Exhibit 10.6

 

GLADWYNE FUNDING LLC,
ISSUER

 

AND

 

CITIBANK, N.A.,
TRUSTEE

 

INDENTURE

 

Dated as of September 11, 2014

 

COLLATERALIZED LOAN OBLIGATIONS

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

ARTICLE I.                             DEFINITIONS

2

 

 

Section 1.1

Definitions

2

 

 

 

Section 1.2

Assumptions as to Collateral Obligations

30

 

 

 

Section 1.3

Rules of Construction and Certain Other Matters

30

 

 

 

ARTICLE II.        THE NOTES

31

 

 

Section 2.1

Forms Generally

31

 

 

 

Section 2.2

Forms of Notes and Certificate of Authentication

31

 

 

 

Section 2.3

Authorized Amount; Note Interest Rate; Stated Maturity; Denominations

32

 

 

 

Section 2.4

Execution, Authentication, Delivery and Dating

32

 

 

 

Section 2.5

Registration, Registration of Transfer and Exchange

33

 

 

 

Section 2.6

Mutilated, Destroyed, Lost or Stolen Notes

40

 

 

 

Section 2.7

Payment of Principal and Interest, Preservation of Rights

40

 

 

 

Section 2.8

Persons Deemed Owners

43

 

 

 

Section 2.9

Cancellation

43

 

 

 

Section 2.10

Rule 144A Global Notes; Temporary Notes

43

 

 

 

Section 2.11

No Gross Up

45

 

 

 

Section 2.12

Notes Beneficially Owned by Non-Permitted Holders

45

 

 

 

Section 2.13

Increases on the Notes

45

 

 

 

ARTICLE III.                   CONDITIONS PRECEDENT; CERTAIN PROVISIONS RELATING
TO COLLATERAL

47

 

 

Section 3.1

General Provisions

47

 

 

 

Section 3.2

Security for the Notes

48

 

 

 

Section 3.3

Delivery of Pledged Obligations

50

 

 

 

Section 3.4

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

51

 

 

 

ARTICLE IV.                    SATISFACTION AND DISCHARGE

51

 

 

Section 4.1

Satisfaction and Discharge of Indenture

51

 

 

 

Section 4.2

Application of Trust Money

53

 

 

 

Section 4.3

Repayment of Monies Held by Paying Agent

53

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

ARTICLE V.                         REMEDIES

53

 

 

Section 5.1

Events of Default

53

 

 

 

Section 5.2

Acceleration of Maturity; Rescission and Annulment

54

 

 

 

Section 5.3

Collection of Indebtedness and Suits for Enforcement by Trustee

55

 

 

 

Section 5.4

Remedies

57

 

 

 

Section 5.5

Optional Preservation of Collateral

58

 

 

 

Section 5.6

Trustee May Enforce Claims Without Possession of the Notes

60

 

 

 

Section 5.7

Application of Money Collected

60

 

 

 

Section 5.8

Limitation on Suits

60

 

 

 

Section 5.9

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

61

 

 

 

Section 5.10

Restoration of Rights and Remedies

61

 

 

 

Section 5.11

Rights and Remedies Cumulative

61

 

 

 

Section 5.12

Delay or Omission Not Waiver

61

 

 

 

Section 5.13

Control by Noteholders

62

 

 

 

Section 5.14

Waiver of Past Defaults

62

 

 

 

Section 5.15

Undertaking for Costs

62

 

 

 

Section 5.16

Waiver of Stay or Extension Laws

63

 

 

 

Section 5.17

Sale of Collateral

63

 

 

 

Section 5.18

Action on the Notes

64

 

 

 

ARTICLE VI.                    THE TRUSTEE

64

 

 

Section 6.1

Certain Duties and Responsibilities

64

 

 

 

Section 6.2

Notice of Default

65

 

 

 

Section 6.3

Certain Rights of Trustee

66

 

 

 

Section 6.4

Not Responsible for Recitals or Issuance of the Notes

69

 

 

 

Section 6.5

May Hold Notes

69

 

 

 

Section 6.6

Money Held in Trust

69

 

 

 

Section 6.7

Compensation and Reimbursement

69

 

 

 

Section 6.8

Corporate Trustee Required; Eligibility

71

 

 

 

Section 6.9

Resignation and Removal; Appointment of Successor

71

 

 

 

Section 6.10

Acceptance of Appointment by Successor

73

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

Section 6.11

Merger, Conversion, Consolidation or Succession to Business of Trustee

73

 

 

 

Section 6.12

Co-Trustees and Separate Trustee

73

 

 

 

Section 6.13

Certain Duties of Trustee Related to Delayed Payment of Proceeds

74

 

 

 

Section 6.14

Representations and Warranties of the Trustee

75

 

 

 

Section 6.15

Authenticating Agents

76

 

 

 

Section 6.16

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

76

 

 

 

Section 6.17

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

77

 

 

 

ARTICLE VII.               COVENANTS

77

 

 

Section 7.1

Payment of Principal and Interest

77

 

 

 

Section 7.2

Compliance With Laws, Etc.

77

 

 

 

Section 7.3

Maintenance of Books and Records

77

 

 

 

Section 7.4

Maintenance of Office or Agency

77

 

 

 

Section 7.5

Money for Security Payments to be Held in Trust

77

 

 

 

Section 7.6

Existence of Issuer

79

 

 

 

Section 7.7

Protection of Collateral

81

 

 

 

Section 7.8

Opinions as to Collateral

82

 

 

 

Section 7.9

Performance of Obligations

82

 

 

 

Section 7.10

Negative Covenants

83

 

 

 

Section 7.11

No Consolidation

85

 

 

 

Section 7.12

Participations

86

 

 

 

Section 7.13

No Other Business; Etc.

86

 

 

 

Section 7.14

Compliance with Investment Management Agreement

86

 

 

 

Section 7.15

Reporting

86

 

 

 

Section 7.16

Calculation Agent

87

 

 

 

Section 7.17

Certain Tax Matters

88

 

 

 

Section 7.18

Representations Relating to Security Interests in the Collateral

90

 

 

 

Section 7.19

Certain Regulations

92

 

 

 

Section 7.20

Section 3(c)(7) Procedures

92

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

Section 7.21

Capital Contributions

93

 

 

 

Section 7.22

Other Accounts

94

 

 

 

ARTICLE VIII.          SUPPLEMENTAL INDENTURES

94

 

 

Section 8.1

Supplemental Indentures

94

 

 

 

Section 8.2

Execution of Supplemental Indentures

94

 

 

 

Section 8.3

Effect of Supplemental Indentures

94

 

 

 

Section 8.4

Reference in Notes to Supplemental Indentures

95

 

 

 

Section 8.5

Effect on the Investment Manager; Effect on the Collateral Administrator

95

 

 

 

ARTICLE IX.                    REDEMPTION OF SECURITIES

95

 

 

Section 9.1

Optional Redemption

95

 

 

 

Section 9.2

Notice to Trustee of Optional Redemption

97

 

 

 

Section 9.3

Notice by the Issuer of Optional Redemption or of Maturity

97

 

 

 

Section 9.4

Notes Payable on Redemption Date

98

 

 

 

ARTICLE X.                         ACCOUNTS, ACCOUNTINGS AND RELEASES

99

 

 

Section 10.1

Collection of Money

99

 

 

 

Section 10.2

Interest Collection Account

100

 

 

 

Section 10.3

Principal Collection Account; Payment Account; and Expense Reserve Account

101

 

 

 

Section 10.4

Reports by Trustee

104

 

 

 

Section 10.5

Accountings

104

 

 

 

Section 10.6

Custodianship and Release of Collateral

110

 

 

 

Section 10.7

[Reserved]

111

 

 

 

Section 10.8

Additional Reports

111

 

 

 

Section 10.9

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

111

 

 

 

Section 10.10

Notices to Holders of the Notes

112

 

 

 

ARTICLE XI.                    APPLICATION OF MONIES

112

 

 

Section 11.1

Disbursements of Monies from Payment Account

112

 

 

 

ARTICLE XII.               SALE OF COLLATERAL OBLIGATIONS; SUBSTITUTION

116

 

 

Section 12.1

Sales of Collateral Obligations

116

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

Section 12.2

Trading Restrictions

118

 

 

 

Section 12.3

Affiliate Transactions

119

 

 

 

ARTICLE XIII.          NOTEHOLDERS’ RELATIONS

119

 

 

Section 13.1

Subordination and Non-Petition

119

 

 

 

Section 13.2

Standard of Conduct

120

 

 

 

ARTICLE XIV.           MISCELLANEOUS

120

 

 

Section 14.1

Form of Documents Delivered to Trustee

120

 

 

 

Section 14.2

Acts of the Noteholders

121

 

 

 

Section 14.3

Notices

122

 

 

 

Section 14.4

Notices to Noteholders; Waiver

122

 

 

 

Section 14.5

Effect of Headings and Table of Contents

123

 

 

 

Section 14.6

Successors and Assigns

123

 

 

 

Section 14.7

Severability

123

 

 

 

Section 14.8

Benefits of Indenture

123

 

 

 

Section 14.9

Governing Law

123

 

 

 

Section 14.10

Submission to Jurisdiction

124

 

 

 

Section 14.11

Counterparts

124

 

 

 

Section 14.12

Waiver Of Jury Trial

124

 

 

 

Section 14.13

Legal Holiday

124

 

 

 

ARTICLE XV.                ASSIGNMENT OF INVESTMENT MANAGEMENT AGREEMENT

125

 

 

Section 15.1

Assignment of Investment Management Agreement

125

 

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Schedule A

Schedule of Collateral Obligations

Schedule B

LIBOR Formula

 

 

Exhibit A

Form of Rule 144A Global Note

Exhibit B

[Reserved]

Exhibit C

[Reserved]

Exhibit D

Form of Owner Certificate

Exhibit E

Form of Section 3(c)(7) Reminder Notice

Exhibit F

Form of Important Section 3(c)(7) Notice

Exhibit G

Form of Increase Request

 

vi

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INDENTURE, dated as of September 11, 2014, between Gladwyne Funding LLC, a
newly-formed Delaware limited liability company (the “Issuer”), and Citibank,
N.A., a national banking association, organized and existing under the laws of
United States of America, as trustee (the “Trustee”).

 

PRELIMINARY STATEMENT

 

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

 

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

 

GRANTING CLAUSE

 

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

 

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

 

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

 

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

 

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

 

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

 

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(f)                                   all Proceeds of any of the foregoing.

 

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

 

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

 

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

 

ARTICLE I.

 

DEFINITIONS

 

Section 1.1                                    Definitions.

 

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

 

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

 

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

 

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

 

2

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

 

(ii)                                  the Collateral Administrator under the
Collateral Administration Agreement or this Indenture;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Applicable Period”:  For (i) the first Interest Accrual Period, the period from
and including the Closing Date (except with respect to any Increase, from and
including the effective

 

3

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Closing Date”:  September 15, 2014.

 

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

 

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

 

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

 

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

 

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

 

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

 

5

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

 

(ii)                                  it does not cause the Aggregate Principal
Amount of the Collateral to consist of greater than 45% of Private Collateral
Obligations; and

 

(iii)                               it does not cause the Aggregate Principal
Amount of the Collateral to consist of greater than 15% of Collateral
Obligations that are Participations (and all of the Participations are Qualified
Participations); and

 

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

 

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

 

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

 

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

 

(iv)                              it does not cause the Aggregate Principal
Amount of the Collateral to consist of greater than 45% of Private Collateral
Obligations;

 

(v)                                 it does not cause the Aggregate Principal
Amount of the Collateral to consist of greater than 15% of Collateral
Obligations that are Participations (and all of the Participations are Qualified
Participations);

 

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

 

(vii)                           it is not a Defaulted Obligation or a Credit
Risk Obligation;

 

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

 

(ix)                              it is not an Interest Only Security;

 

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

 

(xi)                              it does not constitute Margin Stock;

 

(xii)                           it is an obligation with respect to which the
Issuer will receive payments due under the terms of such obligation and proceeds
from disposing of such asset free and clear of withholding tax, other than
(A) withholding tax as to which the obligor or issuer must make additional
payments so that the net amount received by the Issuer after

 

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satisfaction of such tax is the amount due to the Issuer before the imposition
of any withholding tax and (B) withholding tax on (x) late payment fees,
prepayment fees or other similar fees and (y) amendment, waiver, consent and
extension fees;

 

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

 

(xiv)                       it is not an obligation pursuant to which any future
advances or payments to the borrower or the obligor thereof may be required to
be made by the Issuer (other than pursuant to a delayed-draw facility or
pursuant to customary advances made to protect or preserve rights against the
borrower or the obligor thereof, or to indemnify an agent or representative for
lenders pursuant to the Reference Instruments);

 

(xv)                          it is not a Structured Finance Obligation;

 

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

 

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

 

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

 

(xix)                       such obligation is Registered;

 

(xx)                          such obligation is not a Synthetic Security;

 

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

 

(xxii)                    such obligation is not an interest in a grantor trust;

 

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

 

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

 

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

 

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

 

7

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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and records that such Certificated Security or instrument is credited to the
relevant Issuer Account;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

subject, in each case, to such obligations or securities having a maturity date
not later than the earlier of (A) the date that is 60 days after the date of
Delivery thereof and (B) the Business Day immediately preceding the Payment Date
immediately following the date of Delivery thereof; provided that Eligible
Investments shall not include (a) any interest-only security, any security

 

11

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purchased at a price in excess of 100% of the par value thereof or any security
whose repayment is subject to substantial non-credit related risk as determined
in the sole judgment of the Investment Manager, (b) any security whose rating
assigned by S&P includes the subscript “f”, “p”, “q”, “pi”, “r”, “sf” or “t”
(c) any security that is subject to an Offer, (d) any other security that is an
asset the payments on which are subject to withholding tax if owned by the
Issuer unless the issuer or obligor or other Person (and guarantor, if any) is
required to make “gross-up” payments that cover the full amount of any such
withholding taxes, or (e) any security secured by real property.  Eligible
Investments may include those investments with respect to which the Bank or an
Affiliate of the Bank is an obligor or provides services.

 

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

 

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

 

“Equity Owner”:  Means FS Energy and Power Fund, as the owner of the entire
membership interest of the Issuer.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Expense Reserve Amount”:  $50,000.

 

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

 

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

 

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“First Payment Date”:  March 15, 2015.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Initial Principal Amount”:  The initial principal amount of the Notes on the
Closing Date, which is $25,000,000.

 

“instruments”:  The meaning specified in the UCC.

 

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

 

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

 

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

 

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

 

(c)                                  any unpaid Defaulted Interest relating to
the Notes; plus

 

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

 

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

 

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

 

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

 

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such payments of interest and (y) the amounts as specified in clause (vi) of the
definition of Principal Proceeds;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Investment Manager”:  FS Energy and Power Fund, a Delaware statutory trust,
until a successor Person shall have become the investment manager pursuant to
the provisions of the Investment Management Agreement, and thereafter
“Investment Manager” shall mean such successor Person.  Each reference herein to
the Investment Manager shall be deemed to constitute a reference as well to any
agent of the Investment Manager and to any other Person to whom the Investment
Manager has delegated any of its duties hereunder in accordance with the terms
of the Investment Management Agreement, in each case during such time as and to
the extent that such agent or other Person is performing such duties.

 

“investments”:  The meaning specified in the UCC.

 

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

 

“instruments”:  The meaning specified in the UCC.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Loans”:  Collectively, commercial loans and Participations.

 

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

 

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

 

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

 

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

 

(i)                                     the Market Value of the Collateral
Obligations; plus

 

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

 

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

 

(a) the Market Value Numerator; by

 

(b) the Aggregate Outstanding Amount of the Notes.

 

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

 

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

 

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

 

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

 

“Maximum Principal Amount”:  $400,000,000.

 

“Member”:  FS Energy and Power Fund, as the initial member of the Issuer, and
any Person admitted as an additional member of the Issuer or a substitute member
of the Issuer pursuant to the provisions of Limited Liability Company Agreement,
each in its capacity as a member of the Company; provided, however, the term
“Member” shall not include the Independent Managers.

 

“money”:  The meaning specified in the UCC.

 

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

 

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

 

“Net Purchased Loan Balance” means, as of any date of determination, an amount
equal to (a) the Aggregate Principal Amount of all Collateral Obligations
acquired by the Issuer prior

 

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to such date minus (b) the Aggregate Principal Amount of all Warranty
Transferred Asset repurchased by the Equity Owner prior to such date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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hereunder, such Opinion of Counsel may rely on opinions of other counsel who are
so admitted and otherwise satisfactory which opinions of other counsel shall
accompany such Opinion of Counsel and shall be addressed to the Trustee or shall
state that the Trustee shall be entitled to rely thereon.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(ii)                                  the principal amount of any Cash and
Eligible Investments together with any uninvested amounts on deposit in the
Issuer Accounts representing

 

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Principal Proceeds or Liquidation Proceeds (in each case excluding Reinvestment
Income); plus

 

(iii)                               the sum of the Principal Balance of all
Defaulted Obligations.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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such Defaulted Obligation as of the relevant date of determination or (B) that
has been held by the Issuer for three years or more shall be deemed to have a
Principal Balance of zero;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                     the Selling Institution is a lender on
such Loan;

 

(ii)                                  the Selling Institution is (a) any of FS
Investment Corporation, FS Investment Corporation II, FS Investment Corporation
III, FS Energy and Power Fund,

 

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

 

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

 

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

 

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

 

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

 

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

 

(viii)                        such Participation is not a sub-participation
interest.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reinvestment Period”:  The period from the Closing Date to and including the
earlier to occur of (i) the Business Day immediately preceding the Payment Date
in September 2017, and (ii) the occurrence of an Event of Default that results
in an acceleration of the Notes in accordance with Section 5.2.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Sale and Contribution Agreement”:  The Sale and Contribution Agreement dated as
of the Closing Date, between FS Energy and Power Fund and the Issuer.

 

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“Sale Proceeds”:  All amounts representing:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“securities”:  The meaning specified in the UCC.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(e) reduces the principal amount thereof; or

 

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

 

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

 

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

 

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effective.  The Specified Holder, by its acquisition of Notes, will agree to
notify the Issuer and the Trustee if it assigns any or all of its Notes.

 

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

 

“Stated Maturity”:  With respect to any security or debt obligation, including a
Note, the date specified in such security or debt obligation as the fixed date
on which the final payment of principal of such security or debt obligation is
due and payable or, if such date is not a Business Day, the next following
Business Day.  The Stated Maturity with respect to the Notes will be December 1,
2024.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Transfer Date”:  The meaning specified in the Sale and Contribution Agreement.

 

“Transfer Supplement”:  The Transfer Supplement, in the form of Exhibit A to the
Sale and Contribution Agreement, delivered on each Transfer Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Withholding Tax Security”:  A Collateral Obligation if (a) any payments thereon
to the Issuer are subject to deduction or withholding for or on account of any
withholding or similar tax imposed by any jurisdiction or taxing authority
thereof or therein and (b) under the Reference Instrument with respect to such
Collateral Obligation, the issuer of or counterparty with respect to such
Collateral Obligation is not required to make payments to the Issuer that would
result in

 

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the net amount actually received by the Issuer (free and clear of taxes, whether
assessed against such obligor thereof, the counterparty with respect thereto, or
the Issuer) being equal to the full amount that the Issuer would have received
had no such deduction or withholding been required.

 

Section 1.2                                    Assumptions as to Collateral
Obligations.

 

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

 

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

 

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

 

Section 1.3                                    Rules of Construction and Certain
Other Matters.

 

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

 

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

 

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

 

ARTICLE II.
THE NOTES

 

Section 2.1                                    Forms Generally.

 

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

 

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

 

Section 2.2                                    Forms of Notes and Certificate of
Authentication.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.3                                    Authorized Amount; Note Interest
Rate; Stated Maturity; Denominations.

 

Subject to the provisions set forth below, the aggregate principal amount of the
Notes that may be authenticated and delivered under this Indenture is limited to
$400,000,000, except for (i) Notes authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Section 2.5 or 2.6 of this Indenture and (ii) Notes issued in accordance with
Article VIII.

 

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

 

Designation

 

Aggregate
Outstanding
Amount/Original
Notional Amount

 

Note Interest Rate

 

Stated Maturity

 

 

 

 

 

 

 

 

 

 

Notes

 

$

25,000,000

 

LIBOR(1) + 4.00%

 

December 1, 2024

 

 

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

(1)                                 LIBOR refers to LIBOR for the Applicable
Period.

 

The Notes shall be issuable in the following minimum denomination:

 

Note

 

Minimum Denomination (integral multiples)

Notes

 

Rule 144A: $500,000 ($1,000 in excess thereof)

 

Section 2.4                                    Execution, Authentication,
Delivery and Dating.

 

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

 

Notes bearing the manual or facsimile signatures of individuals who were at any
time the Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding the fact that such

 

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individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Notes or did not hold such offices at the
date of issuance of such Notes.

 

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

 

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

 

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

 

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

 

Section 2.5                                    Registration, Registration of
Transfer and Exchange.

 

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

 

If a Person other than the Trustee is appointed by the Issuer as Registrar, the
Issuer will give the Trustee prompt written notice of the appointment of a
Registrar and of the location, and any change in the location, of the Registrar,
and the Trustee shall have the right to inspect the Register at all reasonable
times and to obtain copies thereof and the Trustee shall have the right to rely
upon a certificate executed on behalf of the Registrar by an Officer thereof as
to the

 

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names and addresses of the Holders of the Notes and the principal amounts or
notional amounts, as the case may be, of such Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)                                     (A)  The Holder is a Qualified
Institutional Buyer and a Qualified Purchaser, (B) the Holder is purchasing the
Notes for its own account or the account of another Qualified Purchaser that is
also a Qualified Institutional Buyer as to which the Holder exercises sole
investment discretion, (C) the Holder and any such account is acquiring the
Notes as principal for its own account for investment and not for sale in
connection with any distribution thereof, (D) the Holder and any such account
was not formed solely for the purpose of investing in the Notes (except when
each beneficial owner of the Holder or any such account is a Qualified
Purchaser), (E) to the extent the Holder (or any account for which it is
purchasing the Notes) is a private investment company formed on or before
April 30, 1996, the Holder and each such account has

 

35

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

 

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

 

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liable to any Person having an interest in the Notes sold as a result of any
such sale or the exercise of such discretion (including for the price of any
such sale).

 

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

 

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

 

(v)                                 In connection with the purchase of the
Notes:  (A) none of the Issuer, the Trustee, the Investment Manager (except such
representation is not made by Affiliates of the Investment Manager that purchase
any Notes, with respect to the Investment Manager), the Collateral Administrator
or the Registrar (or any of their respective Affiliates) is acting as a
fiduciary or financial or investment adviser for the Holder; (B) the Holder is
not relying (for purposes of making any investment decision or otherwise) upon
any advice, counsel or representations (whether written or oral) of the Issuer,
the Trustee, the Investment Manager (except such representation is not made by
Affiliates of the Investment Manager that purchase any Notes, with respect to
the Investment Manager), the Collateral Administrator or the Registrar (or any
of their respective Affiliates) other than any representations expressly set
forth in a written agreement with the Issuer and the Investment Manager;
(C) none of the Issuer, the Trustee, the Investment Manager (except such
representation is not made by Affiliates of the Investment Manager that purchase
any Notes, with respect to the Investment Manager), the Collateral Administrator
or the Registrar (or any of their respective Affiliates) has given to the Holder
(directly or indirectly through any other Person) any assurance, guarantee, or
representation whatsoever as to the expected or projected success,
profitability, return, performance, result, effect, consequence or benefit
(including legal,

 

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regulatory, tax, financial, accounting or otherwise) as to an investment in the
Notes; (D) the Holder has consulted with its own legal, regulatory, tax,
business, investment, financial and accounting advisers to the extent it has
deemed necessary, and it has made its own investment decisions (including
decisions regarding the suitability of any transaction pursuant to this
Indenture) based upon its own judgment and upon any advice from such advisers as
it has deemed necessary and not upon any view expressed by the Issuer, the
Trustee, the Investment Manager (except such representation is not made by
Affiliates of the Investment Manager that purchase any Notes, with respect to
the Investment Manager), the Collateral Administrator or the Registrar (or any
of their respective Affiliates); (E) the Holder has evaluated the terms and
conditions of the purchase and sale of the Notes with a full understanding of
all of the risks thereof (economic and otherwise), and it is capable of assuming
and willing to assume (financially and otherwise) those risks; (F) the Holder is
a sophisticated investor; and (G) if acquiring the Notes for any account, the
Holder has not made any disclosure, assurance, guarantee or representation not
consistent with the provisions and the requirements contained herein.

 

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

 

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

 

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

 

(h)                                 Notwithstanding a request made to remove the
legend on any Note or any legend pursuant to Section 4(1) of the Securities Act
from any of the Notes, such Notes shall bear the

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Section 2.6                                    Mutilated, Destroyed, Lost or
Stolen Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 2.7                                    Payment of Principal and
Interest, Preservation of Rights.

 

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

 

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Amount in full (“Deferred Interest”). To the extent lawful and enforceable,
interest on Deferred Interest shall accrue at the Note Interest Rate until paid
as provided herein.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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long as no judgment in the nature of a deficiency judgment or seeking personal
liability shall be asked for or (if obtained) enforced against any such Person.

 

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

 

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

 

Section 2.8                                    Persons Deemed Owners.

 

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

 

Section 2.9                                    Cancellation.

 

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

 

Section 2.10                             Rule 144A Global Notes; Temporary
Notes.

 

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

 

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Notes were in definitive form.  In addition, the owner of a beneficial interest
in a Rule 144A Global Note will be entitled to receive a Definitive Note in
exchange for such interest if an Event of Default has occurred and is
continuing.

 

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

 

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

 

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

 

Pending the preparation of certificates for such Notes, pursuant to this
Section 2.10, the Issuer may execute, and upon Issuer Order the Trustee shall
authenticate and deliver, temporary certificates for such Notes, that are
printed, lithographed, typewritten, mimeographed or otherwise reproduced, in any
authorized denomination, substantially of the tenor of the definitive
certificates in lieu of which they are issued and with such appropriate
insertions, omissions,

 

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substitutions and other variations as the Officers executing such temporary
certificates may determine, as conclusively evidenced by their execution of such
certificates.

 

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

 

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

 

Section 2.11                             No Gross Up.  Neither the Equity Owner
nor the Issuer shall be obligated to pay any additional amounts to the Holders
or beneficial owners of the Notes to compensate for any withholding or deduction
for, or on account of, any present or future taxes, duties, assessments or
governmental charges required with respect to amounts payable under the Notes.

 

Section 2.12                             Notes Beneficially Owned by
Non-Permitted Holders.

 

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

 

Section 2.13                             Increases on the Notes.

 

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

 

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

 

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

 

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

 

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

 

(iii)                               No Event of Default has occurred and is
continuing.

 

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

 

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

 

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

 

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

 

(d)                                 Upon receipt of the cash proceeds of such
Increase by or on behalf of the Issuer, the Trustee shall deposit such proceeds
in the Principal Collection Account and shall instruct the Registrar to make
appropriate notations on the Register or on its books and records of the amount
of such Additional Notes so issued, and the Issuer hereby authorizes the Trustee
to make such notations on the Register and on its books and records as
aforesaid.  Further, in accordance with

 

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DTC’s procedures, the Trustee, as Registrar, will credit or cause to be credited
to the account of the purchaser of such Additional Notes a principal amount of
such Notes equal to such Increase.

 

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

 

ARTICLE III.

 

CONDITIONS PRECEDENT; CERTAIN PROVISIONS
RELATING TO COLLATERAL

 

Section 3.1                                    General Provisions.

 

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

 

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

 

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

 

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required for the valid issuance of such Notes except as may have been given for
purposes of the foregoing;

 

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

 

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

 

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

 

(f)                                   an executed copy of each other Transaction
Document;

 

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

 

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

 

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

 

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

 

Section 3.2                                    Security for the Notes.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)                                  (i)                                    
[Reserved]

 

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

 

(d)                                 Issuer Accounts.  Evidence of the
establishment of the Issuer Accounts.

 

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

 

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

 

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

 

Section 3.3                                    Delivery of Pledged Obligations.

 

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

 

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

 

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

 

(d)                                 In addition to the steps specified in
subclauses (b) and (c) above, the Issuer or the Investment Manager (at the sole
cost and expense of the Issuer) on behalf of the Issuer will use

 

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commercially reasonable efforts to take all actions necessary or advisable under
the laws of the applicable jurisdiction of organization of the Issuer to protect
the security interest of the Trustee.

 

Section 3.4                                    Purchase and Delivery of
Collateral Obligations and Other Actions During the Initial Investment Period;
Effective Date Requirements.

 

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

 

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

 

(c)                                  [Reserved].

 

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

 

ARTICLE IV.

 

SATISFACTION AND DISCHARGE

 

Section 4.1                                    Satisfaction and Discharge of
Indenture.  This Indenture shall cease to be of further effect with respect to
the Notes except as to (i) rights of registration of transfer and exchange,
(ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Holders to receive payments of principal thereof, interest thereon and
distributions as provided herein, (iv) the rights and immunities of the Trustee
hereunder and the obligations of the Trustee in respect of the matters described
in this Section 4.1, and in the last sentence of Section 4.1(c), (v) the rights
and immunities of the Investment Manager hereunder and under the Investment
Management Agreement, (vi) the rights and immunities of the Collateral
Administrator

 

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hereunder and under the Collateral Administration Agreement and (vii) the rights
of Holders as beneficiaries hereof with respect to the property deposited with
the Trustee and payable to all or any of them, and the Trustee, on demand of and
at the expense of the Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:

 

(a)                                 either

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 4.2                                    Application of Trust Money.

 

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

 

Section 4.3                                    Repayment of Monies Held by
Paying Agent.

 

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

 

ARTICLE V.

 

REMEDIES

 

Section 5.1                                    Events of Default.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.2                                    Acceleration of Maturity;
Rescission and Annulment.

 

(a)                                 If an Event of Default occurs and is
continuing (other than an Event of Default specified in Section 5.1(d) or
5.1(e)), the Trustee may by notice to the Issuer or shall, at the written
direction of a Majority of the Noteholders by notice to the Issuer (and the
Trustee shall in turn provide notice to the Holders of all the Notes then
Outstanding) declare the principal of and accrued and unpaid interest on all the
Notes to be immediately due and payable, and upon any

 

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such declaration such principal, together with all accrued and unpaid interest
thereon, and other amounts payable hereunder, shall become immediately due and
payable.  If an Event of Default specified in Section 5.1(d) or (e) occurs, all
unpaid principal, together with all accrued and unpaid interest thereon, of all
the Notes, and other amounts payable hereunder, shall automatically become due
and payable without any declaration or other act on the part of the Trustee or
any Noteholder.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.3                                    Collection of Indebtedness and
Suits for Enforcement by Trustee.

 

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

 

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power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Trustee by this Indenture or by law.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 5.4                                    Remedies.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)                                 Upon any sale, whether made under the power
of sale hereby given or by virtue of judicial proceedings, any Secured Party, to
the extent permitted by the UCC, may bid for and purchase the Collateral or any
part thereof and, upon compliance with the terms of sale, may hold, retain,
possess or dispose of such property in its or their own absolute right without

 

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accountability; and any purchaser at any such sale may, in paying the purchase
money, turn in any of the Notes in lieu of Cash equal to the amount which shall,
upon distribution of the net proceeds of such sale, be payable on the Notes so
turned in by such Holder (taking into account any amounts payable prior to such
Secured Party in accordance with the Priority of Payments and Article XIII). 
Said Notes, in case the amounts so payable thereon shall be less than the amount
due thereon, shall be returned to the Holders thereof after proper notation has
been made thereon to show partial payment.

 

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

 

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

 

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

 

Section 5.5                                    Optional Preservation of
Collateral.

 

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

 

(i)                                     the Trustee determines (based upon
information provided to it by the Investment Manager in accordance with
Section 5.5(c) or, if Cause has occurred under the Investment Management
Agreement, a Majority of the Noteholders), and a Majority of the Noteholders
agree with such determination, that the anticipated proceeds of a sale

 

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or liquidation of the Collateral (after deducting the expenses of such sale or
liquidation) would be sufficient to pay in full the sum of:

 

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

 

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

 

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

 

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

 

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

 

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

 

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Section 5.6                                    Trustee May Enforce Claims
Without Possession of the Notes.  All rights of action and claims under this
Indenture or the Notes may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Trustee shall be
brought in its own name as Trustee of an express trust, and any recovery of
judgment, subject to the payment of the reasonable expenses, disbursements and
compensation of the Trustee, each predecessor Trustee and its agents and
attorneys in counsel, shall be applied as set forth in Section 5.7.

 

Section 5.7                                    Application of Money Collected.

 

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

 

Section 5.8                                    Limitation on Suits.

 

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

 

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

 

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

 

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

 

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

 

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

 

it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of the Notes or to obtain or to seek to obtain priority or preference over any
other Holders of the Notes or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all the
Holders of

 

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the Notes, subject to and in accordance with Section 13.1 and otherwise in
accordance with the Priority of Payments.  In addition, any action taken by any
one or more Holders of the Notes shall be subject to the same restrictions
imposed on the Trustee in accordance with Section 5.4(b).

 

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

 

Section 5.9                                    Unconditional Rights of Holders
of the Notes to Receive Principal and Interest.

 

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

 

Section 5.10                             Restoration of Rights and Remedies.

 

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

 

Section 5.11                             Rights and Remedies Cumulative.

 

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

 

Section 5.12                             Delay or Omission Not Waiver.

 

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

 

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Section 5.13                             Control by Noteholders.

 

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

 

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

 

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

 

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

 

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

 

Section 5.14                             Waiver of Past Defaults.

 

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

 

(a)                                 constituting a Payment Default; or

 

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

 

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

 

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

 

Section 5.15                             Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder of any Note by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken, or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in such suit,

 

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having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 5.15 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Holder of the
Notes, or group of Holders of the Notes, holding in the aggregate more than 10%
of the Aggregate Outstanding Amount of the Notes, or to any suit instituted by
any Holder of the Notes for the enforcement of the payment of the principal of
or interest on any Note on or after the Stated Maturity expressed in such Note
(or, in the case of redemption, on or after the applicable Redemption Date).

 

Section 5.16                             Waiver of Stay or Extension Laws.

 

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

 

Section 5.17                             Sale of Collateral.

 

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

 

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

 

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

 

(d)                                 The Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest, without
recourse, representation or warranty, in any portion of the Collateral in
connection with a sale thereof.  In addition, the Trustee is hereby irrevocably
appointed the agent and attorney-in-fact of the Issuer to transfer and convey
its interest in any portion of the Collateral in connection with a sale thereof,
and to execute and deliver any

 

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instruments and take all action (whether in its name or in the name of the
Issuer) necessary to effect such sale.  No purchaser or transferee at such a
sale shall be bound to ascertain the Trustee’s authority, to inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.

 

Section 5.18                             Action on the Notes.

 

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

 

ARTICLE VI.

 

THE TRUSTEE

 

Section 6.1                                    Certain Duties and
Responsibilities.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.2                                    Notice of Default.

 

Promptly (and in no event later than three Business Days) after the occurrence
of any Default actually known to a Trust Officer of the Trustee or after any
declaration of acceleration has been made or delivered to the Trustee pursuant
to Section 5.2, the Trustee shall transmit by mail or telecopy to the Investment
Manager and to all Holders of the Notes, as their names and

 

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addresses appear on the Register, notice of all Defaults hereunder actually
known to a Trust Officer of the Trustee, unless such Default shall have been
cured or waived.

 

Section 6.3                                    Certain Rights of Trustee.

 

Except as otherwise provided in Section 6.1:

 

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

 

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

 

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

 

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

 

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

 

(f)                                   the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, note or other paper or documents, but the Trustee, in its discretion, may
and, upon the written direction of a Majority of the Noteholders, shall make
such further inquiry or investigation into such facts or matters as it may see
fit or as it shall be directed, and the Trustee shall be entitled to receive, on
reasonable prior notice to the Investment Manager, copies of the books and
records of the Investment Manager relating to the Notes and the Collateral, and
on reasonable prior notice to the Issuer, to examine the books and records
relating to the Notes and the Collateral and the premises of the Issuer
personally or by agent or attorney during the Issuer’s normal business hours;
provided that the Trustee shall, and shall cause its agents, to hold

 

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in confidence all such information, except (i) to the extent disclosure may be
required by law or by any regulatory or governmental authority and (ii) except
to the extent that the Trustee in its sole judgment may determine that such
disclosure is consistent with its obligations hereunder; provided, further, that
the Trustee may disclose on a confidential basis any such information to its
agents, attorneys and auditors in connection with the performance of its
responsibilities hereunder.

 

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

 

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

 

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

 

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

 

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

 

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

 

(m)                             the Trustee shall have no duty (i) to see to any
recording, filing, or depositing of this Indenture or any Indenture referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or

 

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filing or depositing or to any rerecording, refiling or redepositing of any
thereof or (ii) to see to any insurance;

 

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

 

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

 

(p)                                 the Trustee shall not be responsible or
liable for any failure or delay in the performance of its obligations under this
Indenture arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control, including without limitation, acts of God;
earthquakes; fires; floods; wars; civil or military disturbances; sabotage;
epidemics; riots; interruptions, loss or malfunctions of utilities, computer
(hardware or software) or communications service, accidents; labor disputes;
acts of civil or military authority or governmental actions (it being understood
that the Trustee shall use commercially reasonable efforts to resume performance
as soon as practicable under the circumstances);

 

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

 

(r)                                    to help fight the funding of terrorism
and money laundering activities, the Trustee will obtain, verify, and record
information that identifies individuals or entities that establish a
relationship or open an account with the Trustee. The Trustee will ask for the
name, address, tax identification number and other information that will allow
the Trustee to identify the individual or entity who is establishing the
relationship or opening the account. The Trustee may also ask for formation
documents such as articles of incorporation, an offering memorandum, or other
identifying documents to be provided; and

 

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

 

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

 

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Section 6.4                                    Not Responsible for Recitals or
Issuance of the Notes.

 

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

 

Section 6.5                                    May Hold Notes.

 

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

 

Section 6.6                                    Money Held in Trust.

 

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

 

Section 6.7                                    Compensation and Reimbursement.

 

(a)                                 The Issuer agrees:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.8                                    Corporate Trustee Required;
Eligibility.

 

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

 

Section 6.9                                    Resignation and Removal;
Appointment of Successor.

 

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

 

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

 

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

 

(d)                                 If at any time:

 

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

 

(ii)                                  the Trustee shall become incapable of
acting or shall be adjudged as bankrupt or insolvent or a receiver or liquidator
of the Trustee or of its property shall be

 

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appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation;

 

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

 

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

 

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

 

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Section 6.10                             Acceptance of Appointment by Successor.

 

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

 

Section 6.11                             Merger, Conversion, Consolidation or
Succession to Business of Trustee.

 

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

 

Section 6.12                             Co-Trustees and Separate Trustee.

 

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

 

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

 

Should any written instrument from the Issuer be required by any co-Trustee so
appointed for more fully confirming to such co-Trustee such property, title,
right or power, any

 

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and all such instruments shall, on request, be executed, acknowledged and
delivered by the Issuer.  The Issuer agrees to pay (but only from and to the
extent of the Collateral, after payment in full of the amounts payable pursuant
to subclauses (i) through (v) of Section 11.1(a)(A)) for any reasonable fees and
expenses in connection with such appointment.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.13                             Certain Duties of Trustee Related to
Delayed Payment of Proceeds.

 

In the event that in any month the Trustee determines based upon the information
contained in the Monthly Report or information received from the Collateral
Administrator that it has not received a payment with respect to any Pledged
Obligation on its Due Date, (a) the Trustee shall promptly notify the Issuer and
the Investment Manager in writing and (b) unless within three Business Days (or
the end of the applicable grace period for such payment, if longer), after such
notice such payment shall have been received by the Trustee, or the Issuer, in
its absolute discretion (but only to the extent permitted by Section 10.2(a)),
shall have made provision for such payment satisfactory to the Trustee in
accordance with Section 10.2(a), the

 

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Trustee shall request the issuer of such Pledged Obligation, the trustee under
the related Reference Instrument or Paying Agent designated by either of them,
as the case may be, to make such payment as soon as practicable after such
request but in no event later than three Business Days after the date of such
request.  In the event that such payment is not made within such time period,
the Trustee, subject to the provisions of subclause (iv) of Section 6.1(c),
shall take such action as the Investment Manager shall reasonably direct in
writing.  Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture.  In the event that the Issuer
or the Investment Manager requests a release of a Pledged Obligation in
connection with any such action under the Investment Management Agreement, such
release shall be subject to Section 10.6 and Article XII of this Indenture, as
the case may be.  Notwithstanding any other provision hereof, the Trustee shall
deliver to the Issuer or its designee any payment with respect to any Pledged
Obligation received after the Due Date thereof to the extent the Issuer
previously made provisions for such payment satisfactory to the Trustee in
accordance with this Section 6.13 and such payment shall not be deemed part of
the Collateral.

 

Section 6.14                             Representations and Warranties of the
Trustee.

 

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

 

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Section 6.15                             Authenticating Agents.

 

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

 

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

 

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

 

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

 

Section 6.16                             Representative for Holders of the Notes
Only; Agent for all other Secured Parties.

 

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

 

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Section 6.17                             Right of Trustee in Capacity of
Registrar, Paying Agent, Calculation Agent or Securities Intermediary.

 

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

 

ARTICLE VII.

 

COVENANTS

 

Section 7.1                                    Payment of Principal and
Interest.

 

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

 

Section 7.2                                    Compliance With Laws, Etc.

 

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

 

Section 7.3                                    Maintenance of Books and Records.

 

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

 

Section 7.4                                    Maintenance of Office or Agency.

 

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

 

Section 7.5                                    Money for Security Payments to be
Held in Trust.

 

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

 

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

 

(a)                                 the fifth calendar day after each Regular
Record Date; and

 

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

 

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

 

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

 

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

 

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

 

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

 

(C)                               if such Paying Agent is not the Trustee,
immediately resign as a Paying Agent and forthwith pay to the Trustee all sums
held by it in trust for the payment of the

 

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Notes if at any time it ceases to meet the standards set forth above required to
be met by a Paying Agent at the time of its appointment;

 

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

 

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

 

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

 

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

 

Section 7.6                                    Existence of Issuer.

 

(a)                                 The Issuer shall take all reasonable steps
to maintain its identity as a separate legal entity from that of its members. 
The Issuer shall keep its principal place of business at the address specified
in Section 14.3.  The Issuer shall keep separate books and records and will not
commingle its respective funds with those of any other Person.  The Issuer
shall, to the maximum extent permitted by applicable law, keep in full force and
effect its rights and franchises as a limited liability company incorporated
under the laws of the State of Delaware, shall comply with the provisions of its
organizational documents, and shall obtain and preserve

 

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its qualification to do business as a foreign limited liability company in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture, the Notes or any of the
Collateral.

 

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

 

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

 

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Section 7.7                                    Protection of Collateral.

 

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

 

(i)                                     Grant more effectively all or any
portion of the Collateral;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)                                 The Trustee shall not (i) except in
accordance with Section 10.6(a), (b) or (c), as applicable, remove any portion
of the Collateral that consists of Cash or is evidenced by an instrument,
certificate or other writing (A) from the jurisdiction in which it was held at
the date the most recent Opinion of Counsel was delivered pursuant to
Section 7.8 (or from the jurisdiction in which it was held as described in the
Opinion of Counsel delivered at the Closing

 

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Date pursuant to Section 3.1(c), if no Opinion of Counsel has yet been delivered
pursuant to Section 7.8) or (B) from the possession of the Person who held it on
such date or (ii) cause or permit ownership or the pledge of any portion of the
Collateral that consists of book-entry securities to be recorded on the books of
a Person (A) located in a different jurisdiction from the jurisdiction in which
such ownership or pledge was recorded at such date or (B) other than the Person
on whose books such ownership or pledge was recorded at such date, unless the
Trustee shall have first received an Opinion of Counsel to the effect that the
lien and security interest created by this Indenture with respect to such
property will continue to be maintained after giving effect to such action or
actions.

 

Section 7.8                                    Opinions as to Collateral.  On or
before July 1 in each calendar year, commencing in 2015, the Issuer shall
furnish to the Trustee an Opinion of Counsel relating to the security interest
granted by the Issuer to the Trustee, stating that, as of the date of such
opinion, the lien and security interest created by this Indenture with respect
to the Collateral remain in effect and that no further action (other than as
specified in such opinion) needs to be taken to ensure the continued
effectiveness of such lien over the next year.

 

Section 7.9                                    Performance of Obligations.

 

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

 

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

 

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

 

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Section 7.10                             Negative Covenants.

 

(a)                                 The Issuer will not:

 

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

 

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

 

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

 

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

 

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

 

(vi)                              become liable in any way, whether directly or
by assignment or as a guarantor or other surety, for the obligations of the
lessee under any lease, hire any

 

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employees or pay any dividends to the Equity Owner (other than in accordance
with this Indenture);

 

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

 

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

 

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

 

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

 

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

 

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

 

(xiii)                        amend any provision of this Indenture or any other
agreement entered into by the Issuer with respect to the transactions
contemplated hereby, relating to (A) the institution of proceedings for the
Issuer to be adjudicated as bankrupt or insolvent, (B) the consent of the Issuer
to the institution of bankruptcy or insolvency proceedings against it, (C) the
filing with respect to the Issuer of a petition or answer or consent seeking
reorganization, arrangement, moratorium or liquidation proceedings, or other
proceedings under the Bankruptcy Code or any similar laws, or (D) the consent of
the

 

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Issuer to the filing of any such petition or the appointment of a receiver,
liquidator, assignee, trustee or sequestrator (or other similar official) of the
Issuer or any substantial part of its property, respectively;

 

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

 

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

 

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

 

(xvii)                    fail to correct any known misunderstanding regarding
its separate identity;

 

(xviii)                 have any employees;

 

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

 

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

 

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

 

(xxii)                    acquire or form any subsidiary.

 

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

 

Section 7.11                             No Consolidation.

 

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

 

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Section 7.12                             Participations.

 

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

 

Section 7.13                             No Other Business; Etc.

 

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

 

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

 

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

 

Section 7.14                             Compliance with Investment Management
Agreement.

 

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

 

Section 7.15                             Reporting.

 

At any time when the Issuer is not subject to Section 13 or 15(d) of the
Exchange Act and is not exempt from reporting pursuant to Rule 12g-3-2(b) under
the Exchange Act, upon the request of a Holder or beneficial owner of a Note,
the Issuer shall promptly furnish, or cause to be furnished by the Trustee,
Rule 144A Information to such Holder or beneficial owner, to a prospective
purchaser of such Note designated by such Holder or beneficial owner, to another
designee of such Holder or beneficial owner, as the case may be, in order to
permit compliance by such Holder or beneficial owner with Rule 144A in
connection with the resale of such Note by such Holder or beneficial owner. 
Upon request by the Issuer, the Trustee shall cooperate with the Issuer in
mailing or otherwise distributing (at the expense of the Issuer) to such Holders
or prospective purchasers, at and pursuant to the written direction of the
Issuer, the foregoing

 

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materials prepared and provided by the Issuer; provided, however, that the
Trustee shall be entitled to affix thereto or enclose therewith such disclaimers
as the Trustee shall deem reasonably appropriate, at its discretion (such as,
for example, a disclaimer to the effect that such Rule 144A Information was
assembled by the Issuer and not by the Trustee, that the Trustee has not
reviewed or verified the accuracy thereof, and that it makes no representation
as to the sufficiency of such information under Rule 144A or for any other
purpose).

 

Section 7.16                             Calculation Agent.

 

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

 

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

 

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

 

(d)                                 The Calculation Agent shall be required to
agree that it may not, prior to the date which is one year and one day (or, if
longer, the applicable preference period) after the payment in full of all the
Notes, institute against, or join any other Person in instituting against, the
Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceedings, or other proceedings under federal or state bankruptcy
or similar laws.  Nothing in this Section 7.16 shall preclude, or be deemed to
stop, the Calculation Agent (i) from taking any

 

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action prior to the expiration of the aforementioned one year and one day (or
longer) period in (A) any case or proceeding voluntarily filed or commenced by
the Issuer or (B) any involuntary insolvency proceeding filed or commenced by a
Person other than the Calculation Agent, or (ii) from commencing against the
Issuer or any of its properties any legal action which is not a bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceeding.

 

Section 7.17                             Certain Tax Matters.

 

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

 

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

 

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

 

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

 

(e)                                  Each Subsequent Holder of the Notes (and
any interest therein) agrees to provide the Issuer and any relevant intermediary
with any information or documentation that is required under FATCA or that the
Issuer or relevant intermediary deems appropriate to enable the Issuer or
relevant intermediary to determine their duties and liabilities with respect to
any taxes they

 

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may be required to withhold pursuant to FATCA in respect of such Note or the
holder of such Note or beneficial interest therein. In addition, each purchaser
and subsequent transferee of the Notes will be required or deemed to understand
and acknowledge that the Issuer has the right under this Indenture to withhold
on any holder or any beneficial owner of an interest in a Note that fails to
comply with FATCA.

 

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

 

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

 

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

 

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

 

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

 

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Section 7.18                             Representations Relating to Security
Interests in the Collateral.

 

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

 

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

 

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

 

(iii)                               All Issuer Accounts constitute “securities
accounts”.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.19                             Certain Regulations.

 

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

 

Section 7.20                             Section 3(c)(7) Procedures

 

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

 

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

 

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

 

(ii)                                  The Issuer will direct DTC to cause each
physical DTC deliver order ticket delivered by DTC to purchasers to contain the
DTC 20-character security

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.21                             Capital Contributions.

 

Following (but excluding) the Closing Date and for so long as the Notes are
subject to a repurchase financing transaction, the Issuer shall not permit the
Equity Owner to contribute cash (as a capital contribution) to the Issuer in an
aggregate amount that exceeds $25,000,000 (the “Cash Contribution Cap”);
provided, that any cash contributed to the Issuer (as a capital contribution) by
the Equity Owner (x) to acquire Collateral Obligations that have not settled as
of the Closing Date or (y) to redeem or prepay the Notes in whole or in part, in
each case shall be disregarded (and shall not be counted) for purposes of
determining whether the Equity Owner has contributed cash to the Issuer in
excess of such Cash Contribution Cap.

 

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Section 7.22                             Other Accounts. The Issuer shall
terminate all of its deposit accounts and securities accounts with State Street
(and each other institution other than the Trustee) as promptly after the
Closing Date as commercially practicable in light of the purposes for such
accounts.

 

ARTICLE VIII.

 

SUPPLEMENTAL INDENTURES

 

Section 8.1                                    Supplemental Indentures.

 

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

 

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

 

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

 

Section 8.2                                    Execution of Supplemental
Indentures.

 

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

 

Section 8.3                                    Effect of Supplemental
Indentures.

 

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

 

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Section 8.4                                    Reference in Notes to
Supplemental Indentures.

 

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

 

Section 8.5                                    Effect on the Investment Manager;
Effect on the Collateral Administrator.

 

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

 

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

 

ARTICLE IX.

 

REDEMPTION OF SECURITIES

 

Section 9.1                                    Optional Redemption.

 

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

 

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

 

(i)                                     in the case of an optional redemption
directed by the Specified Holders (if it constitutes a Majority of the
Noteholders) or if Cause exists (after the applicable cure and grace periods)
under the Investment Management Agreement (a “Specified Optional Redemption”),
the Specified Holder shall direct the Trustee in writing to sell, and the

 

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Trustee shall sell in the manner directed by the Specified Holder in writing and
in accordance with Section 9.2, any Collateral Obligation and upon any such sale
the Trustee shall release such Collateral Obligations pursuant to Section 10.6;
and

 

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

 

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

 

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

 

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

 

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

 

For the avoidance of doubt, the Issuer may, in effecting a sale contemplated by
subclause (i) of Section 9.1(c), enter into one or more participation agreements
or similar arrangements with the purchaser of the Collateral Obligations
whereby, in connection with the Issuer’s receipt of the purchase price with
respect to all or a portion of the Collateral Obligations, the Issuer shall

 

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grant to such purchaser a participation interest in all or a portion of such
Collateral Obligations and agree to use commercially reasonable efforts (or such
other efforts as shall be specified) to complete the transfer of such Collateral
Obligations to such purchaser thereafter.

 

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

 

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

 

Section 9.2                                    Notice to Trustee of Optional
Redemption.

 

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

 

Section 9.3                                    Notice by the Issuer of Optional
Redemption or of Maturity.

 

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

 

All notices of redemption shall state:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 9.4                                    Notes Payable on Redemption Date.

 

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

 

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

 

ARTICLE X.

 

ACCOUNTS, ACCOUNTINGS AND RELEASES

 

Section 10.1                             Collection of Money.

 

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

 

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

 

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

 

All investment or application of funds in accordance with Section 10.3 shall be
made pursuant to an Issuer Order (which may be in the form of standing
instructions) executed by an Authorized Officer of the Investment Manager.  The
Issuer shall at all times direct the Trustee or the Issuer Accounts Securities
Intermediary, as applicable to, and, upon receipt of such Issuer Order, the
Trustee or the Issuer Accounts Securities Intermediary shall, invest or cause
the investment of, pending application in accordance with Section 10.3, all
funds received into the Issuer Accounts (other than the Payment Account) during
a Due Period (except when such funds shall be required to be disbursed
hereunder), and amounts received in prior Due Periods and retained in any Issuer
Account, as so directed, in Eligible Investments.  If, prior to the occurrence

 

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

 

Section 10.2                             Interest Collection Account.

 

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

 

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of this Indenture and the Securities Account Control Agreement.  At all times,
the Interest Collection Account shall remain at an institution that satisfies
the requirements of Section 10.1.

 

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

 

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

 

Section 10.3                             Principal Collection Account; Payment
Account; and Expense Reserve Account.

 

(a)                                 The Issuer shall, prior to the Closing Date,
establish at the Issuer Accounts Securities Intermediary a segregated trust
account in the name “Gladwyne Funding LLC, subject to the lien of Citibank,
N.A., as Trustee on behalf of the Secured Parties,” which shall be designated as
the Principal Collection Account, which shall be held by the Issuer Accounts
Securities Intermediary in accordance with the Securities Account Control
Agreement.  Any and all funds at any time on deposit in, or otherwise to the
credit of, the Principal Collection Account shall be held in trust by the
Trustee for the benefit of the Secured Parties.  The Trustee agrees to give the
Issuer notice as soon as practicable under the circumstances if the Principal
Collection

 

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Account or any funds on deposit therein, or otherwise to the credit of the
Principal Collection Account, shall become subject to any writ, order, judgment,
warrant of attachment, execution or similar process.  The Issuer shall not have
any legal, equitable or beneficial interest in the Principal Collection Account
other than in accordance with the provisions of this Indenture and the
Securities Account Control Agreement.  At all times, the Principal Collection
Account shall remain at an institution that satisfies the requirements of
Section 10.1.

 

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

 

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

 

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

 

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

 

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Securities Account Control Agreement.  At all times, the Payment Account shall
remain at an institution that satisfies the requirements of Section 10.1.

 

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

 

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

 

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Section 10.4                             Reports by Trustee.

 

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

 

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

 

Section 10.5                             Accountings.

 

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

 

(a)                                 Monthly.  Commencing in November 2014,
(i) in the case of a month in which there is no Payment Date, not later than the
second (2nd) Business Day after the 10th day of such month and (ii) in the case
of a month in which there is a Payment Date, one Business Day prior to such
Payment Date, the Issuer shall compile, or cause to be compiled, a report (the
“Monthly Report”) and the Issuer shall then provide or make available such
Monthly Report by facsimile, overnight courier or electronic mail to the
Trustee, the Collateral Administrator, the Investment Manager and any Holder of
the Notes and, upon written request in the form of Exhibit D attached hereto, by
first class mail or electronic mail to any other Noteholder (or its designee),
provided that a Monthly Report may be provided to any such party by posting such
Monthly Report on the Trustee’s website and providing access thereto to such
parties.  Such written request from a Noteholder (or its designee) may be
submitted directly to the Trustee, and the Trustee shall forward such written
request to the Issuer for processing.  The Monthly Report

 

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shall contain the following information and instructions with respect to the
Collateral, determined as of (1) in the case of a month in which there is no
Payment Date, the 10th day of the applicable month and (2) in the case of a
month in which there is a Payment Date, the Determination Date for such Payment
Date:

 

(i)                                     With respect to the Collateral
Portfolio:

 

(A)                               the Aggregate Principal Amount of the
Collateral Obligations and the Eligible Investments;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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such Defaulted Obligation as of the date of determination of the current Monthly
Report, and (c) the Aggregate Principal Amount of all Defaulted Obligations;

 

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

 

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

 

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

 

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

 

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

 

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

 

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Investments during such Due Period and (B) the release of any Collateral
Obligations during such Due Period;

 

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

 

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

 

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

 

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

 

(vi)                              for the Interest Collection Account:

 

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

 

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

 

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

 

(vii)                           for the Principal Collection Account:

 

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

 

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

 

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

 

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

 

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

 

(x)                                 the Principal Payments received during the
related Due Period;

 

(xi)                              the Principal Proceeds received during the
related Due Period;

 

(xii)                           the Interest Proceeds received during the
related Due Period;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Section 10.6                             Custodianship and Release of
Collateral.

 

(a)                                 Subject to Article XII, the Issuer may, by
Issuer Order delivered to the Trustee at least two Business Days prior to the
settlement date for any sale of a Collateral Obligation (x) in the case of
Defaulted Obligations, Withholding Tax Securities, or Equity Securities, direct
the Trustee to release such Collateral Obligation and, upon receipt of such
Issuer Order, the Trustee shall deliver any such Collateral Obligation, if in
physical form, duly endorsed to the broker or purchaser designated in such
Issuer Order or against receipt of the sales price therefor as set forth in such
Issuer Order; provided, however, that the Trustee may deliver any such
Collateral Obligation in physical form for examination in accordance with street
delivery custom, or (y) if no Event of Default has occurred and is continuing,
certify that (i) it has determined that a Collateral Obligation has become a
Defaulted Obligation (which certification shall contain a short statement of the
reason for such determination), and in each case, that the sale of such
Collateral Obligation will comply with Section 12.1(a), (ii) during the Initial
Investment Period, the sale of such Collateral Obligation and the proposed
purchase and delivery of Substitute Collateral Obligations will comply with
Section 3.4(a), (iii) the sale of such Collateral Obligation will comply with
Section 12.1(a), or (iv) the sale of such Collateral Obligation is being
effected in conjunction with a redemption pursuant to Section 9.1(a), and direct
the Trustee to release such Collateral Obligation and, upon receipt of such
Issuer Order, the Trustee shall deliver any such Collateral Obligation, if in
physical form, duly endorsed to the broker or purchaser designated in such
Issuer Order or against receipt of the sales price therefor as set forth in such
Issuer Order; provided, however, that the Trustee may deliver any such
Collateral Obligation in physical form for examination in accordance with street
delivery custom.

 

(b)                                 Subject to Article XII, the Issuer may, by
Issuer Order delivered to the Trustee at least two Business Days prior to the
date set for redemption or payment in full of a Pledged Obligation or other item
of Collateral and certifying that such Collateral Obligation is being redeemed
or paid in full, direct the Trustee, or at the Trustee’s instructions, the
Issuer Accounts Securities Intermediary, to deliver such Collateral Obligation,
if in physical form, duly endorsed, to cause it to be presented, or otherwise
appropriately deliver or present such security or debt obligation, to the
appropriate Paying Agent therefor or other Person responsible for payment
thereon on or before the date set for redemption or payment, in each case
against receipt of the redemption price or payment in full thereof.  Except with
respect to Defaulted Obligations, Withholding Tax Securities and Equity
Securities, if an Event of Default has occurred and is continuing at the time of
such direction, the Trustee, if so directed by a Majority of the Noteholders,
shall disregard such direction.

 

(c)                                  Subject to Article XII, the Issuer may, by
Issuer Order, delivered to the Trustee at least two Business Days prior to the
date set for an exchange, tender or sale, certifying that a Collateral
Obligation is subject to an Offer and setting forth in reasonable detail the
procedure for response to such Offer, direct the Trustee or, at the Trustee’s
instructions, the Issuer Accounts Securities Intermediary, to deliver such
security or debt obligation, if in physical form, duly endorsed, or, if such
security is a Collateral Obligation for which a Security Entitlement has been
created in an Issuer Account, to cause it to be delivered, or otherwise
appropriately deliver or present such security or debt obligation, in accordance
with such Issuer Order, in each case against receipt of payment therefor. 
Except with respect to Defaulted Obligations, Withholding Tax Securities and
Equity Securities, if an Event of Default has occurred and is continuing at the
time of such direction, the Trustee, if so directed by a Majority of the
Noteholders, shall disregard such direction.

 

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(d)                                 The Trustee shall deposit any proceeds
received from the disposition of a Pledged Obligation in the Principal
Collection Account and/or the Interest Collection Account, as the case may be,
unless directed to simultaneously applied to the purchase of Substitute
Collateral Obligations or Eligible Investments as permitted under and in
accordance with this Article X and Article XII.

 

(e)                                  The Trustee shall, upon receipt of an
Issuer Order at such time as there are no Notes Outstanding and all obligations
of the Issuer hereunder have been satisfied (as evidenced by an Officer’s
Certificate), release the Collateral from the lien of this Indenture.

 

Section 10.7                             [Reserved].

 

Section 10.8                             Additional Reports.

 

In addition to the information and reports specifically required to be provided
pursuant to the terms of this Indenture, the Issuer (at its expense), or the
Investment Manager on behalf of the Issuer, shall compile and the Issuer shall
then provide the Holders of any Notes (upon request of a Majority of the Notes),
with all information or reports delivered to the Trustee hereunder, and such
additional information as a Majority of the Noteholders may from time to time
reasonably request and the Issuer shall reasonably determine may be obtained and
provided without unreasonable burden or expense.  Such a request from a Holder
(or its designee) may be submitted directly to the Trustee and then such request
shall be forwarded to the Issuer for processing.  Such request from a Holder (or
its designee) shall be submitted to the Trustee by delivery of a written request
in the form of Exhibit D attached hereto.

 

Section 10.9                             Procedures Relating to the
Establishment of Issuer Accounts Controlled by the Trustee.

 

(a)                                 (i)                                    
Notwithstanding any term in this Indenture to the contrary and notwithstanding
the terms of Part 5 of Article 8 of the UCC, to the extent applicable, with
respect to Collateral Obligations delivered to the Trustee, any custodian acting
on its behalf, or the Bank acting as Issuer Accounts Securities Intermediary
pursuant to the provisions of this Indenture, the Trustee, any custodian acting
on its behalf, or the Bank acting as, Issuer Accounts Securities Intermediary
shall be obligated to receive and hold until released pursuant to the terms of
this Indenture the items delivered or caused to be delivered to it by the Issuer
or the Investment Manager, and to hold the same in its custody in accordance
with the terms of this Indenture but shall have no further obligation with
respect to, or be obligated to take (or to determine whether there has been
taken) any action in connection with the delivery of such Collateral
Obligations.  Without limiting the foregoing, in no instance shall the Trustee,
any such custodian or the Bank acting as Issuer Accounts Securities Intermediary
be under any duty or obligation to examine the underlying credit agreement, loan
agreement, participation agreement, indenture, trust agreement or similar
instrument that may be applicable to any Collateral Obligation in order to
determine (or otherwise to determine under applicable law) whether sufficient
actions have been taken and documents delivered (including without limitation,
any requisite obligor or agent bank consents, notices or filings) in order to
properly assign, transfer, or otherwise convey title to such Collateral
Obligations.

 

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(ii)                                  In connection with the delivery of any
Collateral Obligation, the Issuer or the Investment Manager shall send to the
Trustee and the Collateral Administrator a trade ticket or transmittal letter
(in form and content mutually reasonably acceptable to them), which shall, at a
minimum (in addition to other appropriate information with regard to the subject
Collateral Obligation as may be mutually agreed upon between the Collateral
Administrator and the Investment Manager), (i) specify the purchase price for
such Collateral Obligation, and (ii) identify the Collateral Obligation and its
material amount, payment and interest rate terms.  Each of the Trustee, the
Collateral Administrator, any custodian acting on its behalf and the Bank acting
as Issuer Accounts Securities Intermediary shall be entitled to assume the
genuineness, validity and enforceability of each such note, certificate,
instrument and agreement delivered to it in connection with the delivery of a
Collateral Obligation, and to assume that each is what it purports on its face
to be, and to assume the genuineness and due authority of all signatures
appearing thereon.

 

(b)                                 Nothing in this Section 10.9 shall impose
upon the Issuer Accounts Securities Intermediary the duties, obligations or
liabilities of the Trustee; and nothing herein shall impose upon the Trustee the
duties, obligations or liabilities of the Issuer Accounts Securities
Intermediary.

 

Section 10.10                      Notices to Holders of the Notes.

 

Each Monthly Report and Valuation Report shall contain or shall have attached to
it a notice to the Holders of the Notes stating that (A) each Holder of a
beneficial interest in the Notes shall be deemed to have (i) represented that
the Holder is both (1) a Qualified Institutional Buyer and (2) a Qualified
Purchaser and (ii) made all other representations set forth in the legends of
the applicable Notes, (B) the Issuer shall have the right to refuse to honor a
transfer of the Notes to a person who does not satisfy the requirements set
forth in subclause (A) of this Section 10.10 and (C) pursuant to Section 2.12,
the Issuer may require a Non-Permitted Holder to transfer its interest in the
Notes to a Person that is not a Non-Permitted Holder within 30 days of receiving
notice to such effect from the Issuer and, if such Non-Permitted Holder fails to
transfer its Notes, the Issuer shall have the right, without further notice to
the Non-Permitted Holder, to sell such Notes or interest in Notes to a purchaser
selected by the Issuer that is not a Non-Permitted Holder on such terms as the
Issuer may choose.  To the extent a notice is sent to a Holder of Rule 144A
Global Notes, the Trustee will request such Holder to send the notice to the
beneficial owners of such Notes.

 

ARTICLE XI.

 

APPLICATION OF MONIES

 

Section 11.1                             Disbursements of Monies from Payment
Account.

 

(a)                                 Notwithstanding any other provision in this
Indenture, but subject to the other subsections of this Section 11.1 and
Section 13.1, on or, with respect to amounts referred to in Section 11.1(d),
before each Payment Date or the Stated Maturity, the Trustee shall disburse
amounts transferred to the Payment Account from the Interest Collection Account
and, to the

 

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extent permitted hereunder, from the Principal Collection Account pursuant to
Section 10.2, Section 10.3, Section 2.7 or Section 3.4 as follows and for
application by the Trustee in accordance with the following priorities
(collectively, the “Priority of Payments”):

 

(A)                               On each Payment Date and on the Stated
Maturity, Interest Proceeds shall be applied as follows:

 

(i)                                     to the payment of taxes of the Issuer,
if any, and any governmental fee, including all filing, registration and annual
return fees payable by the Issuer;

 

(ii)                                  to the payment of accrued and unpaid
Administrative Expenses constituting (x) fees of the Trustee and reimbursement
of expenses (including indemnity payments) of the Trustee pursuant to the terms
of this Indenture and (y) fees and reimbursement of expenses (including
indemnity payments) of the Collateral Administrator under the Collateral
Administration Agreement; provided, however, that total payments pursuant to
this subclause (ii) shall not exceed, on any Payment Date other than the First
Payment Date, an amount equal to a percentage of the Aggregate Principal Amount
of the Collateral Portfolio equal to an annual rate of 0.02%, measured as of the
beginning of the Due Period preceding such Payment Date; and, with respect to
the First Payment Date, 0.005% (not annualized) of the Aggregate Principal
Amount of the Collateral Portfolio, measured as of the beginning of the Due
Period preceding such Payment Date;

 

(iii)                               to the payment (in the order set forth in
the definition of Administrative Expenses), of (a) first, remaining accrued and
unpaid Administrative Expenses (other than indemnity payments) of the Issuer
including other amounts payable by the Issuer to the Investment Manager under
the Investment Management Agreement (excluding any Investment Management Fee),
and to the Trustee and the Collateral Administrator constituting Administrative
Expenses (other than indemnity payments) not paid pursuant to subclause
(ii) above, and (b) second, remaining accrued and unpaid Administrative Expenses
of the Issuer constituting indemnity payments; provided, however, that such
payments pursuant to this subclause (iii), shall not exceed an amount equal on
any Payment Date (when taken together with any Administrative Expenses paid
during the period since the preceding Payment Date or, in the case of the First
Payment Date, the Closing Date) to $325,000 per annum;

 

(iv)                              to the payment of the Interest Distribution
Amount (to the extent funds are available for the payment thereto);

 

(v)                                 to the payment, first, pari passu, of any
accrued and unpaid fees and expenses of the Trustee and the Collateral
Administrator and second, in the order set forth in the definition of
Administrative Expenses, of any accrued and unpaid Administrative Expenses of
the Issuer (including, for the avoidance of doubt and without limitation,
(1) indemnities and amounts payable by the Issuer to the Trustee and the
Collateral Administrator and (2) indemnities and amounts

 

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payable by the Issuer to the Investment Manager under the Investment Management
Agreement (other than any Investment Management Fee)), in each case to the
extent not paid pursuant to subclauses (ii) and (iii) above;

 

(vi)                              to the payment to the Investment Manager of,
first, the current Investment Management Fee in accordance with the terms of the
Investment Management Agreement and, then, any accrued and previously unpaid
Investment Management Fee; and

 

(vii)                           the balance of Interest Proceeds to the Issuer
for distribution to the Equity Owner as a dividend payment thereon or as a final
distribution in redemption thereof, as applicable.

 

(B)                               Without limiting any other applicable
provisions of this Indenture, on each Payment Date and on the Stated Maturity,
Principal Proceeds will be distributed in the following order of priority:

 

(i)                                     to the payment of the amounts referred
to in subclauses (i) through (iv) of clause (A) of this Section 11.1(a) (in the
order of priority set forth therein), but only to the extent not paid in full
thereunder;

 

(ii)                                  during the Reinvestment Period:

 

(1)                                 to the purchase of Collateral Obligations or
to the Principal Collection Account for investment in Eligible Investments
pending purchase of Collateral Obligations at a later date in accordance with
Section 12.2;

 

(2)                                 either (x) such Payment Date is a Redemption
Date or (y) at the election of the Issuer, to the payment of principal of the
Notes (provided, in the case of this clause (y), that, as of such Payment Date,
after giving effect to all sales of Collateral Obligations prior to such Payment
Date, the Aggregate Principal Amount of the Collateral does not consist of
greater than 65% of Private Collateral Obligations); or

 

(3)                                 to the extent the Market Value Test is
satisfied as of the related Determination Date and at the election of the Issuer
(and so long as no Default has occurred and is then continuing, no Cause has
occurred and is then continuing under the Investment Management Agreement and no
Redemption is then pending), to the Issuer for distribution to the Equity Owner
in an amount equal to the Excess Market Value Amount on such Determination Date;

 

(iii)                               after the Reinvestment Period, to the
payment of principal of the Notes, at the Redemption Price;

 

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(iv)                              after the Notes have been paid in full, to the
amounts referred to in subclause (v) of clause (A) of this Section 11.1(a) (in
the order of priority set forth therein), but only to the extent not paid in
full thereunder;

 

(v)                                 to the payment to the Investment Manager of
the current Investment Management Fee in accordance with the terms of the
Investment Management Agreement and then, any accrued and previously unpaid
Investment Management Fee, in each case, to the extent not paid pursuant to
subclause (vii) of clause (A) of this Section 11.1(a); and

 

(vi)                              the balance of Principal Proceeds to the
Issuer for distribution to the Equity Owner as a dividend payment thereon or as
a final distribution in redemption thereof, as applicable.

 

(C)                               On each Payment Date that is a Redemption
Date, pursuant to the procedures described in Article IX, Liquidation Proceeds
shall be applied as follows:

 

(i)                                     to the payment of the amounts referred
to in subclause (i) of clause (B) of this Section 11.1(a), in such order of
priority;

 

(ii)                                  without duplication of the amounts paid
above, to the payment of all or a portion of the Notes then Outstanding, as
applicable, at the Redemption Price plus accrued and unpaid interest thereon;

 

(iii)                               to the payment of the amount referred to in
subclause (v) of Clause (A) of Section 11.1(a) (in the order of priority set
forth therein);

 

(iv)                              to the payment to the Investment Manager of,
first, the current Investment Management Fee in accordance with the terms of the
Investment Management Agreement and, then, any accrued and previously unpaid
Investment Management Fee; and

 

(v)                                 the balance of Liquidation Proceeds to the
Issuer for distribution to the Equity Owner as a dividend payment thereon or as
a final distribution in redemption thereof, as applicable.

 

(D)                               After an Event of Default has occurred and is
continuing, all Interest Proceeds, Principal Proceeds and any other available
funds in the Issuer Accounts will be distributed in the following order of
priority:

 

(i)                                     to the payment of the amounts referred
to in subclauses (i), through (iii) of Clause (A) of Section 11.1(a) (in the
order of priority set forth therein);

 

(ii)                                  to the payment (1) first, of the Interest
Distribution Amount, (2) second, of principal of the Notes, until the Notes have
been paid in full, and (3) third, of the amount referred to in subclause (v) of
Clause A of Section 11.1(a) (in the order of priority set forth therein);

 

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(iii)                               to the payment to the Investment Manager of
the current Investment Management Fee in accordance with the terms of the
Investment Management Agreement and then, any accrued and previously unpaid
Investment Management Fee; and

 

(iv)                              the balance of such funds, if any, to the
Issuer for distribution to the Equity Owner as a final distribution in
redemption thereof, as applicable.

 

(b)                                 Not later than 12:00 noon, New York time, on
the Business Day preceding each Payment Date, the Issuer shall, pursuant to
Section 10.3(c), remit or cause to be remitted to the Trustee for deposit in the
Payment Account an amount of Cash sufficient to pay the amounts described in
Section 11.1(a) required to be paid on such Payment Date.

 

(c)                                  If on any Payment Date the amount available
in the Payment Account from amounts received in the related Due Period is
insufficient to make the full amount of the disbursements required by the
statements furnished by the Issuer pursuant to Section 10.6, the Trustee shall
make the disbursements called for in the order and according to the priority set
forth under Section 11.1(a) above, subject to Article XIII, to the extent funds
are available therefor.

 

(d)                                 Notwithstanding anything to the contrary
contained herein, Interest Proceeds may be applied to the payment of
Administrative Expenses of the Issuer on days other than Payment Dates;
provided, that, in any Due Period such payments shall not exceed an amount equal
on any Payment Date (when taken together with any Administrative Expenses paid
during the period since the preceding Payment Date or, in the case of the First
Payment Date, the Closing Date) to $325,000 per annum; provided, further, that
(1) such payments do not exceed the amounts permitted to be paid on the related
Payment Date pursuant to section 11.1(a)(A)(iii) and (2) sufficient Interest
Proceeds have theretofore been received to cover such payments.

 

(e)                                  Notwithstanding any other provision of this
Indenture, including the other subsections of this Section 11.1, the Issuer, at
the option of the Equity Owner, shall have the right to direct the Trustee to
make a cash distribution from the Interest Proceeds to the Equity Owner on any
Business Day but only if, and only to the extent that, after giving effect to
such cash distribution the Issuer will be able to satisfy all payments
requirements under this Section 11.1 required of it on the next Payment Date as
evidenced by an Officer’s Certificate of the Issuer or the Investment Manager on
behalf of the Issuer, provided to the Trustee upon which the Trustee shall be
entitled to fully rely with no liability therefore.

 

ARTICLE XII.

 

SALE OF COLLATERAL OBLIGATIONS; SUBSTITUTION

 

Section 12.1                             Sales of Collateral Obligations.

 

(a)                                 For so long as no Event of Default has
occurred and is continuing, the Investment Manager may direct the Trustee, on
behalf of the Issuer, in writing to sell, and the Trustee shall sell, in the
manner directed by the Investment Manager any Collateral Obligation at any time,
in accordance with, and subject to, any applicable limitations on amounts and
other requirements

 

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set forth herein (it being understood that the foregoing limitation shall not
apply to any optional or mandatory substitutions or repurchases effected by FS
Energy and Power Fund pursuant to clause (b) below and the Sale and Contribution
Agreement).

 

(b)                                 Notwithstanding the foregoing, the Aggregate
Principal Amount of all Collateral Obligations (other than Warranty Transferred
Assets) sold pursuant hereto to the Equity Owner or an Affiliate thereof or
released to the Equity Owner pursuant to a dividend by the Issuer shall not in
aggregate exceed 20% of the Net Purchased Loan Balance measured as of the date
of such sale or dividend; provided, that the Aggregate Principal Amount of all
Defaulted Obligations (other than Warranty Transferred Assets) sold pursuant to
Section 12(b)(i) to the Equity Owner or an Affiliate thereof or released to the
Equity Owner pursuant to a dividend by the Issuer shall not in any twelve-month
period exceed 10% of the Net Purchased Loan Balance measured as of the date of
such sale or dividend.

 

(c)                                  Application of Sale Proceeds.  During the
Reinvestment Period, all Sale Proceeds shall be applied to purchase additional
Collateral Obligations in accordance with Section 12.2 and Section 3.4(a), as
applicable, or to purchase Eligible Investments in accordance with Section 12.2,
or shall be applied in accordance with the Priority of Payments applicable
thereto on the next succeeding Payment Date.  After the Reinvestment Period, no
Principal Proceeds may be reinvested in Collateral Obligations at any time.

 

(d)                                 Sales of Eligible Investments.  Except as
otherwise expressly provided herein, none of the Issuer, the Investment Manager
or the Trustee may at any time sell or permit the sale of any Eligible
Investment prior to its maturity date if the Issuer or the Investment Manager,
as the case may be, determines that such Eligible Investment will sell at a
price that is below the par value of such Eligible Investment.

 

(e)                                  Collateral Acquisition and Disposition
Terms.  Any transaction involving the purchase or sale of Collateral effected
under this Indenture shall be conducted on terms no less favorable to the Issuer
than terms prevailing in the market.  All sales of Collateral Obligations or any
portion thereof pursuant to this Section 12.1 shall be for Cash on a
non-recourse basis to the Issuer.

 

(f)                                   Sales Prior to Stated Maturity.  On or
prior to the date that is two Business Days prior to the Stated Maturity of the
last Outstanding Note, but no earlier than the date that is 90 Business Days
prior to the Stated Maturity of the last Outstanding Note, the Investment
Manager shall direct the Trustee in writing to sell, and the Trustee shall sell,
all Collateral Obligations and other securities to the extent necessary such
that no Collateral Obligations or other securities will be expected to be held
by the Issuer on or after such date, and the Trustee shall sell such Collateral
Obligations and such other securities in accordance with the direction of the
Investment Manager.  The settlement dates for any such sales of Collateral
Obligations and other securities shall be no later than two Business Days prior
to the Stated Maturity of the last Outstanding Note.

 

(g)                                  Reinvestment in Collateral Obligations. 
Whenever the Investment Manager is required to use commercially reasonable
efforts to direct the reinvestment of Sale Proceeds on

 

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behalf of the Issuer under this Section 12.1, such reinvestment shall be subject
to market conditions and the availability and suitability of available
investments.

 

(h)                                 Following the occurrence and continuation of
an Event of Default or the occurrence and continuation of Cause under the
Investment Management Agreement (and after the application of any cure or grace
periods), the Investment Manager shall obtain the written consent of a Majority
of the Noteholders before acting on behalf of, or otherwise directing, the
Issuer, the Trustee or any other person in connection with a sale of Collateral
Obligations pursuant to any provision of this Indenture.

 

Section 12.2                             Trading Restrictions.

 

(a)                                 In connection with the purchase of a
Collateral Obligation and prior to entering into a commitment to purchase such
Collateral Obligation, the Issuer, or the Investment Manager on behalf of the
Issuer, shall comply with the following procedure:

 

(i)                                     each proposed purchase of a Collateral
Obligation shall be submitted in writing for approval to the Holders of the
Notes;

 

(ii)                                  the Issuer and the Majority of the
Noteholders shall, in good faith, collectively designate each proposed
Collateral Obligation as a “Private Collateral Obligation” or a “Non-Private
Collateral Obligation”;

 

(iii)                               the Majority of the Noteholders shall have
the right to request (and upon receipt of such request, the Investment Manager
shall promptly provide) the following information with respect to the Collateral
Obligation identified for purchase: (1) the Reference Instrument (including the
collateral and security documents) relating to such Collateral Obligation;
(2) any appraisal or valuation reports conducted by third parties; and (3) any
other information customary and typical in performing a detailed credit analysis
and as reasonably requested by the Majority of the Noteholders, including
(without limitation) corporate organization charts of the obligors (to the
extent available to the Investment Manager) and information concerning the
relationship of such obligor to the Issuer and the Investment Manager and their
respective Affiliates (collectively, the “Diligence Information”); and

 

(iv)                              upon receipt of the request for approval and
any requested Diligence Information, as set forth in clauses (i) and (ii) above,
the Majority of the Noteholders shall, within 5 Business Days, either
(x) approve the purchase of such Collateral Obligation and, in connection with
such approval, determine the Market Value for such Collateral Obligation as of
the approval date, or (y) reject the purchase of such Collateral Obligation.

 

For the avoidance of doubt, no Collateral Obligations shall be purchased by the
Issuer unless consent of a Majority of the Noteholders has been obtained
therefor.

 

(b)                                 In connection with the Issuer’s holding of a
Collateral Obligation and for as long as such Collateral Obligation remains part
of the Collateral Portfolio, the Issuer, or the Investment Manager on behalf of
the Issuer, shall use commercially reasonable efforts to provide

 

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upon request, as soon as practically available, the Holders of the Notes with
the Diligence Information referenced to in subclause (a)(ii) above.

 

(c)                                  Notwithstanding anything to the contrary
herein, for the avoidance of doubt, there shall be no reinvestment in any
Collateral Obligations after the end of the Reinvestment Period.

 

(d)                                 Notwithstanding anything to the contrary
herein, the Issuer will not at any time commit to purchase any Collateral
Obligation unless at the time of such commitment the Issuer, in its commercially
reasonable judgment, believes there is or will be an amount of funds on deposit
in the Principal Collection Account that is equal to or greater than the full
amount required by the Issuer to purchase such Collateral Obligation (and all
other Collateral Obligations that the Issuer has committed to purchase but that
have not yet settled).

 

Section 12.3                             Affiliate Transactions. The Issuer will
not have the right or ability to sell to an Affiliate any Collateral Obligation
acquired from an Affiliate except for (a) Defaulted Obligations, (b) required
repurchase obligations or other permitted transactions pursuant to
Section 12.1(a) and the Sale and Contribution Agreement (such repurchase,
“Permitted Repurchases”), or (c) sales to Affiliates conducted on terms and
conditions consistent with those of an arm’s length transaction at fair market
value so long as the Investment Manager obtains bid prices from at least two
nationally recognized dealers (unaffiliated with the Investment Manager or its
affiliates) for such Collateral Obligation.  The Issuer will not have the right
or ability to purchase Collateral Obligations from any Affiliate except for
purchases from Affiliates conducted on terms and conditions consistent with
those of an arm’s length transaction at fair market value.

 

ARTICLE XIII.

 

NOTEHOLDERS’ RELATIONS

 

Section 13.1                             Subordination and Non-Petition.

 

(a)                                 Anything in this Indenture or the Notes to
the contrary notwithstanding, the Issuer agrees for the benefit of the Holders
of the Notes that the rights of the Equity Owner to distribution by the Issuer
and in and to the Collateral, including any payment from Proceeds of Collateral,
shall be subordinate and junior to the Notes, to the extent and in the manner
set forth in this Indenture including, as set forth in Section 11.1 and
hereinafter provided.  If any Event of Default has occurred and has not been
cured or waived, and notwithstanding anything contained in Section 11.1 to the
contrary, interest on and principal of the Notes shall be paid in full in Cash
(in order of priority) before any further payment or distribution is made on
account of the Equity Owner.

 

(b)                                 In the event that notwithstanding the
provisions of this Indenture, any Holder of any Subordinate Interests shall have
received any payment or distribution in respect of such Subordinate Interests
contrary to the provisions of this Indenture, then, unless and until either the
Notes shall have been paid in full in Cash in accordance with this Indenture,
such payment or distribution shall be received and held in trust for the benefit
of, and shall forthwith be paid over and delivered to, the Trustee, which shall
pay and deliver the same to the Holders of the Notes,

 

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as the case may be, in accordance with this Indenture; provided, however, that,
if any such payment or distribution is made other than in Cash, it shall be held
by the Trustee as part of the Collateral and subject in all respects to the
provisions of this Indenture, including this Section 13.1.

 

(c)                                  The Issuer agrees with all Holders of the
Notes that the Issuer shall not demand, accept, or receive any payment or
distribution in respect of such Subordinate Interests in violation of the
provisions of this Indenture, including this Section 13.1.  Nothing in this
Section 13.1 shall affect the obligation of the Issuer to pay Holders of
Subordinate Interests.

 

(d)                                 The Noteholders shall not have a right to
receive from the Trustee or the Registrar a list of the Noteholders.

 

(e)                                  The Holders of the Notes agree not to cause
the filing of a petition in bankruptcy against the Issuer prior to the date
which is one year and one day (or, if longer, the applicable preference period)
after the payment in full of principal of and interest on all the Notes.

 

Section 13.2                             Standard of Conduct.

 

In exercising any of its or their voting rights, rights to direct and consent or
any other rights as a Holder under this Indenture, subject to the terms and
conditions of this Indenture, including Section 5.9, a Holder or Holders shall
not have any obligation or duty to any Person or to consider or take into
account the interests of any Person and shall not be liable to any Person for
any action taken by it or them or at its or their direction or any failure by it
or them to act or to direct that an action be taken, without regard to whether
such action or inaction benefits or adversely affects any Holder, the Issuer, or
any other Person, except for any liability to which such Holder may be subject
to the extent the same results from such Holder’s taking or directing an action,
or failing to take or direct an action, in bad faith or in violation of the
express terms of this Indenture.

 

ARTICLE XIV.

 

MISCELLANEOUS

 

Section 14.1                             Form of Documents Delivered to Trustee.

 

In any case where several matters are required to be certified by, or covered by
an opinion of, any specified Person, it is not necessary that all such matters
be certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.

 

Any certificate of an Authorized Officer of the Issuer or the Investment Manager
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such Authorized Officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous.  Any such certificate of an
Authorized Officer of

 

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the Issuer or the Investment Manager or Opinion of Counsel may be based, insofar
as it relates to factual matters, upon a certificate of, or representations by,
the Issuer, the Investment Manager or any other Person, stating that the
information with respect to such factual matters is in the possession of the
Issuer, the Investment Manager or such other Person, unless such Authorized
Officer of the Issuer or the Investment Manager or such counsel knows that the
certificate or representations with respect to such matters are erroneous.  Any
Opinion of Counsel may also be based, insofar as it relates to factual matters,
upon a certificate of, or representations by, an Authorized Officer of the
Issuer or the Investment Manager, stating that the information with respect to
such matters is in the possession of the Issuer or the Investment Manager,
unless such counsel knows that the certificate or representations with respect
to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications,
requests, consents, certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be consolidated and form one
instrument.

 

Whenever in this Indenture it is provided that the absence of the occurrence and
continuation of a Default or Event of Default is a condition precedent to the
taking of any action by the Trustee at the request or direction of the Issuer,
then notwithstanding that the satisfaction of such condition is a condition
precedent to the Issuer’s rights to make such request or direction, the Trustee
shall be protected in acting in accordance with such request or direction if it
does not have knowledge of the occurrence and continuation of such Default or
Event of Default as provided in Section 6.1(d).

 

Section 14.2                             Acts of the Noteholders.

 

(a)                                 Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Notes may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Holders in
Person or by an agent duly appointed in writing, and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee, and, where it is hereby expressly
required, to the Issuer.  Such instrument or instruments (and the action or
actions embodied therein and evidenced thereby) are herein sometimes referred to
as the “Act” of the Holders signing such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Issuer, if made in the manner provided in this Section 14.2.

 

(b)                                 The fact and date of the execution by any
Person of any such instrument or writing may be proved in any manner which the
Trustee deems sufficient.

 

(c)                                  The principal amount, notional amount and
registered numbers of the Notes held by any Person, and the date of his holding
the same, shall be proved by the Register.

 

(d)                                 Any request, demand, authorization,
direction, notice, consent, waiver or other action by the Holder of any Notes
shall bind the Holder (and any transferee thereof) of such Note and of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof,

 

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in respect of anything done, omitted or suffered to be done by the Trustee, or
the Issuer in reliance thereon, whether or not notation of such action is made
upon such Note.

 

Section 14.3                             Notices.

 

Except as otherwise expressly provided herein, any request, demand,
authorization, direction, instruction, notice, consent, waiver or Act of the
Noteholders or other documents provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with any of the parties indicated
below shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing to and mailed, by first class mail, hand delivered, sent by
overnight courier service guaranteeing next day delivery or by telecopy in
legible form at the following addresses:

 

(a)                                 to the Trustee at, the Corporate Trust
Office, facsimile number: (212) 816-5527, Attention: Citibank Agency & Trust —
Gladwyne Funding LLC, or at any other address previously furnished in writing by
the Trustee;

 

(b)                                 to the Issuer in care of FS Energy and Power
Fund, Cira Centre, 2929 Arch Street, Suite 675, Philadelphia, Pennsylvania
19104, facsimile number: (215) 222-4649, Attention: Gerald F. Stahlecker, or at
any other address previously furnished in writing by the Issuer;

 

(c)                                  to the Investment Manager, Cira Centre,
2929 Arch Street, Suite 675, Philadelphia, Pennsylvania 19104, facsimile number:
(215) 222-4649, Attention: Gerald F. Stahlecker, or at any other address
previously furnished in writing by the Investment Manager; and

 

(d)                                 to the Collateral Administrator, 5400
Westheimer Court, Suite 760, Houston, TX 77056, facsimile number: (866)
816-3203, Attention: Gladwyne Funding LLC; and

 

(e)                                  in the case of notices to the Specified
Noteholder, to the address provided by the Specified Noteholder to the Issuer
and the Trustee on the Closing Date;

 

Section 14.4                             Notices to Noteholders; Waiver.

 

Except as otherwise expressly provided herein, where this Indenture provides for
notice to Holders of the Notes of any event,

 

(a)                                 such notice shall be sufficiently given to
Holders of the Notes if in writing and (i) mailed, first-class postage prepaid,
to each Noteholder affected by such event, at the address of such Holder as it
appears in the Register or (ii) if a Holder is located overseas and so requests,
faxed to such Holder, at the facsimile number of such Person as it appears in
the Register, not earlier than the earliest date and not later than the latest
date, prescribed for the giving of such notice; and

 

(b)                                 such notice shall be in the English
language.

 

Such notices will be deemed to have been given on the date of such mailing or
possible electronic transmission.

 

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The Trustee will deliver to the Holders of the Notes any notice requested to be
so delivered by such Holder (at the expense of such requesting Holder);
provided, that the Trustee may decline to deliver any such notice that it
reasonably determines is contrary to any terms of this Indenture or any duty or
obligation it may have, or that may expose it to liability or that may be
contrary to law.

 

Neither the failure to mail (or otherwise furnish electronically) any notice,
nor any defect in any notice so mailed, to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Holders of the
Notes.  In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impractical to give such notice by mail or
facsimile, as the case may be, then such notification to Holders of the Notes as
shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.

 

Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice. 
Waivers of notice by Noteholders shall be filed with the Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.

 

Section 14.5                             Effect of Headings and Table of
Contents.

 

The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.

 

Section 14.6                             Successors and Assigns.

 

All covenants and agreements in this Indenture by the Issuer shall bind its
successors and assigns, whether so expressed or not.

 

Section 14.7                             Severability.

 

In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

Section 14.8                             Benefits of Indenture.

 

Nothing in this Indenture or in the Notes, expressed or implied, shall give to
any Person (other than the Investment Manager and the Collateral Administrator,
who each shall be an express third party beneficiary of Section 8.5 and the
Granting Clause of this Indenture, the parties hereto and their successors
hereunder and the Holders of the Notes) any benefit or any legal or equitable
right, remedy or claim under this Indenture.

 

Section 14.9                             Governing Law.

 

THIS INDENTURE AND EACH SECURITY SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW

 

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YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN WITHOUT REGARD TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF.

 

Section 14.10                      Submission to Jurisdiction.

 

THE ISSUER AND THE TRUSTEE HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF ANY FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN IN THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THE SECURITIES OR THIS INDENTURE, AND THE ISSUER AND THE TRUSTEE
HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH FEDERAL OR NEW YORK STATE COURT.  THE ISSUER
AND THE TRUSTEE HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THAT THEY
MAY LEGALLY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
SUCH ACTION OR PROCEEDING.  THE ISSUER AND THE TRUSTEE IRREVOCABLY CONSENT TO
THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OR
DELIVERY OF COPIES OF SUCH PROCESS TO IT AT THE OFFICE OF THE ISSUER’S AGENT SET
FORTH IN SECTION 7.4.  THE ISSUER AND THE TRUSTEE AGREE THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

Section 14.11                      Counterparts.

 

This instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

 

Section 14.12                      Waiver Of Jury Trial.

 

THE TRUSTEE, THE NOTEHOLDERS AND THE ISSUER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO.  EACH OF THE ISSUER, THE
TRUSTEE, AND THE NOTEHOLDERS ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL
AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR SUCH PARTIES ENTERING INTO THIS AGREEMENT.

 

Section 14.13                      Legal Holiday.

 

In the event that the date of any Payment Date or Special Payment Date shall not
be a Business Day, then notwithstanding any other provision of the Notes or this
Indenture, payment need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the nominal
date of any such Payment Date or Special

 

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Payment Date, as the case may be; provided that, in the case of the Notes only,
interest shall accrue from and including the immediately preceding Payment Date
to but excluding the next Business Day following the nominal Payment Date.

 

ARTICLE XV.

 

ASSIGNMENT OF INVESTMENT MANAGEMENT AGREEMENT

 

Section 15.1                             Assignment of Investment Management
Agreement.

 

(a)                                 The Issuer, in furtherance of the covenants
of this Indenture and as security for the Secured Obligations and the
performance and observance of the provisions hereof, hereby assigns, transfers,
conveys and sets over to the Trustee, for the benefit of the Secured Parties,
all of the Issuer’s estate, right, title and interest in, to and under the
Investment Management Agreement (except as set forth in the second proviso of
this Section 15.1(a)), including (i) the right to give all notices, consents and
releases thereunder, (ii) the right to take any legal action upon the breach of
an obligation of the Investment Manager thereunder, including the commencement,
conduct and consummation of proceedings at law or in equity, (iii) the right to
receive all notices, accountings, consents, releases and statements thereunder
and (iv) the right to do any and all other things whatsoever that the Issuer is
or may be entitled to do thereunder; provided, however, that notwithstanding
anything herein to the contrary, the Trustee shall not have the authority to
execute any of the rights set forth in subclauses (i) through (iv) above or may
otherwise arise as a result of the Grant until the occurrence of an Event of
Default hereunder and such authority shall terminate at such time, if any, as
such Event of Default is cured or waived; provided, however, further, that the
assignment made hereby does not include an assignment of the Issuer’s right to
terminate the Investment Manager pursuant to Section 13 of the Investment
Management Agreement or any other provision contained therein.

 

(b)                                 The assignment made hereby is executed as
collateral security, and the execution and delivery hereby shall not in any way
impair or diminish the obligations of the Issuer under the provisions of the
Investment Management Agreement, nor shall any of the obligations contained in
the Investment Management Agreement be imposed on the Trustee.

 

(c)                                  Upon the retirement of the Notes and the
release of the Collateral from the lien of this Indenture, this assignment and
all rights herein assigned to the Trustee for the benefit of the Secured Parties
shall cease and terminate and all the estate, right, title and interest of the
Trustee in, to and under the Investment Management Agreement shall revert to the
Issuer and no further instrument or act shall be necessary to evidence such
termination and reversion.

 

(d)                                 The Issuer represents that the Issuer has
not executed any other assignment of the Investment Management Agreement.

 

(e)                                  The Issuer agrees that this assignment is
irrevocable, and that it will not take any action which is inconsistent with
this assignment or make any other assignment inconsistent herewith.  The Issuer
will, from time to time, execute all instruments of further assurance and all
such supplemental instruments with respect to this assignment as the Trustee may
specify or as may be required to maintain the perfection of the lien of this
Indenture.

 

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(f)                                   The Issuer hereby agrees, and hereby
undertakes to obtain the agreement and consent of the Investment Manager in the
Investment Management Agreement, to the following:

 

(i)                                     The Investment Manager consents to the
provisions of this assignment and agrees to perform any provisions of this
Indenture applicable to the Investment Manager subject to the terms of the
Investment Management Agreement.

 

(ii)                                  The Investment Manager acknowledges that,
except as otherwise set forth in Section 15.1(a), the Issuer is assigning all of
its right, title and interest in, to and under the Investment Management
Agreement to the Trustee for the benefit of the Secured Parties.

 

(iii)                               The Investment Manager shall deliver to the
Trustee and the Collateral Administrator duplicate original copies of all
notices, statements, communications and instruments delivered or required to be
delivered to the Issuer pursuant to the Investment Management Agreement.

 

(iv)                              Neither the Issuer nor the Investment Manager
will enter into any agreement amending, modifying or terminating the Investment
Management Agreement without (1) complying with the applicable provisions of the
Investment Management Agreement, and (2) the consent of the Majority of the
Noteholders.

 

(v)                                 Except as otherwise set forth herein and
therein, the Investment Manager shall continue to serve as Investment Manager
under the Investment Management Agreement notwithstanding that the Investment
Manager shall not have received amounts due it under the Investment Management
Agreement because sufficient funds were not then available hereunder to pay such
amounts in accordance with the Priority of Payments.  The Investment Manager
agrees not to cause the filing of a petition in bankruptcy against the Issuer
for the non-payment of the Investment Management Fees, or other amounts payable
by the Issuer to the Investment Manager under the Investment Management
Agreement prior to the date which is one year and one day (or, if longer, the
applicable preference period) after the payment in full of all the Notes issued
under this Indenture; provided, however, nothing in this Section 15.1 shall
preclude, or be deemed to stop, the Investment Manager (i) from taking any
action prior to the expiration of the aforementioned one year and one day (or
longer) period in (A) any case or proceeding voluntarily filed or commenced by
the Issuer or (B) any involuntary insolvency proceeding filed or commenced by a
Person other than the Investment Manager or its Affiliates or (ii) from
commencing against the Issuer or any of its properties any legal action which is
not a bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceeding.

 

(vi)                              The Investment Manager irrevocably submits to
the non-exclusive jurisdiction of any federal or New York state court sitting in
the Borough of Manhattan in The City of New York in any action or Proceeding
arising out of or relating to the Notes or this Indenture, and the Investment
Manager irrevocably agrees that all claims in respect of such action or
Proceeding may be heard and determined in such federal or New York state court. 
The Investment Manager irrevocably waives, to the fullest extent it

 

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may legally do so, the defense of an inconvenient forum to the maintenance of
such action or Proceeding.  The Investment Manager irrevocably consents to the
service of any and all process in any action or Proceeding by the mailing or
delivery of copies of such process to it at the office of the Investment Manager
set forth in Section 14.3.  The Investment Manager agrees that a final judgment
in any such action or Proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.

 

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IN WITNESS WHEREOF, we have set our hands as of the date first written above.

 

 

 

GLADWYNE FUNDING LLC,

 

as Issuer

 

 

 

 

 

By:

/s/ Gerald F. Stahlecker

 

Name: Gerald F. Stahlecker

 

Title: Executive Vice President

 

 

 

 

 

CITIBANK, N.A.,

 

as Trustee

 

 

 

By:

/s/ Jennifer Parker

 

Name: Jennifer Parker

 

Title: Vice President

 

Indenture Signature Page

 

S-1

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