred and be continuing or when a successor
Trustee has been appointed pursuant to Section 6.9(e), a Majority of the
Controlling Class) do not provide written notice to the Issuer objecting to such
appointment (the failure of any such Majority to provide such notice to the
Issuer within ten days of receipt of notice of such appointment from the Issuer
being conclusively deemed to constitute hereunder consent to such appointment
and approval of such successor trustee or trustees). 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 by Act of a Majority of each
Class of Secured Notes voting separately or, at any time when an Event of
Default shall have occurred and be continuing by an Act of a Majority of the
Controlling Class, delivered to the Trustee and to the Co-Issuers.

 

(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 Co-Issuers or a Majority of the
Controlling Class; or

 

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

 

-131-

--------------------------------------------------------------------------------

 

 

then, in any such case (subject to Section 6.9(a)), (A) the Co-Issuers, 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 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 Co-Issuers, by Issuer Order, shall promptly appoint a
successor Trustee. If the Co-Issuers shall fail to appoint a successor Trustee
within 60 days after such 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 Co-Issuers. If no successor Trustee shall have been so appointed
by the Co-Issuers or a Majority of the Controlling Class and shall have accepted
appointment in the manner hereinafter provided, subject to Section 5.15, the
retiring Trustee may, or any Holder 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 Co-Issuers shall give prompt notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first class mail, postage prepaid, to the
Collateral Manager, to the Holders of the Notes as their names and addresses
appear in the Register and to the Rating Agencies. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office. If
the Co-Issuers fail to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be given at the expense of the Co-Issuers.

 

(g)     Any resignation or removal of the Trustee under this Section 6.9 shall
be an effective resignation or removal of the Bank in all capacities under this
Indenture.

 

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 Co-Issuers and the retiring Trustee an
instrument accepting such appointment. Upon delivery of the required
instruments, the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts, duties and
obligations of the retiring Trustee; but, on request of the Co-Issuers or a
Majority of any Class of Secured 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 Co-Issuers 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.

 

-132-

--------------------------------------------------------------------------------

 

 

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 Co-Issuers and the Trustee shall have power to
appoint one or more Persons to act as co-trustee, jointly with the Trustee, of
all or any part of the Assets, with the power to file such proofs of claim and
take such other actions pursuant to Section 5.6 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.

 

The Co-Issuers 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 Co-Issuers do not join in such appointment within 15 days
after the receipt by them of a request to do so, the Trustee shall have the
power to make such appointment.

 

Should any written instrument from the Co-Issuers 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 Co-Issuers. The Co-Issuers agree to pay (but
only from and to the extent of the Assets), to the extent funds are available
therefor under the Priority of Payments, 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;

 

(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;

 

-133-

--------------------------------------------------------------------------------

 

 

(c)     the Trustee at any time, by an instrument in writing executed by it,
with the concurrence of the Co-Issuers 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, the Trustee
shall have the power to accept the resignation of, or remove, any such
co-trustee without the concurrence of the Co-Issuers. 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.

 

Section 6.13     Certain Duties of Trustee Related to Delayed Payment of
Proceeds. In the event that in any month the Trustee receives notice from the
Collateral Manager or the Collateral Administrator that a payment has not been
received with respect to any Pledged Obligation on its Due Date, (a) the Trustee
shall promptly notify the Issuer and the Collateral Manager in writing or
electronically and (b) unless within three Business Days (or the end of the
applicable grace period for such payment, if longer) after such notice such
payment shall have been received by the Trustee, or the Issuer, in its absolute
discretion (but only to the extent permitted by Section 10.2(a)), shall have
made provision for such payment satisfactory to the Trustee in accordance with
Section 10.2(a), the Trustee shall request the issuer of such Pledged
Obligation, the trustee under the related 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 Collateral Manager shall
reasonably direct in writing. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture. In the event
that the Issuer or the Collateral Manager requests a release of a Pledged
Obligation and/or delivers an additional Collateral Obligation in connection
with any such action under the Collateral Management Agreement, such release
and/or substitution shall be subject to Section 10.7 and Article XII of this
Indenture, as the case may be. Notwithstanding any other provision hereof, the
Trustee shall deliver to the Issuer or its designee any payment with respect to
any Pledged Obligation 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.

 

-134-

--------------------------------------------------------------------------------

 

 

Section 6.14     Authenticating Agents. Upon the request of the Co-Issuers, 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, 2.7 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. 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 Co-Issuers. Upon receiving such notice of
resignation or upon such a termination, the Trustee shall, upon the written
request of the Issuer, promptly appoint a successor Authenticating Agent and
shall give written notice of such appointment to the Co-Issuers.

 

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 under Section 11.1. The provisions
of Sections 2.9, 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
payments under the Notes to any Holder, such tax shall reduce the amount
otherwise distributable to such Holder. The Trustee or any Paying Agent 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 by
the Issuer (but such authorization shall not prevent the Trustee or such Paying
Agent from contesting any such tax in appropriate proceedings and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The Issuer shall, upon the Trustee's request, provide information
necessary to determine the nature of any income received and whether any tax or
withholding obligations apply. The amount of any withholding tax imposed with
respect to any Holder shall be treated as cash distributed to such Holder at the
time it is withheld by the Trustee or any Paying Agent. If there is a
possibility that withholding tax is payable with respect to a distribution and
the Trustee or any Paying Agent has not received documentation from such Holder
showing an exemption from withholding, the Trustee or such Paying Agent shall
withhold such amounts in accordance with this Section 6.15. If any Holder wishes
to apply for a refund of any such withholding tax, the Trustee or such Paying
Agent shall reasonably cooperate with such Holder in making such claim so long
as such Holder agrees to reimburse the Trustee or such Paying Agent for any
out-of-pocket expenses incurred. Nothing herein shall impose an obligation on
the part of the Trustee or any Paying Agent to determine the amount of any tax
or withholding obligation on the part of the Issuer or in respect of the Notes.

 

-135-

--------------------------------------------------------------------------------

 

 

Section 6.16     Representative for Secured Noteholders Only; Agent for each
Hedge Counterparty and the Holders of the Subordinated Notes. With respect to
the security interest created hereunder, the delivery of any Asset to the
Trustee is to the Trustee as representative of the Secured Noteholders and agent
for each other Secured Party and the Holders of the Subordinated Notes. 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
Secured Noteholders and agent for each other Secured Party and the Holders of
the Subordinated Notes.

 

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 limited purpose national banking association under the laws of the United
States and has the power to conduct its business and affairs as a trustee.

 

(b)     Authorization; Binding Obligations. The Bank has the corporate power and
authority to perform the duties and obligations of trustee under this Indenture.
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. Upon execution and delivery by the
Bank, this Indenture shall constitute the legal, valid and binding obligation of
the Bank enforceable against the Bank in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium, liquidation and similar laws affecting the rights of creditors, and
subject to equitable principles including without limitation concepts of
materiality, reasonableness, good faith and fair dealing (whether enforcement is
sought in a legal or equitable Proceeding), and except that certain of such
obligations may be enforceable solely against the Assets.

 

(c)     Eligibility. The Bank is eligible under Section 6.8 to serve as Trustee
hereunder.

 

(d)     No Conflict. Neither the execution, delivery and performance of this
Indenture, nor the consummation of the transactions contemplated by this
Indenture, is prohibited by, or requires the Bank to obtain any consent,
authorization, approval or registration with any United States federal agency or
other governmental body under any United States federal regulation or law having
jurisdiction over the banking or trust powers of the Bank.

 

Section 6.18     Communication with Rating Agencies. Subject to Section 14.16,
any written communication, including any confirmation, from any Rating Agency
provided for or required to be obtained by the Trustee hereunder shall be
sufficient in each case when such communication or confirmation is received by
the Trustee, including by electronic message, facsimile, press release, posting
to such Rating Agency's website, or other means then considered industry
standard; provided that the Trustee shall have no obligation to monitor any
Rating Agency website. For the avoidance of doubt, no written communication
given by Moody's under this Section 6.18 shall be deemed to satisfy the Moody's
Rating Condition unless such communication is provided by Moody's specifically
in satisfaction of the Moody's Rating Condition.

 

-136-

--------------------------------------------------------------------------------

 

 

Section 6.19     Provisions related to the Collateral Management Agreement. In
accordance with the notice provisions hereof, the Trustee shall promptly (and in
no event later than three Business Days) upon receiving any written notice
expressly required to be provided to the Trustee under the Collateral Management
Agreement, provide a copy to the Noteholders and the Rating Agencies. The
Trustee shall, in accordance with the notice provisions hereof and promptly upon
receipt of an Issuer Order, forward any notice received in connection with the
Collateral Management Agreement to such Noteholders as set forth in such Issuer
Order. In accordance with the notice provisions hereof, the Issuer shall
promptly forward to all Holders of Notes the details of any amendment pursuant
to Section 18(b) of the Collateral Management Agreement.

 

ARTICLE VII

COVENANTS

 

Section 7.1     Payment of Principal and Interest. The Applicable Issuers shall
duly and punctually pay the principal of and interest on the Secured Notes, in
accordance with the terms of such Notes and this Indenture pursuant to the
Priority of Payments. The Issuer shall, to the extent legally permitted and to
the extent funds are available pursuant to the Priority of Payments, duly and
punctually pay all required distributions on the Subordinated Notes, in
accordance with the Subordinated Notes and this Indenture.

 

The Issuer shall, subject to the Priority of Payments, reimburse the Co-Issuer
for any amounts paid by the Co-Issuer pursuant to the terms of the Notes or this
Indenture. The Co-Issuer shall not reimburse the Issuer for any amounts paid by
the Issuer pursuant to the terms of the Notes or this Indenture.

 

Amounts properly withheld under the Code or other applicable law by any Person
from a payment to any Holder shall be considered as having been paid by the
Applicable Issuers to such Holder for all purposes of this Indenture.

 

Section 7.2     Maintenance of Office or Agency. The Co-Issuers hereby appoint
the Trustee as a Paying Agent for payments on the Notes. Notes may be
surrendered for registration of transfer or exchange at the Corporate Trust
Office of the Trustee or its agent designated for purposes of surrender,
transfer or exchange. The Co-Issuers hereby appoint Corporation Service Company,
1180 Avenue of the Americas, Suite 210, New York, New York 10036, as agent upon
whom process or demands may be served in any action arising out of or based on
this Indenture or the transactions contemplated hereby.

 

-137-

--------------------------------------------------------------------------------

 

 

The Co-Issuers may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents for any or all of
such purposes; provided that the Co-Issuers shall maintain in the Borough of
Manhattan, The City of New York, an office or agency where notices and demands
to or upon the Co-Issuers in respect of such Notes and this Indenture may be
served and, subject to any laws or regulations applicable thereto, an office or
agency outside of the United States where Notes may be presented and surrendered
for payment; provided, further, that no paying agent shall be appointed in a
jurisdiction which subjects payments on the Notes to withholding tax as a result
of such appointment. The Co-Issuers shall at all times maintain a duplicate copy
of the Register at the Corporate Trust Office. The Co-Issuers shall give written
notice as soon as reasonably practicable to the Trustee, the Holders, and the
Rating Agencies of the appointment or termination of any such agent and of the
location and any change in the location of any such office or agency.

 

If at any time the Co-Issuers shall fail to maintain any such required office or
agency in the Borough of Manhattan, The City of New York, or outside the United
States, 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 paragraph) at and notices and demands may be served on the
Co-Issuers, and Notes may be presented and surrendered for payment to the
appropriate Paying Agent at its main office, and the Co-Issuers hereby appoint
the same as their agent to receive such respective presentations, surrenders,
notices and demands.

 

Section 7.3     Money for Note Payments to Be Held in Trust. All payments of
amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Payment Account shall be made on behalf of the
Applicable Issuers by the Trustee or a Paying Agent with respect to payments on
the Notes.

 

When the Applicable Issuers shall have a Paying Agent that is not also the
Registrar, 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 Applicable Issuers shall have a Paying Agent other than the
Trustee, they shall, on or before the Business Day next preceding each Payment
Date or Redemption Date, as the case may be, direct the Trustee to deposit on
such Payment Date with such Paying Agent, if necessary, an aggregate sum
sufficient to pay the amounts then becoming due (to the extent funds are then
available for such purpose in the Payment Account), such sum to be held in trust
for the benefit of the Persons entitled thereto and (unless such Paying Agent is
the Trustee) the Co-Issuers shall promptly notify the Trustee 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.

 

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; provided that so long as the Notes of any Class are
rated by the Rating Agencies, with respect to any additional or successor Paying
Agent, either (i) such Paying Agent has a long-term debt rating of "A1" or
higher by Moody's or a short-term debt rating of "P-1" by Moody's or (ii) the
Moody's Rating Condition is satisfied. In the event that such successor Paying
Agent ceases to have a long-term debt rating of "A1" or higher by Moody's or a
short-term debt rating of "P-1" by Moody's, the Co-Issuers shall promptly remove
such Paying Agent and appoint a successor Paying Agent. The Co-Issuers 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 Co-Issuers
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 shall:

 

-138-

--------------------------------------------------------------------------------

 

 

(a)     allocate all sums received for payment to the Holders of Notes 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 or
report pertaining to such Redemption Date to the extent permitted by applicable
law;

 

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

 

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

 

(d)     if such Paying Agent is not the Trustee, immediately give the Trustee
notice of any default by the Issuer or the Co-Issuer (or any other obligor upon
the Notes) in the making of any payment required to be made; and

 

(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 Co-Issuers 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 Co-Issuers 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 Co-Issuers 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, claims by holders of Notes in
respect of principal and interest must be made to the Trustee or any Paying
Agent if made within two years of such principal or interest becoming due and
payable. 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 Applicable Issuers on Issuer
Order; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Applicable Issuers for payment of such amounts (but
only to the extent of the amounts so paid to the Applicable Issuers) 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 Applicable Issuers any reasonable means of
notification of such release of payment, including, but not limited to, mailing
notice of such release to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in Monies due and
payable but not claimed is determinable from the records of any Paying Agent, at
the last address of record of each such Holder.

 

-139-

--------------------------------------------------------------------------------

 

 

Section 7.4     Existence of Co-Issuers. (a) The Issuer and the Co-Issuer shall,
to the maximum extent permitted by applicable law, maintain in full force and
effect their existence and rights as companies incorporated or organized under
the laws of the Cayman Islands and the State of Delaware, respectively, and
shall obtain and preserve their qualification to do business as exempted or
foreign corporations 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 incorporation from the Cayman Islands 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 by the Issuer
to the Trustee (which shall provide notice to the Holders), the Collateral
Manager and the Rating Agencies 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;
provided, further, that the Issuer shall be entitled to take any action required
by this Indenture within the United States notwithstanding any provision of this
Indenture requiring the Issuer to take such action outside of the United States
so long as prior to taking any such action the Issuer receives a legal opinion
from nationally recognized legal counsel to the effect that it is not necessary
to take such action outside of the United States or any political subdivision
thereof in order to prevent the Issuer from becoming subject to United States
Federal, state or local income taxes on a net income basis to which the Issuer
would not otherwise be subject.

 

(b)     The Issuer and the Co-Issuer shall ensure that all corporate or other
formalities regarding their respective existences (including, to the extent
required by applicable law, holding regular board of directors' and
shareholders' meetings or other similar meetings) are followed. Neither the
Issuer nor the Co-Issuer shall 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, winding up or other insolvency
proceeding. Without limiting the foregoing, (i) the Issuer shall not have any
subsidiaries (other than the Co-Issuer and any Issuer Subsidiary), (ii) the
Co-Issuer shall not have any subsidiaries and (iii) except to the extent
contemplated in the Administration Agreement or the Issuer's declaration of
trust dated July 26, 2018, the Issuer and the Co-Issuer shall not (A) have any
employees (other than their respective directors), (B) except as contemplated by
the Collateral Management Agreement, the Memorandum and Articles or the
Administration Agreement, engage in any transaction with any shareholder that
would constitute a conflict of interest or (C) pay dividends other than in
accordance with the terms of this Indenture and the Memorandum and Articles.

 

-140-

--------------------------------------------------------------------------------

 

 

Section 7.5     Protection of Assets. (a) The Issuer, or the Collateral Manager
on behalf and at the expense of the Issuer, shall cause the taking of such
action by the Issuer (or by the Collateral Manager if within the Collateral
Manager's control under the Collateral Management Agreement) as is reasonably
necessary in order to perfect and maintain the perfection and priority of the
security interest of the Trustee in the Assets. The Issuer shall from time to
time prepare or cause to be prepared, execute, deliver and file all such
supplements and amendments hereto and all such Financing Statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action as may be necessary or advisable or desirable
to secure the rights and remedies of the Trustee for the benefit of the Holders
of the Secured Notes hereunder and to:

 

(i)       Grant more effectively all or any portion of the Issuer's right, title
and interest in, to and under 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);

 

(iv)     enforce any of the Pledged Obligations or other instruments or property
included in the Assets;

 

(v)       preserve and defend title to the Assets and the rights therein of the
Secured Parties in the Assets against the claims of all Persons and parties;

 

(vi)     if reasonably able to do so, deliver or cause to be delivered a United
States Internal Revenue Service Form W-8BEN-E or successor applicable form and
other properly completed and executed documentation, agreements, and
certifications to each issuer, counterparty, paying agent, and/or governmental
authority, and enter into any agreements with a governmental authority, as
necessary to permit the Issuer to receive payments without withholding or
deduction or at a reduced rate of withholding or deduction; or

 

(vii)     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 or record any Financing Statement (other than the Financing
Statement delivered on the Closing Date), continuation statement and all other
instruments, and take all other actions, required pursuant to this Section 7.5;
provided that such appointment shall not impose upon the Trustee any of the
Issuer's or the Collateral Manager's obligations under this Section 7.5. In
connection therewith, the Trustee shall be entitled to receive, at the cost of
the Issuer, and conclusively rely upon an Opinion of Counsel delivered in
accordance with Section 7.6 as to the need to file, the dates by which such
filings are required to be made and the jurisdiction in which such filings are
to be made and the form and content of such filings. The Issuer further
authorizes and shall cause the Issuer's United States counsel to file a
Financing Statement that names the Issuer as debtor and the Trustee, on behalf
of the Secured Parties, as secured party and that describes "all assets in which
the debtor now or hereafter has rights" as the Assets in which the Trustee has a
Grant.

 

-141-

--------------------------------------------------------------------------------

 

 

(b)     The Trustee shall not, except in accordance with Article V and Sections
10.6, 12.1, and 12.4, as applicable, 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 shall continue to be maintained after giving
effect to such action or actions.

 

(c)     The Issuer shall register the security interests created by this
Indenture in the register of mortgages and charges maintained at the Issuer's
registered office in the Cayman Islands.

 

Section 7.6     Opinions as to Assets. 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 the Rating Agencies an Opinion of
Counsel either (i) stating that, in the opinion of such counsel, such action has
been taken (including without limitation with respect to the filing of any
Financing Statements and continuation statements) as is necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or (ii) describing the filing of any Financing Statements
and continuation statements that shall, in the opinion of such counsel, be
required to maintain the lien and security interest of this Indenture.

 

Section 7.7     Performance of Obligations. (a) The Co-Issuers, each as to
itself, shall not take any action, and shall use their commercially reasonable
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 pricing amendments, ordinary
course waivers/amendments, and enforcement action taken with respect to any
Defaulted Obligation in accordance with the provisions hereof and actions by the
Collateral Manager under the Collateral Management Agreement and in conformity
with this Indenture or as otherwise required hereby.

 

(b)     The Applicable Issuers may, with the prior written consent of a Majority
of each Class of Secured Notes (except in the case of the Collateral Management
Agreement and the Collateral Administration Agreement, in which case no consent
shall be required), contract with other Persons, including the Collateral
Manager, the Trustee and the Collateral Administrator for the performance of
actions and obligations to be performed by the Applicable Issuers hereunder and
under the Collateral Management Agreement by such Persons. Notwithstanding any
such arrangement, the Applicable Issuers 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 Applicable Issuers; and the Applicable Issuers
shall punctually perform, and use their commercially reasonable efforts to cause
the Collateral Manager, the Trustee, the Collateral Administrator and such other
Person to perform, all of their obligations and agreements contained in the
Collateral Management Agreement, this Indenture, the Collateral Administration
Agreement or any such other agreement.

 

-142-

--------------------------------------------------------------------------------

 

 

(c)     The Issuer shall notify the Rating Agencies within 10 Business Days
after it has received notice from any Noteholder, the Trustee or the Collateral
Manager of any material breach of any Transaction Document, following any
applicable cure period for such breach.

 

Section 7.8     Negative Covenants. (a) The Issuer shall not and, with respect
to clauses (i), (ii), (iii), (iv), (vi), (vii), (viii), (ix) and (x) the
Co-Issuer shall not, in each case 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 Collateral 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 in accordance with
the Code or any applicable laws of the Cayman Islands or other applicable
jurisdiction) or assert any claim against any present or future Holder of Notes,
by reason of the payment of any taxes levied or assessed upon any part of the
Assets, other than as described in this Indenture;

 

(iii)     (A) incur or assume or guarantee any indebtedness, other than the
Notes and this Indenture and the transactions contemplated hereby, or
(B)(1) issue any additional class of securities (except as provided in
Section 2.4) or (2) issue any additional shares;

 

(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 Collateral 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;

 

(v)       amend the Collateral Management Agreement except pursuant to the terms
thereof;

 

-143-

--------------------------------------------------------------------------------

 

 

(vi)      dissolve or liquidate in whole or in part, except as permitted
hereunder or required by applicable law;

 

(vii)     pay any distributions other than in accordance with the Priority of
Payments;

 

(viii)    permit the formation of any subsidiaries (except in the case of the
Issuer, the Co-Issuer or any Issuer Subsidiary);

 

(ix)      conduct business under any name other than its own;

 

(x)       have any employees (other than directors or managers to the extent
they are employees);

 

(xi)      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 this
Indenture or the Collateral Management Agreement;

 

(xii)     elect to be taxable for U.S. federal income tax purposes as other than
a foreign corporation;

 

(xiii)    establish a branch, agency, office or place of business in the United
States, or take any action or engage in any activity (directly or through any
other agent) which would subject it to United States federal, state, or local
tax;

 

(xiv)    solicit, advertise or publish the Issuer's ability to enter into credit
derivatives;

 

(xv)      register as or become subject to regulatory supervision or other legal
requirements under the laws of any country or political subdivision thereof as a
bank, insurance company or finance company;

 

(xvi)    knowingly take any action that would reasonably be expected to cause it
to be treated as a bank, insurance company or finance company for purposes of
(i) any tax, securities law or other filing or submission made to any
governmental authority, (ii) any application made to a rating agency or (iii)
qualification for any exemption from tax, securities law or any other legal
requirements;

 

(xvii)    hold itself out to the public as a bank, insurance company or finance
company.

 

(b)     The Co-Issuer shall not invest any of its assets in "securities" as such
term is defined in the Investment Company Act, and shall keep all of its assets
in Cash.

 

(c)     So long as any Notes are Outstanding, the Co-Issuer shall not elect to
be taxable for U.S. federal income tax purposes as other than a disregarded
entity.

 

-144-

--------------------------------------------------------------------------------

 

 

(d)     Notwithstanding anything to the contrary contained herein, the Issuer
shall not, and shall use its commercially reasonable efforts to ensure that the
Collateral Manager acting on the Issuer's behalf does not, acquire or own any
asset, conduct any activity or take any action unless the acquisition or
ownership of such asset, the conduct of such activity or the taking of such
action, as the case may be, would not cause the Issuer to be engaged, or deemed
to be engaged, in a trade or business within the United States for United States
federal income tax purposes or otherwise to be subject to United States federal
income tax on a net income basis or income tax on a net income basis in any
other jurisdiction. The requirements of this Section 7.8(d) will be deemed to be
satisfied if the Issuer (and the Collateral Manager acting on the Issuer's
behalf) complies with the Tax Guidelines, so long as there has not been a change
in law subsequent to the date hereof that the Issuer (or the Collateral Manager
acting on the Issuer's behalf) actually knows (acting in good faith), when
considered in light of the other activities by the Issuer, could reasonably
cause the Issuer to be treated as being engaged in a trade or business in the
United States for U.S. federal income tax purposes or otherwise subject to U.S.
federal income tax on a net income basis notwithstanding compliance with the Tax
Guidelines.

 

(e)     In furtherance and not in limitation of Section 7.8(d), notwithstanding
anything to the contrary contained herein, the Issuer shall comply with the Tax
Guidelines, unless, with respect to a particular transaction, the Collateral
Manager (on behalf of the Issuer) shall have received advice or an opinion of
Allen & Overy LLP or Katten Muchin Rosenman LLP, or an opinion of other tax
counsel of nationally recognized standing in the United States experienced in
such matters, to the effect that the Issuer's contemplated activities will not
cause the Issuer to be engaged, or deemed to be engaged, in a trade or business
within the United States for United States federal income tax purposes or
otherwise to be subject to United States federal income tax on a net income
basis. The provisions set forth in the Tax Guidelines may be waived, amended,
eliminated, modified or supplemented (without execution of an amendment to the
Collateral Management Agreement) if the Collateral Manager (on behalf of the
Issuer) shall have received advice or an opinion of Allen & Overy LLP or Katten
Muchin Rosenman LLP, or an opinion of other tax counsel of nationally recognized
standing in the United States experienced in such matters to the effect that the
Issuer's contemplated activities will not cause the Issuer to be engaged, or
deemed to be engaged, in a trade or business within the United States for United
States federal income tax purposes or otherwise to be subject to United States
federal income tax on a net income basis. For the avoidance of doubt, in the
event advice or an opinion of Allen & Overy LLP or Katten Muchin Rosenman LLP,
or an opinion of other tax counsel as described above has been obtained in
accordance with the terms hereof, no consent of any Noteholder or satisfaction
of the Moody's Rating Condition shall be required in order to comply with this
Section 7.8(e) in connection with the waiver, amendment, elimination,
modification or supplementation of any provision of the Tax Guidelines
contemplated by such opinion of tax counsel.

 

(f)     The Issuer and the Co-Issuer shall not be party to any agreements
(including Hedge Agreements) 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 Collateral Manager in
its sole discretion) purchase or sale terms or which are documented using
customary (as determined by the Collateral Manager in its sole discretion) loan
trading documentation.

 

-145-

--------------------------------------------------------------------------------

 

 

(g)     The Issuer shall not acquire or hold any Certificated Securities in
bearer form (other than securities not required to be in registered form under
Section 163(f)(2)(A) of the Code) in a manner that does not satisfy the
requirements of United States Treasury Regulations Section 1.165-12(c).

 

(h)     The Co-Issuer shall not fail to maintain an independent manager under
its limited liability company agreement.

 

Section 7.9     Statement as to Compliance. On or before July 17th in each
calendar year, commencing in 2019, or immediately if there has been a Default
under this Indenture and prior to the issuance of any Additional Notes pursuant
to Section 2.4, the Issuer shall deliver to the Trustee and the Collateral
Manager (to be forwarded, at the cost of the Issuer, by the Trustee to each
Noteholder making a written request therefor and the Rating Agencies) an
Officer's certificate of the Issuer that, having made reasonable inquiries of
the Collateral 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     Co-Issuers May Consolidate, etc. only on Certain Terms. Neither
the Issuer nor the Co-Issuer (the "Merging Entity") shall consolidate or merge
with or into any other Person or transfer or convey all or substantially all of
its assets to any Person, unless permitted by Cayman Islands law (in the case of
the Issuer) or United States and Delaware law (in the case of the Co-Issuer) and
unless:

 

(a)     the Merging Entity shall be the surviving corporation, 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") (A) if the Merging
Entity is the Issuer, shall be a company incorporated and existing under the
laws of the Cayman Islands 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 (B) in any case shall
expressly assume, by an indenture supplemental hereto, executed and delivered to
the Trustee and each Holder, the due and punctual payment of the principal of
and interest on all Secured Notes issued by the Merging Entity and the
performance and observance of every covenant of this Indenture on its part to be
performed or observed, all as provided herein;

 

(b)     the Trustee shall have received notice of such consolidation or merger
and shall have distributed copies of such notice to the Rating Agencies as soon
as reasonably practicable and in any case no less than five days after receipt
of such notice of such merger or consolidation, and the Trustee shall have
received written confirmation from each Rating Agency that the ratings issued
with respect to the Secured Notes then rated by such Rating Agency shall not be
reduced or withdrawn as a result of the consummation of such transaction;

 

-146-

--------------------------------------------------------------------------------

 

 

(c)     if the Merging Entity is not the surviving corporation, 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 surviving corporation, the Successor
Entity shall have delivered to the Trustee and the Rating Agencies an Officer's
certificate and an Opinion of Counsel each stating that such Person shall be
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, 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 Secured Notes; and in each case as to such other
matters as the Trustee or any Noteholder may reasonably require; provided that
nothing in this clause shall imply or impose a duty on the Trustee to require
such other documents;

 

(e)     immediately after giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing;

 

(f)     the Merging Entity shall have delivered notice to the Rating Agencies,
and the Merging Entity shall have delivered to the Trustee and each Noteholder
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 in this Article VII
relating to such transaction have been complied with and that such transaction
will not (1) result in the Merging Entity and Successor Entity becoming subject
to United States federal income taxation with respect to their net income, (2)
result in the Merging Entity and Successor Entity being treated as being engaged
in a trade or business within the United States or (3) adversely affect the
characterization of the Secured Notes as debt for United States federal income
tax purposes;

 

(g)     the Merging Entity shall have delivered to the Trustee an Opinion of
Counsel stating that after giving effect to such transaction, neither of the
Co-Issuers (or, if applicable, the Successor Entity) will be required to
register as an investment company under the Investment Company Act; and

 

-147-

--------------------------------------------------------------------------------

 

 

(h)     after giving effect to such transaction, the outstanding stock (other
than the Subordinated Notes) 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
or the Co-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, and shall be bound
by each obligation and covenant of, the Merging Entity under this Indenture with
the same effect as if such Person had been named as the Issuer or the Co-Issuer,
as the case may be, herein. In the event of any such consolidation, merger,
transfer or conveyance, the Person named as the "Issuer" or the "Co-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 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 Securities Account Control Agreement, the Collateral Management
Agreement and other agreements specifically contemplated by this Indenture and
shall not engage in any activity that would cause the Issuer to be subject to
U.S. federal or state income tax on a net income basis, and the Co-Issuer shall
not engage in any business or activity other than issuing and selling the Notes
to be issued by it pursuant to this Indenture and, with respect to the Issuer
and the Co-Issuer, 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 and the Co-Issuer may amend, or
permit the amendment of, the Memorandum and Articles of the Issuer and the
Certificate of Formation and By-laws of the Co-Issuer, respectively only upon
satisfaction of the Moody's Rating Condition and notice shall have been given to
Fitch in connection therewith.

 

Section 7.13     Annual Rating Review. So long as any of the Secured Notes of
any Class remain Outstanding, on or before July 17th in each year, commencing in
2019, the Applicable Issuers shall obtain and pay for an annual review of the
rating of each such Class of Secured Notes from the applicable Rating Agencies.
The Applicable Issuers shall promptly notify the Trustee and the Collateral
Manager in writing (and the Trustee shall promptly provide the Holders with a
copy of such notice) if at any time the rating of any such Class of Secured
Notes has been, or is known shall be, changed or withdrawn.

 

Section 7.14     Reporting. At any time when the Co-Issuers are not subject to
Section 13.1 or 15(d) of the Exchange Act and are not exempt from reporting
pursuant to Rule 12g3-2(b) under the Exchange Act, upon the request of a Holder
or beneficial owner of a Note, the Co-Issuers 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 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 of such
Note with Rule 144A under the Securities Act in connection with the resale of
such Note by such Holder or beneficial owner of such Note, respectively. "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).

 

-148-

--------------------------------------------------------------------------------

 

 

Section 7.15     Calculation Agent. (a) The Issuer hereby agrees that for so
long as any Secured 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 Collateral Manager or its
Affiliates) to calculate LIBOR in respect of each Interest Accrual Period in
accordance with the terms of Exhibit C hereto (the "Calculation Agent"). The
Issuer hereby appoints the Collateral Administrator as Calculation Agent. The
Calculation Agent may be removed by the Issuer or the Collateral 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 Collateral Manager
(on behalf of the Issuer), the Issuer or the Collateral 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 Collateral Manager or its Affiliates. The Calculation
Agent may not resign its duties 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
practicable 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 Note Interest Rate for each Class of Secured Notes and the
Senior Subordinated Note Rate for the Senior Subordinated Notes for the next
Interest Accrual Period and the Note Interest Amount for each Class of Secured
Notes and the Senior Subordinated Note Amount for the Senior Subordinated Notes
(in each case, rounded to the nearest cent, with half a cent being rounded
upward) for the next Interest Accrual Period, on the related Payment Date. At
such time the Calculation Agent shall communicate such rates and amounts to the
Co-Issuers, the Trustee, each Paying Agent, the Collateral Manager and Euroclear
and Clearstream. The Calculation Agent shall also specify to the Co-Issuers the
quotations upon which the foregoing rates and amounts are based, and in any
event the Calculation Agent shall notify the Co-Issuers 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 Note Interest Rate, Senior
Subordinated Note Rate. Note Interest Amount or Senior Subordinated Note Amount,
together with its reasons therefor. The Calculation Agent's determination of the
foregoing rates and amounts for any Interest Accrual Period shall (in the
absence of manifest error) be final and binding upon all parties. The
Calculation Agent shall have no responsibility for the selection of an
Alternative Base Rate or designation thereof, or any liability for any failure
or delay in performing its duties hereunder as a result of the unavailability of
a “LIBOR” rate as described herein, except to the extent such failure or delay
arose as a result of the Calculation Agent’s own gross negligence or willful
misconduct.

 

-149-

--------------------------------------------------------------------------------

 

 

(c)     Notwithstanding the foregoing provisions of this Section 7.15, from and
after the first Interest Accrual Period to begin after the execution and
effectiveness of any Base Rate Amendment or selection of an Alternative Base
Rate by a court of competent jurisdiction, "LIBOR" with respect to the Secured
Notes and the Senior Subordinated Notes will be calculated by reference to the
Alternative Base Rate specified in such Base Rate Amendment or as selected by
such court.

 

Section 7.16     Certain Tax Matters. (a) The Issuer and the Co-Issuer will
treat the Issuer, the Co-Issuer and the Notes as described in the "Certain U.S.
Federal Income Tax Considerations" section of the Offering Circular for all U.S.
federal, state and local income tax purposes and will take no action
inconsistent with such treatment unless required by law.

 

(b)     The Issuer and Co-Issuer shall prepare and file, and the Issuer shall
cause each Issuer Subsidiary to prepare and file, or in each case shall hire
accountants and the accountants shall cause to be prepared and filed (and, where
applicable, delivered to the Issuer or Holders) for each taxable year of the
Issuer, the Co-Issuer and the Issuer Subsidiary the federal, state and local
income tax returns and reports as required under the Code, or any tax returns or
information tax returns required by any governmental authority which the Issuer,
the Co-Issuer or the Issuer Subsidiary are required to file (and, where
applicable, deliver); provided, that the Issuer shall not file, or cause to be
filed, any income or franchise tax return in the United States or any state
thereof on the basis that it is engaged in a trade or business within the United
States for U.S. federal income tax purposes, unless it shall have obtained
written advice from Katten Muchin Rosenman LLP or Allen & Overy LLP, or an
opinion of other tax counsel of nationally recognized standing in the United
States experienced in such matters, prior to such filing that, under the laws of
such jurisdiction, the Issuer or Co-Issuer (as applicable) should file such
income or franchise tax return. The Issuer shall provide to each Holder of
Subordinated Notes (and any other Class of Notes required to be treated as
equity in the Issuer) any information that such holder reasonably requests in
order for such holder to (i) make and maintain a "qualified electing fund"
("QEF") election (as defined in the Code) with respect to the Issuer and any
Issuer Subsidiary, or (ii) comply with filing requirements that arise as a
result of the Issuer being classified as a "controlled foreign corporation" for
U.S. federal income tax purposes.

 

(c)     Notwithstanding any provision herein to the contrary, the Issuer (or an
agent acting on its behalf) shall take, and shall cause any Issuer Subsidiary to
take, any and all actions that may be necessary or appropriate to ensure that
the Issuer or such Issuer Subsidiary satisfies any and all withholding and tax
payment obligations under Code Sections 1441, 1442, 1445, 1471, 1472, or any
other provision of the Code or other applicable law. Without limiting the
generality of the foregoing, (i) each of the Issuer and any Issuer Subsidiary
may withhold any amount that it or any advisor retained by the Issuer or the
Trustee on its behalf determines is required to be withheld from any amounts
otherwise distributable to any Person, and (ii) if reasonably able to do so, the
Issuer and any Issuer Subsidiary shall deliver or cause to be delivered an
United States Internal Revenue Service Form W-8BEN-E or successor applicable
form and other properly completed and executed documentation, as it determines
is necessary to permit the Issuer or such Issuer Subsidiary to receive payments
without withholding or deduction or at a reduced rate of withholding or
deduction. In addition, the Issuer shall use reasonable best efforts to qualify
as, and comply with any obligations or requirements imposed on, a "participating
FFI" or a "deemed-compliant FFI" within the meaning of U.S. Treasury
regulations.  In furtherance of the preceding sentence the Issuer shall use
reasonable best efforts to comply with the provisions of the intergovernmental
agreement entered into by the Cayman Islands government and the United States in
respect of FATCA (including the provisions of Cayman Island legislation enacted,
or other official guidance issued, in connection therewith).  In the event that
the Issuer is unable to comply with such intergovernmental agreement (or such
compliance will not preclude FATCA withholding on payments to it), it will use
reasonable best efforts to enter into an agreement with the IRS described in
Section 1471(b)(1) of the Code.  In addition, the Issuer shall use reasonable
best efforts to make any amendments to this Indenture reasonably necessary to
enable the Issuer to comply with FATCA and to cause the Noteholders to provide
information requested in connection with FATCA.  Without limiting the generality
of the foregoing, the Issuer shall obtain a Global Intermediary Identification
Number from the IRS on or prior to the Closing Date, and shall comply with any
requirements necessary to establish and maintain its status as a "Reporting
Model 1 FFI" within the meaning of U.S. Treasury regulations. Upon written
request, the Trustee and the Registrar shall provide to the Issuer, the
Collateral Manager or any agent thereof any information specified by such
parties regarding the Holders of the Notes and payments on the Notes that is in
the possession of and reasonably available to the Trustee or the Registrar, as
the case may be, and may reasonably be necessary for the Issuer to comply with
FATCA, subject in all cases to confidentiality provisions.

 

-150-

--------------------------------------------------------------------------------

 

 

(d)     Upon the Trustee's receipt of a request of a Holder, delivered in
accordance with the notice procedures of Section 14.3, for the information
described in United States Treasury Regulations Section 1.1275-3(b)(1)(i) that
is applicable to such Holder, the Issuer shall cause its Independent accountants
to provide promptly to the Trustee, and the Trustee shall promptly deliver to
such requesting Holder, all of such information. Any issuance of the Additional
Notes or Replacement Notes shall be accomplished in a manner that shall allow
the Independent accountants of the Issuer to accurately calculate original issue
discount income to Holders of the Additional Notes or Replacement Notes.

 

(e)     Upon discovery that an asset violates the Tax Guidelines, or prior to
the time that:

 

(i)     the Issuer would acquire or receive any asset in connection with a
workout or restructuring of a Collateral Obligation that could cause the Issuer
to be treated as engaged in a trade or business in the United States for U.S.
federal income tax purposes or subject to U.S. federal tax on a net income
basis, or

 

(ii)     any Collateral Obligation is modified in such a manner that could cause
the Issuer to be treated as engaged in a trade or business in the United States
for U.S. federal income tax purposes or subject to U.S. federal tax on a net
income basis,

 

the Issuer will either (x) organize one or more wholly-owned special purpose
vehicles of the Issuer that are treated as corporations for U.S. federal income
tax purposes (each, an "Issuer Subsidiary") and contribute to an Issuer
Subsidiary the right to receive such asset or the Collateral Obligation that is
the subject of the workout, restructuring, modification, or asset that violates
the Tax Guidelines, (y) contribute to an existing Issuer Subsidiary the right to
receive such asset or the Collateral Obligation that is the subject of the
workout, restructuring, modification, or asset that violates the Tax Guidelines,
or (z) sell the right to receive such asset or the Collateral Obligation that is
the subject of the workout, restructuring, modification, or asset that violates
the Tax Guidelines in each case unless the Issuer receives an opinion from Allen
& Overy LLP or Katten Muchin Rosenman LLP, or an opinion of other nationally
recognized U.S. tax counsel experienced in such matters, to the effect that the
acquisition, ownership, and disposition of such asset, or that the workout,
restructuring, or modification of such Collateral Obligation or retaining the
asset that violates the Tax Guidelines (as the case may be), will not cause the
Issuer to be treated as engaged in a trade or business in the United States or
otherwise subject to U.S. federal income tax on a net income basis.

 

-151-

--------------------------------------------------------------------------------

 

 

(f)     Notwithstanding Section 7.16(e), the Issuer shall not acquire any asset
(including an asset that may otherwise qualify as a Collateral Obligation) if a
restructuring, or workout of such asset proposed to be acquired is in process
and if such restructuring or workout could reasonably result in the Issuer being
treated as engaged in a trade or business in the United States or subject to
U.S. federal tax on a net income basis (because the Issuer would receive another
asset in connection with the restructuring or workout that would cause the
Issuer to be treated as engaged in a trade or business in the United States or
otherwise subject to U.S. federal income tax on a net income basis).

 

(g)     Each Issuer Subsidiary must at all times have at least one independent
director meeting the requirements of an "Independent Director" as set forth in
the Issuer Subsidiary's organizational documents complying with any applicable
Rating Agency rating criteria. The Issuer shall cause the purposes and permitted
activities of any Issuer Subsidiary to be restricted solely to the acquisition,
receipt, holding, management and disposition of Collateral Obligations referred
to in Section 7.16(e)(x) and Section 7.16(e)(y) and any assets, income and
proceeds received in respect thereof (collectively, "Issuer Subsidiary Assets"),
and shall require each Issuer Subsidiary to distribute 100% of the net proceeds
of any sale of such Issuer Subsidiary Assets, net of any tax or other
liabilities, to the Issuer. No supplemental indenture pursuant to Section 8.1 or
Section 8.2 hereof shall be necessary to permit the Issuer, or the Collateral
Manager on its behalf, to take any actions necessary to set up an Issuer
Subsidiary. The Issuer (or the Collateral Manager on behalf of the Issuer) shall
provide to the Rating Agencies prior notice of the formation of any Issuer
Subsidiary and of the transfer of any asset to any Issuer Subsidiary. For the
avoidance of doubt, any Issuer Subsidiary may distribute an Issuer Subsidiary
Asset to the Issuer if such distribution does not otherwise violate this
Indenture and the acquisition, ownership, and disposition of such asset by the
Issuer will not cause the Issuer to be treated as engaged in a trade or business
in the United States for U.S. federal income tax purposes or otherwise cause the
Issuer to be subject to U.S. federal income tax on a net income basis.

 

-152-

--------------------------------------------------------------------------------

 

 

(h)     Each Issuer Subsidiary that holds a Letter of Credit and that has not
received an opinion or advice from Allen & Overy LLP or Katten Muchin Rosenman
LLP or an opinion of other nationally recognized U.S. tax counsel experienced in
such matters to the effect that the Issuer Subsidiary should not or will not be
subject to U.S. federal income tax on a net income basis with respect to any
fees it receives in respect of such Letter of Credit and any gain it recognizes
on the disposition of such Letter of Credit shall deposit an amount equal to the
highest marginal tax rate specified in Section 11(b) of the Code (or any
successor provisions) multiplied by all of such fees and gain, less any amounts
withheld in respect of taxes on such fees or from the purchase price (as the
case may be), into a single, segregated non-interest bearing trust account
established with the Custodian and held in the name of the Trustee for the
benefit of the Secured Parties (the "Letter of Credit Reserve Account"). If an
Issuer Subsidiary receives the advice or opinion described in the immediately
preceding sentence, the Issuer Subsidiary shall instead deposit an amount equal
to 30% of all such fees (and shall not deposit any amount in respect of such
gain) into the Letter of Credit Reserve Account, less any amounts withheld in
respect of taxes on such fees, unless the Issuer Subsidiary receives an opinion
or advice from Allen & Overy LLP or Katten Muchin Rosenman LLP or an opinion of
other nationally recognized U.S. tax counsel experienced in such matters to the
effect that such fees should not or will not be subject to U.S. federal
withholding tax, in which case the Issuer Subsidiary shall not be required to
deposit any amounts into the Letter of Credit Reserve Account. The Issuer
Subsidiary may withdraw funds from the Letter of Credit Reserve Account to pay
(or to provide for the payments of) the related taxes when due. The Issuer
Subsidiary may also withdraw funds from the Letter of Credit Reserve Account and
distribute such funds to the Issuer for application as Principal Proceeds or
Interest Proceeds (as applicable) on the immediately following Payment Date (x)
if and to the extent that, based on an opinion or advice of Allen & Overy LLP or
Katten Muchin Rosenman LLP or an opinion of other nationally recognized U.S. tax
counsel experienced in such matters, the Issuer Subsidiary should not or will
not be subject to U.S. tax with respect to the fees or gain from which such
funds were reserved, (y) if and to the extent that, based on an opinion or
advice of Allen & Overy LLP or Katten Muchin Rosenman LLP or an opinion of other
nationally recognized U.S. tax counsel experienced in such matters, the Issuer
Subsidiary, more likely than not, will not be subject to withholding tax with
respect to the fees from which such funds were reserved at Stated Maturity or
(z) on a Redemption Date in connection with an optional redemption of Notes
(other than pursuant to a Refinancing), a Clean-Up Call Redemption, or a
Redemption by reason of a Tax Event. The Issuer Subsidiary shall provide to
Fitch and Moody's a copy of any opinion obtained pursuant to clause (x) of the
immediately preceding sentence.

 

(i)          With respect to any Issuer Subsidiary:

 

(i)      the Issuer shall not allow such Issuer Subsidiary to (A) purchase any
assets, or (B) acquire title to real property or a controlling interest in any
entity that owns real property;

 

(ii)     the Issuer shall ensure that such Issuer Subsidiary shall not 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 such Issuer Subsidiary Assets, except as expressly permitted by this
Indenture and the Collateral Management Agreement;

 

(iii)     the Issuer Subsidiary shall not elect to be treated as a "real estate
investment trust" for U.S. Federal income tax purposes;

 

(iv)     the Issuer shall ensure that such Issuer Subsidiary shall not (A) have
any employees (other than its directors), (B) have any subsidiaries (other than
any subsidiary of such Issuer Subsidiary which is subject, to the extent
applicable, to covenants set forth in this Section 7.16 applicable to an Issuer
Subsidiary), or (C) incur or assume or guarantee any indebtedness or hold itself
out as liable for the debt of any other Persons;

 

-153-

--------------------------------------------------------------------------------

 

 

(v)      the Issuer shall ensure that such Issuer Subsidiary shall not conduct
business under any name other than its own;

 

(vi)    the constitutive documents of such Issuer Subsidiary shall provide that
recourse with respect to costs, expenses or other liabilities of such Issuer
Subsidiary shall be solely to the assets of such Issuer Subsidiary and no
creditor of such Issuer Subsidiary shall have any recourse whatsoever to the
Issuer or its assets except to the extent otherwise required under applicable
law;

 

(vii)    the Issuer shall ensure that such Issuer Subsidiary shall file all tax
returns and reports required to be filed by it and to pay all taxes required to
be paid by it;

 

(viii)   the Issuer shall notify the Trustee of the filing or commencement of
any action, suit or proceeding by or before any arbiter or governmental
authority against or affecting such Issuer Subsidiary;

 

(ix)     the Issuer shall ensure that such Issuer Subsidiary shall not enter
into any agreement or other arrangement that prohibits or restricts or imposes
any condition upon the ability of such Issuer Subsidiary to pay dividends or
other distributions with respect to any of its ownership interests;

 

(x)      the Issuer shall be permitted to take any actions and enter into any
agreements to effect the transactions contemplated by Section 7.16(e) so long as
they do not violate Section 7.16(f);

 

(xi)    the Issuer shall keep in full effect the existence, rights and
franchises of such Issuer Subsidiary as a company or corporation organized under
the laws of its jurisdiction and shall obtain and preserve its qualification to
do business in each jurisdiction in which such qualification is or shall be
necessary to preserve the Issuer Subsidiary Assets held from time to time by
such Issuer Subsidiary. In addition, the Issuer and such Issuer Subsidiary shall
not take any action, or conduct its affairs in a manner, that is likely to
result in the separate existence of such Issuer Subsidiary being ignored or in
its assets and liabilities being substantively consolidated with any other
Person in a bankruptcy, reorganization or other insolvency proceeding.
Notwithstanding the foregoing, the Issuer shall be permitted to dissolve any
Issuer Subsidiary at any time;

 

(xii)     the parties hereto agree that any reports prepared by the Trustee, the
Collateral Manager or the Collateral Administrator with respect to the
Collateral Obligations shall indicate that any Issuer Subsidiary Assets are held
by an Issuer Subsidiary, and shall refer directly and solely to such Issuer
Subsidiary Assets, and the Trustee shall not be obligated to refer to the equity
interest in such Issuer Subsidiary;

 

(xiii)     the Issuer, the Co-Issuer, the Collateral Manager and the Trustee
shall not cause the filing of a petition in bankruptcy against the Issuer
Subsidiary for the nonpayment of any amounts due hereunder until at least one
year and one day, or any longer applicable preference period then in effect plus
one day, after the payment in full of all the Notes issued under this Indenture;

 

-154-

--------------------------------------------------------------------------------

 

 

(xiv)     in connection with the organization of such Issuer Subsidiary and the
contribution of any Issuer Subsidiary Assets to such Issuer Subsidiary pursuant
to Section 7.16(e), the Issuer Subsidiary shall establish one or more custodial
and/or collateral accounts, as necessary, with the Bank or the Custodian to hold
the Issuer Subsidiary Assets pursuant to an account control agreement; provided
that (A) an Issuer Subsidiary Asset shall not be required to be held in such a
custodial or collateral account if doing so would be in violation of another
agreement related to such Issuer Subsidiary Asset or any other asset and (B) the
Issuer may pledge an Issuer Subsidiary Asset to a Person other than the Trustee
if required pursuant to a related reorganization or bankruptcy Proceeding;

 

(xv)     subject to the other provisions of this Indenture, the Issuer shall
cause the Issuer Subsidiary to distribute, or cause to be distributed, Issuer
Subsidiary Assets to the Issuer, in such amounts and at such times as shall be
determined by the Collateral Manager (any Cash proceeds distributed to the
Issuer shall be deposited into the Principal Collection Subaccount or the
Interest Collection Subaccount, as applicable); provided that the Issuer shall
not cause any amounts to be so distributed unless all amounts in respect of any
related tax liabilities and expenses have been paid in full or have been
properly reserved for in accordance with GAAP;

 

(xvi)     notwithstanding the complete and absolute transfer of an Issuer
Subsidiary Asset to an Issuer Subsidiary, for purposes of measuring compliance
with the Concentration Limitations, Portfolio Quality Test, and Coverage Tests,
the ownership interests of the Issuer in such Issuer Subsidiary or any property
distributed to the Issuer by the Issuer Subsidiary (other than Cash) shall be
treated as ownership of the Issuer Subsidiary Asset(s) owned by such Issuer
Subsidiary (and shall be treated as having the same characteristics as such
Issuer Subsidiary Asset(s)). If, prior to its transfer to the Issuer Subsidiary,
an Issuer Subsidiary Asset was a Defaulted Obligation, the ownership interests
of the Issuer in the Issuer Subsidiary shall be treated as a Defaulted
Obligation until such Issuer Subsidiary Asset would have ceased to be a
Defaulted Obligation if owned directly by the Issuer;

 

(xvii)     any distribution of Cash by such Issuer Subsidiary to the Issuer
shall be characterized as Interest Proceeds or Principal Proceeds to the same
extent that such Cash would have been characterized as Interest Proceeds or
Principal Proceeds if received directly by the Issuer;

 

(xviii)    if (A) any Event of Default occurs, the Notes have been declared due
and payable (and such declaration shall not have been rescinded and annulled in
accordance with this Indenture), and the Trustee or any other authorized party
takes any action under this Indenture to sell, liquidate or dispose of the
Collateral, (B) notice is given of any mandatory redemption, Redemption by
Liquidation, a Tax Redemption, Clean-Up Call Redemption or other prepayment in
full or repayment in full of all Notes Outstanding and such notice is not
capable of being rescinded, (C) the Stated Maturity has occurred, or (D)
irrevocable notice is given of any other final liquidation and final
distribution of the Collateral, however described, the Issuer or the Collateral
Manager on the Issuer's behalf shall (x) instruct such Issuer Subsidiary to sell
each Issuer Subsidiary Asset held by such Issuer Subsidiary and distribute the
proceeds of such sale, net of any amounts necessary to satisfy any related
expenses and tax liabilities, to the Issuer in exchange for the equity security
of or other interest in such Issuer Subsidiary held by the Issuer or (y) sell
its interest in such Issuer Subsidiary; and

 

-155-

--------------------------------------------------------------------------------

 

 

(xix)     (A) the Issuer shall not dispose of an interest in such Issuer
Subsidiary if such interest is a "United States real property interest," as
defined in Section 897(c) of the Code, and (B) such Issuer Subsidiary shall not
make any distribution to the Issuer if such distribution would cause the Issuer
to be treated as engaged in a trade or business in the United States for federal
income tax purposes or cause the Issuer to be subject to U.S. federal tax on a
net income basis.

 

(j)        Each contribution by the Issuer to an Issuer Subsidiary as provided
in this Section 7.16 may be effected by means of granting a participation
interest in the relevant asset to the Issuer Subsidiary; provided that such
grant transfers ownership of such asset to the Issuer Subsidiary for U.S.
federal income tax purposes based on an opinion of Allen & Overy LLP or Katten
Muchin Rosenman LLP or an opinion of other tax counsel of nationally recognized
standing in the United States experienced in such matters.

 

(k)       No more than 40% of the debt obligations (as determined for U.S.
federal income tax purposes) held by the Issuer shall at any time consist of
real estate mortgages as determined for purposes of Section 7701(i) of the Code
unless, upon an opinion of Allen & Overy LLP or Katten Muchin Rosenman LLP, or
an opinion of other nationally recognized U.S. tax counsel experienced in such
matters, the ownership of such debt obligations will not cause the Issuer to be
treated as a taxable mortgage pool for U.S. federal income tax purposes.

 

(l)       Notwithstanding anything herein to the contrary, the Collateral
Manager, the Issuer, the Co-Issuer, the Trustee, the Holders and beneficial
owners of the Notes and each listed employee, representative or other agent of
those Persons, may disclose to any and all Persons, without limitation of any
kind, the U.S. federal, state, or local tax treatment and tax structure of the
transactions contemplated by this Indenture and all materials of any kind,
including opinions or other tax analyses, that are provided to those Persons.
This authorization to disclose the U.S. tax treatment and tax structure does not
permit disclosure of information identifying the Collateral Manager, the
Co-Issuers, the Trustee or any other party to the transactions contemplated by
this Indenture, the Offering, or the pricing (except to the extent such
information is relevant to the U.S. federal, state, or local tax structure or
tax treatment of such transactions).

 

(m)      If the Issuer has purchased an interest and the Issuer is aware that
such interest is a "reportable transaction" within the meaning of section 6011
of the Code, and the Holder of a Subordinated Note (or any other Note that is
required to be treated as equity for U.S. federal income tax purposes) requests
in writing information about any such transactions in which the Issuer is an
investor, the Issuer shall provide, or cause its Independent accountants to
provide, such information it has reasonably available that is required to be
obtained by such Holder under the Code as soon as practicable after such
request.

 

-156-

--------------------------------------------------------------------------------

 

 

Section 7.17     Ramp-Up Period; Purchase of Additional Collateral Obligations.
(a) During the Ramp-Up Period, the Issuer shall use the following funds to
purchase additional Collateral Obligations in the following order: (i) to pay
for the principal portion of any Collateral Obligation from, first, any amounts
on deposit in the Ramp-Up Account, and second, any Principal Proceeds on deposit
in the Collection Account and then (ii) to pay for accrued interest on any such
Collateral Obligation from, 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 shall use its commercially reasonable efforts
to acquire such Collateral Obligations that shall satisfy, as of the end of the
Ramp-Up Period, the Concentration Limitations, Portfolio Quality Test and the
Par Value Ratio Tests.

 

(b)     Unless clause (e) below is applicable, within 30 Business Days after the
end of the Ramp-Up Period (but in no event later than the Determination Date
relating to the second Payment Date), the Issuer shall provide, or (at the
Issuer's expense) cause the Collateral Manager to provide the following
documents: (i) to the Rating Agencies, a report which the Issuer shall cause the
Collateral Administrator to prepare on its behalf in accordance with, and
subject to the terms of, the Collateral Administration Agreement, identifying
the Collateral Obligations and, with respect to each Collateral Obligation,
specifying (1) its LoanX Mark-It Partners identifier (if any), LIBOR floor (if
any) and classification as a Senior Secured Loan (or a Participation Interest
therein), Second Lien Loan or Unsecured Loan, (2) its Principal Balance, (3) an
indication of whether the purchase of such Collateral Obligation has settled
and, if the purchase of such Collateral Obligation has not settled and the
Aggregate Principal Balance of the Collateral Obligations the purchase of which
has not settled exceeds 10% of the Aggregate Ramp-Up Par Amount, the Market
Value of such Collateral Obligation (as determined by the Collateral Manager),
and (4) the balance of each Account; (ii) to the Trustee, the Collateral Manager
and the Rating Agencies, (x) a report (which the Issuer shall cause the
Collateral Administrator to prepare on its behalf in accordance with, and
subject to the terms of, the Collateral Administration Agreement) stating the
following information (the "Ramp-Up Period Report"): (1) the Obligor, Principal
Balance, coupon/spread, stated maturity, Moody's Default Probability Rating,
Moody's Industry Classification and country of Domicile with respect to each
Collateral Obligation as of the end of the Ramp-Up Period and substantially
similar information provided by the Issuer with respect to every other asset
included in the Assets, by reference to such sources as shall be specified
therein, and (2) calculating, as of the end of the Ramp-Up Period, the level of
compliance with, and satisfaction or non-satisfaction of, (A) the Aggregate
Ramp-Up Par Condition, (B) each Par Value Ratio Test, (C) the Concentration
Limitations and (D) the Portfolio Quality Test; and (y) a certificate of the
Issuer (such certificate, the "Ramp-Up Period Issuer Certificate") certifying
that the Issuer has received an Accountants' Report that recalculates and
compares the information set forth in the Ramp-Up Period Report (such
Accountants' Report, the "Ramp-Up Period Accountants' Report"); and (iii) to the
Trustee, the Ramp-Up Period Accountants' Report. Upon receipt of the Ramp-Up
Period Report, the Trustee and the Collateral Manager shall each compare the
information contained in such Ramp-Up Period Report to the information contained
in their respective records with respect to the Assets and shall, within three
Business Days after receipt of such Ramp-Up Period Report, notify such other
party and the Issuer, the Collateral Administrator and the Rating Agencies if
the information contained in the Ramp-Up Period Report does not conform to the
information maintained by the Trustee or the Collateral Manager, as the case may
be, with respect to the Assets. In the event that any discrepancy exists, the
Trustee and the Issuer, or the Collateral Manager on behalf of the Issuer, shall
attempt to resolve the discrepancy. If such discrepancy cannot be resolved
within five Business Days after the delivery of such a notice of discrepancy,
the Collateral Manager shall request that the Independent accountants selected
by the Issuer pursuant to Section 10.8 perform agreed-upon procedures on the
Ramp-Up Period Report and the Collateral Manager's and Trustee's records to
determine the cause of such discrepancy. If such procedures reveal an error in
the Ramp-Up Period Report or the Collateral Manager's or Trustee's records, the
Ramp-Up Period Report or the Collateral Manager's or Trustee's records shall be
revised accordingly and notice of any error in the Ramp-Up Period Report shall
be sent as soon as practicable by the Issuer to all recipients of such report.
For the avoidance of doubt, the Ramp-Up Period Report shall not include or refer
to the Ramp-Up Period Accountants' Report, except that in accordance with SEC
Release No. 34-72936, Form 15-E, only in its complete and unedited form, 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 Rule 17g-5
website maintained in connection with the transaction. Copies of the Ramp-Up
Period Accountants' Report or any other agreed-upon procedures report provided
by the independent accountants to the Issuer or Trustee will not be provided to
any other party including the Rating Agencies, other than as required by a court
of competent jurisdiction or as otherwise required by applicable legal or
regulatory process.

 

-157-

--------------------------------------------------------------------------------

 

 

(c)     If neither the Moody's Ramp-Up Condition nor the Moody's Rating
Condition is satisfied prior to the date 30 Business Days after the end of the
Ramp-Up Period (but in no event later than the Determination Date relating to
the second Payment Date) (such occurrence constituting a "Moody's Ramp-Up
Failure"), then (A) the Issuer (or the Collateral Manager on the Issuer's
behalf) shall either (i) notify Moody's that the Moody's Ramp-Up Condition has
been satisfied within 30 Business Days after the end of the Ramp-Up Period (but
in no event later than the Determination Date relating to the second Payment
Date) or (ii) satisfy the Moody's Rating Condition within 30 Business Days after
the end of the Ramp-Up Period (but in no event later than the Determination Date
relating to the second Payment Date) and (B) if, by the Determination Date
relating to the second Payment Date, the Issuer (or the Collateral Manager on
the Issuer's behalf) has not confirmed to Moody's that the Moody's Ramp-Up
Condition has been satisfied or satisfied the Moody's Rating Condition, each as
described in the preceding clause (A) of this paragraph, the Issuer (or the
Collateral Manager on the Issuer's behalf) shall instruct the Trustee to
transfer amounts from the Interest Collection Subaccount to the Principal
Collection Subaccount and may, prior to the second Payment Date, purchase
additional Collateral Obligations in an amount sufficient to enable the Issuer
(or the Collateral Manager on the Issuer's behalf) to (i) confirm to Moody's
that the Moody's Ramp-Up Condition has been satisfied or (ii) satisfy the
Moody's Rating Condition; provided that, in lieu of complying with the preceding
clauses (A) and (B), the Issuer (or the Collateral Manager on the Issuer's
behalf) may take such action, including but not limited to, a Special Redemption
and/or transferring amounts from the Interest Collection Subaccount to the
Principal Collection Subaccount as Principal Proceeds (for use in a Special
Redemption), sufficient to enable the Issuer (or the Collateral Manager on the
Issuer's behalf) to (1) confirm to Moody's that the Moody's Ramp-Up Condition
has been satisfied or (2) satisfy the Moody's Rating Condition; provided,
further, that, amounts may not be transferred from the Interest Collection
Subaccount to the Principal Collection Subaccount if, after giving effect to
such transfer, (I) the amounts available pursuant to the Priority of Payments on
the next succeeding Payment Date would be insufficient to pay in full the amount
of the accrued and unpaid interest on any Class of Secured Notes on such next
succeeding Payment Date, or (II) such transfer would result in a deferral of
interest with respect to the Class C Notes, Class D Notes or Class E Notes on
the next succeeding Payment Date. The Trustee shall provide notice to Fitch of a
Moody's Ramp-Up Failure. For the avoidance of doubt, any confirmation by the
Issuer (or the Collateral Manager on its behalf) to Moody's that the Moody's
Ramp-Up Condition has been satisfied as provided in this Section 7.17(c) will be
by way of delivery by the Issuer (or the Collateral Manager on its behalf) to
Moody's of the relevant Ramp-Up Period Report and Ramp-Up Issuer Certificate as
contemplated in the definition of "Moody's Ramp-Up Condition".

 

-158-

--------------------------------------------------------------------------------

 

 

(d)     The failure of the Issuer to satisfy the requirements of this
Section 7.17 will not constitute an Event of Default unless such failure
constitutes an Event of Default under Section 5.1(d) hereof and the Issuer, or
the Collateral Manager acting on behalf of the Issuer, has acted in bad faith.

 

(e)     Asset Quality Matrix. On or prior to the last day of the Ramp-Up Period,
the Collateral Manager shall determine which "row/column combination" of the
Asset Quality Matrix shall apply on and after the last day of the Ramp-Up Period
to the Collateral Obligations for purposes of determining compliance with the
Moody's Diversity Test, the Maximum Moody's Rating Factor Test and the Minimum
Floating Spread Test and for the purposes of determining the Moody's Recovery
Rate Modifier and the Spread Modifier in the Recovery Rate Modifier Matrix, and
if such "row/column combination" differs from the "row/column combination"
chosen to apply as of the Closing Date, the Collateral Manager shall so notify
the Trustee, the Collateral Administrator and each Rating Agency. Thereafter, at
any time on written notice of two Business Day to the Trustee, the Collateral
Administrator and each Rating Agency (via email to Moody's at
cdomonitoring@moodys.com and via email to Fitch at
cdo.surveillance@fitchratings.com), the Collateral Manager may elect a different
"row/column combination" of the Asset Quality Matrix to apply to the Collateral
Obligations; provided that: (i) if the election is in relation to a proposed
purchase of a Collateral Obligation and each Portfolio Quality Test will be
satisfied following such purchase, then such election shall be deemed to go into
effect simultaneously with such proposed purchase after giving effect to such
purchase, and (ii) in all other cases, such election shall only be permitted if
the Collateral Obligations are in compliance with the Asset Quality Matrix case
to which the Collateral Manager desires to change. If the Collateral Manager
does not notify the Trustee and the Collateral Administrator that it will alter
the "row/column combination" of the Asset Quality Matrix chosen on the last day
of the Ramp-Up Period in the manner set forth above, the "row/column
combination" of the Asset Quality Matrix chosen on the last day of the Ramp-Up
Period shall continue to apply. Notwithstanding the foregoing, the Collateral
Manager may elect at any time after the last day of the Ramp-Up Period, in lieu
of selecting a "row/column combination" of the Asset Quality Matrix (but
otherwise in compliance with the requirements of the fourth sentence of this
Section 7.17(e)) to interpolate between two adjacent rows and/or two adjacent
columns, as applicable, on a straight-line basis and round the results to two
decimal points.

 

-159-

--------------------------------------------------------------------------------

 

 

Section 7.18     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), with respect to the Assets:

 

(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.

 

(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.

 

(iii)     All Assets constitute Cash, accounts (as defined in
Section 9-102(a)(2) of the UCC), Instruments, general intangibles (as defined in
Section 9-102(a)(42) 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
Section 8-501(a) of the UCC).

 

(iv)     All Accounts constitute "securities accounts" under Section 8-501(a) of
the UCC, or "deposit accounts" under Section 9-102(a)(29) of the UCC.

 

(v)      This Indenture creates a valid and continuing security interest (as
defined in Section 1-201(37) 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.

 

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

 

(i)     Either (x) the Issuer has caused or shall have caused, within ten days
of the Closing Date, the filing of all appropriate Financing Statements in the
proper office in the appropriate jurisdictions under applicable law in order to
perfect the security interest in the Instruments granted to the Trustee, for the
benefit and security of the Secured Parties, hereunder or (y)(A) all original
executed copies of each promissory note or mortgage note that constitutes or
evidences the Instruments have been delivered to the Trustee or the Issuer has
received written acknowledgement from a custodian that such custodian is holding
the mortgage notes or promissory notes that constitute evidence of the
Instruments solely on behalf of the Trustee and for the benefit of the Secured
Parties and (B) none of the Instruments that constitute or evidence the 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.

 

-160-

--------------------------------------------------------------------------------

 

 

(ii)     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 that constitute Instruments.

 

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

 

(i)     All of such Assets have been and shall have been credited to one of the
Accounts which are securities accounts within the meaning of Section 8-501(a) of
the UCC. The Securities Intermediary for each Account has agreed to treat all
assets credited to such Accounts (other than General Intangibles and Cash) as
Financial Assets.

 

(ii)     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 that constitute Security Entitlements.

 

(iii)     Either (x) the Issuer has caused or shall have caused, within ten days
of the Closing Date, the filing of all appropriate Financing Statements in the
proper office in the appropriate jurisdictions under applicable law in order to
perfect the security interest granted to the Trustee, for the benefit and
security of the Secured Parties, hereunder or (y)(A) the Issuer has delivered to
the Trustee a fully executed Securities Account Control Agreement pursuant to
which the Custodian has agreed to comply with all instructions 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.

 

(iv)     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 of any person other than the Trustee (and the Issuer prior to
a notice of exclusive control being provided by the Trustee).

 

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

 

(i)     The Issuer has caused or shall have caused, within ten days of the
Closing Date, the filing of all appropriate Financing Statements in the proper
filing office in the appropriate jurisdictions under applicable law in order to
perfect the security interest in the Assets granted to the Trustee, for the
benefit and security of the Secured Parties, hereunder.

 

-161-

--------------------------------------------------------------------------------

 

 

(ii)     The Issuer has received, or shall receive, 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 that constitute general intangibles.

 

(e)         The Co-Issuers agree to promptly provide notice to the Rating
Agencies if they become aware of the breach of any of the representations and
warranties contained in this Section 7.18.

 

Section 7.19     Acknowledgement of Collateral Manager Standard of Care. The
Co-Issuers acknowledge that they shall be responsible for their own compliance
with the covenants set forth in this Article VII and that, to the extent the
Co-Issuers have engaged the Collateral Manager to take certain actions on their
behalf in order to comply with such covenants, the Collateral Manager shall only
be required to perform such actions in accordance with the standard of care set
forth in Section 2(f) of the Collateral Management Agreement (or the
corresponding provision of any collateral management agreement entered into as a
result of JMP Credit Advisors LLC no longer being the Collateral Manager). The
Co-Issuers further acknowledge and agree that, to the extent the Co-Issuers have
engaged the Collateral Manager to take certain actions on their behalf in order
to comply with the covenants set forth in this Article VII, the Collateral
Manager shall have no obligation to take any action to cure any breach of any
such covenant set forth in this Article VII until such time as an Authorized
Officer of the Collateral Manager has actual knowledge of such breach.

 

Section 7.20     [Reserved].

 

Section 7.21     Section 3(c)(7) Procedures. In addition to the notices required
to be given under Section 10.5, the Issuer shall take the following actions to
ensure compliance with the requirements of Section 3(c)(7) of the Investment
Company Act (provided that such procedures and disclosures may be revised by the
Issuer to be consistent with generally accepted practice for compliance with the
requirements of Section 3(c)(7) of the Investment Company Act):

 

(a)      The Issuer shall, or shall cause its agent to request of DTC, and
cooperate with DTC to ensure, that (i) DTC's security description and delivery
order include a "3(c)(7) marker" and that DTC's reference directory contains an
accurate description of the restrictions on the holding and transfer of the
Notes due to the Issuer's reliance on the exemption to registration provided by
Section 3(c)(7) of the Investment Company Act, (ii) DTC send to its participants
in connection with the initial offering of the Notes, a notice that the Issuer
is relying on Section 3(c)(7) and (iii) DTC's reference directory include each
class of Notes (and the applicable CUSIP numbers for the Notes) in the listing
of 3(c)(7) issues together with an attached description of the limitations as to
the distribution, purchase, sale and holding of the Notes.

 

(b)      The Issuer shall, or shall cause its agent to, (i) ensure that all
CUSIP numbers identifying the Notes shall have a "fixed field" attached thereto
that contains "3c7" and "144A" indicators and (ii) take steps to cause the
Initial Purchaser to require that all "confirms" of trades of the Notes contain
CUSIP numbers with such "fixed field" identifiers.

 

-162-

--------------------------------------------------------------------------------

 

 

(c)     The Issuer shall, or shall cause its agent to, cause the Bloomberg
screen or screens containing information about the Notes to include the
following language: (i) the "Note Box" on the bottom of "Security Display" page
describing the Notes shall state: "Iss'd Under 144A/3(c)(7)," (ii) the "Security
Display" page shall have the flashing red indicator "See Other Available
Information," and (iii) the indicator shall link to the "Additional Security
Information" page, which shall state that the securities "are being offered in
reliance on the exemption from registration under Rule 144A of the Securities
Act of 1933, as amended (the "Securities Act") to Persons who are both (x)
qualified institutional buyers (as defined in Rule 144A under the Securities
Act) and (y) qualified purchasers (as defined under Section 3(c)(7) under the
Investment Company Act of 1940)." The Issuer shall use commercially reasonable
efforts to cause any other third-party vendor screens containing information
about the Notes to include substantially similar language to clauses (i) through
(iii) above.

 

ARTICLE VIII

SUPPLEMENTAL INDENTURES

 

Section 8.1     Supplemental Indentures without Consent of Holders of Notes.
Without the consent of the Holders of any Notes (except as otherwise provided
below) or any Hedge Counterparty, the Co-Issuers, when authorized by Board
Resolutions, at any time and from time to time subject to the requirement
provided below in this Section 8.1 with respect to the ratings of any Class of
Secured Notes, may enter into one or more indentures supplemental hereto in form
satisfactory to the Trustee for any of the following purposes:

 

(i)       to evidence the succession of another Person to the Issuer or the
Co-Issuer and the assumption by any such successor Person of the covenants of
the Issuer or the Co-Issuer herein and in the Notes;

 

(ii)      to add to the covenants of the Co-Issuers or the Trustee for the
benefit of the Secured Parties or to surrender any right or power herein
conferred upon the Co-Issuers;

 

(iii)     to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee for the benefit of the Secured Parties 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;

 

-163-

--------------------------------------------------------------------------------

 

 

(vi)     to modify the restrictions on and procedures for resales and other
transfers of Notes to reflect any changes in applicable law or regulation (or
the interpretation thereof) or to enable the Co-Issuers to rely upon any
exemption from registration under the Securities Act or the Investment Company
Act or to remove restrictions on resale and transfer to the extent not required
thereunder;

 

(vii)     to make such changes (including the removal and appointment of any
listing agent) as shall be necessary or advisable in order for the Notes (if
any) to be or to remain listed or to be de-listed on an exchange;

 

(viii)    at any time within the Reinvestment Period (or, in the case of an
issuance of additional Subordinated Notes or a Risk Retention Issuance only, at
any time), to facilitate the Applicable Issuers (A) to issue Additional Notes of
any one or more new classes that are subordinated to the existing Secured Notes
(or to the most junior class of securities of the Issuer (other than the
Subordinated Notes) issued pursuant to this Indenture, if any class of
securities issued pursuant to this Indenture other than the Secured Notes and
the Subordinated Notes is then outstanding); provided that any such additional
issuance of Notes shall be issued in accordance with Section 2.4, (B) to issue
Additional Notes of any one or more existing Classes provided, further, that any
such additional issuance of Notes shall be issued in accordance with
Section 2.4, or (C) to issue replacement securities in connection with a
Refinancing in accordance with Section 9.2(b) or Section 9.3;

 

(ix)     to correct any inconsistency or cure any ambiguity, omission or errors
in this Indenture, subject to the prior affirmative consent of a Majority of the
Controlling Class;

 

(x)      to conform the provisions of this Indenture to the Offering Circular;

 

(xi)     to amend, modify, enter into or accommodate the execution of any Hedge
Agreement;

 

(xii)    to take any action advisable, necessary or helpful to prevent the
Issuer or any Issuer Subsidiary from becoming subject to (or to otherwise
minimize) withholding or other taxes, fees or assessments, including by
complying with FATCA or to reduce the risk that the Issuer may be treated as
engaged in a trade or business within the United States for U.S. federal income
tax purposes or otherwise subject to U.S. federal, state or local income tax on
a net income basis;

 

-164-

--------------------------------------------------------------------------------

 

 

(xiii)    to amend, modify or otherwise accommodate changes to this Indenture
relating to compliance with Rule 17g-5 of the Exchange Act or to permit
compliance with the Dodd-Frank Wall Street Reform and Consumer Protection Act
(subject to clause (xxiii) below), as amended from time to time, the rules and
regulations of the Commodity Futures Trading Commission, or other laws, rules
and regulations (or any interpretation thereof) enacted or implemented by
regulatory agencies of the United States federal government as applicable to the
Co-Issuers, the Collateral Manager or the Notes, or any rules or regulations
thereunder or to reduce costs to the Issuer as a result thereof;

 

(xiv)     to effect a Refinancing in conformity with Section 9.2(b);

 

(xv)     to evidence any waiver or elimination by any Rating Agency of any
requirement or condition of any Rating Agency set forth herein, subject to the
prior affirmative consent of a Majority of the Controlling Class;

 

(xvi)     to conform to ratings criteria and other guidelines (including any
alternative methodology published by any Rating Agency) relating to collateral
debt obligations in general published by any Rating Agency, subject to the prior
affirmative consent of a Majority of the Controlling Class;

 

(xvii)     to amend, modify or otherwise accommodate changes to Section 7.13
relating to the administrative procedures for reaffirmation of ratings on the
Notes;

 

(xviii)     to change the name of the Issuer or the Co-Issuer in connection with
the change in name or identity of the Collateral 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 or the Co-Issuer does not have
a license;

 

(xix)     to facilitate the issuance of participation notes, combination notes,
composite securities, and other similar securities by the Applicable Issuers;

 

(xx)     (A) to modify or amend any component of the Asset Quality Matrix and/or
the Recovery Rate Modifier Matrix, the restrictions on the sales of Collateral
Obligations, the Investment Criteria (related to the criteria during or after
the Reinvestment Period) or the Portfolio Quality Tests and the definitions
related thereto which affect the calculation thereof (subject to the Global
Rating Agency Condition being satisfied in respect thereof) or (B) to modify the
Concentration Limitations (subject to the Global Rating Agency Condition being
satisfied in respect thereof), in each case of (A) and (B) above, subject to the
prior consent of a Majority of the Controlling Class;

 

(xxi)     to accommodate the settlement of the Notes in book-entry form through
the facilities of DTC or otherwise;

 

(xxii)     to authorize the appointment of any listing agent, transfer agent,
paying agent or additional registrar for any Class of Notes required or
advisable in connection with the listing of any Class of Notes on any stock
exchange, and otherwise to amend this Indenture to incorporate any 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 in connection herewith;

 

-165-

--------------------------------------------------------------------------------

 

 

(xxiii)     to make any modification or amendment determined by the Issuer or
the Collateral Manager (in consultation with legal counsel of national
reputation experienced in such matters) as necessary or advisable (A) for any
Class of Secured Notes to not be considered an "ownership interest" as defined
for purposes of the Volcker Rule or (B) (1) to enable the Issuer to rely upon
the exemption or exclusion from registration as an investment company provided
by Rule 3a-7 under the Investment Company Act or another exemption or exclusion
from registration as an investment company under the Investment Company Act
(other than Section 3(c)(1) or Section 3(c)(7) thereof) or (2) for the Issuer to
not otherwise be considered a "covered fund" as defined for purposes of the
Volcker Rule, in each case so long as any such modification or amendment would
not have a material adverse effect on any Class of Notes, subject to the prior
affirmative consent of a Majority of the Controlling Class;

 

(xxiv)     except as set forth in clause (xxiii), to prevent either of the
Co-Issuers or the pool of collateral securing the Indenture from becoming an
investment company or being required to register as an investment company under
the Investment Company Act;

 

(xxv)     with the prior written consent of a Majority of the Controlling Class,
to amend or otherwise modify, if the Moody's Rating Condition is satisfied, any
reference herein to "Moody's Default Probability Rating" or to a rating assigned
by Moody's;

 

(xxvi)     to take any action necessary or advisable for any Bankruptcy
Subordination Agreement; and to (A) issue a new Note or Notes in respect of, or
issue one or more new sub classes of, any Class of Notes, in each case with new
identifiers (including CUSIPs, ISINs and Common Codes, as applicable) in
connection with any Bankruptcy Subordination Agreement; provided that any sub
class of a Class of Notes issued pursuant to this clause will be issued on
identical terms as, and rank pari passu in all respects with, the existing Notes
of such Class and (B) provide for procedures under which beneficial owners of
such Class that are not subject to a Bankruptcy Subordination Agreement, may
take an interest in such new Note(s) or sub class(es);

 

(xxvii)     to make such other changes as the Co-Issuers deem appropriate and
that do not materially and adversely affect the interests of any Holder of the
Notes as evidenced by an Opinion of Counsel delivered to the Trustee (which may
be supported as to factual and business (including financial and capital
markets) matters by any relevant certificates and other documents necessary or
advisable in the judgment of counsel delivering the opinion), subject to the
prior affirmative consent of a Majority of the Controlling Class; or

 

-166-

--------------------------------------------------------------------------------

 

 

(xxviii)      following (i) a material disruption to LIBOR, a change in the
methodology of calculating LIBOR or LIBOR ceasing to exist or be reported or
updated on the Reuters Screen (or the reasonable expectation of the Collateral
Manager that any of the events specified in this clause (i) will occur within
the current or next succeeding Interest Accrual Period), or (ii) any date on
which at least 50% (by principal amount) of the Collateral Obligations are
floating rate Collateral Obligations that are quarterly pay and rely on
reference or base rates other than LIBOR (in the case of this clause (ii), as
determined as of the first day of the Interest Accrual Period during which a
Base Rate Amendment is proposed under this Indenture), the Collateral Manager
shall, upon written notice to the Issuer and the Trustee, propose an alternative
base rate, which shall include a Base Rate Modifier, to replace LIBOR as the
base rate used to calculate the Interest Rate on the Secured Notes (such
alternative base rate, including the Base Rate Modifier, the "Alternative Base
Rate"). Promptly upon receipt of such notice, the Issuer (or the Collateral
Manager on its behalf) shall prepare a supplemental indenture which by its terms
(x) changes the base rate used to calculate the Interest Rate on the Secured
Notes from LIBOR to the Alternative Base Rate, (y) expressly provides that at no
time will the Alternative Base Rate be less than 0.0% per annum and (z) makes
such other amendments as are necessary or advisable in the reasonable judgment
of the Collateral Manager to facilitate the change to the Alternative Base Rate
(a "Base Rate Amendment"). Any supplemental indenture providing for a Base Rate
Amendment will be delivered by the Trustee in accordance with the notice
requirements contained in this Section 8.1. Subject to such notice provisions,
the Co-Issuers and the Trustee may execute such supplemental indenture (x)
without the consent of the Holders of any of the Notes if such Alternative Base
Rate is the Designated Base Rate or a Market Replacement Rate and (y) with the
consent of a Majority of the Controlling Class (but without the consent of any
other Holders of the Notes) if such Alternative Base Rate is any other
alternative base rate; provided that, in the event that (I) there is a material
disruption to LIBOR, a change in the methodology of calculating LIBOR, or LIBOR
ceases to exist or be reported or updated on the Reuters Screen and (II) a Base
Rate Amendment has not been executed within 60 days of the events described in
(I), any Holder of the Controlling Class may petition a court of competent
jurisdiction to select an Alternative Base Rate (which will include a Base Rate
Modifier) and any such selection by such court shall not be subject to the
consent of any Holders of the Notes. For the avoidance of doubt, a Base Rate
Amendment is not required to be proposed for any Holder of the Controlling Class
to petition a court after the events described in clauses (I) and (II) above;

 

provided that, for the avoidance of doubt, Reset Amendments are not subject to
any consent requirements that would otherwise apply to supplemental indentures
described above or elsewhere in this Indenture.

 

At the cost of the Co-Issuers, for so long as any Notes shall remain
Outstanding, not later than 25 Business Days prior to the execution of any
proposed supplemental indenture pursuant to this Section 8.1, the Trustee shall
deliver to the Collateral Manager, the Collateral Administrator, the
Noteholders, and each Rating Agency (so long as any Secured Notes are
Outstanding and are rated by such Rating Agency) a copy of such supplemental
indenture. With respect to any proposed supplemental indenture pursuant to the
above provisions (other than any proposed supplemental indenture to be entered
into under clause (xxviii)), at the cost of the Co-Issuers, for so long as any
Notes shall remain Outstanding, if a Majority of the Controlling Class has
provided written notice to the Trustee within 20 Business Days after delivery of
such notice that the Controlling Class objects to any such proposed supplemental
indenture and such written notice includes a statement describing why such
proposed amendment would be adverse to the interests of such Holders, the
interests of such Class shall be deemed to be materially and adversely affected
and therefore the Trustee and the Co-Issuers shall not enter into such
supplemental indenture. In addition, the Trustee shall not enter into any
proposed supplemental indenture pursuant to this Section 8.1, (and no such
proposed supplemental indenture may become effective) (other than any proposed
supplemental indenture to be entered into under clause (xxviii)) if a Majority
of the Controlling Class delivers to the Issuer and the Trustee, at least one
Business Day prior to the proposed effective date of such supplemental
indenture, an opinion of counsel (which may be supported as to factual
(including financial and capital markets) matters by any relevant certificates
and other documents necessary or advisable in the judgment of the counsel
delivering the opinion) that the interests of the Holders in such Class of Notes
will be materially and adversely affected by such proposed supplemental
indenture.

 

-167-

--------------------------------------------------------------------------------

 

 

Except as set forth above, 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.

 

At the cost of the Co-Issuers, the Trustee shall provide to the Holders and each
Rating Agency (so long as any Secured Notes are Outstanding and are rated by
such Rating Agency), a copy of the executed supplemental indenture after its
execution. Any failure of the Trustee to publish or deliver such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any such supplemental indenture. The Trustee may conclusively rely on an Opinion
of Counsel (which may be supported as to factual and business (including
financial and capital markets) matters by any relevant certificates and other
documents necessary or advisable in the judgment of counsel delivering the
opinion) or an Officer's certificate of the Collateral Manager as to whether the
interests of any Holder of Notes would be materially and adversely affected by
the modifications set forth in such supplemental indenture, it being expressly
understood and agreed that the Trustee shall have no obligation to make any
determination as to the satisfaction of the requirements related to any
supplemental indenture which may form the basis of such Opinion of Counsel. Such
determination shall be conclusive and binding on all present and future Holders.
The Trustee shall not be liable for any such determination made in good faith
and in reliance upon the above described Officer's certificate or an Opinion of
Counsel delivered to the Trustee as described in Section 8.4 hereof.

 

A supplemental indenture entered into for any purpose other than the purposes
provided for in this Section 8.1 shall require the consent of the Holders of
Notes as required in Section 8.2.

 

Section 8.2     Supplemental Indentures with Consent of Holders of Notes.
(a) With the consent of a Majority of each Class of Notes materially and
adversely affected thereby, the Trustee and the Co-Issuers may enter into a
supplemental indenture 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 such Class under this Indenture; provided
that, no such supplemental indenture pursuant to this Section 8.2(a) shall,
without the consent of each Holder of each Outstanding Note of each Class
materially and adversely affected thereby:

 

-168-

--------------------------------------------------------------------------------

 

 

(i)     change the Stated Maturity of the principal of or the due date of any
installment of interest on any Secured Note or Senior Subordinated Note Amount
on any Senior Subordinated Note, reduce the principal amount thereof or the rate
of interest thereon or the Redemption Price with respect to any Note, or change
the earliest date on which Notes of any Class may be redeemed, change the
provisions of this Indenture relating to the application of proceeds of any
Assets to the payment of principal of or interest on Secured Notes or
distributions on the Subordinated Notes (other than, following a redemption in
full of the Secured Notes, an amendment to permit distributions to the Holders
of Subordinated Notes on dates other than a Payment Date) or change any place
where, or the coin or currency in which, Subordinated Notes or Secured Notes or
the principal thereof or interest 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);

 

(ii)     change the percentage of the Aggregate Outstanding Amount of Holders of
Notes of each Class whose consent is required under this Indenture, including
for the authorization of any such supplemental indenture, exercise of remedies
under this Indenture or for any waiver of compliance with certain provisions of
this Indenture or certain defaults hereunder or their consequences;

 

(iii)     materially impair or materially adversely affect the Assets except as
otherwise permitted in this Indenture;

 

(iv)     except as otherwise expressly 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 Secured Note of
the security afforded by the lien of this Indenture;

 

(v)     modify any of the provisions of this Section 8.2, except to increase the
percentage of Outstanding Secured Notes or Subordinated Notes 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 Secured Note or Subordinated Note Outstanding and
affected thereby;

 

(vi)     modify the definitions of the terms "Outstanding," "Class,"
"Controlling Class," "Majority" or "Supermajority";

 

(vii)    modify any of the provisions of this Indenture in such a manner as to
directly affect the calculation of the amount of any payment of interest or
principal on any Secured Note, or any amount available for distribution to the
Subordinated Notes or to affect the rights of the Holders of Secured Notes to
the benefit of any provisions for the redemption of such Secured Notes contained
herein;

 

(viii)   amend any of the provisions of this Indenture relating to the
institution of proceedings for certain events of bankruptcy, insolvency,
receivership or reorganization of the Co-Issuers; or

 

-169-

--------------------------------------------------------------------------------

 

 

(ix)     modify the restrictions on and procedures for resales and other
transfers of Notes (except as set forth in Section 8.1(vi) and (xii)),

 

provided that, with respect to any supplemental indenture which, by its terms,
(A) provides for a Refinancing of all, but not less than all, Classes of the
Secured Notes in whole, but not in part, and (B) is consented to by at least a
Majority of the Junior Subordinated Notes, notwithstanding anything to the
contrary contained or implied elsewhere in this Indenture, the Collateral
Manager may, without regard to any other consent requirement specified above or
elsewhere in this Indenture, cause such supplemental indenture to also (1)
effect an extension of the end of the Reinvestment Period, (2) establish a
non-call period for the obligations or loans issued to replace such Secured
Notes or prohibit a future refinancing of such replacement securities, (3)
modify the Weighted Average Life Test, (4) provide for a stated maturity of such
obligations or loans that is later than the Stated Maturity of the Secured
Notes, (5) effect an extension of the Stated Maturity of the Subordinated Notes
and/or (6) make any other supplements or amendments to this Indenture that would
otherwise be subject to the consent rights set forth above (a "Reset
Amendment").

 

(b)     Not later than twenty-five (25) Business Days prior to the execution of
any proposed supplemental indenture pursuant to Section 8.2(a), the Trustee, at
the expense of the Co-Issuers, shall mail to the Noteholders, the Collateral
Manager, the Collateral Administrator, any Hedge Counterparty and each Rating
Agency (so long as any Secured Notes are Outstanding and are rated by such
Rating Agency) a copy of such proposed supplemental indenture and shall request
any required consent from the applicable Holders of Notes to be given within
twenty (20) Business Days. Any consent given to a proposed supplemental
indenture by the Holder of any Notes will be irrevocable and binding on all
future holders or beneficial owners of that Note, irrespective of the execution
date of the supplemental indenture. At any time after the delivery of notice of
any proposed supplemental indenture by the Trustee to the Holders of Notes as
described herein, the Trustee shall, as promptly as commercially practicable
upon the Collateral Manager's written request, inform the Collateral Manager
(and, if so requested by the Collateral Manager, the Issuer) of any
communications received by the Trustee from any Holder of Notes in connection
with such supplemental indenture, including, without limitation, any consents or
objections received in respect thereto and which Holders of Notes (and, to the
extent such information is available to the Trustee, which beneficial owners
(excluding any beneficial owner that has requested the Trustee to not reveal its
identity)) have so consented or objected.

 

(c)     It shall not be necessary for any Act of Holders under this Section 8.2
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act or consent shall approve the substance thereof,
so long as the Holders have received a copy of the language to be included in
any proposed supplemental indenture and any changes to such language included in
any proposed supplemental indenture sent to Holders is or are of a purely minor
nature or to fix typographic mistakes. Following delivery by the Trustee of a
proposed supplemental indenture in relation to or pursuant to Section 8.1(ix),
(xv), (xvi), (xx), (xxiii), (xxv), (xxvii) or (xxviii) or Section 8.2(b), if any
changes are made to such supplemental indenture other than changes which are of
a purely minor nature, to correct typographical errors, to complete or change
dates, or to adjust formatting, then at the expense of the Co-Issuers, for so
long as any Notes shall remain Outstanding, not later than five Business Days
prior to the execution of such proposed supplemental indenture, the Trustee
shall mail to the Noteholders, the Collateral Manager, the Collateral
Administrator, any Hedge Counterparty and each Rating Agency (so long as any
Secured Notes are Outstanding and are rated by such Rating Agency) a copy of
such supplemental indenture as revised, indicating the changes that were made.
If, prior to delivery by the Trustee of such supplemental indenture as revised,
any Holder has provided its written consent to the supplemental indenture as
initially distributed, such Holder shall have the right to withdraw such consent
by written notice to the Trustee and Issuer not later than one (1) Business Day
prior to the execution of such supplemental indenture; provided that the written
consent of such Holder to such supplemental indenture as revised shall be
further required if such Holder is materially adversely affected by such
revisions.

 

-170-

--------------------------------------------------------------------------------

 

 

(d)     The Issuer shall not enter into any supplemental indenture pursuant to
this Section 8.2 if any Hedge Counterparty (in its reasonable judgment) would be
materially and adversely affected by such supplemental indenture and notifies
the Issuer and the Trustee thereof without the prior written consent of such
Hedge Counterparty.

 

(e)     Promptly after the execution by the Co-Issuers and the Trustee of any
supplemental indenture pursuant to this Section 8.2, the Trustee, at the expense
of the Co-Issuers, shall deliver to the Holders, the Collateral Manager and each
Rating Agency (so long as any Secured Notes are Outstanding and are rated by
such Rating Agency), a copy thereof. Any failure of the Trustee to deliver a
copy of any supplemental indenture as provided herein, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.

 

(f)     The Trustee may conclusively rely on an Opinion of Counsel (which may be
supported as to factual (including financial and capital markets) matters by any
relevant certificates and other documents necessary or advisable in the judgment
of counsel delivering the opinion) or an Officer's certificate of the Collateral
Manager as to whether the interests of any Holder of Notes would be materially
and adversely affected by the modifications set forth in such supplemental
indenture, it being expressly understood and agreed that the Trustee shall have
no obligation to make any determination as to the satisfaction of the
requirements related to any supplemental indenture which may form the basis of
such Opinion of Counsel; provided that if the Trustee and the Issuer are
notified (within 20 Business Days after notice by the Trustee to the Holders of
a proposed supplemental indenture) by a Majority of the Controlling Class that
such Holders believe the interests of the Holders in such Class of Notes will be
materially and adversely affected by the proposed supplemental indenture
pursuant to the provisions described above in this Section 8.2(f), the interests
of such Class will be deemed to be materially and adversely affected by such
proposed supplemental indenture pursuant to the provisions described herein. The
determinations made pursuant to this clause shall be conclusive and binding on
all present and future Holders. The Trustee shall not be liable for any such
determination made in good faith and in reliance upon the above described
Officer's certificate or an Opinion of Counsel delivered to the Trustee as
described in Section 8.4 hereof. For the avoidance of doubt, the failure to
satisfy the Global Rating Agency Condition (except in the case of Section
8.1(xx) and Section 8.1(xxv) above), as applicable, shall not prevent the
execution or effectiveness of any supplemental indenture.

 

-171-

--------------------------------------------------------------------------------

 

 

Section 8.3     Supplemental Indentures with consent of the Section 13 Banking
Entities.

 

(a)     Notwithstanding the foregoing, without the prior written consent of 100%
of the Section 13 Banking Entities, no supplemental indenture may modify the
definition of "Collateral Obligations", the definition of "Eligible
Investments", the definition of "Participation Interests", the definition of
"Section 13 Banking Entities", the criteria required to enter into a hedge
agreement, or the criteria required for additional issuance of Notes. Moreover,
the Trustee, the Collateral Manager and the Co-Issuers may execute one or more
indentures supplemental to the Indenture to make any modification or amendment
determined by the Issuer or the Collateral Manager (in consultation with legal
counsel of national reputation experienced in such matters) as necessary or
advisable (A) for any Class of Secured Notes to not be considered an "ownership
interest" as defined for purposes of the Volcker Rule or (B) for the Issuer to
not otherwise be considered a "covered fund" as defined for purposes of the
Volcker Rule, in each case so long as (1) any such modification or amendment
would not have a material adverse effect on any Class of Notes, as evidenced by
an opinion of counsel (which may be supported as to factual (including financial
and capital markets) matters by any relevant certificates and other documents
necessary or advisable in the judgment of the counsel delivering the opinion),
and (2) such modification or amendment is approved in writing by a supermajority
(66-2/3% based on the aggregate principal amount of Notes held by the Section 13
Banking Entities) of the Section 13 Banking Entities (voting as a single class).

 

Section 8.4     Execution of Supplemental Indentures.

 

(a)     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 shall be entitled
to receive, and (subject to Section 6.1 and 6.3) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized and permitted by this Indenture and that
all conditions precedent thereto have been satisfied. The Trustee may, but shall
not be obligated to, enter into any such supplemental indenture which affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise. Neither the Collateral Manager nor the Collateral Administrator shall
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 the
amendment or supplement from the Issuer or the Trustee prior to the execution
thereof in accordance with the notice requirements of Section 8.1 and
Section 8.2. Notwithstanding anything in this Indenture to the contrary, the
Issuer agrees that it shall not permit to become effective any amendment or
supplement to this Indenture which would alter or affect the rights or
obligations of the Collateral Manager in any way, including (i) increasing the
duties or liabilities of, reducing or eliminating any right or privilege of
(including as a result of an effect on the amount or the priority of any fees or
other amounts payable to the Collateral Manager or the Collateral
Administrator), or adversely changing the economic consequences to, the
Collateral Manager or the Collateral Administrator, (ii) directly or indirectly
modifying the restrictions on the purchases or sales of Collateral Obligations
under Article XII or the Investment Criteria, (iii) expanding or restricting the
Collateral Manager's discretion or (iv) adversely affecting the Collateral
Manager or the Collateral Administrator, unless the Collateral Manager or the
Collateral Administrator, as applicable, shall have consented in advance thereto
in writing.

 

-172-

--------------------------------------------------------------------------------

 

 

(b)     Notwithstanding anything to the contrary herein, no supplemental
indenture, or other modification or amendment of this Indenture, may become
effective without the consent of the Holders of all Notes of each Outstanding
Class unless such supplemental indenture or other modification or amendment
would not, in the reasonable judgment of the Issuer in consultation with legal
counsel experienced in such matters, as certified by the Issuer to the Trustee
upon which the Trustee may conclusively rely, (A) result in the Issuer becoming
subject to U.S. federal income taxation with respect to its net income, (B)
result in the Issuer being treated as being engaged in a trade or business
within the United States, or (C) adversely affect the characterization of the
Secured Notes as debt for United States federal income tax purposes.

 

Section 8.5     Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture under this Article VIII, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Notes theretofore and
thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 8.6     Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article VIII may, and if required by the Issuer shall, bear a
notice in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Applicable Issuers shall so determine, new Notes,
so modified as to conform in the opinion of the Co-Issuers to any such
supplemental indenture, may be prepared and executed by the Applicable Issuers
and authenticated and delivered by the Trustee in exchange for Outstanding
Notes.

 

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 on the related Payment Date to
make payments as required pursuant to the Priority of Payments to achieve
compliance with such Coverage Test.

 

Section 9.2     Optional Redemption. (a) The Secured Notes shall be redeemed by
the Co-Issuers or the Issuer, as the case may be (i) in whole but not in part,
on any Business Day after the Non-Call Period pursuant to a Redemption by
Liquidation or a Redemption by Refinancing, and (ii) in part by Class, on any
Business Day after the Non-Call Period pursuant to a Partial Redemption by
Refinancing (each such redemption in subclauses (i) and (ii), an "Optional
Redemption") at the written direction of a Majority of the Junior Subordinated
Notes delivered to the Issuer, the Trustee and the Collateral Manager not later
than 30 days (or such shorter time as the Trustee and the Collateral Manager
find reasonably acceptable) prior to the proposed Redemption Date. A Majority of
the Junior Subordinated Notes may direct that an Optional Redemption occur by
directing the Collateral Manager to either (i) liquidate a sufficient amount of
the Assets (a "Redemption by Liquidation") to fully redeem all Classes of
Secured Notes, or (ii) negotiate and obtain on behalf of the Issuer (x) one or
more loans or other financing arrangements to be made to the Issuer, and/or (y)
the issuance of replacement notes ("Replacement Notes") by the Issuer (each, a
"Refinancing"), the proceeds of which shall be used to fully redeem all Classes
of Secured Notes (a "Redemption by Refinancing"). The Issuer shall deposit, or
cause to be deposited, the funds required for an Optional Redemption on or prior
to the Redemption Date.

 

-173-

--------------------------------------------------------------------------------

 

 

(b)     Upon receipt of a direction of a Redemption by Liquidation, the
Collateral Manager shall, in its sole discretion, direct the sale (and the
manner thereof) of all or part of the Assets in accordance with the procedures
set forth in Section 9.2(c). The Liquidation Proceeds and all other funds
available for such redemption in the Collection Account and the Payment Account
shall be at least sufficient to pay the Redemption Price on all of the Secured
Notes and to pay all Administrative Expenses (regardless of the Administrative
Expense Cap) and other fees and expenses payable under the Priority of Payments
(including, without limitation, any Management Fees and any amounts due to the
Hedge Counterparties); provided that any Holder of a Secured Note may in its
sole discretion elect, by written notice to the Issuer, the Trustee, the Paying
Agent and the Collateral Manager, to receive in full payment for the redemption
of its Secured Note an amount less than the Redemption Price of such Secured
Note in connection with a Redemption by Liquidation of all Classes of Secured
Notes and the Collateral Manager may, in its sole discretion, elect, by written
notice to the Issuer, the Trustee and the Paying Agent, to waive all or any
portion of the Management Fees and any Management Fee Interest then owing to the
Collateral Manager. If such Liquidation Proceeds and all other funds available
for such purpose in the Collection Account and the Payment Account would not be
sufficient to redeem all of the Secured Notes at the applicable Redemption Price
and to pay such Administrative Expenses and other fees and expenses, the Secured
Notes may not be redeemed. The Collateral Manager, in its discretion, may effect
the sale of all or any part of the Collateral Obligations or other Assets
through the sale of one or more participations in such Assets or other
arrangement.

 

(c)     Notwithstanding anything to the contrary set forth herein, the Secured
Notes shall not be redeemed pursuant to a Redemption by Liquidation unless (i)
at least five (5) Business Days before the scheduled Redemption Date the
Collateral Manager shall have certified to the Trustee that the Collateral
Manager on behalf of the Issuer has entered into a binding agreement or
agreements with 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 "P-1" by Moody's to purchase (which purchase may be through a
participation), not later than the Business Day immediately preceding the
scheduled Redemption Date in immediately available funds, all or part of the
Collateral Obligations and/or any Hedge Agreements at a purchase price at least
equal to an amount sufficient, together with the Eligible Investments maturing,
redeemable (or putable to the issuer thereof at par) on or prior to the
scheduled Redemption Date, any payments to be received in respect of any Hedge
Agreements, to pay all Administrative Expenses and other fees and expenses
payable in accordance with the Priority of Payments (regardless of the
Administrative Expense Cap) prior to the payment of the principal of the Notes
to be redeemed and redeem all of the Secured Notes on the scheduled Redemption
Date at the applicable Redemption Price, or (ii) prior to selling any Collateral
Obligations and/or Eligible Investments, the Collateral Manager has certified to
the Trustee that, in its judgment, the aggregate sum of (A) any expected
proceeds from Hedge Agreements and the sale of Eligible Investments, (B) any
Refinancing Proceeds and (C) for each Collateral Obligation, the product of its
Principal Balance and its Market Value, shall exceed the sum of (x) the
aggregate Redemption Prices of the Outstanding Secured Notes and (y) all
Administrative Expenses and other fees and expenses payable under the Priority
of Payments (including, without limitation, the Management Fees, Management Fee
Interest and any amounts due to Hedge Counterparties) (without limitation
thereof by the Administrative Expense Cap) prior to the redemption of the Notes.
Any certification delivered by the Collateral Manager pursuant to this
Section 9.2(c) shall include (1) the prices of, and expected proceeds from, the
sale (directly or by participation or other arrangement) of any Collateral
Obligations, Eligible Investments and/or Hedge Agreements and (2) all
calculations required by this Section 9.2(c).

 

-174-

--------------------------------------------------------------------------------

 

 

(d)     Upon receipt of a direction of a Redemption by Refinancing, the
Collateral Manager may obtain a Refinancing on behalf of the Issuer only if (i)
the Refinancing Proceeds and all other available funds in the Accounts shall be
at least sufficient to redeem simultaneously each Class of Secured Notes, in
whole but not in part, and to pay the other amounts included in the aggregate
Redemption Price and all accrued and unpaid Administrative Expenses (regardless
of the Administrative Expense Cap), including the reasonable fees, costs,
charges and expenses incurred by the Trustee and the Collateral Administrator
(including reasonable attorneys' fees and expenses) in connection with such
Refinancing; provided that any Holder of a Secured Note may in its sole
discretion elect, by written notice to the Issuer, the Trustee, the Paying Agent
and the Collateral Manager, to receive in full payment for the redemption of its
Secured Note an amount less than the Redemption Price of such Secured Note in
connection with a Refinancing of all Classes of Secured Notes and the Collateral
Manager may, in its sole discretion, elect, by written notice to the Issuer, the
Trustee and the Paying Agent, to waive all or any portion of the Management Fees
and any Management Fee Interest then owing to the Collateral Manager (provided
that, for the avoidance of doubt, any person entitled to payment of expenses in
connection with such Refinancing may elect, in its sole discretion, to defer
payment of such amounts to one or more future Payments Dates; provided further
that, any such deferred payments shall be paid in accordance with the Priorities
of Payment), (ii) the Refinancing Proceeds and other available funds are used to
the extent necessary to make such redemption, and (iii) the agreements relating
to such Refinancing contain limited recourse and non-petition provisions
equivalent (mutatis mutandis) to those contained in Section 5.4(d).

 

(e)     The Subordinated Notes may be redeemed, in whole but not in part, on any
Business Day on or after the redemption or repayment of all of the Secured Notes
in full and payment in full of all amounts then due and owing of the Co-Issuers,
at the direction of either of (x) a Majority of the Junior Subordinated Notes or
(y) the Collateral Manager, so long as JMP Credit Advisors LLC or any Affiliate
thereof is the Collateral Manager.

 

The Holders of the Junior Subordinated Notes shall not have any cause of action
against any of the Co-Issuers, the Collateral Manager or the Trustee for any
failure to obtain a Refinancing. In the event that a Refinancing is obtained
meeting the requirements specified above as certified by the Collateral Manager,
the Co-Issuers and the Trustee (as directed by the Issuer) shall amend this
Indenture pursuant to Article VIII 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 Notes, other than the Majority of the Junior Subordinated
Notes directing the redemption.

 

-175-

--------------------------------------------------------------------------------

 

 

Section 9.3     Partial Redemption by Refinancing. (a) Upon written direction of
a Majority of the Junior Subordinated Notes delivered to the Issuer, the Trustee
and the Collateral Manager not later than 30 days (or such shorter period of
time as the Trustee and the Collateral Manager find reasonably acceptable) prior
to the proposed Redemption Date, the Issuer shall redeem one or more Classes of
Secured Notes following the end of the Non-Call Period, in whole but not in part
with respect to each such Class to be redeemed, from Refinancing Proceeds (any
such redemption, a "Partial Redemption by Refinancing"); provided that such
Refinancing satisfies the conditions described below.

 

The Collateral Manager shall obtain a Refinancing in connection with a Partial
Redemption by Refinancing on behalf of the Issuer only if (x) the Moody's Rating
Condition shall have been satisfied with respect to any Secured Notes that are
not subject to such Partial Redemption by Refinancing and (y) the Collateral
Manager determines and certifies to the Trustee and the Issuer that: (i) notice
is provided to Fitch so long as Fitch is rating any class of Secured Notes, (ii)
the Refinancing Proceeds (together with Interest Proceeds available in
accordance with the Priority of Payments to pay the accrued interest portion of
the Redemption Price) shall be in an amount at least equal to the amount
required to pay the Redemption Price of the Class(es) of Secured Notes to be
redeemed, (iii) the aggregate principal amount of the Replacement Notes issued
by the Issuer under such Refinancing is equal to the Aggregate Outstanding
Amount of the Secured Notes to be redeemed with the proceeds of such
Refinancing, (iv) the obligations providing such Refinancing shall have the same
or longer Maturity as the Notes Outstanding prior to such Refinancing, (v) the
Refinancing Proceeds (to the extent necessary) are used to make such redemption,
(vi) the agreements relating to the Refinancing contain limited recourse and
non-petition provisions equivalent (mutatis mutandis) to those contained in
Section 2.8(i) and Section 5.4(d), (vii) the obligations providing such
Refinancing are not senior in priority of payment, and do not have greater
voting, consent and redemption rights than the corresponding Class of Notes that
is being refinanced, (viii) the Replacement Notes shall have the same or lower
interest rate as the Class(es) of Secured Notes to be redeemed, (ix) the
expenses incurred in connection with the Partial Redemption by Refinancing shall
have been paid or will be adequately provided for from the Refinancing Proceeds
(except for expenses owed to persons that agree to be paid solely as
Administrative Expenses in accordance with the Priority of Payments and provided
that, for the avoidance of doubt, any person entitled to payment of expenses in
connection with such Refinancing may elect, in its sole discretion, to defer
payment of such amounts to one or more future Payment Dates; provided further
that, any such deferred payments shall be paid in accordance with the Priorities
of Payment), (x) such new Secured Notes will be issued in a manner that will
allow the Issuer to accurately provide the information described in Treasury
Regulation Section 1.1275-3(b)(1)(i) and in connection with a Refinancing of
less than all Classes of Secured Notes, the Issuer shall have received an
opinion of tax counsel of nationally recognized standing in the United States
experienced in such matters to the effect that such new Secured Notes would have
the same U.S. federal income tax characterization as debt as any Secured Notes
outstanding immediately after such Refinancing that are pari passu with such new
Secured Notes and (xi) the Collateral Manager has consented to such Partial
Redemption by Refinancing (such consent not to be unreasonably withheld).

 

-176-

--------------------------------------------------------------------------------

 

 

(b)     In the event of any redemption pursuant to Section 9.2 or 9.3, the
Issuer shall, at least 30 days prior to the Redemption Date (or such shorter
period of time as the Trustee and the Collateral Manager find reasonably
acceptable), notify the Trustee and the Collateral Manager in writing of such
Redemption Date, the applicable Record Date, the principal amount of Secured
Notes to be redeemed on such Redemption Date and the applicable Redemption
Prices.

 

Section 9.4     Tax Redemption. The Secured Notes shall be redeemed by the
Co-Issuers or the Issuer, as the case may be, in whole but not in part, on any
Payment Date (any such redemption, a "Tax Redemption") on or after the
occurrence of a Tax Event at the written direction of (x) a Majority of the
Senior Subordinated Notes or the Junior Subordinated Notes or (y) a Majority of
any Affected Class delivered to the Trustee and the Collateral Manager not later
than 30 days (or such shorter period of time as the Trustee and the Collateral
Manager find reasonably acceptable) prior to the proposed Redemption Date.
Either (i) a Majority of the Senior Subordinated Notes or the Junior
Subordinated Notes or (ii) a Majority of any Affected Class may direct the
Collateral Manager to effect a Redemption by Liquidation to fully redeem all
Classes of Secured Notes in accordance with the procedures set forth in
Section 9.5. The funds available for such a redemption of the Notes shall
include all Principal Proceeds, Interest Proceeds, Liquidation Proceeds, Sale
Proceeds and all other available funds in the Collection Account and the Payment
Account. Each Class of Notes shall be redeemed at the applicable Redemption
Price for such Class in accordance with the Priority of Payments.

 

Section 9.5     Redemption Procedures. (a) In the event of any redemption
pursuant to Section 9.2 or Section 9.3, the written direction of the Holders of
the Junior Subordinated Notes required as set forth herein shall be provided to
the Issuer, the Trustee and the Collateral Manager not later than 30 days (or
such shorter period of time as the Trustee and the Collateral Manager find
reasonably acceptable) prior to the applicable Redemption Date on which such
redemption is to be made (which date shall be designated in such notice). In the
event of any Tax Redemption pursuant to Section 9.4, the written direction of
(x)  a Majority of the Senior Subordinated Notes or the Junior Subordinated
Notes or (y) a Majority of any Affected Class shall be provided to the Issuer,
the Trustee and the Collateral Manager not later than 30 days (or such shorter
period of time as the Trustee and the Collateral Manager find reasonably
acceptable) prior to the applicable Redemption Date on which such redemption is
to be made (which date shall be designated in such notice). In the event of any
redemption pursuant to Section 9.2, Section 9.3 or Section 9.4, a notice of
redemption shall be given by the Trustee by first class mail, postage prepaid,
mailed not later than nine Business Days prior to the applicable Redemption
Date, to each Holder of Notes to be redeemed, at such Holder's address in the
Register and each Rating Agency then rating a Class of Secured Notes.

 

(b)      All notices of redemption delivered pursuant to Section 9.5(a) shall
state:

 

(i)      the applicable Redemption Date;

 

(ii)     the Redemption Price of the Notes to be redeemed;

 

(iii)    in the case of a Redemption by Liquidation or a Redemption by
Refinancing, that all of the Secured Notes are to be redeemed in full and that
interest on such Secured Notes shall cease to accrue on the Payment Date
specified in the notice;

 

-177-

--------------------------------------------------------------------------------

 

 

(iv)    in the case of a Partial Redemption by Refinancing, the Classes of
Secured Notes to be redeemed in full and that interest on such Secured Notes
shall cease to accrue on the Payment Date specified in the notice;

 

(v)     the place or places where Notes are to be surrendered for payment of the
Redemption Price, which shall be the office or agency of the Co-Issuers to be
maintained as provided in Section 7.2; and

 

(vi)    in the case of an Optional Redemption, whether the Subordinated Notes
are to be redeemed in full on such Redemption Date and, if so, the place or
places where the Subordinated Notes are to be surrendered for payment of the
Redemption Price, which shall be the office or agency of the Co-Issuers to be
maintained as provided in Section 7.2 for purposes of surrender.

 

The Applicable Issuers shall have the option to withdraw any such notice of
redemption up to and including the later of (x) the day on which the Collateral
Manager is required to deliver to the Trustee the sale agreement or agreements
or certifications as described in Section 9.2(c), by written notice to the
Trustee that the Collateral Manager will be unable to deliver the sale agreement
or agreements or certifications described in Section 9.2(c), (y) the day on
which the Holders of Notes are notified of such redemption in accordance with
Section 9.5(a), by written notice to the Trustee and the Collateral Manager and
(z) one Business Day prior to the applicable Redemption Date if the Collateral
Manager determines, in its commercially reasonable business judgment, that the
Co-Issuers will not have sufficient proceeds to redeem all of the Secured Notes
on the applicable Redemption Date (provided that the Issuer will use reasonable
efforts to notify the Trustee as soon as possible upon learning of such
withdrawal and, in any case, prior to the Redemption Date). Any withdrawal of
such notice of redemption pursuant to clause (x), (y) or (z) in the preceding
sentence shall be made by written notice to the Trustee, the Collateral Manager
and the Rating Agencies and shall be made by the Applicable Issuers only if the
Collateral Manager has notified the Co-Issuers that either (i) it is unable to
deliver the sale agreement or agreements or certifications described in
Section 9.2(c) and Section 12.1(e) or (ii) it is unable to obtain the applicable
Refinancing on behalf of the Issuer.

 

In addition, a Majority of the Junior Subordinated Notes, in the case of any
Optional Redemption, or a Majority of the Senior Subordinated Notes or the
Junior Subordinated Notes or a Majority of an Affected Class, as applicable in
the case of a Tax Redemption, shall have the option to withdraw any such notice
of redemption up to and including the sixth Business Day prior to the proposed
Redemption Date; provided that neither the Issuer (nor the Collateral Manager)
has entered into a binding agreement in connection with the sale of any portion
of the Assets or taken any other action in connection with the liquidation of
any portion of the Assets pursuant to such notice of redemption.

 

If the Co-Issuer or the Issuer, as the case may be, so withdraws any notice of
redemption or is otherwise unable to complete any redemption of the Notes, the
Sale Proceeds received from the sale of any Collateral Obligations and other
Assets sold pursuant to Section 9.2 may, during the Reinvestment Period at the
Collateral Manager's sole discretion, be reinvested in accordance with the
Investment Criteria.

 

-178-

--------------------------------------------------------------------------------

 

 

Notice of redemption shall be given by the Co-Issuer or the Issuer, as the case
may be, (so long as the Co-Issuer or Issuer, as applicable, have received notice
thereof) or, upon an Issuer Order, by the Trustee in the name and at the expense
of the Co-Issuer or the Issuer, as the case may be. 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.

 

Any holder of Notes, the Collateral Manager or any of the Collateral Manager's
Affiliates or accounts managed by it 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 redemption pursuant to Section 9.4.

 

Section 9.6     Notes Payable on Redemption Date. (a) Notice of redemption
pursuant to Section 9.5 having been given as aforesaid, the Notes to be redeemed
shall, on the Redemption Date, subject to Section 9.2(c) in the case of an
Optional Redemption and the right to withdraw any notice of redemption pursuant
to Section 9.5(b), become due and payable at the Redemption Price therein
specified, and from and after the Redemption Date (unless the Issuer shall
default in the payment of the Redemption Price and accrued interest) all such
Secured Notes shall cease to bear interest on the Redemption Date. Upon final
payment on a Note to be so redeemed, the Holder shall present and surrender such
Note at the place specified in the notice of redemption on or prior to such
Redemption Date; provided that if there is delivered to the Co-Issuers and the
Trustee such security or indemnity as may be required by any of them to save
such party harmless and an undertaking thereafter to surrender such Note, then,
in the absence of notice to the Co-Issuers or the Trustee that the applicable
Note has been acquired by a Protected Purchaser, such final payment shall be
made without presentation or surrender. Payments of interest on Secured Notes
and payments in respect of Subordinated Notes so to be redeemed whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Notes, or 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 2.8(e).

 

(b)     If any Secured 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 Note Interest Rate for each
successive Interest Accrual Period the Secured Note remains Outstanding;
provided that the reason for such non-payment is not the fault of such
Noteholder.

 

(c)     Notwithstanding anything to the contrary set forth herein, the
Refinancing Proceeds shall not constitute Interest Proceeds or Principal
Proceeds but shall be applied directly on the related Redemption Date to redeem
the Class(es) of Secured Notes subject to such Redemption by Refinancing without
regard to the Priority of Payments; provided that to the extent such Refinancing
Proceeds are not applied to redeem such Class(es) of Secured Notes or to pay
expenses in connection with such Refinancing, such Refinancing Proceeds shall be
treated as Principal Proceeds.

 

-179-

--------------------------------------------------------------------------------

 

 

Section 9.7     Special Redemption. Principal payments on the Secured Notes
shall be made in part in accordance with the Priority of Payments on any Payment
Date (A) during the Reinvestment Period, if the Collateral Manager at its sole
discretion notifies the Trustee 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 Collateral Manager in its sole
discretion and would meet 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 (a "Reinvestment Period Special Redemption") or (B) after the
Ramp-Up Period, if the Collateral Manager notifies the Trustee that a redemption
is required pursuant to Section 7.17(c) (a "Ramp-Up Period Special Redemption"
and together with a Reinvestment Period Special Redemption, each a "Special
Redemption"). On the first Payment Date (and all subsequent Payment Dates)
following the Collection Period in which such notice is given (a "Special
Redemption Date"), (1) in the case of a Reinvestment Period Special Redemption,
the amount in the Principal Collection Subaccount representing Principal
Proceeds which the Collateral Manager has determined cannot be reinvested in
additional Collateral Obligations or (2) in the case of a Ramp-Up Period Special
Redemption, the amounts in the Interest Collection Subaccount and Principal
Collection Subaccount, as applicable, representing Interest Proceeds and
Principal Proceeds, as applicable, that the Issuer (or the Collateral Manager on
the Issuer's behalf) has determined are required for a Special Redemption
pursuant to Section 7.17(c) (each such amount, a "Special Redemption Amount")
shall be applied in accordance with the Priority of Payments under
Section 11.1(a)(ii). Notice of payments pursuant to this Section 9.7 shall be
given by the Trustee either by first class mail, postage prepaid, mailed as soon
as reasonably practicable, but in any case not less than three Business Days
prior to the applicable Special Redemption Date (provided that such notice shall
not be required in connection with a Special Redemption pursuant to clause (B)
of the definition of such term if the Special Redemption Amount is not known on
or prior to such date) to each Holder of Secured Notes affected thereby at such
Holder's address in the Register and to the Rating Agencies or by facsimile or
via email transmission to such parties.

 

Section 9.8     Clean-Up Call Redemption.

 

(a)     Each Class of outstanding Secured Notes shall be redeemed by the Issuer,
in whole but not in part (a "Clean-Up Call Redemption"), on the next Payment
Date after the Non-Call Period that is at least 60 days following the date on
which a Monthly Report is distributed reporting a Collateral Principal Amount
that is less than 18.5% of the Aggregate Ramp-Up Par Amount (the "Report Date");
subject to the conditions described below, unless either the Collateral Manager
has provided notice to the Issuer and the Trustee of its objection to such
Clean-Up Call Redemption or a Majority of the Junior Subordinated Notes has
provided notice to the Collateral Manager, the Issuer and the Trustee of its
objection to such Clean-Up Call Redemption within 15 Business Days following the
Report Date. The Trustee shall provide notice to the Collateral Manager and the
Holders of Subordinated Notes when a Report Date occurs.

 

If either the Collateral Manager or a Majority of the Junior Subordinated Notes
successfully objects to a Clean-Up Call Redemption (a "Clean-Up Call
Rescission"), then either the Collateral Manager or a Majority of the Junior
Subordinated Notes, upon notice to the Issuer, the Trustee and the Collateral
Manager or the Junior Subordinated Notes (as applicable), may reinstate the
Clean-Up Call Redemption such that it will occur on the next Payment Date that
is at least 60 days following the date of reinstatement so long as the
Collateral Principal Amount is less than 18.5% of the Aggregate Ramp-Up Par
Amount; provided that if the Collateral Manager provides notice of reinstatement
of the Clean-Up Call Redemption and a Majority of the Junior Subordinated Notes
provides notice to the Collateral Manager, the Issuer and the Trustee of its
objection to such Clean-Up Call Redemption within 15 Business Days of such
notice of reinstatement, then the Clean-Up Call Redemption shall not be
reinstated.

 

-180-

--------------------------------------------------------------------------------

 

 

(b)     In connection with any Clean-Up Call Redemption, as long as no Clean-Up
Call Rescission is effected, the Issuer shall set the related date of redemption
(the "Clean-Up Call Redemption Date") and the Record Date for any redemption
pursuant to this Section and give written notice thereof to the Trustee (which
shall forward such notice to the Holders), the Collateral Administrator, the
Collateral Manager and the Rating Agencies not later than fifteen 15 Business
Days prior to the proposed date of redemption (and the Trustee in turn shall, in
the name and at the expense of the Co-Issuers, notify the holders of Notes of
the Clean-Up Call Redemption Date, the applicable Record Date, that the Secured
Notes shall be redeemed in full, and the Redemption Prices to be paid, at least
10 Business Days prior to the Clean-Up Call Redemption Date).

 

(c)     Promptly after the Issuer has notified the Trustee, the Collateral
Administrator, the Collateral Manager and the Rating Agencies of the Clean-Up
Call Redemption Date, and as long as no Clean-Up Call Rescission is effected,
the Issuer (or the Trustee on its behalf) will offer the Collateral Manager, the
holders of the Junior Subordinated Notes and any other Person identified by the
Issuer or the Collateral Manager the right to bid to purchase the Collateral
Obligations at a price not less than the Clean-Up Call Purchase Price. Any
Clean-Up Call Redemption is subject to (i) the sale of the Collateral
Obligations by the Issuer to the highest bidder therefor pursuant to the
immediately preceding sentence on or prior to the third Business Day immediately
preceding the related Clean-Up Call Redemption Date, for a purchase price in
Cash (the "Clean-Up Call Purchase Price") payable prior to or on the Clean-Up
Call Redemption Date at least equal to the greater of (1) the sum of (a) the sum
of the Redemption Prices of the Secured Notes, plus (b) 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 prior to distributions in
respect of the Subordinated Notes, minus (c) all other Assets available for
application in accordance with the Priority of Payments on the Redemption Date
and (2) the Market Value of such Assets being purchased, and (ii) the receipt by
the Trustee from the Collateral Manager, prior to such purchase, of
certification from the Collateral Manager that the sum to be received satisfies
clause (i). Upon receipt by the Trustee of the certification referred to in the
preceding sentence, 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 applicable holder of Subordinated Notes, the Collateral Manager or
such other Person upon payment in immediately available funds of the Clean-Up
Call Purchase Price. The Trustee shall deposit such payment into the applicable
sub-account of the Collection Account in accordance with the instructions of the
Collateral Manager.

 

(d)     Any notice of Clean-Up Call Redemption may be withdrawn by the Issuer on
any day up to and including the day that is two (2) Business Days prior to the
scheduled Redemption Date by written notice to the Trustee, the Rating Agencies
and the Collateral Manager only if amounts equal to the Clean-Up Call Purchase
Price are not received in full in immediately available funds by the third
Business Day immediately preceding such Redemption Date. Notice of any such
withdrawal of a notice of Clean-Up Call Redemption shall be given by the Trustee
at the expense of the Issuer to each Holder of Notes to be redeemed at such
Holder's address in the Note Register, by overnight courier guaranteeing next
day delivery not later than the Business Day prior to the related scheduled
Redemption Date.

 

-181-

--------------------------------------------------------------------------------

 

 

(e)     On the Clean-Up Call Redemption Date related to any Clean-Up Call
Redemption, the Clean-Up Call Purchase Price, along with all other amounts
available for distribution on the related Clean-Up Call Redemption Date, shall
be distributed pursuant to the Priority of Payments.

 

ARTICLE X

ACCOUNTS, ACCOUNTINGS AND RELEASES

 

Section 10.1     Collection of Money. Except as otherwise expressly provided
herein, the Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent or
other intermediary, all Money and other property payable to or receivable by the
Trustee pursuant to this Indenture, including all payments due on the Pledged
Obligations, in accordance with the terms and conditions of such Pledged
Obligations. The Trustee shall segregate and hold all such Money and property
received by it in trust for the Holders of the Notes and shall apply it as
provided in this Indenture.

 

Section 10.2     Collection Accounts. (a) The Trustee shall, on or prior to the
Closing Date, establish at the Custodian two segregated non-interest bearing
trust accounts, each held in the name of the Trustee as Entitlement Holder in
trust for the benefit of the Secured Parties, one of which shall be designated
the "Interest Collection Subaccount" and the other of which shall be designated
the "Principal Collection Subaccount," each of which shall be maintained by the
Issuer with the Custodian in accordance with the Securities Account Control
Agreement. The Trustee shall from time to time deposit into the Interest
Collection Subaccount, in addition to the deposits required pursuant to
Section 10.5(a), immediately upon receipt thereof (i) any funds in the Interest
Reserve Account deemed by the Collateral Manager in its sole discretion (with
notice to the Trustee and the Collateral Administrator) to be Interest Proceeds
pursuant to Section 10.3(e) and (ii) all Interest Proceeds (unless designated as
Principal Proceeds in accordance with the definition of "Interest Proceeds")
received by the Trustee. The Trustee shall deposit immediately upon receipt
thereof all other amounts remitted to the Collection Account into the Principal
Collection Subaccount, including in addition to the deposits required pursuant
to Section 10.5(a), (i) any funds in the Interest Reserve Account deemed by the
Collateral Manager in its sole discretion (with notice to the Trustee and the
Collateral Administrator) to be Principal Proceeds pursuant to Section 10.3(e),
(ii) all Principal Proceeds (unless simultaneously reinvested in additional
Collateral Obligations in accordance with Article XII or in Eligible
Investments) received by the Trustee, and (iii) all other funds received by the
Trustee; provided that, the Collateral Manager, in its sole discretion, may, on
any date during the Designated Proceeds Period, instruct the Trustee to deposit
(and the Trustee will so deposit) from the Principal Collection Subaccount into
the Interest Collection Subaccount as Interest Proceeds, an amount (any such
amount, the "Designated Principal Proceeds") not to exceed the Designated
Proceeds Cap as of such date (provided that the Collateral Manager may not
designate any such amounts as Interest Proceeds if such designation would cause
the Adjusted Collateral Principal Amount to be less than the Aggregate Ramp-Up
Par Amount (after taking into account any Designated Unused Proceeds to be made
on such date)). In addition to the items described above, the Issuer (or the
Collateral Manager on its behalf) may, but under no circumstances shall be
required to, deposit from time to time additional Monies into the Collection
Account that it receives 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 it deems, in its sole
discretion, to be advisable (and may designate any amounts credited pursuant to
this sentence as Principal Proceeds or Interest Proceeds in its discretion);
provided that the contributor of each any additional Monies will not receive any
securities, additional security interest or any other consideration from the
Issuer in return for such contribution. 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 Section 10.2(d), amounts in the Collection Account shall be
reinvested pursuant to Section 10.5(a).

 

-182-

--------------------------------------------------------------------------------

 

 

(b)     The Trustee, within one Business Day after receipt of any distribution
or other proceeds in respect of the Assets which are not Cash or Equity
Securities, shall so notify or cause the Issuer and the Collateral Manager to be
notified and the Collateral Manager on behalf of the Issuer shall use its
commercially reasonable efforts to, within five (5) Business Days of 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 the
Collateral Manager (on behalf of the Issuer) (i) need not sell such
distributions or other proceeds if it delivers an Officer's certificate to the
Trustee certifying that such distributions or other proceeds constitute
Collateral Obligations or Eligible Investments 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 shall 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
Collateral Manager on behalf of the Issuer may direct the Trustee to, and upon
receipt of such direction the Trustee shall, withdraw funds (i) on deposit in
the Principal Collection Subaccount representing Principal Proceeds (including
Principal Financed Accrued Interest used to pay for accrued interest on an
additional Collateral Obligation) and reinvest (or invest, in the case of funds
referred to in Section 7.17) such funds in additional Collateral Obligations in
accordance with the requirements of Article XII and such direction and (ii) on
deposit in the Interest Collection Subaccount representing Interest Proceeds and
use such funds to exercise a warrant held in the Assets in accordance with the
requirements of Article XII and such direction so long as the Collateral Manager
reasonably believes that such withdrawal of Interest Proceeds will not result in
the failure to make any payment of interest due on the Class A Notes or Class B
Notes on the next succeeding Payment Date. At any time, the Collateral Manager
on behalf of the Issuer may direct the Trustee to, and upon receipt of such
direction the Trustee shall, withdraw funds on deposit in the Principal
Collection Subaccount representing Principal Proceeds and deposit such funds in
the Unfunded Exposure Account to meet funding requirements on Delayed Drawdown
Collateral Obligations or Revolving Collateral Obligations.

 

-183-

--------------------------------------------------------------------------------

 

 

(d)     The Collateral Manager on behalf of the Issuer may by direct the Trustee
to, and upon receipt of such direction the Trustee shall, pay from amounts on
deposit in the Interest Collection Subaccount representing Interest Proceeds on
any Business Day during any Interest Accrual Period (i) any amount required to
exercise a warrant held in the Assets or right to acquire securities in
accordance with the requirements of Article XII and such direction and (ii) any
Administrative Expenses (paid in the order of priority set forth in the
definition thereof); provided that the payment of Administrative Expenses
payable to the Trustee, to the Bank in any capacity or to the Collateral
Administrator shall not require such direction; provided, further, 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. 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 as applicable, from
the Collection Account, for application pursuant to Section 11.1(a) of this
Indenture, on or not later than the Business Day preceding each Payment Date,
the amount set forth to be so transferred in the Distribution Report for such
Payment Date.

 

(f)     The Collateral Manager on behalf of the Issuer may direct the Trustee
to, and upon receipt of such direction the Trustee shall, transfer from amounts
on deposit in the Interest Collection Subaccount on any Business Day during any
Interest Accrual Period to the Principal Collection Subaccount, amounts
necessary for application pursuant to Section 7.17(c).

 

Section 10.3     Payment Account; Custodial Account; Ramp-Up Account; Expense
Reserve Account; Interest Reserve Account; Unfunded Exposure Account.

 

(a)     Payment Account. The Trustee shall, on or prior to the Closing Date,
establish at the Custodian a segregated non-interest bearing trust account which
shall be held in the name of the Trustee as Entitlement Holder in trust for the
benefit of the Secured Parties, which shall be designated as the Payment
Account, which shall be maintained by the Issuer with the Custodian in
accordance with the Securities Account Control 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 in accordance with their terms and the
provisions of this Indenture and to pay Administrative Expenses and other
amounts specified herein, each in accordance with the Priority of Payments. The
Co-Issuers shall not have any legal, equitable or beneficial interest in the
Payment Account other than in accordance with the Priority of Payments. Funds in
the Payment Account shall not be invested.

 

(b)     Custodial Account. The Trustee shall, on or prior to the Closing Date,
establish at the Custodian a segregated non-interest bearing trust account which
shall be held in the name of the Trustee as Entitlement Holder in trust for the
benefit of the Secured Parties, which shall be designated as the Custodial
Account, which shall be maintained by the Issuer with the Custodian in
accordance with the Securities Account Control Agreement. The only permitted
withdrawals from the Custodial Account shall be in accordance with the
provisions of this Indenture. The Co-Issuers shall not have any legal, equitable
or beneficial interest in the Custodial Account other than in accordance with
the Priority of Payments. Amounts, if any, in the Custodial Account shall not be
invested.

 

-184-

--------------------------------------------------------------------------------

 

 

(c)     Ramp-Up Account. The Trustee shall, on or prior to the Closing Date,
establish at the Custodian a single, segregated non-interest bearing trust
account held in the name of the Trustee as Entitlement Holder in trust for the
benefit of the Secured Parties, and shall be designated as the Ramp-Up Account,
which shall be maintained by the Issuer with the Custodian in accordance with
the Securities Account Control Agreement. The Issuer hereby directs the Trustee
to deposit U.S.$32,446,485.47 to the Ramp-Up Account on the Closing Date. In
connection with any purchase of an additional Collateral Obligation, the Trustee
shall apply amounts held in the Ramp-Up Account as provided by Section 7.17(a).
Upon the occurrence of an Event of Default (and excluding any proceeds that
shall be used to settle binding commitments entered into prior to that date),
the Trustee shall deposit any remaining amounts in the Ramp-Up Account into the
Principal Collection Subaccount as Principal Proceeds. On the first Business Day
after a Trust Officer of the Trustee has received written notice from the Issuer
(or the Collateral Manager on the Issuer's behalf) that either (i) the
requirements of Section 7.17(c) will not be applicable or (ii) the Issuer (or
the Collateral Manager on the Issuer's behalf) has satisfied the requirements
set out in Section 7.17(c), the Trustee shall, at any time during the period
beginning on the date of receipt of such notice and ending on the Determination
Date relating to the second Payment Date following the Closing Date (the
"Designated Proceeds Period"), at the direction of the Collateral Manager,
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 Principal Collection Subaccount as Principal
Proceeds; provided, that the Collateral Manager, in its sole discretion, may, on
any date during the Designated Proceeds Period, instruct the Trustee to deposit
(and the Trustee will so deposit) into the Interest Collection Subaccount as
Interest Proceeds, an amount (any such amount, the "Designated Unused Proceeds")
not to exceed the greater of (x) the Designated Proceeds Cap as of such date and
(y) the amount necessary to pay accrued and unpaid interest on each Class of
Secured Notes in full on the next succeeding Payment Date (provided that the
Collateral Manager may not designate any such amounts set forth in clauses (x)
or (y) as Interest Proceeds if such designation would cause the Adjusted
Collateral Principal Amount to be less than the Aggregate Ramp-Up Par Amount
(after taking into account any Designated Principal Proceeds to be made on such
date)). Any income earned on amounts deposited in the Ramp-Up Account shall be
deposited in the Collection Account as Interest Proceeds as it is paid.

 

-185-

--------------------------------------------------------------------------------

 

 

(d)     Expense Reserve Account. The Trustee shall, on or prior to the Closing
Date, establish at the Custodian a segregated non-interest bearing trust account
which shall be held in the name of the Trustee as Entitlement Holder in trust
for the benefit of the Secured Parties, which shall be designated as the Expense
Reserve Account, which shall be maintained by the Issuer with the Custodian in
accordance with the Securities Account Control Agreement. The Issuer hereby
directs the Trustee to deposit U.S.$1,216,894 from the proceeds of the sale of
the Notes to the Expense Reserve Account as Interest Proceeds on the Closing
Date. The Trustee shall apply funds from the Expense Reserve Account, in the
amounts and as directed in writing by the Collateral Manager, to pay amounts due
in respect of actions taken on or before the Closing Date. On each Payment Date,
the Trustee shall, if so directed by the Collateral Manager, transfer to the
Expense Reserve Account an amount equal to the excess, if any, of the
Administrative Expense Cap over the amounts due under clauses (1) and (2) of
Section 11.1(a)(i)(A) (up to U.S.$50,000) to the Expense Reserve Account in
accordance with clause (3) of Section 11.1(a)(i)(A). Amounts in the Expense
Reserve Account shall be invested at the direction of the Collateral Manager in
Eligible Investments with stated maturities no later than the Business Day prior
to the Payment Date next succeeding the acquisition of such securities or
instruments. Any income earned on amounts on deposit in the Expense Reserve
Account shall be deposited in the Interest Collection Subaccount as Interest
Proceeds as it is paid. On any Business Day, at the direction of the Collateral
Manager funds in the Expense Reserve Account (after deducting any expenses to be
paid on the immediately succeeding Payment Date (if any) or in connection with
actions taken on or before the Closing Date) may be deposited in the Collection
Account as Interest Proceeds and/or Principal Proceeds (in the respective
amounts directed by the Collateral Manager in its sole discretion). On any such
date between Payment Dates and on each Payment Date, the Trustee shall apply
amounts, if any, in the Expense Reserve Account to the payment of expenses and
fees that must be paid between Payment Dates or that are due on that Payment
Date under clauses (1) and (2) of Section 11.1(a)(i)(A), provided that the
Trustee shall be entitled (but not required) without liability on its part, to
refrain from making any such payment of an Administrative Expense on any day
other than a Payment Date if, in its reasonable determination, taking into
account the Administrative Expense Cap, the payment of such amount is likely to
leave insufficient funds available to pay in full each of the items described in
Section 11.1(a)(i)(A) as reasonably anticipated to be or become due and payable
on the next Payment Date, and having priority over the payment to be made on
such day in accordance with such Section 11.1(a)(i)(A) and the definition of
"Administrative Expenses".

 

(e)     Interest Reserve Account. The Trustee shall, on or prior to the Closing
Date, establish at the Custodian a segregated non-interest bearing trust account
which shall be held in the name of the Trustee as Entitlement Holder in trust
for the benefit of the Secured Parties, which shall be designated as the
Interest Reserve Account, which shall be maintained by the Issuer with the
Custodian in accordance with the Securities Account Control Agreement. The
Issuer hereby directs the Trustee to deposit U.S.$1,000,000 to the Interest
Reserve Account on the Closing Date. On any date prior to the Determination Date
relating to the second Payment Date following the Closing Date, the Issuer, at
the direction of the Collateral Manager, by Issuer Order, may direct that all or
any portion of funds in the Interest Reserve Account be deposited in the
Collection Account as Interest Proceeds and/or Principal Proceeds (in the
respective amounts directed by the Collateral Manager in its sole discretion) as
long as, after giving effect to such deposits, the Collateral Manager determines
(as certified in such Issuer Order) that the Issuer shall have sufficient funds
in the Collection Account to pay Administrative Expenses pursuant to clause (A),
the Senior Management Fee pursuant to clause (B) and any amounts on the Secured
Notes pursuant to clauses (D), (E), (G), (H), (J), (K), (M) and (N) of
Section 11.1(a)(i) on the Payment Date occurring in January 2019. Amounts in the
Interest Reserve Account will be invested at the direction of the Collateral
Manager in Eligible Investments with stated maturities no later than the
Business Day prior to the Payment Date next succeeding the acquisition of such
securities or instruments. Any income earned on amounts deposited in the
Interest Reserve Account will be deposited in the Interest Collection Subaccount
as Interest Proceeds as it is paid.

 

-186-

--------------------------------------------------------------------------------

 

 

(f)     Unfunded Exposure Account. Upon the purchase of any Delayed Drawdown
Collateral Obligation or Revolving Collateral Obligation identified by written
notice to the Trustee, funds 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 Principal Collection Subaccount and deposited by the Trustee in a
segregated non-interest bearing trust account which shall be held in the name of
the Trustee as Entitlement Holder in trust for the benefit of the Secured
Parties, which shall be designated as the Unfunded Exposure Account, which shall
be maintained by the Issuer with the Custodian in accordance with the Securities
Account Control Agreement. The Issuer hereby directs the Trustee to deposit
U.S.$1,304,988.39 from the proceeds of the sale of the Notes to the Unfunded
Exposure Account on the Closing Date. Upon initial purchase of any such
obligations, funds deposited in the Unfunded Exposure Account in respect of any
Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation will
be treated as part of the purchase price therefor. Amounts on deposit in the
Unfunded Exposure Account will be invested in overnight funds that are Eligible
Investments selected by the Collateral Manager pursuant to Section 10.5 and
income earned from all such investments will be deposited in the Interest
Collection Subaccount as Interest Proceeds as it is paid.

 

The Issuer shall at all times maintain sufficient funds on deposit in the
Unfunded Exposure Account such that the sum of the amount of funds on deposit in
the Unfunded Exposure Account shall be equal to or greater than the sum of the
unfunded funding obligations under all such Delayed Drawdown Collateral
Obligations and Revolving Collateral Obligations then included in the Assets.
Funds shall be deposited in the Unfunded Exposure 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 Collateral Manager on behalf
of the Issuer. In the event of any shortfall in the Unfunded Exposure Account,
the Collateral Manager (on behalf of the Issuer) may direct the Trustee to, and
the Trustee thereafter shall, transfer funds in an amount equal to such
shortfall from the Ramp-Up Account or the Principal Collection Subaccount to the
Unfunded Exposure Account.

 

Any funds in the Unfunded Exposure Account (other than earnings from Eligible
Investments therein) will be applied solely to cover any drawdowns on the
Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations;
provided that any excess of (A) the amounts on deposit in the Unfunded Exposure
Account over (B) the sum of the unfunded funding obligations under all Delayed
Drawdown Collateral Obligations and Revolving Collateral Obligations that are
included in the Assets may be transferred by the Trustee (at the written
direction of the Collateral Manager on behalf of the Issuer) from time to time
as Principal Proceeds to the Principal Collection Subaccount.

 

Section 10.4     Hedge Counterparty Collateral Account. If and to the extent
that any Hedge Agreement requires the Hedge Counterparty to post collateral with
respect to such Hedge Agreement, the Issuer shall (at the direction of the
Collateral Manager), on or prior to the date such Hedge Agreement is entered
into, direct the Trustee to establish in the name of the Trustee a segregated,
non-interest bearing trust account which shall be designated as a Hedge
Counterparty Collateral Account (each, a "Hedge Counterparty Collateral
Account"). The Trustee (as directed in writing by the Collateral Manager on
behalf of the Issuer) shall deposit into each Hedge Counterparty Collateral
Account all collateral required to be posted by a Hedge Counterparty and all
other funds and property required by the terms of any Hedge Agreement to be
deposited into the Hedge Counterparty Collateral Account, in accordance with the
terms of the related Hedge Agreement. The only permitted withdrawals from or
application of funds or property on deposit in the Hedge Counterparty Collateral
Account shall be in accordance with the written instructions of the Collateral
Manager. Amounts in the Hedge Counterparty Collateral Account Amounts will be
invested in overnight funds that are Eligible Investments selected by the
Collateral Manager and income earned from all such investments will be deposited
in the Interest Collection Subaccount as Interest Proceeds as it is paid.

 

-187-

--------------------------------------------------------------------------------

 

 

Section 10.5     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 Collateral 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, the Ramp-Up Account, the Expense
Reserve Account and the Interest Reserve Account as so directed in Eligible
Investments having Stated Maturities no later than the Business Day preceding
the next Payment Date (or such other maturities expressly provided herein). If
prior to the occurrence of an Event of Default with respect to which the Secured
Notes have been declared (or have become) due and payable and such declaration
has not been rescinded, the Issuer shall not have given any such investment
directions, the Trustee shall seek instructions from the Collateral Manager
within three Business Days after transfer of any funds to such accounts. If the
Trustee does not thereafter receive written instructions from the Collateral
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 an investment vehicle (which shall be an Eligible Investment)
designated as such by the Collateral Manager to the Trustee in writing on or
before the Closing Date, (such investment, until and as it may be changed from
time to time as hereinafter provided, the "Standby Directed Investment"), until
investment instruction as provided in the preceding sentence is received by the
Trustee; or, if the Trustee from time to time receives a standing written
instruction from the Collateral Manager expressly stating that it is changing
the "Standby Directed Investment" under this paragraph, the Standby Designated
Investment may thereby be changed to an Eligible Investment of the type
described in clause (ii) of the definition of "Eligible Investments" maturing no
later than the Business Day immediately preceding the next Payment Date (or such
shorter maturities expressly provided herein) as designated in such instruction.
After an Event of Default with respect to which the Secured Notes have been
declared (or have become) due and payable and such declaration has not been
rescinded, the Trustee shall invest and reinvest such Monies as fully as
practicable in "U.S. Bank Money Market Deposit Account" or, if no longer
available, such similar investment of the type set forth in clause (ii) of the
definition of Eligible Investments maturing not later than the earlier of (i) 30
days after the date of such investment (unless putable at par to the issuer
thereof) or (ii) the Business Day immediately preceding the next Payment Date
(or such other maturities expressly provided herein). Except to the extent
expressly provided otherwise herein, all interest and other income from such
investments shall be deposited in the Interest Collection Subaccount, any gain
realized from such investments shall be credited to the Principal Collection
Subaccount upon receipt, and any loss resulting from such investments shall be
charged to the Principal Collection Subaccount. The Trustee shall not in any way
be held liable for the selection of investments, for investment losses incurred
therein including by reason of untimely written directions or for any
insufficiency of such accounts which results from any loss relating to any such
investment; provided that the foregoing shall not relieve the Bank of its
obligations under any security or obligation issued by the Bank or any Affiliate
thereof.

 

-188-

--------------------------------------------------------------------------------

 

 

The Trustee agrees to give the Issuer immediate notice if a Trust Officer of the
Trustee receives written notice 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. All
Accounts shall remain at all times with the Trustee or (a) with a federal or
state chartered depository institution that (x) satisfies the Fitch Eligible
Counterparty Ratings and (y) has a long-term senior unsecured debt rating of at
least "A2" or a short-term debt rating of at least "P-1" by Moody's, and if such
institution's rating falls below the Fitch Eligible Counterparty Ratings or
below "P-1" or "A2" by Moody's, the Issuer shall use commercially reasonable
efforts to cause the assets held in such Account to be moved within 30 calendar
days to another institution that satisfies the Fitch Eligible Counterparty
Ratings and has a long-term senior unsecured debt rating of at least "A2" or a
short-term debt rating of at least "P-1" by Moody's or (b) other than in the
case of Accounts to which cash is credited, in segregated trust accounts with
the corporate trust department of a federal or state chartered deposit
institution that has a long-term CR Assessment of at least "Baa3(cr)" by Moody's
(or, if such institution has no CR Assessment, a long-term senior unsecured debt
rating of at least "Baa3" by Moody's) and that meets the Fitch Eligible
Counterparty Ratings and if such institution's long-term CR Assessment falls
below "Baa3(cr)" by Moody's, or, if such institution has no CR Assessment, such
institution's long-term senior unsecured debt rating falls below "Baa3" by
Moody's, or below the Fitch Eligible Counterparty Ratings, the Issuer shall use
commercially reasonable efforts to cause the assets held in such Account to be
moved within 30 calendar days to another institution that has a long-term CR
Assessment of at least "Baa3(cr)" by Moody's (or, if such institution has no CR
Assessment, a long-term senior unsecured debt rating of at least "Baa3" by
Moody's) and that meets the Fitch Eligible Counterparty Ratings and subject to
regulations regarding fiduciary funds on deposit similar to Title 12 of the Code
of Federal Regulation Section 9.10(b). Such institution shall have a combined
capital and surplus of at least U.S.$200,000,000. All 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.

 

(b)     The Trustee shall supply, in a timely fashion, to the Co-Issuers, the
Collateral Manager, the Collateral Administrator and the Rating Agencies any
information regularly maintained by the Trustee that the Co-Issuers, the
Collateral Administrator, the Rating Agencies or the Collateral Manager may from
time to time request in writing with respect to the Pledged Obligations, 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 (at the direction of the Collateral Manager) to be provided by
Section 10.6, to permit the Collateral Manager to perform its obligations under
the Collateral Management Agreement or the Collateral Administration Agreement
or to permit the Collateral Administrator to perform its obligations under the
Collateral Administration Agreement. The Trustee shall promptly forward to the
Collateral Manager copies of notices and other writings received by it from the
Obligor of any Collateral Obligation or from any Clearing Agency with respect to
any Collateral Obligation which notices or writings advise the holders of such
security 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, and other communications received from such Obligor and
Clearing Agencies with respect to such Obligor.

 

-189-

--------------------------------------------------------------------------------

 

 

Section 10.6     Accountings.

 

(a)     Monthly. Not later than (x) in the case of the first Monthly Report
delivered in September 2018, due within 12 Business Days of the Monthly Report
Determination Date, and (y) in the case of each Monthly Report thereafter, the
12th Business Day following the Monthly Report Determination Date, the Issuer
shall compile and make available (or cause to be compiled and made available)
(including, at the election of the Issuer, via appropriate electronic means
acceptable to each recipient) to the Rating Agencies, the Trustee, the
Collateral Manager, the Initial Purchaser and, upon written request therefor, to
any Holder shown on the Register and, upon written notice to the Trustee in the
form of Exhibit D, any beneficial owner of a Note, a monthly report (each a
"Monthly Report") determined as of (i) in the case of a Monthly Report prepared
in connection with a Payment Date, the related Determination Date or (ii) in all
other cases, the last Business Day of the month preceding the month in which
such Monthly Report is delivered (such date of determination, the "Monthly
Report Determination Date").  The Monthly Report shall contain the following
information with respect to the Collateral Obligations and Eligible Investments
included in the Assets (based, in part, on information provided by the
Collateral Manager):

 

(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 detailed information:

 

(A)     The Obligor thereon (including the issuer ticker, if any);

 

(B)     The CUSIP, the ISIN, the LoanX ID, the Bloomberg Financial Instrument
Global Identifier (to the extent available), the Bloomberg Loan ID and any other
security identifier thereof;

 

(C)     The Principal Balance thereof (other than any accrued interest that was
purchased with Principal Proceeds (but noting any capitalized interest));

 

(D)     The percentage of the aggregate Collateral Principal Amount represented
by such Collateral Obligation;

 

(E)     The related interest rate or spread (excluding, in the case where such
Collateral Obligation is a LIBOR Floor Obligation, the effect of any specified
"floor" rate per annum related thereto);

 

-190-

--------------------------------------------------------------------------------

 

 

(F)     The stated maturity thereof;

 

(G)     The related Moody's Industry Classification;

 

(H)     The Moody's Rating, unless such rating is based on a credit estimate
unpublished by Moody's (and, in the event of a downgrade or withdrawal of the
applicable Moody's Rating, the prior rating and the date such Moody's Rating was
changed) and if based on a credit estimate, the date such credit estimate was
last provided (or updated) by Moody's to the Issuer;

 

(I)      The Moody's Default Probability Rating and Moody's Adjusted Weighted
Average Rating Factor;

 

(J)      The country of Domicile;

 

(K)     An indication as to whether each such Collateral Obligation is (1) a
Defaulted Obligation, (2) a Senior Secured Loan, Second Lien Loan, First Lien
Last Out Loan or Senior Unsecured Loan, (3) a floating rate Collateral
Obligation, (4) a Participation Interest (indicating the related Selling
Institution and its ratings by the Rating Agencies), (5) a Current Pay
Obligation, (6) a DIP Collateral Obligation, (7) convertible into or
exchangeable for equity securities, (8) a Discount Obligation (including its
purchase price and purchase yield in the case of a fixed rate Collateral
Obligation), (9) a Deferrable Obligation or (10) a Cov-Lite Loan;

 

(L)     The Moody's Recovery Rate;

 

(M)     Whether such Collateral Obligation is a LIBOR Floor Obligation and the
specified "floor" rate per annum related thereto as specified by the Collateral
Manager;

 

(N)     The Market Value of such Collateral Obligation;

 

(O)     Whether such Collateral Obligation was acquired from or sold to, as
applicable, an Affiliate of the Collateral Manager;

 

(P)     The identity of any Collateral Obligation that would otherwise be a
Cov-Lite Loan but for the proviso in the definition of "Cov-Lite Loan";

 

(Q)     Whether such Collateral Obligation was the subject of an amendment,
waiver or other modification that would extend the maturity thereof in
accordance with Section 12.2(e);

 

(R)     Whether a Distressed Exchange has occurred in connection with such
Collateral Obligation;

 

-191-

--------------------------------------------------------------------------------

 

 

(S)     With respect to any Collateral Obligations purchased pursuant to
Sections 12.2(b)(i) and 12.2(b)(ii), information showing satisfaction of the
requirements set forth in Sections 12.2(b)(i)(E) and 12.2(b)(ii)(E),
respectively; and

 

(T)     Whether the issuer or obligor of such Collateral Obligation is treated
as domiciled in the United States pursuant to clause (d) of the definition of
"Domicile."

 

(v)      For each of the limitations and tests specified in the definitions of
Concentration Limitations and Portfolio 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 calculation of each of the following:

 

(A)     From and after the Determination Date immediately preceding the third
Payment Date, each Interest Coverage Ratio (and setting forth each related
Required Coverage Ratio);

 

(B)     Each Par Value Ratio (and setting forth each related Required Coverage
Ratio); and

 

(C)     The Reinvestment Diversion Test (and setting forth the required test
level).

 

(D)     The Weighted Average Fixed Coupon.

 

(E)     The Weighted Average Floating Spread.

 

(vii)    For each Account, a schedule showing the beginning balance and the
ending balance.

 

(viii)   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.

 

(ix)     with respect to any Designated Proceeds, the amount thereof and such
amount as a percentage of the Aggregate Ramp-Up Par Amount compared to the
Designated Proceeds Cap as of the Closing Date.

 

(x)      A list of all Eligible Investments held during such calendar month.

 

-192-

--------------------------------------------------------------------------------

 

 

(xi)     Purchases, prepayments and sales:

 

(A)     the (1) identity, (2) Principal Balance (other than any accrued interest
that was purchased with Principal Proceeds (but excluding any capitalized
interest)), (3) Principal Proceeds and Interest Proceeds received, and (4) date
for each Collateral Obligation that was released for sale or disposition
pursuant to Section 12.1 since the date of determination of the immediately
preceding Monthly Report, and whether such Collateral Obligation was a Credit
Impaired Obligation or a Credit Improved Obligation, 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 Collateral Manager;

 

(B)     the (1) identity, (2) Principal Balance (other than any accrued interest
that was purchased with Principal Proceeds (but excluding any capitalized
interest)), and (3) Principal Proceeds and Interest Proceeds expended to acquire
each Collateral Obligation acquired pursuant to Section 12.2 since the date of
determination of the immediately preceding Monthly Report; and

 

(C)     for all purchases, sales and prepayments of Collateral Obligations after
the end of the Reinvestment Period, a list of each Collateral Obligation that is
either sold or prepaid corresponded in easily identifiable columnar format with
the Collateral Obligation that was purchased with the proceeds from such
Collateral Obligation that was either sold or prepaid.

 

(xii)    The identity of each Defaulted Obligation, the Moody's Collateral Value
and the Market Value of each such Defaulted Obligation and date of default
thereof.

 

(xiii)   The identity of each Collateral Obligation with a Moody's Rating of
"Caa1" or below, and/or a Moody's Default Probability Rating of "Caa1" or below
and the Market Value of each such Collateral Obligation.

 

(xiv)   The identity of each Current Pay Obligation, the Market Value of each
such Current Pay Obligation, the percentage of the Collateral Principal Amount
comprised of Current Pay Obligations, the portfolio limitation for Current Pay
Obligations expressed as a percentage of the Collateral Principal Amount and
whether such limitation is satisfied.

 

(xv)     The Market Value of each Collateral Obligation for which a Market Value
was required to be calculated pursuant to the terms of this Indenture.

 

(xvi)    The identity of the Issuer Subsidiary and the identity of each
Collateral Obligation, Equity Security or Defaulted Obligation, if any, held by
such Issuer Subsidiary.

 

(xvii)   The amount of Cash, if any, held in any Issuer Subsidiary.

 

-193-

--------------------------------------------------------------------------------

 

 

(xviii)   (a) For each Trading Plan occurring during such month a list of
Collateral Obligations (including the notional amount for each such Collateral
Obligation) subject to such Trading Plan, as well as the start date for the
related Trading Plan Period and (b) the percentage of the Collateral Principal
Amount consisting of the Collateral Obligations subject to each such Trading
Plan. The Trustee, as soon as reasonably practicable, will post notice of a
Trading Plan having been executed on the website where Monthly Reports are made
available to Holders of Notes.

 

(xix)     The identity of any non-LIBOR-based floating rate obligation.

 

(xx)      With respect to any Collateral Obligation purchased pursuant to
Section 12.2(b)(i) or (b)(ii), information indicating compliance with
Section 12.2(b)(i)(E) or (b)(ii)(E), as applicable.

 

(xxi)     The amount of Credit Amendment proceeds that are not eligible for
reinvestment.

 

(xxii)    The aggregate amount of Principal Proceeds reinvested after the
Reinvestment Period against the limit set forth in the definition of Eligible
Post-Reinvestment Principal Proceeds.

 

(xxiii)   The amount of any Unused Proceeds on deposit in the Ramp-Up Account.

 

(xxiv)   Such other information as the Trustee, any Hedge Counterparty, any
Rating Agency or the Collateral Manager may reasonably request.

 

Upon receipt of each Monthly Report, the Trustee shall, if the Trustee is not
the same Person as the Collateral Administrator, 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
Collateral Manager, and the Rating Agencies 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, the Issuer, or the Collateral Manager on behalf of the Issuer and the
Collateral Administrator, shall attempt to resolve the discrepancy. If such
discrepancy cannot be promptly resolved, the Trustee shall within five Business
Days cause the Independent accountants appointed by the Issuer pursuant to
Section 10.8 to review such Monthly Report and the Trustee's records to
determine the cause of such discrepancy. If such review reveals an error in the
Monthly Report or the Trustee's records, the Monthly Report or the Trustee's
records shall be revised accordingly and, as so revised, shall be utilized in
making all calculations pursuant to this Indenture 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.

 

-194-

--------------------------------------------------------------------------------

 

 

(b)       Payment Date Accounting. The Issuer shall render (or cause to be
rendered) a report (each a "Distribution Report"), determined as of the close of
business on each Determination Date preceding a Payment Date, and shall make
available such Distribution Report (including, at the election of the Issuer,
via appropriate electronic means acceptable to each recipient) to the Trustee,
the Collateral Manager, the Initial Purchaser and the Rating Agencies and, upon
written request therefor, any Holder shown on the Register 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 Payment Date. The
Distribution Report shall contain the following information (based, in part, on
information provided by the Collateral Manager):

 

(i)     the Aggregate Principal Balance of Collateral Obligations and Eligible
Investments representing Principal Proceeds;

 

(ii)     (a) the Aggregate Outstanding Amount of the Secured 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 Secured Notes of such Class,
the amount of principal payments to be made on the Secured Notes of each Class
on the next Payment Date, the amount of any Deferred Interest on each Class of
Deferred Interest Notes, and the Aggregate Outstanding Amount of the Secured
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 Secured Notes of such Class, (b) the Aggregate
Outstanding Amount of the Senior Subordinated Notes at the beginning of the
Interest Accrual Period, the accrued Senior Subordinated Note Amount and
Deferred Interest thereon and the amount of payments in respect thereof to be
made on such Payment Date, the aggregate amount of principal thereon to be
repaid on such Payment Date, and the Aggregate Outstanding Amount of the Senior
Subordinated Notes after giving effect to such payments and (c) the Aggregate
Outstanding Amount of the Junior Subordinated Notes at the beginning of the
Interest Accrual Period and such amount as a percentage of the original
Aggregate Outstanding Amount of the Junior Subordinated Notes, the amount of
payments to be made on the Junior Subordinated Notes in respect of the Junior
Subordinated Note Redemption Price on the next Payment Date, and the Aggregate
Outstanding Amount of the Junior Subordinated Notes after giving effect to such
payments, if any, on the next Payment Date and such amount as a percentage of
the original Aggregate Outstanding Amount of the Junior Subordinated Notes;

 

(iii)     the Note Interest Rate and accrued interest for each applicable Class
of Secured Notes for such Payment Date;

 

(iv)     the amounts payable pursuant to each clause of Section 11.1(a)(i) and
each clause of Section 11.1(a)(ii) and each clause of Section 11.1(a)(iii) on
the related Payment Date;

 

(v)      for the Collection Account:

 

(A)     the Balance on deposit in the Collection Account at the end of the
related Collection Period (or, with respect to the Interest Collection
Subaccount, the next Business Day);

 

-195-

--------------------------------------------------------------------------------

 

 

(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)
and Section 11.1(a)(iii) on the next Payment Date (net of (I) amounts which the
Collateral Manager has committed to re-invest in additional Collateral
Obligations pursuant to Article XII, (II) during the Reinvestment Period,
Principal Collections received in the last thirty (30) days of the related
Collection Period and (III) following the Reinvestment Period, Principal
Collections received with respect to sales of Credit Impaired Obligations and
Unscheduled Principal Payments received and not reinvested in the related
Collection Period); and

 

(C)     the Balance remaining in the Collection Account immediately after all
payments and deposits to be made on such Payment Date;

 

(vi)     each Interest Coverage Ratio, as applicable (and setting forth each
related Required Coverage Ratio); each Par Value Ratio (and setting forth each
related Required Coverage Ratio); and the Reinvestment Diversion Test (and
setting forth the required test level); and

 

(vii)     such other information as the Trustee, any Hedge Counterparty or the
Collateral 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 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 Trustee shall make available to each Holder
of Secured Notes, as soon as reasonably practicable but in any case no later
than the sixth Business Day after each Payment Date, a notice setting forth the
Note Interest Rate for such Notes for the Interest Accrual Period preceding the
next Payment Date. The Trustee shall also make available to the Issuer, each
Holder of Notes, as soon as reasonably practicable but in any case no later than
the sixth Business Day after each Interest Determination Date, a notice setting
forth LIBOR for the Interest Accrual Period following such Interest
Determination Date.

 

(d)     Failure to Provide Accounting. If the Trustee shall not have received
any accounting provided for in this Section 10.6 on the first Business Day after
the date on which such accounting is due to the Trustee, the Trustee shall use
all reasonable efforts to cause such accounting to be made by the applicable
Payment Date. To the extent the Issuer fails to provide any information or
reports pursuant to this Section 10.6 by the applicable Payment Date, the
Trustee (with the assistance of the Collateral Manager) shall be entitled to
retain an Independent certified public accountant in connection therewith and
the reasonable costs and expenses incurred by the Trustee and the Collateral
Manager for such Independent certified public accountant shall be paid by the
Issuer.

 

-196-

--------------------------------------------------------------------------------

 

 

(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:

 

The Notes may be beneficially owned only by Persons that (a)(i) are not U.S.
persons (within the meaning of Regulation S under the United States Securities
Act of 1933, as amended) and are purchasing their beneficial interest in an
offshore transaction or (ii) are either (A)(1) qualified institutional buyers
("Qualified Institutional Buyers") within the meaning of Rule 144A and
(2) qualified purchasers (as defined in Section 2(a)(51) of the Investment
Company Act) ("Qualified Purchasers"), (B) (in the case of Certificated Secured
Notes only) (1) institutional accredited investors meeting the requirements of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act ("IAIs") and Qualified
Purchasers or (2) accredited investors meeting the requirements of Rule 501(a)
under the Securities Act ("Accredited Investors") who are also Qualified
Purchasers or Knowledgeable Employee and (C) (in the case Certificated
Subordinated Notes only), (1) Accredited Investors who are also Qualified
Purchasers or Knowledgeable Employees or (2), in the case of subsequent
transfers only, Accredited Investors who are also Qualified Purchasers or
Knowledgeable Employees and (b) can make the representations set forth in
Section 2.6 or the appropriate Exhibit to this Indenture. Beneficial ownership
interests in the Rule 144A Global Notes may be transferred only to a Person that
is both a Qualified Institutional Buyer and a Qualified Purchaser and that can
make the representations referred to in clause (b) of the preceding sentence.
The Issuer has the right to compel any beneficial owner of an interest in Rule
144A Global Notes that does not meet the qualifications set forth in such
clauses to sell its interest in such Notes, or may sell such interest on behalf
of such owner, pursuant to Section 2.12.

 

Each Holder or beneficial owner of a Note 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 Note;
provided that any such Holder or beneficial owner may provide such information
on a confidential basis to any prospective purchaser of such Holder's or
beneficial owner's Notes that is permitted by the terms of this Indenture to
acquire such Holder's or beneficial owner's Notes and that agrees to keep such
information confidential in accordance with the terms of this Indenture.

 

(f)     Initial Purchaser Information. The Issuer and the Initial Purchaser, or
any successor to the Initial Purchaser, may post the information contained in a
Monthly Report or Distribution Report to a password-protected internet site
accessible only to the Holders of the Notes, the Trustee and the Collateral
Manager.

 

(g)     Availability of Reports. The Monthly Reports and Distribution Reports
shall be made available to the Persons entitled to such reports via the
Trustee's website. The Trustee's website shall initially be located at
www.usbank.com/cdo. Persons who are unable to use the above distribution option
are entitled to have a paper copy mailed to them via first class mail by calling
the Trustee's investor relations desk. The Trustee shall have the right to
change the method such reports are distributed in order to make such
distribution more convenient and/or more accessible to the Persons entitled to
such reports, and the Trustee shall provide timely notification (in any event,
not less than 30 days) to all such Persons. As a condition to access to the
Trustee's internet website, the Trustee may require registration and the
acceptance of a disclaimer. The Trustee shall not be liable for the information
it is directed or required to disseminate in accordance with this Indenture. The
Trustee shall be entitled to rely on but shall not be responsible for the
content or accuracy of any information provided in the information set forth in
the Monthly Report and the Distribution Report and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion. Upon written
request of any Holder, the Trustee shall also provide such Holder copies of
reports produced pursuant to this Indenture and the Collateral Management
Agreement. For the avoidance of doubt, the Initial Purchaser shall be entitled
to receive or have access to the Monthly Reports and Distribution Reports.

 

-197-

--------------------------------------------------------------------------------

 

 

(h)     [Reserved].

 

(i)     Intex and Bloomberg.     The Trustee is authorized to make available to
(i) Intex Solutions, Inc. each Monthly Report, Distribution Report and related
data files and (ii) Bloomberg L.P. each Monthly Report and related data files.
On the Closing Date, the Collateral Manager (on behalf of the Issuer) shall
deliver a schedule of Collateral Obligations, as of the Closing Date, to Intex
Solutions, Inc. and Bloomberg L.P.

 

Section 10.7     Release of Securities. (a) The Issuer may, by Issuer Order
executed by an Authorized Officer of the Collateral Manager, delivered to the
Trustee and the Collateral Administrator no later than the settlement date for
any sale of a security certifying that the sale of such security is being made
in accordance with Section 12.1 and such sale complies with all applicable
requirements of Section 12.1, direct the Trustee to release or cause to be
released such security from the lien of this Indenture and, upon receipt of such
Issuer Order, the Trustee shall deliver any such security, if in physical form,
duly endorsed to the broker or purchaser designated in such Issuer Order or, if
such security is a Clearing Corporation Security, cause an appropriate transfer
thereof to be made, in each case against receipt of the sales price therefor as
specified by the Collateral Manager in such Issuer Order; provided that the
Trustee may deliver any such security in physical form for examination in
accordance with street delivery custom; provided, further, that, notwithstanding
the foregoing, the Issuer shall not direct the Trustee to release any security
pursuant to this Section 10.7(a) following the occurrence and during the
continuance of an Event of Default with respect to which the Secured Notes have
been declared (or have become) due and payable and such declaration has not been
rescinded unless (x) such release is in connection with a sale in accordance
with Sections 12.1(a), (b), (c), (d), (g) or (h) or (y) the liquidation of the
Assets has begun or the Trustee has exercised any remedies of a Secured Party
pursuant to Section 5.4(a)(iv) at the direction of a Majority of the Controlling
Class. For purposes of the foregoing, the delivery to the Trustee of a final
trade ticket from the Collateral Manager in respect of the sale of a security
shall constitute the required Issuer Order.

 

(b)     Subject to the terms of this Indenture, the Trustee shall upon an Issuer
Order (i) deliver any Pledged Obligation, and release or cause to be released
such security from the lien of this Indenture, which is set for any mandatory
call or redemption or payment in full to the appropriate Paying Agent on or
before the date set for such call, redemption or payment, in each case against
receipt of the call or redemption price or payment in full thereof and (ii)
provide notice thereof to the Collateral Manager.

 

(c)     Upon receiving actual notice of any Offer (as defined below) or any
request for a waiver, consent, amendment or other modification with respect to
any Collateral Obligation, the Trustee on behalf of the Issuer shall promptly
notify the Collateral Manager of any Collateral Obligation that is subject to a
tender offer, voluntary redemption, exchange offer, conversion or other similar
action (an "Offer") or such request. The Collateral Manager may direct (x) the
Trustee to accept or participate in or decline or refuse to participate in such
Offer and, in the case of acceptance or participation, to release from the lien
of this Indenture such Collateral Obligation in accordance with the terms of the
Offer against receipt of payment therefor, or (y) the Issuer or the Trustee to
agree to or otherwise act with respect to such consent, waiver, amendment,
modification or action; provided that in the absence of any such direction, the
Trustee shall not respond or react to such Offer or request; provided, further,
that if the Trustee has commenced remedies pursuant to Section 5.4, any such
direction may only be made with the consent of a Majority of the Controlling
Class.

 

(d)     As provided in Section 10.2(a), the Trustee shall deposit any proceeds
received by it from the disposition of a Pledged Obligation in the applicable
account under the Collection Account, unless simultaneously applied to the
purchase of additional Collateral Obligations or Eligible Investments as
permitted under and in accordance with the requirements of this Article X and
Article XII.

 

-198-

--------------------------------------------------------------------------------

 

 

(e)     The Trustee shall, upon receipt of an Issuer Order at such time as there
are no Secured Notes Outstanding and all obligations of the Co-Issuers hereunder
have been satisfied, release any remaining Assets from the lien of this
Indenture.

 

(f)     [Reserved].

 

(g)     Upon receipt by the Trustee of an Issuer Order from an Authorized
Officer of the Issuer or an Authorized Officer of the Collateral Manager
certifying that the transfer of any Issuer Subsidiary Asset is being made in
accordance with Section 7.16 and that all applicable requirements of
Section 7.16 have been or shall be satisfied, the Trustee shall release such
Issuer Subsidiary Asset and shall deliver such Issuer Subsidiary Asset as
specified in such Issuer Order.

 

(h)     Any security, Collateral Obligation or amounts that are released
pursuant to Section 10.7(a), (b), (c), (f) or (g) shall be released from the
lien of this Indenture.

 

Section 10.8     Reports by Independent Accountants. (a) Prior to the delivery
of any reports or certificates of accountants pursuant to the terms hereof, the
Issuer shall appoint one or more firms of Independent certified public
accountants of recognized international reputation for purposes of reviewing and
delivering the reports or certificates of such accountants required by this
Indenture, which may be the firm of Independent certified public accountants
that performs accounting services for the Issuer or the Collateral Manager. The
Issuer may remove any firm of Independent certified public accountants at any
time without the consent of any Holder of Notes. Upon any resignation by such
firm or removal of such firm by the Issuer, the Issuer (or the Collateral
Manager on behalf of the Issuer) shall promptly appoint by Issuer Order
delivered to the Trustee and the Rating Agencies 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 Collateral
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 of such failure
in writing. If the Issuer shall not have appointed a successor within ten days
thereafter, the Trustee shall promptly notify the Collateral 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 as an
Administrative Expense.

 

-199-

--------------------------------------------------------------------------------

 

 

(b)     On or before July 17th of each year, commencing in 2019, the Issuer
shall cause to be delivered to the Trustee and the Collateral Manager a
statement from a firm of Independent certified public accountants for each
Distribution Report received since the last statement (i) indicating that the
calculations required to be within those Distribution Reports have been
performed in accordance with the applicable provisions of this Indenture and
(ii) recalculating the Aggregate Principal Balance of the Pledged Obligations
and the Aggregate Principal Balance of the Collateral Obligations securing the
Secured 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 10.8, the
determination by such firm of Independent certified public accountants shall be
conclusive. In the event such firm requires the Trustee to agree to the
procedures performed by such firm, the Issuer hereby directs the Trustee to so
agree; it being 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 validity or correctness of such procedures.

 

The Trustee and Collateral Administrator may require the delivery of an Issuer
Order directing the execution of any such agreement or other acknowledgement
required for the delivery of any report, statement or certificate of such
Independent accountants to the Trustee or Collateral Administrator under this
Indenture or other Transaction Document. The Bank shall be authorized, without
liability on its part, to execute and deliver any acknowledgement or other
agreement with such firm of Independent certified public accountants required
for the Trustee (or Collateral Administrator, as applicable) to receive any of
the certificates, reports or instructions provided for herein, which
acknowledgement or agreement may include, among other things, (i)
acknowledgement that the Issuer has agreed that the procedures to be performed
by the Independent accountants are sufficient for relevant purposes, (ii)
releases by the Trustee (on behalf of itself and/or the Holders) of any claims,
liabilities, and expenses arising out of or relating to such Independent
accountant's engagement, agreed-upon procedures or any report issued by such
Independent accountants under any such engagement and acknowledgement of other
limitations of liability in favor of the Independent certified public
accountants, and (iii) restrictions or prohibitions on the disclosure of any
such certificates, reports or other information or documents provided to it by
such firm of Independent accountants (including to the Holders). Notwithstanding
the foregoing, in no event shall the Trustee or Collateral Administrator be
required to execute any agreement in respect of the Independent accountants that
the Trustee reasonably determines may subject it to risk of expenses or
liability for which it is not adequately indemnified or otherwise adversely
affects it.

 

(c)     Any statement delivered to the Trustee pursuant to clause (b) above from
the firm of Independent certified public accountants may be requested by any
Holder directly from such accountants. Upon written request from a Holder to the
Trustee in the form of Exhibit D hereto, the Trustee shall provide to such
Holder the contact information for such accountants.

 

-200-

--------------------------------------------------------------------------------

 

 

(d)     A Holder may only obtain such statement or report directly from such
accountants. Notwithstanding any provision in this Indenture to the contrary,
the Trustee shall have no liability or responsibility for taking any action or
omitting to take any action in accordance with this Section 10.8(d).

 

Section 10.9     Reports to Rating Agencies. 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 (or the Collateral Manager on behalf of
the Issuer) shall provide to each Rating Agency all information or reports
delivered to the Trustee hereunder (with the exception of the Accountant's
Reports), and such additional information as any Rating Agency may from time to
time reasonably request (with the exception of the Accountant's Reports)
(including, with respect to credit estimates, notification to Moody's and Fitch
of any Specified Amendment) in accordance with Section 14.3(b) and Section 14.16
hereof. The Issuer shall notify Moody's and Fitch of any termination,
modification or amendment to the Collateral Management Agreement, the Collateral
Administration Agreement, the Securities Account Control Agreement or any other
agreement to which it is party in connection with any such agreement or this
Indenture and shall notify Moody's and Fitch of any material breach by any party
to any such agreement of which it has actual knowledge.

 

Section 10.10     Procedures Relating to the Establishment of Accounts
Controlled by the Trustee. Notwithstanding anything else contained herein, the
Trustee is hereby directed, with respect to each of the Accounts, to enter into
the Securities Account Control Agreement with the Securities Intermediary. The
Trustee shall have the right to open such subaccounts of any such account as it
deems necessary or appropriate for convenience of administration.

 

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, if any, from the
Collection Account to the Payment Account pursuant to Section 10.2 in accordance
with the following priorities (the "Priority of Payments").

 

(i)       On each Payment Date (other than a Post-Acceleration Payment Date or
the Stated Maturity), Interest Proceeds that have been transferred into the
Payment Account, shall be applied in the following order of priority:

 

(A)     (1) first, to the payment of taxes, registered office and governmental
fees owing by the Issuer and the Co-Issuer, if any, (2) second, to the payment
of the accrued and unpaid Administrative Expenses (in the order set forth in the
definition of such term) and (3) third, solely at the discretion and direction
of the Collateral Manager, the excess, if any, of the Administrative Expense Cap
over the amounts paid pursuant to clauses (1) and (2) above to deposit into the
Expense Reserve Account up to $50,000 for each Payment Date; provided that
amounts paid or deposited pursuant to clause (2) and any Administrative Expenses
paid from the Expense Reserve Account or from the Collection Account pursuant to
Section 10.2(d)(ii) on or between Payment Dates, collectively, may not exceed,
in the aggregate, the Administrative Expense Cap;

 

-201-

--------------------------------------------------------------------------------

 

 

(B)     to the payment of the accrued and unpaid Senior Management Fee;

 

(C)     to the payment on a pro rata basis of the following amounts based on the
respective amounts due on such Payment Date (1) any amounts due to a Hedge
Counterparty under a Hedge Agreement other than amounts due as a result of the
termination (or partial termination) of such Hedge Agreement and (2) any amounts
due to a Hedge Counterparty under a Hedge Agreement pursuant to a termination
(or partial termination) of such Hedge Agreement as a result of a Priority Hedge
Termination Event;

 

(D)     to the payment of accrued and unpaid interest on the Class A Notes;

 

(E)     to the payment of accrued and unpaid interest on the Class B Notes;

 

(F)     if either of the Class A/B Coverage Tests is not satisfied on the
related Determination Date, to make payments in accordance with the Sequential
Note Redemption to the extent necessary to cause both Class A/B Coverage Tests
to be met as of the related Determination Date on a pro forma basis after giving
effect to any payments made through this clause (F);

 

(G)     to the payment of accrued and unpaid interest (other than any Deferred
Interest but including interest on Deferred Interest) on the Class C Notes;

 

(H)     if either of the Class C Coverage Tests is not satisfied on the related
Determination Date, to make payments in accordance with the Sequential Note
Redemption to the extent necessary to cause both Class C Coverage Tests to be
met as of the related Determination Date on a pro forma basis after giving
effect to any payments made through this clause (H);

 

(I)     to the payment of any Deferred Interest on the Class C Notes;

 

(J)     to the payment of accrued and unpaid interest (other than any Deferred
Interest but including interest on Deferred Interest) on the Class D Notes;

 

(K)     if either of the Class D Coverage Tests is not satisfied on the related
Determination Date, to make payments in accordance with the Sequential Note
Redemption to the extent necessary to cause both Class D Coverage Tests to be
met as of the related Determination Date on a pro forma basis after giving
effect to any payments made through this clause (K);

 

-202-

--------------------------------------------------------------------------------

 

 

(L)     to the payment of any Deferred Interest on the Class D Notes;

 

(M)     to the payment of accrued and unpaid interest (other than any Deferred
Interest but including interest on Deferred Interest) on the Class E Notes;

 

(N)     if either of the Class E Coverage Tests is not satisfied on the related
Determination Date, to make payments in accordance with the Sequential Note
Redemption to the extent necessary to cause both Class E Coverage Tests to be
met as of the related Determination Date on a pro forma basis after giving
effect to any payments made through this clause (N);

 

(O)     to the payment of any Deferred Interest on the Class E Notes;

 

(P)     to the payment of the accrued and unpaid Subordinated Management Fee and
any accrued and unpaid Subordinated Management Fee Interest thereon to the
Collateral Manager, except to the extent that the Collateral Manager elects to
treat such current Subordinated Management Fee as Deferred Subordinated
Management Fees in accordance with Section 8(b) of the Collateral Management
Agreement; provided, that (1) if, with respect to the first Payment Date, the
Ramp-Up Period has not ended, all remaining Interest Proceeds after application
of Interest Proceeds pursuant to (A) through (O) above shall be deposited into
the Collection Account to be applied as Interest Proceeds on the next Payment
Date and (2) if, with respect to any Payment Date following the end of the
Ramp-Up Period upon which a Moody's Ramp-Up Failure has occurred and is
continuing, remaining Interest Proceeds after application of Interest Proceeds
pursuant to (A) through (O) above will be applied as Principal Proceeds pursuant
to Section 11.1(a)(ii) on such Payment Date in an amount sufficient to obtain,
in connection with any actions taken pursuant to Section 7.17(c), Moody's
confirmation of the initial rating assigned by it on the Closing Date to any
Class of the Secured Notes;

 

(Q)     during the Reinvestment Period, if the Reinvestment Diversion Test is
not satisfied on the related Determination Date, for deposit to the Collection
Account as Principal Proceeds the lesser of (i) 50% of the remaining Interest
Proceeds after application of Interest Proceeds pursuant to clauses (A) through
(P) above and (ii) the amount necessary to cause the Reinvestment Diversion Test
to be satisfied as of such Determination Date on a pro forma basis after giving
effect to any payments made through this clause;

 

-203-

--------------------------------------------------------------------------------

 

 

(R)     to the payment of any accrued and unpaid Deferred Subordinated
Management Fee that has been deferred with respect to prior Payment Dates
together with all accrued and unpaid Deferred Subordinated Management Fee
Interest thereon which the Collateral Manager elects to have paid on such
Payment Date in accordance with Section 8(b) of the Collateral Management
Agreement;

 

(S)     to the payment of (1) first, any Administrative Expenses not paid
pursuant to clause (A)(2) above due to the limitations contained therein (in the
priority stated in clause (A)(2) above, but without regard to the Administrative
Expense Cap) and (2) second, pro rata based on amounts due, any amounts due to
any Hedge Counterparty under any Hedge Agreement not otherwise paid pursuant to
clause (C) above;

 

(T)     to the Holders of the Senior Subordinated Notes, (1) first, the Senior
Subordinated Note Amount and any Deferred Interest thereon (including any
interest on Deferred Interest) and (2) second, 55% of the remaining Interest
Proceeds to the payment of principal of the Senior Subordinated Notes until the
Senior Subordinated Notes have been paid in full;

 

(U)     to the Holders of the Junior Subordinated Notes in an amount necessary
(taking into account all payments made to the Holders of the Junior Subordinated
Notes on prior Payment Dates) to cause the Incentive Management Fee Threshold to
be met;

 

(V)     to the payment of any accrued and unpaid Incentive Management Fee to the
Collateral Manager; and

 

(W)     any remaining Interest Proceeds to the Holders of the Junior
Subordinated Notes.

 

(ii)     On each Payment Date (other than a Post-Acceleration Payment Date or
the Stated Maturity), Principal Proceeds that have been received on or before
the related Determination Date and that are transferred to the Payment Account
in accordance with Section 10.2(e) shall be applied in the following order of
priority:

 

(A)     to pay, in accordance with Section 11.1(a)(i) above (1) first, the
amounts referred to in clauses (A) through (F), (2) then, to the extent the
Class C Notes are the Controlling Class, the amounts referred to in clause (G),
(3) then, the amounts referred to in clause (H), (4) then, to the extent the
Class C Notes are the Controlling Class, the amounts referred to in clause (I),
(5) then, to the extent the Class D Notes are the Controlling Class, the amounts
referred to in clause (J), (6) then, to the amounts referred to in clause (K),
(7) then, to the extent the Class D Notes are the Controlling Class, the amounts
referred to in clause (L), (8) then, to the extent the Class E Notes are the
Controlling Class, the amounts referred to in clause (M), (9) then, the amounts
referred to in clause (N), (10) then, to the extent the Class E Notes are the
Controlling Class, the amounts referred to in clause (O), but, in each case, (I)
only to the extent not paid in full thereunder, and (II) subject to any
applicable cap set forth therein;

 

-204-

--------------------------------------------------------------------------------

 

 

(B)     if the Secured Notes are to be redeemed on such Payment Date in
connection with (1) a Tax Event or an Optional Redemption, to the payment of the
Redemption Price in accordance with the Sequential Note Redemption, or (2) a
Special Redemption, to make payments with respect to the Notes in accordance
with the Sequential Note Redemption (in each case, without duplication of any
payments received by any Class of Secured Notes pursuant to Section 11.1(a)(i)
above or under clause (A) of this Section 11.1(a)(ii));

 

(C)     (1) during the Reinvestment Period, at the sole discretion of the
Collateral Manager, to the Collection Account as Principal Proceeds to invest in
Eligible Investments and/or to the purchase of additional Collateral
Obligations; and (2) after the Reinvestment Period as designated by the
Collateral Manager in the case of Unscheduled Principal Payments and the
proceeds from the disposition of Credit Impaired Obligations and Credit Improved
Obligations not exceeding (in aggregate) the Eligible Post-Reinvestment
Principal Proceeds to the Collection Account as Principal Proceeds to invest in
Eligible Investments (pending the purchase of additional Collateral Obligations
made in compliance with Section 12.2(b));

 

(D)     to make payments in accordance with the Sequential Note Redemption after
taking into account payments made pursuant to Section 11.1(a)(i) above and
clauses (A) and (B) of this Section 11.1(a)(ii);

 

(E)     to pay, in accordance with Section 11.1(a)(i) above, the amounts
referred to in clauses (P) and (R) of Section 11.1(a)(i) above, but only to the
extent not previously paid in full under such clause;

 

(F)     to pay, in accordance with Section 11.1(a)(i) above, the amounts
referred to in clauses (A) and (S)(1) of Section 11.1(a)(i) above (without
regard to the Administrative Expense Cap), but only to the extent not previously
paid in full under such clauses and under clause (A) of this
Section 11.1(a)(ii);

 

(G)     to pay, in accordance with Section 11.1(a)(i) above, the amounts
referred to in clauses (C) and (S)(2) of Section 11.1(a)(i) above, but only to
the extent not previously paid in full under such clauses and under clause (A)
of this Section 11.1(a)(ii);

 

(H)     if the Subordinated Notes are to be redeemed on such Payment Date in
connection with an Optional Redemption of the Subordinated Notes, to fund a
reasonable reserve for unpaid Administrative Expenses (as determined by the
Collateral Manager with approval from the Trustee in their respective sole
discretion);

 

(I)     to pay, in accordance with Section 11.1(a)(i) above, to the Holders of
the Senior Subordinated Notes, (1) first, the amounts referred to in clause
(T)(1) of Section 11.1(a)(i) above, but only to the extent not previously paid
in full under such clause and (2) second, to the payment of principal of the
Senior Subordinated Notes until the Senior Subordinated Notes have been paid in
full;

 

-205-

--------------------------------------------------------------------------------

 

 

(J)     to pay, in accordance with Section 11.1(a)(i) above, the amounts
referred to in clause (U) of Section 11.1(a)(i) above, but only to the extent
not previously paid in full under such clause;

 

(K)     to pay, in accordance with Section 11.1(a)(i) above, the amounts
referred to in clause (V) of Section 11.1(a)(i) above, but only to the extent
not previously paid in full under such clause; and

 

(L)     any remaining Principal Proceeds to the Holders of the Junior
Subordinated Notes.

 

(iii)     On each Post-Acceleration Payment Date or on the Stated Maturity, all
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 that are transferred
into the Payment Account, and, in the case of any Hedge Agreements, payments
received on or before such Payment Date, and all Principal Proceeds on deposit
in the Collection Account that are received on or before the related
Determination Date and that are transferred to the Payment Account shall be
applied, except for any Principal Proceeds that shall be used to settle binding
commitments (entered into prior to the Determination Date) for the purchase of
Collateral Obligations, in the following order of priority:

 

(A)     to pay all amounts under clauses (A) through (C) of Section 11.1(a)(i)
in the priority and subject to the limitations stated therein;

 

(B)     to the payment of accrued and unpaid interest on the Class A Notes until
such amounts have been paid in full;

 

(C)     to the payment of principal on the Class A Notes until such amount has
been paid in full;

 

(D)     to the payment of accrued and unpaid interest on the Class B Notes until
such amounts have been paid in full;

 

(E)     to the payment of principal on the Class B Notes until such amount has
been paid in full;

 

(F)     to the payment of accrued and unpaid interest and any Deferred Interest
on the Class C Notes until such amounts have been paid in full;

 

(G)     to the payment of principal of the Class C Notes until such amount has
been paid in full;

 

(H)     to the payment of accrued and unpaid interest and any Deferred Interest
on the Class D Notes until such amounts have been paid in full;

 

-206-

--------------------------------------------------------------------------------

 

 

(I)     to the payment of principal of the Class D Notes until such amount has
been paid in full;

 

(J)     to the payment of accrued and unpaid interest and any Deferred Interest
on the Class E Notes until such amounts have been paid in full;

 

(K)     to the payment of principal of the Class E Notes until such amount has
been paid in full;

 

(L)     to the payment, pro rata, of (1) first the accrued and unpaid
Subordinated Management Fee; and then (2) any accrued and unpaid Subordinated
Management Fee Interest thereon to the Collateral Manager, except to the extent
that the Collateral Manager elects to treat such current Subordinated Management
Fee as Deferred Subordinated Management Fees in accordance with Section 8(b) of
the Collateral Management Agreement, plus any accrued and unpaid Deferred
Subordinated Management Fee that has been deferred with respect to prior Payment
Dates together with all accrued and unpaid Deferred Subordinated Management Fee
Interest thereon which the Collateral Manager elects to have paid on such
Payment Date in accordance with Section 8(b) of the Collateral Management
Agreement;

 

(M)     to the payment of (1) first, any Administrative Expenses not paid
pursuant to clause (A) above due to the Administrative Expense Cap (in the
priority stated therein, but without regard to the Administrative Expense Cap)
and (2) second, pro rata based on amounts due, any amounts due to any Hedge
Counterparty under any Hedge Agreement pursuant to an early termination (or
partial termination) of such Hedge Agreement not otherwise paid pursuant to
clause (A) above;

 

(N)     to the Holders of the Senior Subordinated Notes, (1) first, the Senior
Subordinated Note Amount and any Deferred Interest thereon (including any
interest on Deferred Interest) and (2) second, the payment of principal of the
Senior Subordinated Notes until the Senior Subordinated Notes have been paid in
full;

 

(O)     to the Holders of the Junior Subordinated Notes in an amount necessary
(taking into account all payments made to the holders of the Junior Subordinated
Notes on prior Payment Dates) to cause the Incentive Management Fee Threshold to
be met;

 

(P)     to the payment of any accrued and unpaid Incentive Management Fee to the
Collateral Manager; and

 

(Q)     any remaining Interest Proceeds and Principal Proceeds to the Holders of
the Junior Subordinated Notes.

 

-207-

--------------------------------------------------------------------------------

 

 

(b)     On the Stated Maturity of the Notes, and after payment of all amounts
specified in Section 11.1(a)(iii), the Trustee shall pay the net proceeds from
the liquidation of the Assets and all available Cash, after the payment of (or
establishment of a reserve for) any remaining fees, expenses, including the
Trustee's fees and other Administrative Expenses, and interest and principal on
the Secured Notes and the Senior Subordinated Notes, to the Holders of the
Junior Subordinated Notes in final payment of such Junior Subordinated Notes.

 

(c)     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 to the
extent funds are available therefor.

 

(d)     In connection with the application of funds to pay Administrative
Expenses of the Issuer or the Co-Issuer, as the case may be, in accordance with
Sections 11.1(a)(i), (ii) and (iii), the Trustee shall remit such funds, to the
extent available, as directed and designated in the Distribution Report in
respect of such Payment Date pursuant to Section 10.6(b)(iv).

 

(e)     In the event that the Hedge Counterparty defaults in the payment of its
obligations to the Issuer under any Hedge Agreement on the date on which any
payment is due thereunder, the Collateral Manager shall make a demand on such
Hedge Counterparty in accordance with Section 16.1(f). The Trustee shall give
notice as soon as reasonably practicable to the Holders of Notes, the Collateral
Manager and the Rating Agencies if such Hedge Counterparty continues to fail to
perform its obligations for two Business Days following a demand made by the
Trustee on such Hedge Counterparty, and shall take such action with respect to
such continuing failure as may be directed to be taken pursuant to Section 5.13.

 

(f)     If there are insufficient funds to pay the Subordinated Management Fee
in full on any Payment Date, the amount not so paid shall be deferred and such
amount (together with any Subordinated Management Fee Interest thereon) shall be
payable on such later Payment Date on which funds are available therefor as
provided in the Priority of Payments. The Collateral Manager may, in its sole
discretion, irrevocably elect in a written notice to each of the Trustee, the
Collateral Administrator and the Issuer prior to the beginning of any calendar
year, to defer payment of all or any portion of the Subordinated Management Fee
payable in accordance with the Priority of Payments on any Payment Date during
such calendar year (the "Deferred Subordinated Management Fee"). An amount equal
to the Deferred Subordinated Management Fee for any Payment Date shall be
distributed as Interest Proceeds in accordance with the Priority of Payments on
such Payment Date or, at the election of the Collateral Manager by written
notice to the Trustee, deposited into the Principal Collection Subaccount for
application as Principal Proceeds. Any such accrued and unpaid Deferred
Subordinated Management Fee shall accrue interest at a rate equal to three-month
LIBOR in effect at such periods plus 3.00% for the period from (and including)
the date on which such Deferred Subordinated Management Fee was deferred through
(but excluding) the date of payment thereof (calculated on the basis of a
360-day year and the actual number of days elapsed) (the "Deferred Subordinated
Management Fee Interest"). Any such Deferred Subordinated Management Fee and any
accrued and unpaid Deferred Subordinated Management Fee Interest thereon shall
be paid to the Collateral Manager in accordance with the Priority of Payments on
the earlier to occur of the following events: (i) the Payment Date or Payment
Dates designated by the Collateral Manager in its deferral election described
above with respect to the related deferred amounts, or (ii) upon direction of
the Collateral Manager under the circumstances described in Section 8(b) of the
Collateral Management Agreement.

 

-208-

--------------------------------------------------------------------------------

 

 

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 12.4 and provided that no Event of Default
has occurred and is continuing with respect to which the Secured Notes have been
declared (or have become) due and payable and such declaration has not been
rescinded (except for sales pursuant to Sections 12.1(a), (b), (c), (d) and (g)
which are permitted unless liquidation of the Assets has begun or the Trustee
has exercised any remedies of a Secured Party pursuant to Section 5.4), the
Collateral Manager on behalf of the Issuer may in writing direct the Trustee to
sell and the Trustee (on behalf of the Issuer) shall sell in the manner directed
by the Collateral Manager any Collateral Obligation or Equity Security if, as
certified by the Collateral Manager (upon which certification the Trustee may
conclusively rely), to the best of its knowledge, such sale meets the
requirements of any one of paragraphs (a) through (g) of this Section 12.1 (the
delivery to the Trustee of a trade ticket for such Collateral Obligation or
Equity Security by the Collateral Manager shall constitute such a
certification). 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.

 

(a)     Credit Impaired Obligations. The Collateral Manager may direct the
Trustee to sell any Credit Impaired Obligation at any time during or after the
Reinvestment Period without restriction.

 

(b)     Credit Improved Obligations. The Collateral Manager may direct the
Trustee to sell any Credit Improved Obligation either:

 

(i)     at any time if (A) the Sale Proceeds from such sale are at least equal
to the Investment Criteria Adjusted Balance of such Credit Improved Obligation,
or (B) after giving effect to such sale, the Collateral Principal Amount
(excluding the Collateral Obligations being sold but including, without
duplication, the anticipated net Sale Proceeds of such Sale) shall be at least
equal to the Reinvestment Target Par Balance; or

 

(ii)     during the Reinvestment Period if the Collateral Manager reasonably
believes prior to such sale that either (A) after giving effect to such sale and
subsequent reinvestment, the Collateral Principal Amount (excluding the
Collateral Obligations 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, and provided that the Principal Balance in respect of any
Defaulted Obligation that has been a Defaulted Obligation for less than three
years shall be deemed to be the Moody's Collateral Value thereof) plus, without
duplication, amounts on deposit in the Issuer's transaction accounts (excluding
the Interest Collection Subaccount) shall be at least equal to the Reinvestment
Target Par Balance, or (B) after such sale, it shall be able to enter into
binding commitments to reinvest all or a portion of the proceeds of such sale,
in compliance with the Investment Criteria, in one or more additional Collateral
Obligations with an aggregate Investment Criteria Adjusted Balance at least
equal to the Investment Criteria Adjusted Balance of such Credit Improved
Obligation within 30 Business Days of such sale.

 

-209-

--------------------------------------------------------------------------------

 

 

(c)     Defaulted Obligations. The Collateral Manager may direct the Trustee to
sell any Defaulted Obligation at any time during or after the Reinvestment
Period without restriction.

 

(d)     Equity Securities. The Collateral Manager may direct the Trustee to sell
any Equity Security at any time during or after the Reinvestment Period without
restriction; provided that the Collateral Manager shall use its commercially
reasonable efforts to dispose of any Equity Security within three (3) years of
receipt of such Equity Security by the Issuer unless such sale is prohibited by
applicable law or contractual restrictions, in which case such Equity Security
shall be sold as soon as such sale is permitted by applicable law and not
prohibited by such contractual restrictions.

 

(e)     Optional Redemption, Tax Redemption or Clean-Up Call Redemption. After
(x)(i) a Majority of the Junior Subordinated Notes has directed (by a written
direction delivered to the Trustee and the Collateral Manager) an Optional
Redemption of the Secured Notes, (ii) a Majority of an Affected Class or a
Majority of the Senior Subordinated Notes or the Junior Subordinated Notes has
directed (by a written direction delivered to the Trustee) a Tax Redemption, or
(iii) the Issuer has notified the Trustee of a Clean-Up Call Redemption, and (y)
all requirements for such an Optional Redemption, Tax Redemption or Clean-Up
Call Redemption set forth in this Indenture are met, the Collateral Manager (on
behalf of the Issuer) shall direct the Trustee to sell (which sale may be
through participation or other arrangement) all or a portion of the Collateral
Obligations. If any such sale is made through participations, the Issuer shall
use reasonable efforts to cause such participations to be converted to
assignments within six months after the sale.

 

(f)     Discretionary Sales. The Collateral Manager may direct the Trustee to
sell any Collateral Obligation (other than Collateral Obligations the Issuer is
permitted to sell as provided in clauses (a) through (e) above), during the
Reinvestment Period, at any time other than a Restricted Trading Period, so long
as no Event of Default has occurred and is continuing, if (i) after giving
effect to such sale, the Aggregate Principal Balance of all Collateral
Obligations sold pursuant to this Section 12.1(f) during the preceding period of
twelve calendar months (or, for the first twelve calendar months after the
Closing Date, during the period commencing on the Closing Date) is not greater
than 25% of the Collateral Principal Amount as of the beginning of such twelve
calendar month period (or as of the Closing Date, as the case may be); provided
that for the purpose of determining the percentage of Collateral Obligations
sold during any such period, the amount of any Collateral Obligations sold shall
be reduced to the extent of any purchases of Collateral Obligations of the same
Obligor (which are pari passu or senior to such sold Collateral Obligation)
occurring within 45 days of such sale (determined based upon the date of any
relevant trade confirmation or commitment letter) so long as any such Collateral
Obligation was sold with the intention of purchasing a Collateral Obligation of
the same Obligor (which would be pari passu or senior to such sold Collateral
Obligation) and (ii) either:

 

-210-

--------------------------------------------------------------------------------

 

 

(A)     after giving effect to such sale, the Aggregate Principal Balance of the
Collateral Obligations (excluding the Collateral Obligation being sold) and
Eligible Investments constituting Principal Proceeds (including, without
duplication, the anticipated net proceeds of such sale) shall be greater than
(or equal to) the Reinvestment Target Par Balance; or

 

(B)     the Collateral Manager reasonably believes prior to such sale that it
shall be able to enter into binding commitments to reinvest all or a portion of
the proceeds of such sale, in compliance with the Investment Criteria, in one or
more additional Collateral Obligations with an Aggregate Principal Balance at
least equal to the Investment Criteria Adjusted Balance of such sold Collateral
Obligation within the earlier of (1) 60 Business Days and (2) the end of the
Reinvestment Period (but not less than 20 Business Days) after the settlement of
such sale.

 

(g)     Mandatory Sales. The Collateral Manager shall use commercially
reasonable efforts to sell each Equity Security, Collateral Obligation and any
other security held by the Issuer that constitutes Margin Stock not later than
45 days after the later of (x) the date of the Issuer's acquisition thereof and
(y) the date such Equity Security, Collateral Obligation or other security held
by the Issuer became Margin Stock.

 

(h)     [Reserved.]

 

(i)     [Reserved.]

 

(j)     Stated Maturity. Notwithstanding the restrictions of this Section 12.1,
the Collateral 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 liquidation of all assets held at each
Issuer Subsidiary and distribution of any proceeds thereof to the Issuer.

 

Section 12.2     Purchase of Additional Collateral Obligations. On any date
during the Reinvestment Period (and after the Reinvestment Period with respect
to purchases made pursuant to Section 12.2(b)) the Collateral Manager, on behalf
of the Issuer, may, but shall not be required to, direct the Trustee to invest
Principal Proceeds (and accrued interest received with respect to any Collateral
Obligation to the extent used to pay for accrued interest on additional
Collateral Obligations) in additional Collateral Obligations, and the Trustee
shall invest such proceeds, if, as certified by the Collateral Manager, each of
the conditions specified in this Section 12.2 including Section 12.2(f), if
applicable, are met.

 

-211-

--------------------------------------------------------------------------------

 

 

(a)     Investment Criteria - Investment during the Reinvestment Period. During
the Reinvestment Period, no Collateral Obligation may be purchased unless each
of the following conditions are satisfied as of the date the Collateral Manager
commits on behalf of the Issuer to make such purchase after giving effect to
such purchase and all other sales or purchases previously or simultaneously
committed to but which have not settled; provided that the conditions set forth
in clauses (ii), (iii) and (iv) below need only be satisfied with respect to
purchases of Collateral Obligations occurring after the end of the Ramp-Up
Period:

 

(i)     such obligation is a Collateral Obligation;

 

(ii)     (A) each Coverage Test shall be satisfied, or if not satisfied, such
Coverage Test shall be maintained or improved, and (B) if each Coverage Test is
not satisfied, the Principal Proceeds received in respect of any Defaulted
Obligation or the proceeds of any sale of a Defaulted Obligation pursuant to
Section 12.1(c) shall not be reinvested in additional Collateral Obligations;

 

(iii)     (A) in the case of additional Collateral Obligations purchased with
the proceeds from the sale of a Credit Impaired Obligation or a Defaulted
Obligation, the Collateral Manager shall use commercially reasonable efforts to
ensure that after giving effect to such purchase, either (1) the aggregate
Investment Criteria Adjusted Balance of all additional Collateral Obligations
purchased with the proceeds from such sale shall at least equal the Sale
Proceeds from such sale, (2) after giving effect to such purchase, the Adjusted
Collateral Principal Amount shall be maintained or increased (when compared to
the Adjusted Collateral Principal Amount immediately prior to such sale)
(provided that, for the purposes of this determination, sub-paragraph (i) in the
definition of "Principal Balance" shall be deemed not to apply in respect of any
such Collateral Obligations sold), or (3) the Collateral Principal Amount
(excluding Collateral Obligations being sold but including, without duplication
the Collateral Obligations being purchased and the anticipated cash proceeds, if
any, of such sale that are not applied to the purchase of such additional
Collateral Obligations; and provided that the Principal Balance in respect of
any Defaulted Obligation that has been a Defaulted Obligation for less than
three years shall be deemed to be the Moody's Collateral Value thereof) plus,
without duplication, amounts on deposit in the Issuer's transaction accounts
(excluding the Interest Collection Subaccount) shall be at least equal to the
Reinvestment Target Par Balance, and (B) in the case of any other purchase of
additional Collateral Obligations, the Collateral Manager shall use commercially
reasonable efforts to ensure that after giving effect to such purchase, either
(1) the Aggregate Principal Balance of the additional Collateral Obligations
purchased with the proceeds of such sale shall be greater or equal than the
Aggregate Principal Balance of the Collateral Obligations sold, or (2) after
giving effect to such reinvestment of Sale Proceeds, the Collateral Principal
Amount (excluding Collateral Obligations being sold but including, without
duplication the Collateral Obligations being purchased and the anticipated cash
proceeds, if any, of such sale that are not applied to the purchase of such
additional Collateral Obligations; and provided that the Principal Balance in
respect of any Defaulted Obligation that has been a Defaulted Obligation for
less than three years shall be deemed to be the Moody's Collateral Value
thereof) shall be at least equal to the Reinvestment Target Par Balance;

 

-212-

--------------------------------------------------------------------------------

 

 

(iv)     either (A) each requirement or test, as the case may be, of the
Concentration Limitations and the Portfolio Quality Test shall be satisfied or
(B) if any such requirement or test was not satisfied immediately prior to such
reinvestment, such requirement or test shall be maintained or improved after
giving effect to the reinvestment (it being agreed, for the avoidance of doubt,
that each Concentration Limitation and Portfolio Quality Test, including the
Weighted Average Life Test, shall be measured before receipt of the proceeds
from any scheduled or unscheduled principal payments on, or sales or
dispositions of, any Collateral Obligations and after the reinvestment of such
proceeds);

 

(v)      if such Collateral Obligation is a Post-Reinvestment Period Settlement
Obligation, the Reinvestment Period Settlement Condition is satisfied; and

 

(vi)     no Event of Default has occurred and is continuing at the time of such
proposed investment.

 

(b)        Investment Criteria - Investment after the Reinvestment Period. After
the Reinvestment Period, Principal Proceeds actually received with respect to
sales of Credit Improved Obligations or Credit Impaired Obligations and
Unscheduled Principal Payments may be reinvested in additional Collateral
Obligations in accordance with the following requirements:

 

(i)     After the Reinvestment Period, provided, that no Event of Default has
occurred and is continuing, the Collateral Manager may, but shall not be
required to, invest Principal Proceeds that were received with respect to sales
of Credit Improved Obligations or Credit Impaired Obligations at any time prior
to the later of (x) the thirtieth (30th) day after such Principal Proceeds were
received and (y) the last Business Day of the Collection Period in which such
Principal Proceeds were received; provided, that the Collateral Manager may not
reinvest such Principal Proceeds unless the Collateral Manager reasonably
believes that after giving effect to any such reinvestment (A) the aggregate
amount of Principal Proceeds reinvested after the Reinvestment Period pursuant
to this clause (i) and the following clause (ii) will not exceed the Eligible
Post-Reinvestment Principal Proceeds, (B) the Maximum Moody's Rating Factor Test
shall be satisfied (and for the avoidance of doubt the "maintain or improved"
standard shall not apply when measuring the test in this clause (B)), (C) (x) if
the Weighted Average Life Test was not satisfied on the last day of the
Reinvestment Period, the Weighted Average Life Test shall be satisfied after
giving effect to such reinvestment (and for the avoidance of doubt the "maintain
or improved" standard shall not apply when measuring the test in this
sub-clause (C)(x)) or (y) if the Weighted Average Life Test was satisfied on the
last day of the Reinvestment Period, the Weighted Average Life Test will be
satisfied, or if not satisfied, the Weighted Average Life Test will be
maintained or improved after giving effect to such reinvestment, (D) the
Coverage Tests shall be satisfied, (E) a Restricted Trading Period is not then
in effect, (F) the additional Collateral Obligations purchased shall have the
same or earlier maturity, in each case, in comparison to the Credit Improved
Obligation or Credit Impaired Obligation from which such Principal Proceeds were
received, (G) the Concentration Limitation set forth in clause (xii) of the
definition of the term Concentration Limitations shall be satisfied and all
other Concentration Limitations shall be satisfied or, if not satisfied,
maintained or improved, (H) either (1) the aggregate Investment Criteria
Adjusted Balance of all additional Collateral Obligations purchased with the
proceeds from such sale shall at least equal the Sale Proceeds from such sale,
(2) after giving effect to such purchase, the Adjusted Collateral Principal
Amount shall be maintained or increased (when compared to the Adjusted
Collateral Principal Amount immediately prior to such sale), or (3) the
Collateral Principal Amount (excluding Collateral Obligations being sold but
including, without duplication the Collateral Obligations being purchased and
the anticipated cash proceeds, if any, of such sale that are not applied to the
purchase of such additional Collateral Obligations) plus, without duplication,
amounts on deposit in the Issuer's transaction accounts (excluding the Interest
Collection Subaccount) shall be at least equal to the Reinvestment Target Par
Balance and (I) in respect of any additional Collateral Obligation purchased
with Principal Proceeds received with respect to any sale of a Credit Impaired
Obligation, such additional Collateral Obligation will have the same or higher
Moody's Rating as such Credit Impaired Obligation.

 

-213-

--------------------------------------------------------------------------------

 

 

(ii)     After the Reinvestment Period, provided, that no Event of Default has
occurred and is continuing, the Collateral Manager may, but shall not be
required to, invest Principal Proceeds that were received with respect to
Unscheduled Principal Payments at any time prior to the later of (x) the
thirtieth (30th) day after such Principal Proceeds were received and (y) the
last Business Day of the Collection Period in which such Principal Proceeds were
received; provided, that the Collateral Manager may not reinvest such Principal
Proceeds unless the Collateral Manager reasonably believes that after giving
effect to any such reinvestment (A) the aggregate amount of Principal Proceeds
reinvested after the Reinvestment Period pursuant to this clause (ii) and the
preceding clause (i) will not exceed the Eligible Post-Reinvestment Principal
Proceeds, (B) the Maximum Moody's Rating Factor Test shall be satisfied (and for
the avoidance of doubt the "maintain or improved" standard shall not apply when
measuring the test in this clause (B)), (C) (x) if the Weighted Average Life
Test was not satisfied on the last day of the Reinvestment Period, the Weighted
Average Life Test shall be satisfied after giving effect to such reinvestment
(and for the avoidance of doubt the "maintain or improved" standard shall not
apply when measuring the test in this clause (C)(x)) or (y) if the Weighted
Average Life Test was satisfied on the last day of the Reinvestment Period, the
Weighted Average Life Test will be satisfied, or if not satisfied, the Weighted
Average Life Test will be maintained or improved after giving effect to such
reinvestment, (D) the Coverage Tests shall be satisfied, (E) a Restricted
Trading Period is not then in effect, (F) the additional Collateral Obligations
purchased shall have the same or earlier maturity, in each case, in comparison
to the Collateral Obligation with respect to which such Unscheduled Principal
Payments were made, (G) the Aggregate Principal Balance of all additional
Collateral Obligations purchased with Unscheduled Principal Payments shall be at
least equal to such Unscheduled Principal Payments, (H) the Concentration
Limitation set forth in clause (xii) of the definition of the term Concentration
Limitations shall be satisfied and all other Concentration Limitations shall be
satisfied or, if not satisfied, maintained or improved and (I) in respect of any
additional Collateral Obligation purchased with Principal Proceeds received with
respect to Unscheduled Principal Payments of a Collateral Obligation (the
"Prepaid Collateral Obligation"), such additional Collateral Obligation will
have the same or higher Moody's Rating as the related Prepaid Collateral
Obligation.

 

(c)     Investment in Eligible Investments. Cash on deposit in any Account may
be invested at any time in Eligible Investments in accordance with Article X.

 

-214-

--------------------------------------------------------------------------------

 

 

(d)     Trading Plan Period. For purposes of calculating compliance with the
Investment Criteria, at the election of the Collateral Manager in its sole
discretion, any proposed investment (whether a single Collateral Obligation or a
group of Collateral Obligations identified by the Collateral Manager to the
Trustee 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 the ten
(10) Business Days following the date of determination of such compliance (such
period, the "Trading Plan Period"); provided that (i) no Trading Plan may result
in the purchase of Collateral Obligations having an Aggregate Principal Balance
that exceeds 5% of the Collateral Principal Amount as of the first day of the
Trading Plan Period, (ii) no Trading Plan Period may include a Determination
Date, (iii) no more than one Trading Plan may be in effect at any time during a
Trading Plan Period, (iv) the Collateral Manager reasonably believes that each
Trading Plan shall satisfy the Investment Criteria, (v) after the Reinvestment
Period, the Collateral Obligations purchased as part of a Trading Plan shall
have the same or earlier maturity in comparison to (I) the Collateral Obligation
in respect of which such Unscheduled Principal Payments were made or (II) the
Credit Impaired Obligation or Credit Improved Obligation from which such
Principal Proceeds were received, (vi) the difference in maturities between any
two Collateral Obligations included in any one Trading Plan shall not exceed two
years, (vii) no Trading Plan shall include any Collateral Obligation that
matures within twelve (12) months of the start of such Trading Plan Period,
(viii) no Trading Plan may result in the averaging of the purchase price of one
or more Collateral Obligations purchased at separate times for the purpose of
determining whether any particular Collateral Obligation is a Discount
Obligation and (ix) if the Investment Criteria are not satisfied with respect to
any Trading Plan, notice shall be provided to each Rating Agency by the
Collateral Manager and compliance with the Investment Criteria shall not be
evaluated by giving effect to another Trading Plan at any time thereafter.
Notice shall be provided to Fitch (so long as the Class A Notes are
outstanding), Moody's, the Trustee (who shall forward such notice to the Holders
of the Notes no later than the Business Day following receipt thereof) and the
Collateral Administrator by the Issuer (or the Collateral Manager on its behalf)
of any Trading Plan and shall specify the proposed investments identified by the
Collateral Manager for acquisition as part of such Trading Plan. The Trustee
shall post a notice to investors on its website if any Trading Plan is executed.

 

(e)     Exercise of Warrants. The Issuer (or the Collateral Manager on its
behalf) will not exercise any warrant or other similar right received in
connection with a workout or a restructuring of a Collateral Obligation that
requires a payment that results in receipt of an Equity Security unless the
Collateral Manager on the Issuer's behalf certifies to the Trustee that (i)
exercising the warrant or other similar right is necessary for the Issuer to
realize the value of the workout or restructuring, (ii) such Equity Security
will be sold prior to the Issuer's receipt of such Equity Security unless such
sale or other disposition is prohibited by applicable law or an applicable
contractual restriction in the related Underlying Instruments, in which case the
Collateral Manager will sell such Equity Security as soon as such sale or
disposition is permitted by applicable law and not prohibited by such
contractual restriction and (iii) the Collateral Manager and the Issuer have
received written advice of counsel of national reputation experienced in such
matters that such exercise, payment, and retention, in and of themselves, should
not cause the Issuer to fail to qualify as a loan securitization under the
Volcker Rule or result in the Issuer becoming a "covered fund" under the Volcker
Rule.

 

-215-

--------------------------------------------------------------------------------

 

 

(f)     Amendments to Collateral Obligations. The Issuer shall only consent, and
shall only allow the Collateral Manager to consent to any amendment, waiver or
other modification to any Collateral Obligation that would extend the maturity
thereof (a "Maturity Amendment") if, after giving effect to such amendment,
waiver or other modification, (a) the Weighted Average Life Test (1) is
satisfied or (2) if the Weighted Average Life Test is not satisfied immediately
after giving effect to such Maturity Amendment, the Weighted Average Life Test
shall be maintained or improved and (b) the maturity of such Collateral
Obligation is not extended beyond the shortest Stated Maturity of any of the
Secured Notes still Outstanding.

 

Notwithstanding the immediately preceding paragraph, the Issuer may consent to a
Maturity Amendment before or after the Reinvestment Period if it has received
the express consent of each of the Collateral Manager and a Majority of the
Controlling Class. It shall not be a violation of the restrictions of this
Section 12.2(f) if any Collateral Obligation is amended in violation of the
restriction in this Section 12.2(f) so long as the Issuer (or the Collateral
Manager on behalf of the Issuer) has not consented to such amendment. A waiver,
modification, amendment or variance that would extend the stated maturity date
of the credit facility of which any applicable Collateral Obligation is a part,
but which would not extend the stated maturity date of such Collateral
Obligation held by the Issuer, shall not constitute a Maturity Amendment. In
addition, the restrictions in this Section 12.2(f) shall not apply if such
Maturity Amendment is a Credit Amendment (provided that any Credit Amendment
shall not extend the maturity of any Collateral Obligation beyond the shortest
Stated Maturity of any of the Secured Notes still Outstanding), and any Credit
Amendment that does not satisfy the Weighted Average Life Test shall have all
payments (interest, principal and otherwise) be counted as Principal Proceeds
and after the Reinvestment Period such payments shall not be eligible for
reinvestment; provided further that the aggregate principal balance of all
Collateral Obligations that have been subject to Credit Amendments since the
Closing Date shall not exceed 10% of the Aggregate Ramp-Up Par Amount.

 

(g)     Post-Reinvestment Period Settlement. The Issuer shall be prohibited from
purchasing a Collateral Obligation during the Reinvestment Period if such
purchase is not scheduled to settle prior to the end of the Reinvestment Period
(such Collateral Obligation, the "Post-Reinvestment Period Settlement
Obligation"); provided, that, notwithstanding the foregoing, the Issuer may
purchase such Post-Reinvestment Period Settlement Obligation during the
Reinvestment Period if the sum of (i) the amount of Eligible Investments and
cash representing Principal Proceeds in the Collection Account as of the last
day of the Reinvestment Period plus (ii) the expected sale proceeds from any
Collateral Obligations that the Issuer has entered into a written trade ticket
or other written binding commitment to sell that are also not scheduled to
settle prior to the end of the Reinvestment Period is equal to or greater than
the principal amount of the Post-Reinvestment Period Settlement Obligation being
purchased (the "Reinvestment Period Settlement Condition"). If the Issuer has
entered into a written trade ticket or other written binding commitment to
purchase a Post-Reinvestment Period Settlement Obligation during the
Reinvestment Period with respect to which the Reinvestment Period Settlement
Condition is satisfied, 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 after the end of the Reinvestment Period may be applied to the
payment of the purchase price of such Post-Reinvestment Period Settlement
Obligation. Immediately preceding the end of the Reinvestment Period, the
Collateral Manager shall deliver to the Trustee a schedule of Post-Reinvestment
Period Settlement Obligations and shall certify to the Trustee that the
Reinvestment Period Settlement Condition is satisfied with respect to each such
Post-Reinvestment Period Settlement Obligation.

 

-216-

--------------------------------------------------------------------------------

 

 

Section 12.3     Disposition of Illiquid Assets. (a) Notwithstanding the other
provisions of this Article XII or any other provision herein to the contrary, if
(A) at any time the Assets consist exclusively of (1) Eligible Investments
(including Cash), and/or (2) one or more of the following: (i) 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 (x) the Issuer has not received a payment in
Cash during the preceding twelve (12) calendar months and (y) the Collateral
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 (12) calendar months or (ii) any asset, claim or other
property identified in a certificate of an officer of the Collateral Manager as
having a Market Value of less than U.S.$1,000 (the items described in clause
(a)(A)(2)(i) and (ii) each being an "Illiquid Asset"), or (B) at any time after
the Reinvestment Period any Assets are Illiquid Assets, then the Collateral
Manager may provide written direction to the Trustee to request (or retain
another bank or agent to request) bids with respect to each such Illiquid Asset
pursuant to Section 12.3(b) and to provide written notice to the Holders of
Notes requesting that any Holder of Notes that wishes to bid on any such
Illiquid Asset notify the Trustee (with a copy to the Collateral Manager) of
such intention within 15 Business Days after the date of such notice. The
Trustee (or another bank or agent retained by it) shall, after the end of such
15 Business Day period, offer the Illiquid Assets for public or private sale as
determined and directed by the Collateral Manager (including, in the case of a
private sale, to Persons, if any, identified to the Trustee by the Collateral
Manager) and, if any Holder of Notes so notifies the Trustee that it wishes to
bid, such Holder of Notes 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.

 

(b)     The Trustee (or another bank or agent retained by it) shall request bids
for the sale of each such Illiquid Asset from (i) at least three Persons
identified to the Trustee by the Collateral Manager that make a market in or
specialize in obligations of the nature of such Illiquid Asset, (ii) the
Collateral Manager, (iii) each Holder of Notes 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 (or other bank or agent retained by it) shall notify the Collateral
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 Collateral 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 (or other bank or
agent retained by it) shall dispose of the Illiquid Assets as directed by the
Collateral Manager in its reasonable business judgment, which may include (with
respect to each Illiquid Asset) (I) selling it to the highest bidder (which may
include the Collateral Manager and its Affiliates) if a bid was received; (II)
donating it to a charitable organization designated by the Collateral Manager or
(III) returning it to its issuer or Obligor for cancellation. The proceeds of
the sale of Illiquid Assets (after payment of fees and expenses of the Trustee
(or other bank or agent retained by it) and the Collateral Manager incurred in
connection with dispositions under the provisions described in this section), if
any, shall be applied in accordance with the Priority of Payments.

 

-217-

--------------------------------------------------------------------------------

 

 

(c)     The Trustee shall not dispose of Illiquid Assets in accordance with the
immediately preceding paragraph 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 Controlling Class or a
Majority of the Junior Subordinated Notes. 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.

 

(d)     Following any disposition of Illiquid Assets in accordance with
Section 12.3(a)(A), any remaining Assets held by the Issuer shall be liquidated
immediately prior to the Stated Maturity so that the net proceeds of such
liquidation shall be available on the Stated Maturity.

 

Section 12.4     Conditions Applicable to All Sale and Purchase Transactions.
(a) Any transaction effected under this Article XII or in connection with the
acquisition of additional Collateral Obligations during the Ramp-Up Period shall
be conducted on an arm's length basis and, if effected with a Person Affiliated
with the Collateral Manager, shall be effected in accordance with the
requirements of Section 5(f) of the Collateral Management Agreement; provided
that the Trustee shall have no responsibility to oversee compliance with this
clause (a) by the other parties.

 

(b)     Upon any acquisition of a Collateral Obligation pursuant to this
Article XII, all of the Issuer's right, title and interest to the Pledged
Obligation or Pledged Obligations shall be Granted to the Trustee pursuant to
this Indenture, such Pledged Obligations shall be Delivered to the Trustee.

 

(c)     Notwithstanding anything contained in this Article XII to the contrary,
the Issuer shall have the right to effect any sale of any Pledged Obligation or
purchase of any Collateral Obligation (x) that has been separately consented to
by Noteholders evidencing at least 75% of the Aggregate Outstanding Amount of
each Class of Notes, and (y) of which the Trustee and the Rating Agencies have
been notified.

 

(d)     If the Issuer and the Collateral Manager have received an Opinion of
Counsel of national reputation experienced in such matters (together with an
Officer's certificate of the Issuer or the Collateral Manager to the Trustee (on
which the Trustee may rely) that the Opinion of Counsel specified in this clause
has been received by the Issuer and the Collateral Manager) that the Issuer's
ownership of any specific Collateral Obligations or Eligible Investments would
cause the Issuer to be unable to comply with the "loan securitization" exclusion
from the definition of "covered fund" under the Volcker Rule, then
(i) notwithstanding Sections 12.1, 12.3 and 12.4, and without regard to the
limitations set forth in Section 12.1(f), the Collateral Manager shall take
commercially reasonable efforts to sell such Collateral Obligations or Eligible
Investments (excluding any Senior Secured Loan) and (ii) notwithstanding
Sections 12.2 and 12.4, the Collateral Manager shall not purchase any additional
Collateral Obligations or Eligible Investments of the type identified in such
Opinion of Counsel. The Trustee shall have no responsibility to independently
oversee compliance with this clause (d) by the Issuer or the Collateral Manager.

 

-218-

--------------------------------------------------------------------------------

 

 

ARTICLE XIII

NOTEHOLDERS' 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 Article XI of this Indenture. On any
Post-Acceleration Payment Date or on the Stated Maturity, all accrued and unpaid
interest on and outstanding principal of each Priority Class shall be paid
pursuant to Section 11.1(a)(iii) in full in Cash or, to the extent 100% of
Holders of the Class A Notes and a Majority of such Class of Secured Notes
consents, other than in Cash, before any further payment or distribution is made
on account of any Junior Class with respect thereto, to the extent and in the
manner provided in Section 11.1(a)(iii).

 

(b)     If 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 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. Nothing in this Section 13.1 shall affect
the obligation of the Issuer to pay Holders of any Junior Class of Notes.

 

(d)     The Holders of each Class of Notes agree, for the benefit of all Holders
of each Class of Notes, not to cause the filing of a petition in bankruptcy
against the Issuer, the Co-Issuer or any Issuer Subsidiary until the payment in
full of the Notes and not before one year and a day, or if longer, the
applicable preference period then in effect plus one day, has elapsed since such
payment.

 

-219-

--------------------------------------------------------------------------------

 

 

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.

 

Section 13.3     Provision of Information.

 

(a)     The Trustee shall provide to the Issuer and the Collateral Manager upon
reasonable request all reasonably available information in the possession of the
Trustee and specifically requested by the Issuer or the Collateral Manager (or
their respective agents) in connection with regulatory matters, including any
information that is necessary or advisable in order for the Issuer or the
Collateral Manager (or its parent or Affiliates) to comply with regulatory
requirements, including, for the avoidance of doubt, FATCA. The Trustee shall
provide to the Issuer and the Collateral Manager (or their respective agents)
upon request a list of Holders (including beneficial owners who have provided
the Trustee with a beneficial holder certificate substantially in the form of
Exhibit D for any purpose unless such beneficial owner has requested
confidential treatment of its identity). The Trustee shall obtain and provide to
the Issuer and the Collateral Manager (or their respective agents) upon request
a list of Agent Members holding positions in the Notes at the cost of the Issuer
as an Administrative Expense to the extent funds are available to pay such
expense.

 

(b)     Each purchaser of Notes, by its acceptance of an interest in Notes,
agrees to provide to the Issuer (or agents acting on its behalf) and the
Collateral Manager all information reasonably available to it that is reasonably
requested by the Collateral Manager in connection with regulatory matters,
including any information that is necessary or advisable in order for the
Collateral Manager (or its parent or Affiliates) to comply with regulatory
requirements applicable to the Collateral Manager from time to time.

 

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.

 

-220-

--------------------------------------------------------------------------------

 

 

Any certificate or opinion of an Officer of the Issuer, the Co-Issuer or the
Collateral Manager may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such Officer
knows, or should know that the certificate or opinion or representations with
respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Officer of the Issuer, Co-Issuer or the
Collateral 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 Co-Issuer, the Collateral Manager or any other Person, stating that
the information with respect to such factual matters is in the possession of the
Issuer, the Co-Issuer, the Collateral Manager or such other Person, unless such
Officer of the Issuer, Co-Issuer or the Collateral 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 Issuer or the Co-Issuer, stating that the information with
respect to such matters is in the possession of the Issuer or the Co-Issuer,
unless such counsel knows that the certificate or opinion or representations
with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

 

Whenever in this Indenture it is provided that the absence of the occurrence and
continuation of a Default or Event of Default is a condition precedent to the
taking of any action by the Trustee at the request or direction of either
Co-Issuer, then notwithstanding that the satisfaction of such condition is a
condition precedent to such Co-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 or Event of Default 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" 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
Co-Issuers, 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 or face amount, as the case may be, 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.

 

-221-

--------------------------------------------------------------------------------

 

 

(d)     Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder (and any
transferee thereof) of such Note and of every Note issued upon the registration
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by the Trustee or the Co-Issuers in reliance
thereon, whether or not notation of such action is made upon such Note.

 

Section 14.3     Notices, etc., to Trustee, the Co-Issuers, the Collateral
Administrator, the Collateral Manager, the Hedge Counterparty, the Paying Agent,
the Administrator and the Rating Agencies. (a) Any request, demand,
authorization, direction, instruction, order, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given, e-mailed or furnished to, or filed with:

 

(i)     the Trustee shall be sufficient for every purpose hereunder if in
writing and made, given, furnished or filed to and mailed, by certified mail,
return receipt requested, hand delivered, sent by overnight courier service
guaranteeing next day delivery or by facsimile in legible form, to the Trustee
addressed to it at its Corporate Trust Office, Attention: Global Corporate Trust
Services – JMP Credit Advisors CLO V Ltd., e-mail:
JMPCreditAdvisorsCLOV@usbank.com or at any other address previously furnished in
writing to the other parties hereto by the Trustee;

 

(ii)     the Co-Issuers shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and mailed, first class
postage prepaid, hand delivered, sent by overnight courier service or by
facsimile in legible form, to the Issuer addressed to it at the offices of the
Administrator at c/o Estera Trust (Cayman) Limited, Clifton House, 75 Fort
Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands; Attention: The
Directors, email: sf@estera.com, facsimile no: +1 (345) 949 4901; with a copy
to: JMP Credit Advisors LLC, 3440 Preston Ridge Road, Suite 350, Alpharetta,
Georgia 30005; Attention: Operations Manager, email: clo@jmpcredit.com, or to
the Co-Issuer addressed to it at c/o Puglisi & Associates, 850 Library Avenue,
Suite 204, Newark, Delaware 19711, or at any other address previously furnished
in writing to the other parties hereto by the Issuer or the Co-Issuer, as the
case may be, with a copy to the Collateral Manager at its address below;

 

(iii)     the Collateral Manager shall be sufficient for every purpose hereunder
if in writing and mailed, first class postage prepaid, hand delivered, sent by
overnight courier service or by facsimile in legible form, to the Collateral
Manager addressed to it at JMP Credit Advisors LLC, 3440 Preston Ridge Road,
Suite 350, Alpharetta, Georgia 30005; Attention: Operations Manager, email:
clo@jmpcredit.com, or at any other address previously furnished in writing to
the other parties hereto;

 

(iv)     BNPP shall be sufficient for every purpose hereunder if in writing and
mailed, first class postage prepaid, hand delivered, sent by overnight courier
service or by telecopy in legible form, addressed to 787 7th Avenue, New York,
New York, 10019, Attention: Fixed Income Structuring and Legal Dept., or at any
other address subsequently furnished in writing to the Co-Issuers and the
Trustee by BNPP;

 

-222-

--------------------------------------------------------------------------------

 

 

(v)     a Hedge Counterparty shall be sufficient for every purpose hereunder
(unless otherwise herein expressly provided) if in writing and mailed, first
class postage prepaid, hand delivered or sent by overnight courier service or by
facsimile in legible form to such Hedge Counterparty addressed to it at the
address specified in the relevant Hedge Agreement or at any other address
previously furnished in writing to the Issuer or the Trustee by such Hedge
Counterparty;

 

(vi)     subject to clause (d) below, the Rating Agencies shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first class postage prepaid, hand delivered, sent by
overnight courier service if to Moody's addressed to it at Moody's Investors
Service, Inc., 7 World Trade Center, New York, New York, 10007, Attention:
CBO/CLO Monitoring or by email to cdomonitoring@moodys.com and if to Fitch,
addressed to it at Fitch Ratings, Inc., 33 Whitehall Street, New York, New York
10004, Attention: Structured Credit or by email to
cdo.surveillance@fitchratings.com;

 

(vii)     the Collateral Administrator shall be sufficient for every purpose
hereunder if in writing and mailed, first class postage prepaid, hand delivered,
sent by overnight courier service or by email in legible form, to the Collateral
Administrator addressed to it at U.S. Bank National Association, 190 S. LaSalle
Street, Chicago, Illinois 60603, Attention: Global Corporate Trust Services –
JMP Credit Advisors CLO V Ltd., email: JMPCreditAdvisorsCLOV@usbank.com, or at
any other address previously furnished in writing to the other parties hereto;
and

 

(viii)     the Administrator 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 in legible form, to the
Administrator addressed to it at Estera Trust (Cayman) Limited, Clifton House,
75 Fort Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands; Attention:
The Directors, email: sf@estera.com, facsimile no: +1 (345) 949 4901.

 

(b)      Any request, demand, authorization, direction, order, notice, consent,
waiver or Act of Holders or other documents provided or permitted by this
Indenture, including the 17g-5 Information, to be made upon, given or furnished
to, or filed with any Rating Agency shall be given in accordance with, and
subject to, the provisions of Section 14.16 hereof and shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing to such Rating Agency by email to cdomonitoring@moodys.com or
cdo.surveillance@fitchratings.com, as applicable.

 

(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.

 

-223-

--------------------------------------------------------------------------------

 

 

(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 a website containing such information (with the exception
of the Accountant's Report or the Ramp-Up Period Accountant's Report).

 

(e)     The Bank (in each of its capacities) agrees to accept and act upon
instructions or directions pursuant to this Indenture or any document executed
in connection herewith 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 persons 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 properly given in accordance with Section
14.3(a)(i): (x) based on the Bank's reasonable understanding of the content of
such instructions, or (y) notwithstanding such instructions conflicting with or
being inconsistent with a subsequent written instruction. Subject to Section
6.1(c), any person providing such instructions or directions agrees to assume
all risks 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 it a commercially
reasonable degree of protection in light of its particular needs and
circumstances.

 

Section 14.4     Notices to Holders; Waiver. Except as otherwise expressly
provided herein, where this Indenture provides for notice to Holders of any
event,

 

(a)     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, as applicable, in
accordance with the procedures at DTC, as soon as reasonably practicable but in
any case not earlier than the earliest date and not later than the latest date,
prescribed for the giving of such notice; and

 

(b)     such notice shall be in the English language.

 

Such notices shall be deemed to have been given on the date of such mailing.

 

Except as specifically stated in Section 10.8, the Trustee shall deliver to the
Holders any information or notice relating to this Indenture 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.

 

-224-

--------------------------------------------------------------------------------

 

 

The Trustee shall deliver to any Holder of Notes or any Person that has
certified to the Trustee in a writing substantially in the form of Exhibit D to
this Indenture that it is the owner of a beneficial interest in a Global Note,
any information or notice requested to be so delivered by a Holder or a Person
that has made such certification that is reasonably available to the Trustee and
all related costs will be borne by the requesting Holder or Person.

 

Neither the failure to mail 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.

 

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.

 

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 Co-Issuers shall bind their respective successors and assigns,
whether so expressed or not.

 

Section 14.7     Separability. Except to the extent prohibited by applicable
law, in case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

Section 14.8     Benefits of Indenture. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the Collateral Manager, the Holders of
the Notes, the Collateral Administrator and (to the extent provided herein) the
Administrator (solely in its capacity as such) and the other Secured Parties any
benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 14.9     Intentionally Omitted.

 

Section 14.10     Governing Law. THIS INDENTURE AND EACH NOTE AND ANY CLAIM,
CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT, THE
RELATIONSHIP OF THE PARTIES, AND/OR THE INTERPRETATION AND ENFORCEMENT OF THE
RIGHTS AND DUTIES OF THE PARTIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED IN ALL RESPECTS (WHETHER IN CONTRACT OR IN TORT) BY THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS.

 

-225-

--------------------------------------------------------------------------------

 

 

Section 14.11     Submission to Jurisdiction. The Co-Issuers hereby irrevocably
submit to the non-exclusive jurisdiction of any New York State or federal 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
Co-Issuers hereby irrevocably agree that all claims in respect of such action or
Proceeding may be heard and determined in such New York State or federal court.
The Co-Issuers hereby irrevocably waive, to the fullest extent that they may
legally do so, the defense of an inconvenient forum to the maintenance of such
action or Proceeding and further waives the right to object, with respect to
such Proceeding, that such court does not have any jurisdiction over such party.
The Co-Issuers irrevocably consent to the service of any and all process in any
action or Proceeding by the mailing or delivery of copies of such process to it
at the office of the Co-Issuers' agent set forth in Section 7.2. The Co-Issuers
agree that a final judgment in any such action or Proceeding shall be conclusive
and may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.

 

Section 14.12     Counterparts. This Indenture (and each amendment, modification
and waiver in respect of it) and the Notes may be executed and delivered in any
number of counterparts (including by electronic mail or facsimile transmission),
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. Delivery
of an executed counterpart signature page of this Indenture by electronic mail
(PDF) or telecopy shall be effective as delivery of a manually executed
counterpart of this Indenture.

 

Section 14.13     Acts of Issuer. Any report, information, communication,
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 Collateral Manager on
the Issuer's behalf.

 

-226-

--------------------------------------------------------------------------------

 

 

Section 14.14     Confidential Information. (a) The Trustee, the Collateral
Administrator and each Holder of Notes shall maintain the confidentiality of all
Confidential Information in good faith using the highest degree of skill and
attention to maintain the confidentiality of all Confidential Information and
each such Person shall take all reasonable steps to protect the Confidential
Information of third parties delivered to such Person; provided that such Person
may deliver or disclose Confidential Information to: (i) such Person's
directors, trustees, managers, members, officers, employees, agents, attorneys
and affiliates who agree to hold confidential the Confidential Information
substantially in accordance with the terms of this Section 14.14 and to the
extent such disclosure is reasonably required for the administration of this
Indenture, the matters contemplated hereby or the investment represented by the
Notes; (ii) such Person's legal advisors, financial advisors, auditors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 14.14 and
to the extent such disclosure is reasonably required for the administration of
this Indenture, the matters contemplated hereby or the investment represented by
the Notes; (iii) any other Holder, or any of the other parties to this
Indenture, the Collateral Management Agreement or the Collateral Administration
Agreement; (iv) any Person of the type that would be, to such Person's
knowledge, permitted to acquire Notes in accordance with the requirements of
Section 2.6 hereof to which such Person sells or offers to sell any such Note or
any part thereof (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this
Section 14.14); (v) any other Person from which such former Person offers to
purchase any security of the Co-Issuers (if such other Person has agreed in
writing prior to its receipt of such Confidential Information to be bound by the
provisions of this Section 14.14); (vi) any Federal or state or other
regulatory, governmental or judicial authority having jurisdiction over such
Person; (vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about the investment portfolio of such Person, reinsurers and
liquidity and credit providers that agree to hold confidential the Confidential
Information substantially in accordance with this Section 14.14; (viii) the
Rating Agencies; (ix) any other Person with the written consent of the
Co-Issuers and the Collateral Manager; (x) any other disclosure that is
permitted or required under this Indenture or the Collateral Administration
Agreement; or (xi) any other Person to which such delivery or disclosure may be
necessary or appropriate (A) to effect compliance with any law, rule, regulation
or order applicable to such Person, (B) in response to any subpoena or other
legal process upon prior notice to the Co-Issuers (unless prohibited by
applicable law, rule, order or decree or other requirement having the force of
law), (C) in connection with any litigation to which such Person is a party upon
prior notice to the Co-Issuers (unless prohibited by applicable law, rule, order
or decree or other requirement having the force of law), (D) if an Event of
Default has occurred and is continuing, to the extent such Person may reasonably
determine such delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under the Notes or
this Indenture or (E) in the Trustee's or Collateral Administrator's performance
of its obligations under this Indenture, the Collateral Administration Agreement
or other transaction documents related thereto; provided, further, that delivery
to Holders by the Trustee or the Collateral Administrator of any report or
information required by the terms of this Indenture to be provided to Holders
shall not be a violation of this Section 14.14. Each Holder of Notes agrees,
except as set forth in clauses (vi), (vii) and (x) 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 14.14. 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 of a Note, by its acceptance of a Note
shall be deemed to have agreed to be bound by and to be entitled to the benefits
of this Section 14.14. Notwithstanding the foregoing, the Trustee, the
Collateral Administrator, the Holders and beneficial owners of the Notes (and
each of their respective employees, representatives or other agents) may
disclose to any and all Persons, without limitation of any kind, the U.S.
federal, state and local income tax treatment of the Issuer and the transactions
contemplated by this Indenture and all materials of any kind (including opinions
or other tax analyses) that are provided to them relating to such U.S. federal,
state and local income tax treatment.

 

(b)     For the purposes of this Section 14.14, "Confidential Information" means
information delivered to the Trustee, the Collateral Administrator or any Holder
of Notes by or on behalf of the Co-Issuers 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 Co-Issuers or (y) to the knowledge of the Trustee, the
Collateral Administrator or a Holder, as the case may be, as a result of the
breach of a fiduciary duty to the Co-Issuers or a contractual duty to the
Co-Issuers; or (iv) is allowed to be treated as non-confidential by consent of
the Co-Issuers.

 

-227-

--------------------------------------------------------------------------------

 

 

(c)     Notwithstanding the foregoing, the Trustee and the Collateral
Administrator may disclose Confidential Information to the extent disclosure may
be required by law or by any regulatory or governmental authority and the
Trustee and the Collateral Administrator may disclose on a confidential basis
any Confidential Information to its agents, attorneys and auditors in connection
with the performance of its responsibilities hereunder and the Trustee may make
available to Intex Solutions, Inc. the information specified in Section 10.6(i).

 

Section 14.15     Liability of Co-Issuers. Notwithstanding any other terms of
this Indenture, the Notes or any other agreement entered into between, inter
alia, the Co-Issuers or otherwise, neither of the Co-Issuers shall have any
liability whatsoever to the other of the Co-Issuers under this Indenture, the
Notes, any such agreement or otherwise and, without prejudice to the generality
of the foregoing, neither of the Co-Issuers shall be entitled to take any action
to enforce, or bring any action or Proceeding, in respect of this Indenture, the
Notes, any such agreement or otherwise against the other of the Co-Issuers. In
particular, neither of the Co-Issuers shall be entitled to petition or take any
other steps for the winding up or bankruptcy of the other of the Co-Issuers or
shall have any claim in respect to any assets of the other of the Co-Issuers.

 

Section 14.16     17g-5 Information.

 

(a)     To enable the Rating Agencies to comply with their obligations under
Rule 17g-5 promulgated under the Exchange Act ("Rule 17g-5"), the Information
Agent shall post on a password-protected internet website, in accordance with
the provisions hereof and of the Collateral Management Agreement, all
information (which shall not include any Accountants' Report) the Issuer
provides to the Rating Agencies for the purposes of determining the initial
credit rating of the Notes or undertaking credit rating surveillance of the
Notes (the "17g-5 Information"). In the case of information provided for the
purposes of undertaking credit rating surveillance of the Notes, such
information shall be posted on a password-protected internet website in
accordance with the procedures set forth in Section 14.16(b). The Issuer shall
appoint the Collateral Manager as the information agent (the "Information
Agent") pursuant to the Collateral Management Agreement and the sole duty of the
Information Agent shall be to post such information to the 17g-5 Website in
accordance with the terms of the Collateral Management Agreement.

 

(b)     (i) To the extent that a Rating Agency makes an inquiry or initiates
communications with the Issuer, the Collateral Administrator, the Trustee or the
Collateral Manager that is relevant to such Rating Agency's credit rating
surveillance of the Notes, all responses to such inquiries or communications
from such Rating Agency shall be formulated in writing by the responding party
or its representative or advisor and shall be provided to the Information Agent
who shall promptly post such written response to the 17g-5 Website in accordance
with the procedures set forth in Section 14.16(b)(iv) and the Collateral
Management Agreement.

 

-228-

--------------------------------------------------------------------------------

 

 

(ii) To the extent that any of the Issuer, the Collateral Manager, the
Collateral Administrator or the Trustee is required to provide any information
to, or communicate with, any Rating Agency in accordance with its obligations
under this Indenture or the Collateral Management Agreement, the Issuer, the
Collateral Manager, the Collateral Administrator or the Trustee, as applicable
(or their respective representatives or advisors), shall provide such
information or communication to the Information Agent by e-mail at
loanaccounting@jmpcredit.com, which the Information Agent shall promptly post to
the 17g-5 Website in accordance with the procedures set forth in Section
14.16(b)(iv) and the Collateral Management Agreement.

 

(iii) The Issuer and the Collateral Manager (and their respective
representatives and advisors) shall be permitted (but shall not be required) to
orally communicate with the Rating Agencies regarding any Collateral Obligation
or the Notes; provided that such party summarizes the information provided to
the Rating Agencies in such communication and provides the Information Agent
with such summary in accordance with the procedures set forth in this Section
14.16 within one Business Day of such communication taking place. The
Information Agent shall post such summary on the 17g-5 Website in accordance
with the procedures set forth in Section 14.16(b)(iv) and the Collateral
Management Agreement. For the avoidance of doubt, neither audio nor video
recordings shall be delivered to the Information Agent and if such recordings
are delivered to the Information Agent, the Information Agent is not required to
post such recordings on the 17g-5 Website unless it otherwise consents.

 

(iv) All information to be made available to the Rating Agencies pursuant to
this Section 14.16(b) shall be made available on the 17g-5 Website. Information
will be posted by the Information Agent on the same Business Day of receipt
provided that such information is received by the Information Agent by 12:00
p.m. (Eastern time) or, if received after 12:00 p.m. (Eastern time), on the next
Business Day in accordance with Collateral Management Agreement. The Information
Agent shall have no obligation or duty to verify, confirm or otherwise determine
whether the information being delivered is accurate, complete, conforms to the
transaction or otherwise is or is not anything other than what it purports to
be. In the event that any information is delivered or posted in error, the
Collateral Manager on the Issuer's behalf may cause it to be removed from the
17g-5 Website. None of the Trustee, the Collateral Manager, the Collateral
Administrator or the Information Agent shall have obtained or shall be deemed to
have obtained actual knowledge of any information solely due to receipt and
posting to the 17g-5 Website. Access will be provided by the Issuer or the
Collateral Manager (on the Issuer's behalf) to (A) any NRSRO (other than the
Rating Agencies) upon receipt by the Issuer and the Collateral Manager of an
NRSRO Certification from such NRSRO (which may be submitted electronically via
the 17g-5 Website) and (B) the Rating Agencies, without submission of an NRSRO
Certification. Questions regarding delivery of information to the Information
Agent may be directed to the Information Agent.

 

-229-

--------------------------------------------------------------------------------

 

 

(v) In connection with providing access to the 17g-5 Website, the Issuer and/or
the Collateral Manager may require registration and the acceptance of a
disclaimer. The Information Agent, the Issuer and the Collateral Manager shall
not be liable for unauthorized disclosure of any information that it
disseminates in accordance with this Section 14.16(b) and solely in respect of
the Information Agent, the Collateral Management Agreement and makes no
representations or warranties as to the accuracy or completeness of information
made available on the 17g-5 Website. The Information Agent shall not be liable
for its failure to make any information available to the Rating Agencies or
NRSROs unless such information was delivered to the Information Agent at the
email address set forth in Section 14.16(b)(ii) and in accordance with the
Collateral Management Agreement.

 

(vi) For the avoidance of doubt, no report of Independent certified public
accountants (including, without limitation, any Ramp-Up Period Accountants'
Report) shall be provided to or otherwise shared with any Rating Agency and
under no circumstances shall any such report be posted to the 17g-5 Website.

 

(vii) 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 Secured Notes or
undertaking credit rating surveillance of the Secured Notes with any Rating
Agency or any of its respective officers, directors or employees.

 

(viii) The Trustee will not be responsible for creating 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.

 

(ix) 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 the Co-Issuers, the Rating Agencies, an NRSRO, any of
their respective agents or any other party. None of the Information Agent, the
Collateral Manager or the Trustee shall be liable for the use of the information
posted on the 17g-5 Website, whether by the Co-Issuers, the Rating Agencies, an
NRSRO or any other third party that may gain access to the 17g-5 Website or the
information posted thereon.

 

(x) 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.

 

-230-

--------------------------------------------------------------------------------

 

 

Section 14.17     Moody's Rating Condition. (a) Notwithstanding the terms of the
Collateral Management Agreement, any Hedge Agreement or other provisions of this
Indenture, if any action under the Collateral Management Agreement, any Hedge
Agreement or this Indenture requires satisfaction of the Moody's Rating
Condition as a condition precedent to such action, if the party (the "Requesting
Party") required to obtain satisfaction of such condition has made a request to
Moody's for satisfaction of such condition and, within 10 Business Days of such
request being posted to the 17g-5 Website, Moody's has not replied to such
request or has responded in a manner that indicates that Moody's is neither
reviewing such request nor waiving the requirement for satisfaction of such
condition, then such Requesting Party shall be required to confirm that Moody's
has received the request, and, if it has, promptly (but in no event later than
one Business Day thereafter) request satisfaction of the related condition
again.

 

(b)     Any request for satisfaction of any such condition described in
Section 14.17(a) made by the Issuer (or Collateral Manager on its behalf),
Co-Issuer or Trustee, as applicable, pursuant to this Indenture, shall be made
in writing, which writing shall contain a cover page indicating the nature of
the request for satisfaction of such condition, and shall contain all back-up
material necessary for Moody's to process such request. Such written request for
satisfaction of such condition shall be provided in electronic format to the
Information Agent for posting on the 17g-5 Website in accordance with
Section 14.16 hereof, and after receiving actual knowledge of such posting
(which may be in the form of an automatic email notification of posting
delivered by the 17g-5 Website to such party), the Issuer (or the Collateral
Manager on its behalf), Co-Issuer or Trustee, as applicable, shall send the
request for satisfaction of such condition to Moody's in accordance with the
delivery instructions set forth in Section 14.3(b).

 

Section 14.18     Waiver of Jury Trial. THE TRUSTEE, THE HOLDERS AND EACH OF THE
CO-ISSUERS EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE
EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS INDENTURE, THE NOTES OR ANY OTHER RELATED DOCUMENTS, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN), OR ACTIONS OF THE TRUSTEE OR EITHER OF THE CO-ISSUERS. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE TRUSTEE AND THE CO-ISSUERS TO ENTER INTO THIS
INDENTURE.

 

Section 14.19     Escheat. In the absence of a written request from the
Co-Issuers to return unclaimed funds to the Co-Issuers, the Trustee may from
time to time following the final Payment Date with respect to the Securities
deliver all unclaimed funds to the Issuer or as directed by applicable escheat
authorities, as determined by the Trustee in its sole discretion, in accordance
with the customary practices and procedures of the Trustee. Any unclaimed funds
held by the Trustee pursuant to this Section 14.19 shall be held uninvested and
without any liability for interest.

 

-231-

--------------------------------------------------------------------------------

 

 

Section 14.20     Records. For the term of the Notes, copies of the Memorandum
and Articles of Association of the Issuer, the Certificate of Formation and
Limited Liability Company Agreement of the Co-Issuer, the Collateral Management
Agreement and this Indenture shall be available for inspection by the Holders of
the Notes in electronic form at the Corporate Trust Office of the Trustee upon
prior written request and during normal business hours of the Trustee.

 

ARTICLE XV

ASSIGNMENT OF COLLATERAL MANAGEMENT AGREEMENT

 

Section 15.1     Assignment of Collateral Management Agreement. (a) The Issuer
hereby acknowledges that its Grant pursuant to the first Granting Clause hereof
includes all of the Issuer's estate, right, title and interest in, to and under
the Collateral Management Agreement, including (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
Collateral 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 that except as otherwise expressly set forth
in this Indenture, the Trustee shall not have the authority to exercise any of
the rights set forth in (i) through (iv) above or that may otherwise arise as a
result of the Grant until the Trustee has commenced exercising remedies in
accordance with Section 5.4.

 

(b)     The assignment made hereby is executed as collateral security, and the
execution and delivery hereby shall not in any way impair or diminish the
obligations of the Issuer under the provisions of the Collateral Management
Agreement, or increase, impair or alter the rights and obligations of the
Collateral Manager under the Collateral Management Agreement, nor shall any of
the obligations contained in the Collateral Management Agreement be imposed on
the Trustee.

 

(c)     Upon the retirement of the Notes, the payment of all amounts required to
be paid pursuant to the Priority of Payments and the release of the Assets from
the lien of this Indenture, this assignment and all rights herein assigned to
the Trustee for the benefit of the Noteholders shall cease and terminate and all
the estate, right, title and interest of the Trustee in, to and under the
Collateral Management Agreement shall revert to the Issuer and no further
instrument or act shall be necessary to evidence such termination and reversion.

 

(d)     The Issuer represents that the Issuer has not executed any other
assignment of the Collateral Management Agreement.

 

(e)     The Issuer agrees that this assignment is irrevocable and that it shall
not take any action which is inconsistent with this assignment or makes any
other assignment inconsistent herewith. The Issuer shall, from time to time upon
the request of the Trustee, execute all instruments of further assurance and all
such supplemental instruments with respect to this assignment.

 

(f)     The Issuer hereby agrees that the Issuer shall not enter into any
agreement amending, modifying or terminating the Collateral Management Agreement
except in accordance with the terms of the Collateral Management Agreement.

 

-232-

--------------------------------------------------------------------------------

 

 

ARTICLE XVI

HEDGE AGREEMENTS

 

Section 16.1     Hedge Agreements. (a) The Issuer may enter into Hedge
Agreements from time to time on and after the Closing Date solely for the
purpose of managing interest rate and foreign exchange risks in connection with
the Issuer's issuance of, and making payments on, the Notes. The Issuer shall
provide prior notice of the entry into any Hedge Agreement to the Trustee, the
Collateral Administrator and the Rating Agencies. Notwithstanding anything to
the contrary contained in this Indenture, the Issuer (or the Collateral Manager
on behalf of the Issuer) shall not enter into any Hedge Agreement unless (x) the
Global Rating Agency Condition has been satisfied with respect thereto (so long
as a Rating Agency is then rating a Class of Notes) and (y) the hedging
arrangement contemplated by such Hedge Agreement constitutes an interest rate or
foreign exchange derivative and the terms of such derivative relate to the Notes
and reduce the interest rate or foreign exchange risks related to the Notes in
compliance with the "loan securitization" exclusion under the Volcker Rule. The
Issuer shall provide a copy of each Hedge Agreement to the Rating Agencies. The
Issuer may enter into Hedge Agreements on or after the Closing Date, solely for
the purpose of managing interest rate and foreign exchange risks in connection
with the Issuer's issuance of, and making payments on, the Notes; provided, that
the Issuer will not enter into or amend any Hedge Agreement unless it obtains:

 

(i)       the prior written consent of a Majority of the Controlling Class;

 

(ii)      a certification from the Collateral Manager that (x) the written terms
of the derivative directly relate to the Collateral Obligations and the Notes
and (y) such derivative reduces the interest rate and/or foreign exchange risks
related to the Collateral Obligations and the Notes; and

 

(iii)     (x) the advice of Allen & Overy LLP, Katten Muchin Rosenman LLP or an
opinion of other nationally recognized counsel approved by the Initial Purchaser
that entering into such Hedge Agreement will not cause the Issuer to be
considered a "commodity pool" as defined in Section 1a(10) of the CEA, or
(y) the Issuer will be operated such that the Collateral Manager and/or such
other relevant party to the transaction, as applicable, will be eligible for an
exemption from registration as a "commodity pool operator" and a "commodity
trading advisor" under the CEA and all conditions precedent to obtaining such an
exemption have been satisfied.

 

For so long as the Issuer and, if applicable, the Collateral Manager are subject
to clause (ii) above, the Issuer and, as applicable, the Collateral Manager
shall take all action necessary to ensure ongoing compliance with the applicable
exemption from registration under the CEA. The reasonable fees, costs, charges
and expenses incurred by the Issuer and the Collateral Manager (including
reasonable attorneys', accountants' and other professional fees and expenses) in
connection with these requirements shall be paid as Administrative Expenses.

 

-233-

--------------------------------------------------------------------------------

 

 

Each Hedge Agreement shall contain appropriate limited recourse and non-petition
provisions equivalent (mutatis mutandis) to those contained in Section 2.8(i)
and Section 5.4(d). Each Hedge Counterparty shall be required to have, at the
time that any Hedge Agreement to which it is a party is entered into, the
Required Hedge Counterparty Ratings (so long as a Rating Agency is then rating a
Class of Notes) unless credit support is provided as set forth in the Hedge
Agreement. Payments with respect to Hedge Agreements shall be subject to
Article XI. Each Hedge Agreement shall contain an acknowledgement by the Hedge
Counterparty that the obligations of the Issuer to the Hedge Counterparty under
the relevant Hedge Agreement shall be payable in accordance with Article XI of
this Agreement.

 

(b)     In the event of any early termination of a Hedge Agreement with respect
to which the Hedge Counterparty is the sole "defaulting party" or "affected
party" (each as defined in the Hedge Agreements), (i) any termination payment
paid by the Hedge Counterparty to the Issuer may be paid to a replacement Hedge
Counterparty at the direction of the Collateral Manager and (ii) any payment
received from a replacement Hedge Counterparty may be paid to the replaced Hedge
Counterparty at the direction of the Collateral Manager under the terminated
Hedge Agreement.

 

(c)     The Issuer (or the Collateral Manager on its behalf) shall, upon
receiving written notice of the exposure calculated under a credit support annex
to any Hedge Agreement, if applicable, make a demand to the relevant Hedge
Counterparty and its credit support provider, if applicable, for securities
having a value under such credit support annex equal to the required credit
support amount.

 

(d)      Each Hedge Agreement shall, at a minimum, permit the Issuer to
terminate such agreement (with the Hedge Counterparty bearing the costs of any
replacement Hedge Agreement) if such Hedge Counterparty fails to do any of the
following as and when applicable.

 

If any Moody's rating of the Hedge Counterparty (or its guarantor under the
Hedge Agreement) is downgraded to

 

(i)     the first trigger level or lower (but above the second trigger level),
such Hedge Counterparty must provide Hedge Counterparty Credit Support or, at
its own cost, assign the Hedge Agreement to a Hedge Counterparty that meets the
Required Hedge Counterparty Rating of Moody's within 30 days; and

 

(ii)    the second trigger level or lower, or if the rating of the Hedge
Counterparty (or its guarantor under the Hedge Agreement) is withdrawn, such
Hedge Counterparty must, at its own cost, assign the Hedge Agreement to a Hedge
Counterparty and if such assignment has not been accomplished within 30 days,
provide Hedge Counterparty Credit Support pending such assignment.

 

Moody's Trigger Level

 

Short-term/long-term

 

Long-term (no short-term)

First

 

P-2/A3

 

A2

Second

 

P-3/Baa1

 

Baa1

 

-234-

--------------------------------------------------------------------------------

 

 

(e)     The Issuer shall give prompt notice to the Rating Agencies of any
termination or amendment of a Hedge Agreement or agreement to provide Hedge
Counterparty Credit Support. Any collateral received from a Hedge Counterparty
under a Hedge Agreement shall be deposited in the Hedge Counterparty Collateral
Account.

 

(f)     If a Hedge Counterparty has defaulted in the payment when due of its
obligations to the Issuer under the Hedge Agreement, promptly after an
Authorized Officer becomes aware thereof the Collateral Manager shall make a
demand on the Hedge Counterparty (or its guarantor under the Hedge Agreement)
with a copy to the Trustee, demanding payment by the close of business on such
date (or by such time on the next succeeding Business Day if such knowledge is
obtained after 11:30 a.m., New York time).

 

(g)     Each Hedge Agreement shall provide that it may not be terminated due to
the occurrence of an Event of Default until liquidation of the Collateral has
commenced.

 

[Signature page follows]

 

-235-

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, we have set our hands as of the day and year first written
above.

 

 

 

EXECUTED AS A DEED BY

 

JMP CREDIT ADVISORS CLO V LTD., as

Issuer

 

 

 

By:

        /s/ :  Nicholas Swartz

    Name:  Nicholas Swartz
Title:    Director

 

      In the presence of:                   /s/ :  Jacqueline Bentley   Witness:
Name:  Jacqueline Bentley
Title:    Corporate Secretary          

JMP CREDIT ADVISORS CLO V LLC, as

Co-Issuer

 

 

 

 

By:

        /s/ :  Donald J. Puglisi

    Name:  Donald J. Puglisi
Title:    Independent Manager              

U.S. BANK NATIONAL ASSOCIATION, as

Trustee

                    By:         /s/ :  Elaine Mah     Name:  Elaine P. Mah
Title:    Senior Vice President

 

 

 

[Signature Page to Indenture]

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE 1

MOODY'S INDUSTRY CLASSIFICATION GROUP LIST

 

1. Aerospace & Defense

2.

Automotive

3.

Banking, Finance, Insurance & Real Estate

4.

Beverage, Food & Tobacco

5.

Capital Equipment

6.

Chemicals, Plastics & Rubber

7.

Construction & Building

8.

Consumer goods: Durable

9.

Consumer goods: Non-durable

10.

Containers, Packaging & Glass

11.

Energy: Electricity

12.

Energy: Oil & Gas

13.

Environmental Industries

14.

Forest Products & Paper

15.

Healthcare & Pharmaceuticals

16.

High Tech Industries

17.

Hotel, Gaming & Leisure

18.

Media: Advertising, Printing & Publishing

19.

Media: Broadcasting & Subscription

20.

Media: Diversified & Production

21.

Metals & Mining

22.

Retail

23.

Services: Business

24.

Services: Consumer

25.

Sovereign & Public Finance

26.

Telecommunications

27.

Transportation: Cargo

28.

Transportation: Consumer

29.

Utilities: Electric

30.

Utilities: Oil & Gas

31.

Utilities: Water

32.

Wholesale

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE 2

 

S&P INDUSTRY CLASSIFICATIONS

 

Asset Type Code

 

Asset Type Description

1020000

 

Energy Equipment & Services

1030000

 

Oil, Gas & Consumable Fuels

1033403

 

Mortgage REITs

2020000

 

Chemicals

2030000

 

Construction Materials

2040000

 

Containers & Packaging

2050000

 

Metals & Mining

2060000

 

Paper & Forest Products

3020000

 

Aerospace & Defense

3030000

 

Building Products

3040000

 

Construction & Engineering

3050000

 

Electrical Equipment

3060000

 

Industrial Conglomerates

3070000

 

Machinery

3080000

 

Trading Companies & Distributors

3110000

 

Commercial Services & Supplies

9612010

 

Professional Services

3210000

 

Air Freight & Logistics

3220000

 

Airlines

3230000

 

Marine

3240000

 

Road & Rail

3250000

 

Transportation Infrastructure

4011000

 

Auto Components

4020000

 

Automobiles

4110000

 

Household Durables

4120000

 

Leisure Products

4130000

 

Textiles, Apparel & Luxury Goods

4210000

 

Hotels, Restaurants & Leisure

9551701

 

Diversified Consumer Services

4310000

 

Media

4410000

 

Distributors

4420000

 

Internet and Catalog Retail

4430000

 

Multiline Retail

4440000

 

Specialty Retail

5020000

 

Food & Staples Retailing

5110000

 

Beverages

5120000

 

Food Products

5130000

 

Tobacco

5210000

 

Household Products

5220000

 

Personal Products

6020000

 

Health Care Equipment & Supplies

6030000

 

Health Care Providers & Services

9551729

 

Health Care Technology

6110000

 

Biotechnology

6120000

 

Pharmaceuticals

9551727

 

Life Sciences Tools & Services

7011000

 

Banks

7020000

 

Thrifts & Mortgage Finance

7110000

 

Diversified Financial Services

7120000

 

Consumer Finance

7130000

 

Capital Markets

7210000

 

Insurance

7311000

 

Equity REITs

 

 

--------------------------------------------------------------------------------

 

 

7310000

 

Real Estate Management & Development

8020000

 

Internet Software & Services

8030000

 

IT Services

8040000

 

Software

8110000

 

Communications Equipment

8120000

 

Technology Hardware, Storage & Peripherals

8130000

 

Electronic Equipment, Instruments & Components

8210000

 

Semiconductors & Semiconductor Equipment

9020000

 

Diversified Telecommunication Services

9030000

 

Wireless Telecommunication Services

9520000

 

Electric Utilities

9530000

 

Gas Utilities

9540000

 

Multi-Utilities

9550000

 

Water Utilities

9551702

 

Independent Power and Renewable Electricity Producers

PF1

 

Project finance: industrial equipment

PF2

 

Project finance: leisure and gaming

PF3

 

Project finance: natural resources and mining

PF4

 

Project finance: oil and gas

PF5

 

Project finance: power

PF6

 

Project finance: public finance and real estate

PF7

 

Project finance: telecommunications

PF8

 

Project finance: transport

  PF1000-PF1099

 

Reserved

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE 3

DIVERSITY SCORE CALCULATION

 

The Diversity Score is calculated as follows:

 

(a)     An "Issuer Par Amount" is calculated for each issuer of a Collateral
Obligation, and is equal to the Aggregate Principal Balance of all the
Collateral Obligations issued by that issuer and all affiliates.

 

(b)     An "Average Par Amount" is calculated by summing the Issuer Par Amounts
for all issuers, and dividing by the number of issuers.

 

(c)     An "Equivalent Unit Score" is calculated for each issuer, and is equal
to the lesser of (x) one and (y) the Issuer Par Amount for such issuer divided
by the Average Par Amount.

 

(d)     An "Aggregate Industry Equivalent Unit Score" is then calculated for
each of the Moody's Industry Classifications, shown on Schedule 1, and is equal
to the sum of the Equivalent Unit Scores for each issuer in such industry
classification group.

 

 

--------------------------------------------------------------------------------

 

 

(e)     An "Industry Diversity Score" is then established for each Moody's
Industry Classification, shown on Schedule 1, by reference to the following
table for the related Aggregate Industry Equivalent Unit Score; provided that if
any Aggregate Industry Equivalent Unit Score falls between any two such scores,
the applicable Industry Diversity Score shall be the lower of the two Industry
Diversity Scores:

 

Aggregate

Industry

Equivalent

Unit Score

 

Industry

Diversity

Score

 

Aggregate

Industry

Equivalent

Unit Score

 

Industry

Diversity

Score

 

Aggregate

Industry

Equivalent

Unit Score

 

Industry

Diversity

Score

 

Aggregate

Industry

Equivalent

Unit Score

 

Industry

Diversity

Score

0.0000

 

0.0000

 

5.0500

 

2.7000

 

10.1500

 

4.0200

 

15.2500

 

4.5300

0.0500

 

0.1000

 

5.1500

 

2.7333

 

10.2500

 

4.0300

 

15.3500

 

4.5400

0.1500

 

0.2000

 

5.2500

 

2.7667

 

10.3500

 

4.0400

 

15.4500

 

4.5500

0.2500

 

0.3000

 

5.3500

 

2.8000

 

10.4500

 

4.0500

 

15.5500

 

4.5600

0.3500

 

0.4000

 

5.4500

 

2.8333

 

10.5500

 

4.0600

 

15.6500

 

4.5700

0.4500

 

0.5000

 

5.5500

 

2.8667

 

10.6500

 

4.0700

 

15.7500

 

4.5800

0.5500

 

0.6000

 

5.6500

 

2.9000

 

10.7500

 

4.0800

 

15.8500

 

4.5900

0.6500

 

0.7000

 

5.7500

 

2.9333

 

10.8500

 

4.0900

 

15.9500

 

4.6000

0.7500

 

0.8000

 

5.8500

 

2.9667

 

10.9500

 

4.1000

 

16.0500

 

4.6100

0.8500

 

0.9000

 

5.9500

 

3.0000

 

11.0500

 

4.1100

 

16.1500

 

4.6200

0.9500

 

1.0000

 

6.0500

 

3.0250

 

11.1500

 

4.1200

 

16.2500

 

4.6300

1.0500

 

1.0500

 

6.1500

 

3.0500

 

11.2500

 

4.1300

 

16.3500

 

4.6400

1.1500

 

1.1000

 

6.2500

 

3.0750

 

11.3500

 

4.1400

 

16.4500

 

4.6500

1.2500

 

1.1500

 

6.3500

 

3.1000

 

11.4500

 

4.1500

 

16.5500

 

4.6600

1.3500

 

1.2000

 

6.4500

 

3.1250

 

11.5500

 

4.1600

 

16.6500

 

4.6700

1.4500

 

1.2500

 

6.5500

 

3.1500

 

11.6500

 

4.1700

 

16.7500

 

4.6800

1.5500

 

1.3000

 

6.6500

 

3.1750

 

11.7500

 

4.1800

 

16.8500

 

4.6900

1.6500

 

1.3500

 

6.7500

 

3.2000

 

11.8500

 

4.1900

 

16.9500

 

4.7000

1.7500

 

1.4000

 

6.8500

 

3.2250

 

11.9500

 

4.2000

 

17.0500

 

4.7100

1.8500

 

1.4500

 

6.9500

 

3.2500

 

12.0500

 

4.2100

 

17.1500

 

4.7200

1.9500

 

1.5000

 

7.0500

 

3.2750

 

12.1500

 

4.2200

 

17.2500

 

4.7300

2.0500

 

1.5500

 

7.1500

 

3.3000

 

12.2500

 

4.2300

 

17.3500

 

4.7400

2.1500

 

1.6000

 

7.2500

 

3.3250

 

12.3500

 

4.2400

 

17.4500

 

4.7500

2.2500

 

1.6500

 

7.3500

 

3.3500

 

12.4500

 

4.2500

 

17.5500

 

4.7600

2.3500

 

1.7000

 

7.4500

 

3.3750

 

12.5500

 

4.2600

 

17.6500

 

4.7700

2.4500

 

1.7500

 

7.5500

 

3.4000

 

12.6500

 

4.2700

 

17.7500

 

4.7800

2.5500

 

1.8000

 

7.6500

 

3.4250

 

12.7500

 

4.2800

 

17.8500

 

4.7900

2.6500

 

1.8500

 

7.7500

 

3.4500

 

12.8500

 

4.2900

 

17.9500

 

4.8000

2.7500

 

1.9000

 

7.8500

 

3.4750

 

12.9500

 

4.3000

 

18.0500

 

4.8100

2.8500

 

1.9500

 

7.9500

 

3.5000

 

13.0500

 

4.3100

 

18.1500

 

4.8200

2.9500

 

2.0000

 

8.0500

 

3.5250

 

13.1500

 

4.3200

 

18.2500

 

4.8300

3.0500

 

2.0333

 

8.1500

 

3.5500

 

13.2500

 

4.3300

 

18.3500

 

4.8400

3.1500

 

2.0667

 

8.2500

 

3.5750

 

13.3500

 

4.3400

 

18.4500

 

4.8500

3.2500

 

2.1000

 

8.3500

 

3.6000

 

13.4500

 

4.3500

 

18.5500

 

4.8600

3.3500

 

2.1333

 

8.4500

 

3.6250

 

13.5500

 

4.3600

 

18.6500

 

4.8700

3.4500

 

2.1667

 

8.5500

 

3.6500

 

13.6500

 

4.3700

 

18.7500

 

4.8800

3.5500

 

2.2000

 

8.6500

 

3.6750

 

13.7500

 

4.3800

 

18.8500

 

4.8900

3.6500

 

2.2333

 

8.7500

 

3.7000

 

13.8500

 

4.3900

 

18.9500

 

4.9000

3.7500

 

2.2667

 

8.8500

 

3.7250

 

13.9500

 

4.4000

 

19.0500

 

4.9100

3.8500

 

2.3000

 

8.9500

 

3.7500

 

14.0500

 

4.4100

 

19.1500

 

4.9200

3.9500

 

2.3333

 

9.0500

 

3.7750

 

14.1500

 

4.4200

 

19.2500

 

4.9300

4.0500

 

2.3667

 

9.1500

 

3.8000

 

14.2500

 

4.4300

 

19.3500

 

4.9400

4.1500

 

2.4000

 

9.2500

 

3.8250

 

14.3500

 

4.4400

 

19.4500

 

4.9500

4.2500

 

2.4333

 

9.3500

 

3.8500

 

14.4500

 

4.4500

 

19.5500

 

4.9600

4.3500

 

2.4667

 

9.4500

 

3.8750

 

14.5500

 

4.4600

 

19.6500

 

4.9700

4.4500

 

2.5000

 

9.5500

 

3.9000

 

14.6500

 

4.4700

 

19.7500

 

4.9800

4.5500

 

2.5333

 

9.6500

 

3.9250

 

14.7500

 

4.4800

 

19.8500

 

4.9900

4.6500

 

2.5667

 

9.7500

 

3.9500

 

14.8500

 

4.4900

 

19.9500

 

5.0000

4.7500

 

2.6000

 

9.8500

 

3.9750

 

14.9500

 

4.5000

       

4.8500

 

2.6333

 

9.9500

 

4.0000

 

15.0500

 

4.5100

       

4.9500

 

2.6667

 

10.0500

 

4.0100

 

15.1500

 

4.5200

       

 

 

(f)     The Diversity Score is then calculated by summing each of the Industry
Diversity Scores for each Moody's Industry Classification shown on Schedule 1.

 

For purposes of calculating the Diversity Score, affiliated issuers in the same
industry are deemed to be a single issuer except as otherwise agreed to by
Moody's and collateralized loan obligations shall not be included.

 

 

--------------------------------------------------------------------------------

 

 

SCHEDULE 4

MOODY'S RATING DEFINITIONS

 

MOODY'S DEFAULT PROBABILITY RATING

 

(a)     if the obligor of such Collateral Obligation has a CFR, 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 with an
Assigned Moody's Rating, then the Assigned Moody's Rating on any such senior
unsecured obligation as selected by the Collateral Manager in its sole
discretion;

 

(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 with an
Assigned Moody's Rating, then the Moody's rating that is one subcategory lower
than the Assigned Moody's Rating on any such obligation as selected by the
Collateral Manager in its sole discretion;

 

(d)     if not determined pursuant to clause (a), (b) or (c) above, if a rating
or rating estimate has been assigned to such Collateral Obligation by Moody's
upon the request of the Issuer, the Collateral Manager or an Affiliate of the
Collateral Manager, such rating or, in the case of a rating estimate, the
applicable rating estimate for such obligation so long as such rating estimate
or a renewal for such rating estimate has been issued or provided by Moody's, in
each case, within the 15 month period preceding the date on which a Moody's
Default Probability Rating is determined; provided that if such rating estimate
has been issued or provided by Moody's more than 13 months prior to the date on
which a Moody's Default Probability Rating is determined, then the Moody's
rating that is one subcategory lower than such rating estimate;

 

(e)     if not determined pursuant to clause (a), (b), (c) or (d) above and at
the election of the Collateral Manager, the Moody's Derived Rating; and

 

(f)     if not determined pursuant to clause (a) through (e) above, "Caa3";

 

provided that notwithstanding the methodology above, if a Collateral Obligation
is a DIP Collateral Obligation, the Moody's Default Probability Rating will be
the rating that is one subcategory below the Assigned Moody's Rating of such DIP
Collateral Obligation; provided further, that, each applicable rating, at the
time of calculation, (i) on credit watch by Moody's with positive implications
will be treated as having been upgraded by one rating subcategory, and (ii) on
credit watch by Moody's with negative implications will be treated as having
been downgraded by one rating subcategory.

 

"CFR" means, with respect to the obligor of any Collateral Obligation, the
corporate family rating assigned to such obligor by Moody's; provided that if
the obligor of any Collateral Obligation does not have a corporate family rating
by Moody's but another entity in such obligor's corporate family does have a
corporate family rating by Moody's, then the corporate family rating of such
other entity will be the CFR for the obligor of such Collateral Obligation.

 

 

--------------------------------------------------------------------------------

 

 

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 as determined
in the manner set forth below:

 

(a)     If such Collateral Obligation is not rated by Moody's and no other
security or obligation of the issuer of such Collateral Obligation is rated by
Moody's, and if Moody's has been requested by the Issuer, the Collateral 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 of such Collateral Obligation for purposes of the definitions of
Moody's Rating or Moody's Default Probability Rating of such Collateral
Obligation shall be (i) "B3" if the Collateral Manager certifies to the Trustee
and the Collateral Administrator that the Collateral Manager believes that such
estimate shall be at least "B3" and if the Aggregate Principal Balance of
Collateral Obligations determined pursuant to this clause (a)(i) does not exceed
5% of the Collateral Principal Amount or (ii) otherwise "Caa;"

 

(b)     If not determined pursuant to clause (a) above, by using one of the
methods provided below:

 

(i)     if such Collateral Obligation has a public and monitored rating by S&P,
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

 

N/A

 

Loan or Participation Interest in Loan

 

-2

 

-2-

--------------------------------------------------------------------------------

 

 

(ii)     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 Collateral Manager be determined in accordance with the table
set forth in subclause (b)(i) above, and the Moody's Derived Rating for purposes
of the definitions of Moody's Rating and 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)(ii)):

 

Obligation Category of

Rated Obligation

Rating of Rated Obligation

Number of Subcategories

Relative to Rated Obligation

Rating

Senior secured obligation

greater than or equal to B2

-1

Senior secured obligation

less than B2

-2

Subordinated obligation

greater than or equal to B3

+1

Subordinated obligation

less than B3

0

 

(iii)     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;

 

provided, that the Aggregate Principal Balance of the Collateral Obligations
that may have a Moody's Rating derived from an S&P rating as set forth in
sub-clauses (i) or (ii) of this clause (b) may not exceed 10% of the Collateral
Principal Amount.

 

For purposes of calculating a Moody's Derived Rating, each applicable rating, at
the time of calculation, (i) on credit watch by Moody's with positive
implications will be treated as having been upgraded by one rating subcategory
and (ii) on credit watch by Moody's with negative implications will be treated
as having been downgraded by one rating subcategory.

 

MOODY'S SENIOR SECURED LOAN

 

(1)     A loan that:

 

First, is not (and cannot by its terms become) subordinate in right of payment
to any other debt obligation of the Obligor of the loan;

 

Second, (x) 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 (y) such specified collateral does not consist entirely of equity
securities or common stock; provided that any loan that would be considered a
Moody's Senior Secured Loan but for clause (y) above shall be considered a
Moody's Senior Secured Loan if it is a loan made to a parent entity and as to
which the Collateral Manager determines in good faith that the value of the
common stock of the subsidiary (or other equity interests in the subsidiary)
securing such loan at or about the time of acquisition of such loan by the
Issuer has a value that is at least equal to the outstanding principal balance
of such loan and the outstanding principal balances of any other obligations of
such parent entity that are pari passu with such loan, which value may include,
among other things, the enterprise value of such subsidiary of such parent
entity; and

 

-3-

--------------------------------------------------------------------------------

 

 

Third,     the value of the collateral securing the loan 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 Collateral 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; and

 

(2)     the loan is not:

 

First, a DIP Collateral Obligation; or

 

Second, a loan for which the security interest or lien (or the validity or
effectiveness thereof) in substantially all of its collateral attaches, becomes
effective, or otherwise "springs" into existence after the origination thereof.

 

-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 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 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 sub-category below such rating;

 

 

(c)

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 sub-category 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 sub-category above such rating if such
rating is "B+" or higher and (y) two sub-categories above such rating if such
rating is "B" or lower;

 

 

(d)

if a Fitch Rating cannot be determined pursuant to clause (a), (b) or (c) and

 

 

(i)

Moody's has issued a publicly available corporate family 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
Moody's rating;

 

 

--------------------------------------------------------------------------------

 

 

 

(ii)

Moody's has not issued a publicly available corporate family rating for the
issuer of such Collateral Obligation but has issued a long-term issuer rating
for such issuer, 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 corporate family rating for the
issuer of such Collateral Obligation but Moody's has issued an outstanding
insurance financial strength rating for such issuer, then, subject to subclause
(viii) below, the Fitch Rating of such Collateral Obligation will be one
sub-category below the Fitch equivalent of such Moody's rating;

 

 

(iv)

Moody's has not issued a publicly available corporate family rating for the
issuer of such Collateral Obligation but has issued outstanding corporate issue
ratings for such issuer, 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 then (y) if such
corporate issue rating relates to senior, senior secured or subordinated secured
obligations of such issuer, (1) one sub-category 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 sub-categories 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 then
(z) if such corporate issue rating relates to subordinated, junior subordinated
or senior subordinated obligations of such issuer, (1) one sub-category above
the Fitch equivalent of such Moody's rating if such obligations are rated "B1"
or above by Moody's or (2) two sub-categories 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, then, subject to subclause (viii) below, the
Fitch Rating of such Collateral Obligation will be one sub-category below the
Fitch equivalent of such S&P rating;

 

-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, 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 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 sub-category 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 then (z) if
such corporate issue rating relates to subordinated, junior subordinated or
senior subordinated obligations of such issuer, (1) one sub-category above the
Fitch equivalent of such S&P rating if such obligations are rated "B+" or above
by S&P or (2) two sub-categories 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).

 

 

(e)

if a rating cannot be determined pursuant to clauses (a) through (d) then, (i)
at the discretion of the Collateral Manager, the Collateral 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 rating 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 after the Closing Date, if any rating described above is (i) on
rating watch negative or negative credit watch, the rating will be adjusted down
by one-sub-category, or (ii) on outlook negative, the rating will not be
adjusted; 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 or in the determination of the lower of the Moody's and S&P rating public
ratings.

 

 

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

 

-3-

--------------------------------------------------------------------------------

 

 

Fitch Rating   Moody's rating   S&P rating

A-

 

A3

 

A-

BBB+

 

Baa1

 

BBB+

BBB

 

Baa2

 

BBB

BBB-

 

Baa3

 

BBB-

BB+

 

Bal

 

BB+

BB

 

Ba2

 

BB

BB-

 

Ba3

 

BB-

B+

 

B-1

 

B+

B

 

B-2

 

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

 

NA

 

0

Issuer Credit Rating

 

S&P

 

NA

 

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

 

"Bal" 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

 

The following steps are used to calculate the Fitch IDR equivalent ratings:

 

 

(1)

Public or private Fitch-issued IDR.

 

 

(2)

If Fitch has not issued an IDR, but has an outstanding Long-Term Financial
Strength Rating, then the IDR equivalent is one rating lower.

 

 

(3)

If 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.

 

 

(4)

If 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.

 

 

(5)

A 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.

 

 

(6)

If Moody's has not issued a CFR, but has an outstanding Insurance Financial
Strength Rating, then the Fitch IDR equivalent is one rating lower.

 

-4-

--------------------------------------------------------------------------------

 

 

 

(7)

If 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.

 

 

(8)

A public S&P-issued Issuer Credit Rating (ICR) is equivalent in terms of
definition to the Fitch IDR.

 

 

(9)

If S&P has not issued an ICR, but has an outstanding Insurance Financial
Strength Rating, then the Fitch IDR equivalent is one rating lower.

 

 

(10)

If 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.

 

If 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.

 

-5-