EXECUTION COPY 

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SECURITY AND INTERCREDITOR AGREEMENT 

dated as of March 3, 2009 

among 

TALF LLC, 

as Borrower, 

FEDERAL RESERVE BANK OF NEW YORK, 

as Senior Lender, 

UNITED STATES DEPARTMENT OF THE TREASURY, 

as Subordinated Lender, 

FEDERAL RESERVE BANK OF NEW YORK, 

as Controlling Party, 

and 

THE BANK OF NEW YORK MELLON, 

as Collateral Agent 
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TABLE OF CONTENTS 

PAGE

Section 1. Definitions............................................................................................. 1 

Section 2. Security Interest. ................................................................................... 5 

Section 3. Representations, Warranties and Covenants of the Borrower ............. 6 

Section 4. Administration of Collateral................................................................. 9 

Section 5. Collateral Account and Application of Proceeds. .............................. 10 

Section 6. Certain Agreements Among Secured Parties...................................... 14 

Section 7. The Collateral Agent........................................................................... 15 

Section 8. Waivers; Amendment. ......................................................................... 22 

Section 9. Notices................................................................................................. 22 

Section 10. Binding Effect.................................................................................... 23 

Section 11. Survival of Agreement....................................................................... 23 

Section 12. Expenses; Indemnity. ........................................................................ 23 

Section 13. Successors and Assigns..................................................................... 25 

Section 14. Counterparts..................................................................................... 25 

Section 15. Severability ....................................................................................... 25 

Section 16. Integration......................................................................................... 26 

Section 17. Applicable Law ................................................................................. 26 

Section 18. Submission to Jurisdiction; Venue; Etc ............................................ 26 

Section 19. Confidentiality................................................................................... 27 

Section 20. WAIVERS OF JURY TRIAL.............................................................. 27 

Section 21. Limited Recourse .............................................................................. 27 

Section 22. Headings........................................................................................... 27 

Section 23. Waiver of Right of Setoff................................................................... 28 

Section 24. Instructions ....................................................................................... 28 

Section 25. Further Assurances........................................................................... 28 

Section 26. Internal Controls............................................................................... 28 

Section 27. Role of the Controlling Party............................................................ 28 

Section 28. No Petitions....................................................................................... 28 

Section 29. Maintenance of Books and Records.................................................. 28 

Section 30. Termination....................................................................................... 30 

Exhibit A Form of Collateral Account Control Agreement 

Exhibit B Form of Incumbency Certificate 
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SECURITY AND INTERCREDITOR AGREEMENT 

This SECURITY AND INTERCREDITOR AGREEMENT dated as of 

March 3, 2009 (this “Agreement”) among TALF LLC, a Delaware limited 

liability company (the “Borrower”), FEDERAL RESERVE BANK OF NEW 

YORK, as Senior Lender, UNITED STATES DEPARTMENT OF THE 

TREASURY, as Subordinated Lender, FEDERAL RESERVE BANK OF NEW 

YORK, as Controlling Party and THE BANK OF NEW YORK MELLON, as 

collateral agent for the Secured Parties hereinafter referred to (in such capacity, 

together with its successors in such capacity, the “Collateral Agent”). 

WHEREAS, concurrently with the execution and delivery of this 

Agreement, the Borrower, the Senior Lender, the Subordinated Lender and the 

Controlling Party are entering into the Credit Agreement dated as of the date 

hereof (the “Credit Agreement”) pursuant to which the Lenders have agreed to 

make the Loans to the Borrower thereunder upon the terms and subject to the 

conditions set forth therein; and 

WHEREAS, the proceeds of the Loans shall be used by the Borrower to 

acquire assets (including by way of assignment) pursuant to the Put Option 

Agreement; and 

WHEREAS, it is a condition precedent to the obligations of the Lenders to 

make the Loans to the Borrower under the Credit Agreement that the Borrower 

shall have executed and delivered this Agreement; and 

WHEREAS, contemporaneously herewith the Borrower, the Collateral 

Agent and the Securities Intermediary are executing and delivering the Collateral 

Account Control Agreement; and 

WHEREAS, the Borrower and the Secured Parties agree that the 

Collateral Agent shall administer the Collateral, and the Collateral Agent is 

willing to administer the Collateral, pursuant to the terms and conditions set forth 

herein; 

NOW THEREFORE, in consideration of the foregoing and other good and 

valuable consideration, the receipt and sufficiency of which are hereby 

acknowledged, the Parties agree as follows: 

Section 1. Definitions. 

(a) Terms Defined in Credit Agreement. Terms defined in the Credit 

Agreement and not otherwise defined in this Section have, as used herein, the 

respective meanings provided for therein. The rules of construction specified in 

Sections 1.02 and 1.03 of the Credit Agreement also apply to this Agreement. 
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(b) Terms Defined in UCC. As used herein, each of the following terms 

has the meaning specified in the UCC: 

Term UCC Section

Account 9-102 

Authenticate 9-102 

Chattel Paper 9-102 

Deposit Account 9-102 

Document 9-102 

Entitlement Holder 8-102 

Financial Asset 8-102 & 8-103 

General Intangibles 9-102 

Instrument 9-102 

Investment Property 9-102 

Letter-of-Credit Right 9-102 

Proceeds 9-102 

Security 8-102 

Securities Account 8-501 

Security Entitlement 8-102 

Supporting Obligation 9-102 

(c) Additional Definitions. The following additional terms, as used 

herein, have the following meanings: 

“Cash Collateral Account” means such sub-accounts of the Collateral 

Account that shall hold the amounts required to be deposited thereto pursuant to 

Section 5(b), which amounts (x) shall be held in cash and Permitted Investments 

and (y) may be used in accordance with Section 5(d). 

“Collateral” has the meaning set forth in Section 2(a) hereof. 

“Collateral Account” means, collectively, the accounts maintained by the 

Borrower with the Securities Intermediary for the purposes set forth in this 

Agreement, including the Cash Collateral Account, the Expense Reimbursement 

Account, the Loan Proceeds Account and all other accounts and sub-accounts 

established thereunder for the purpose of holding property pursuant to this 

Agreement. 

“Collateral Account Control Agreement” means a Collateral Account 

Control Agreement substantially in the form of Exhibit A (with any changes that 

the Controlling Party shall have approved) among the Securities Intermediary, the 

Borrower and the Collateral Agent. 

 “Control” has the meaning specified in UCC Section 8-106, 9-104, 9-105, 

9-106 or 9-107, as may be applicable to the relevant Collateral. 
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“Costs and Expenses” means each of the following to the extent owing 

by the Borrower: (i) all reasonable costs, disbursements (including any advances 

or overdrafts) and expenses incurred or paid by, or owing to the Administrator, 

the Securities Intermediary, the Investment Manager, the Senior Lender, the 

Subordinated Lender, the Collateral Agent and the Controlling Party and their 

respective advisors, agents and counsel in connection with (A) the administration 

of the Collateral (including the Collateral Account) and the delivery and 

performance of the Transaction Documents, and any amendment, supplement or 

modification to the Transaction Documents, (B) the administration and 

preservation of the Borrower, including all reasonable audit, accounting, legal and 

other professional fees and expenses and other administrative costs of the 

Borrower (in the case of clauses (A) and (B) to the extent payable by the 

Borrower pursuant to the Transaction Documents) and (C) the enforcement, 

exercise or preservation of any rights or remedies under the Transaction 

Documents and such other instruments and documents related thereto, including, 

in the case of clauses (A), (B) and (C), reasonable legal, audit, accounting and 

other professional fees and expenses of any service providers; and (ii) all taxes 

that are determined to be owing by the Borrower from time to time. 

“Expense Reimbursement Account” means such sub-account of the 

Collateral Account holding cash and Permitted Investments that may be used at 

any time and from time to time to pay or record expenses pursuant to Section 5(c). 

“Fees” means (a) the fees of the Collateral Agent and the Administrator 

under the Fee Letter and (b) the management fees of the Investment Manager 

under the Investment Management Agreement. 

“Loan Proceeds Account” means the sub-account of the Collateral 

Account maintained exclusively for the deposit of the proceeds of Loans. 

 “Officer’s Certificate” means, with respect to any entity, a certificate 

signed by the Chairperson, the Vice Chairperson, the President, any Vice 

President, any Assistant Vice President, the Treasurer, any Assistant Treasurer or 

any other duly authorized signatory of such entity. 

“Party” means a party to this Agreement. 

“Payment Calculation Report” means a report prepared by the 

Administrator pursuant to Section 2.01(a)(iii) of the Administration Agreement 

and used as a basis for the Controlling Party to approve payments to be made by 

the Borrower on the Payment Date scheduled to occur immediately succeeding 

delivery thereof. 

“Permitted Investments” means investments consistent with an 

investment plan approved in writing by the Senior Lender and the Subordinated 

Lender. 
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“Proper Instructions” has the meaning set forth in Section 7(a)(iii). 

“Purchase” has the meaning set forth in the Put Option Agreement. 

“Purchase Consideration” has the meaning set forth in the Put Option 

Agreement. 

“Purchased Assets” has the meaning set forth in the Put Option 

Agreement. 

“Records” has the meaning set forth in Section 29. 

“Secured Obligations” means collectively, (i) the Borrower’s obligations 

to the Senior Lender, the Subordinated Lender, the Controlling Party, the 

Collateral Agent, the Securities Intermediary, the Administrator and the 

Investment Manager under each Transaction Document, including the Obligations 

and, without duplication, (ii) the Borrower’s obligations to the Seller under the 

Put Option Agreement. 

“Secured Parties” means the holders from time to time of the Secured 

Obligations. 

“Securities Intermediary” means The Bank of New York Mellon, in its 

capacity as securities intermediary (within the meaning of UCC Section 8-

102(a)(14)) in respect of the Collateral Account. 

“Securities System” has the meaning set forth in Section 7(c)(i) hereof. 

“Security Interest” means the security interest in the Collateral granted 

hereunder. 

“Seller” has the meaning set forth in the Put Option Agreement. 

“Specified Actions” has the meaning set forth in Section 6(d) hereof. 

“UCC” means the Uniform Commercial Code as in effect from time to 

time in the State of New York; provided that if perfection or the effect of 

perfection or non perfection or the priority of the Security Interest on any 

Collateral is governed by the Uniform Commercial Code as in effect in a 

jurisdiction other than New York, “UCC” means the Uniform Commercial Code 

as in effect from time to time in such other jurisdiction for purposes of the 

provisions hereof relating to such perfection, effect of perfection or non perfection 

or priority. 

(d) Terms Generally. The definitions of terms herein (including those 

incorporated by reference to the UCC or to another document) apply equally to 

the singular and plural forms of the terms defined. Whenever the context may 

require, any pronoun includes the corresponding masculine, feminine and neuter 
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forms. The words “include”, “includes” and “including” shall be deemed to be 

followed by the phrase “without limitation”. The word “will” shall be construed 

to have the same meaning and effect as the word “shall”. Unless the context 

requires otherwise, (i) any definition of or reference to any agreement, instrument 

or other document herein shall be construed as referring to such agreement, 

instrument or other document as from time to time amended, supplemented or 

otherwise modified (subject to any restrictions on such amendments, supplements 

or modifications set forth herein), (ii) any reference herein to any Person shall be 

construed to include such Person’s successors and permitted assigns, (iii) the 

words “herein”, “hereof” and “hereunder”, and words of similar import, shall be 

construed to refer to this Agreement in its entirety and not to any particular 

provision hereof, (iv) all references herein to Sections, Exhibits and Schedules 

shall be construed to refer to Sections of, and Exhibits and Schedules to, this 

Agreement and (v) the word “property” shall be construed to refer to any and all 

tangible and intangible assets and properties, including cash, securities, accounts 

and contract rights. 

(e) Consent Rights of Subordinated Lender. If at any time the United 

States Department of the Treasury is the Controlling Party pursuant to the 

definition thereof set forth in the Credit Agreement, all consent rights reserved to 

the Subordinated Lender in this Agreement at such time shall instead be 

exercisable by the Senior Lender. 

Section 2. Security Interest.

(a) In order to secure the Secured Obligations, the Borrower hereby 

grants to the Collateral Agent for the benefit of the Secured Parties holding such 

Secured Obligations a continuing security interest in all of the following property 

of the Borrower whether now owned or existing or hereafter acquired or arising 

and regardless of where located (the “Collateral”): 

(i) all Purchased Assets and Related Recourse Rights and all 

of the Borrower’s rights under the Transaction Documents; 

(ii) all right, title and interest of the Borrower in all Securities 

Accounts including, without limitation, the Collateral Account, and for 

each such Securities Account, all Financial Assets held therein or credited 

thereto (including all cash, Instruments and Investment Property) and all 

Security Entitlements in respect thereof, and all rights of the Borrower in 

respect of the foregoing; 

(iii) all Accounts; 

(iv) all Chattel Paper; 

(v) all cash and Deposit Accounts; 
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(vi) all Documents; 

(vii) all General Intangibles; 

(viii) all Instruments; 

(ix) all Investment Property; 

(x) all Letter-of-Credit Rights; 

(xi) all books and records of the Borrower pertaining to any of 

its Collateral; and 

(xii) all Proceeds of the Collateral described in the foregoing 

clauses (ii) through (xi). 

(b) With respect to each right to payment or performance included in 

the Collateral from time to time, the Security Interest granted therein includes a 

continuing security interest in (i) any Supporting Obligation that supports such 

payment or performance and (ii) any Lien that (x) secures such right to payment 

or performance or (y) secures any such Supporting Obligation. 

(c) The Security Interest is granted as security only and shall not subject 

the Collateral Agent or any other Secured Party to, or transfer or in any way affect 

or modify, any obligation or liability of the Borrower with respect to any of the 

Collateral or any transaction in connection therewith. 

Section 3. Representations, Warranties and Covenants of the Borrower. 

The Borrower represents and warrants to the Collateral Agent and the Secured 

Parties as of the date hereof, and covenants with the Collateral Agent and the 

Secured Parties, as follows: 

(a) The Borrower is a limited liability company, validly existing and in 

good standing under the laws of the State of Delaware. The Borrower’s exact 

legal name is correctly set forth on the signature page hereof. The Borrower’s 

mailing address is c/o Federal Reserve Bank of New York, as Managing Member, 

33 Liberty Street, New York, NY 10045, Attention: and the 

address of its registered office is 615 S. DuPont Highway, Dover, DE 19901. The 

Borrower will provide the Collateral Agent with at least 60 days’ prior written 

notice of any change in the Borrower’s name, form, jurisdiction of organization, 

organizational identification number, federal tax identification number, mailing 

address or the address of its registered office from that provided to the Collateral 

Agent on the Closing Date. 

(b) The Borrower has good and marketable title to all of the Collateral, 

and has not granted any security interest in, or Lien on, any of the Collateral other 

than the Security Interest. The Borrower has full power and authority to grant to 

the Collateral Agent (for the benefit of the Secured Parties) the Security Interest. 
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The Borrower has not performed any acts that might prevent the Collateral Agent 

from enforcing any of the provisions of this Agreement. No financing statement, 

security agreement, mortgage or similar or equivalent document or instrument 

covering all or part of the Collateral is on file or of record in any jurisdiction in 

which such filing or recording would be effective to perfect or record a Lien on 

such Collateral except for the Security Interest. After the date of this Agreement, 

no Collateral will be in the possession or under the Control of any other Person 

having a claim thereto or security interest therein, other than the Security Interest. 

(c) The Security Interest on all Collateral owned by the Borrower (i) has 

been validly created, (ii) is one of first priority subject to Liens set forth in clauses 

(i) through (iv) of the definition of “Permitted Liens”, (iii) will attach to each 

item of such Collateral on the Closing Date (or, if the Borrower first obtains rights 

thereto on a later date, on such later date) and (iv) when so attached, will secure 

all the Secured Obligations. 

(d) The Collateral Account is a Securities Account. Subject to the 

execution of the Collateral Account Control Agreement by the parties thereto, and 

subject to the representations and warranties made by the Securities Intermediary 

thereunder, and so long as the Financial Asset underlying any Security 

Entitlement owned by the Borrower is credited to the Collateral Account, (i) the 

Security Interest in such Security Entitlement will be perfected, subject to no prior 

Liens or rights of others, (ii) the Collateral Agent will have Control of such 

Security Entitlement and (iii) no action based on an “adverse claim” (as defined in 

Article 8 of the UCC) to such Security Entitlement or such Financial Asset, 

whether framed in conversion, replevin, constructive trust, equitable lien or other 

theory, may be asserted against the Collateral Agent or any other Secured Party. 

(e) When a UCC financing statement describing the Collateral as “all 

assets” or “all personal property” (or other words to that effect) has been filed in 

the State of Delaware, the Security Interest will constitute a perfected security 

interest in the Collateral to the extent that a security interest therein may be 

perfected by filing a financing statement pursuant to the Delaware UCC, prior to 

all Liens and rights of others therein. Except for the filing of such UCC financing 

statement, no registration, recordation or filing with any governmental body, 

agency or official is required in connection with the execution or delivery of this 

Agreement or the Collateral Account Control Agreement or is necessary for the 

validity or enforceability thereof or for the perfection or due recordation of the 

Security Interest or for the enforcement of the Security Interest. 

(f) The Borrower will promptly give to the Collateral Agent copies of 

any notices and other communications received by it with respect to Security 

Entitlements as to which the Borrower is the Entitlement Holder. 

(g) The Borrower will, from time to time, at its expense, execute, 

deliver, file and record any statement, assignment, instrument, document, 

agreement or other paper and take any other action (including any filing of 
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financing or continuation statements under the UCC) that from time to time may 

be necessary or desirable, or that the Collateral Agent may reasonably request, in 

order to (i) create, preserve, perfect, confirm or validate the Security Interest, (ii) 

cause the Collateral Agent to have Control of any item of Collateral (if 

applicable), (iii) enable the Collateral Agent or the Controlling Party to obtain the 

full benefits of the Security Documents or (iv) enable the Collateral Agent to 

exercise and enforce any of its rights, powers and remedies with respect to the 

Collateral. The Borrower authorizes the Collateral Agent to execute and file such 

financing statements or continuation statements in such jurisdictions with such 

descriptions of collateral (including “all assets” or “all personal property” or 

other words to that effect) and other information set forth therein as the Collateral 

Agent may deem necessary or desirable for the purposes set forth in the preceding 

sentence. The Borrower also ratifies its authorization for the Collateral Agent to 

file in any such jurisdiction any initial financing statements or amendments 

thereto if filed prior to the date hereof. 

(h) The Borrower will, promptly upon request, provide to the Collateral 

Agent all information and evidence concerning the Collateral that the Collateral 

Agent may reasonably request from time to time to enable it to enforce the 

provisions of this Agreement. 

(i) Promptly following a request from the Collateral Agent or the 

Controlling Party to do so, and at the Borrower’s own expense, the Borrower 

agrees (i) to take all such lawful action as the Collateral Agent or the Controlling 

Party may request to compel or secure the performance and observance by any 

obligor of its obligations to the Borrower under or in connection with (A) 

agreements or instruments pursuant to which any Collateral is issued in 

accordance with the terms thereof (provided that such action is not inconsistent 

with or in violation of any of the Borrower’s obligations under such agreements 

or instruments) and (B) any Transaction Document in accordance with the terms 

thereof (provided that such action is not inconsistent with or in violation of any of 

the Borrower’s obligations under such Transaction Documents) and (ii) to 

exercise any and all rights, remedies, powers and privileges lawfully available to 

the Borrower, as owner of the Collateral, under or in connection with such 

agreements or instruments, or under or in connection with any Transaction 

Document, in each case to the extent and in the manner directed by the Collateral 

Agent or by the Controlling Party, including the transmission of notices of default 

and the institution of legal or administrative actions or proceedings to compel or 

secure performance by any such Person of its obligations thereunder. The 

Borrower further agrees that it will not (A) exercise any right, remedy, power or 

privilege available to it under or in connection with the agreements or instruments 

pursuant to which any Collateral is issued or under or in connection with any 

Transaction Document, (B) take any action to compel or secure performance or 

observance by any Person of its obligations to the Borrower as holder of the 

Collateral under or in connection with such agreements or instruments or under or 

in connection with any Transaction Document or (C) give any consent, request, 
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notice, direction, approval, extension or waiver to any Person under the 

agreements or instruments pursuant to which any Collateral is issued or under any 

Transaction Document, in each case not required to be exercised, taken, observed 

or given by the Borrower pursuant to the terms thereof unless, in each case, it has 

obtained the prior written consent of the Controlling Party and such action is not 

inconsistent with or in violation of any of the Borrower’s obligations under such 

agreements, instruments or Transaction Documents, as the case may be. 

(j) The Borrower owns no assets other than the Collateral. 

Section 4. Administration of Collateral. 

(a) The Collateral Agent shall at all times have all the rights of a 

secured party under the UCC (whether or not in effect in the jurisdiction where 

such rights are exercised) with respect to the Collateral. In addition, the 

Collateral Agent shall, upon Proper Instructions from the Controlling Party, and 

whether or not an Event of Default has occurred, sell, lease, license or otherwise 

dispose of the Collateral or any part thereof, in one or more parcels at public or 

private sale, at any exchange, broker’s board or at any of Collateral Agent’s 

offices or elsewhere, for cash, on credit or for future delivery, at such time or 

times and at such price or prices and upon such other terms as the Collateral 

Agent may deem commercially reasonable, irrespective of the impact of any such 

sales on the market price of the Collateral. To the maximum extent permitted by 

applicable law, any Secured Party may be the purchaser of any or all of the 

Collateral at any such sale and (with the consent of the Controlling Party, which 

may be withheld in its reasonable discretion) shall be entitled, for the purpose of 

bidding and making settlement or payment of the purchase price for all or any 

portion of the Collateral sold at any such public sale, to use and apply all or any 

part of its Secured Obligations as a credit on account of the purchase price of any 

Collateral payable at such sale. Upon any sale of Collateral by the Collateral 

Agent (including pursuant to a power of sale granted by statute or under a judicial 

proceeding), the receipt of the Collateral Agent or of the officer making the sale 

shall be a sufficient discharge to the purchaser or purchasers of the Collateral so 

sold and such purchaser or purchasers shall not be obligated to see to the 

application of any part of the purchase money paid over to the Borrower or such 

officer or be answerable in any way for the misapplication thereof. Each 

purchaser at any such sale shall hold the property sold absolutely free from any 

claim or right on the part of the Borrower, and the Borrower hereby waives (to the 

extent permitted by law) all rights of redemption, stay or appraisal that it now has 

or may at any time in the future have under any rule of law or statute now existing 

or hereafter enacted. The Collateral Agent shall not be obliged to make any sale 

of Collateral regardless of notice of sale having been given. The Collateral Agent 

may adjourn any public or private sale from time to time by announcement at the 

time and place fixed therefor, and such sale may, without further notice, be made 

at the time and place to which it was so adjourned. To the maximum extent 

permitted by law, the Borrower hereby waives any claim against the Collateral 

Agent arising because the price at which any Collateral may have been sold at 
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such a private sale was less than the price that might have been obtained at a 

public sale, even if the Collateral Agent accepts the first offer received and does 

not offer such Collateral to more than one offeree. The Collateral Agent may, 

with the consent of the Controlling Party, disclaim any warranty, as to title or as 

to any other matter, in connection with such sale or other disposition, and its 

doing so shall not be considered adversely to affect the commercial 

reasonableness of such sale or other disposition. 

(b) If the Collateral Agent sells any of the Collateral upon credit, the 

Borrower will be credited only with payment actually made by the purchaser, 

received by the Collateral Agent and applied in accordance with Section 5(b) 

hereof. If the purchaser fails to pay for the Collateral, the Collateral Agent may 

resell the same, subject to the same rights and duties set forth herein. 

(c) Any and all interest and other cash and non-cash distributions in 

respect of any Collateral, any and all payments received upon disposition of any 

Collateral and any and all other Proceeds of any Collateral shall be paid directly 

to, and shall be received and held in, the Collateral Account (provided, that only 

the proceeds of Loans, and no other amounts, shall be received and held in the 

Loan Proceeds Account). If any Proceeds of the Collateral are received by the 

Borrower otherwise than in the Collateral Account, such Proceeds shall be so 

received in trust for the Collateral Agent, shall be segregated from other funds and 

property of the Borrower and shall be forthwith delivered to the Securities 

Intermediary for deposit in the Collateral Account in the same form as received, 

with any necessary endorsements. 

(d) The Controlling Party agrees that the instructions included in any 

Proper Instructions delivered to the Collateral Agent pursuant to Section 4(a) shall 

be consistent with an Approved Disposition Plan (it being understood that the 

Collateral Agent shall be entitled to rely on instructions with respect to any sale, 

lease, license or disposition of the Collateral contained in such Proper Instructions, 

and shall have no obligation to confirm that any such sale, lease, license or 

disposition of the Collateral is in accordance with an Approved Disposition Plan). 

Section 5. Collateral Account and Application of Proceeds. 

(a) Collateral Account. The Collateral Agent shall have Control over 

the Collateral Account. The Borrower will make no transfers or withdrawals 

from the Collateral Account except (i) for application in accordance with the 

Waterfall, (ii) for application in accordance with Section 5(c), (iii) to pay the 

Purchase Consideration for Purchased Assets in accordance with Section 5(d) or 

(iv) otherwise in accordance with Proper Instructions from the Controlling Party 

and the Subordinated Lender. The Borrower, the Collateral Agent and the 

Securities Intermediary shall always be party to the Collateral Account Control 

Agreement. The Collateral Account may be further sub-divided into sub-accounts. 

Funds on deposit in the Collateral Account shall be invested, applied or 

distributed in the manner set forth in this Section 5. 
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(b) Application of Proceeds. All amounts available in the Collateral 

Account (other than amounts available in the Loan Proceeds Account) as of each 

Payment Determination Date shall be distributed by the Collateral Agent on the 

first following Payment Date in accordance with a Payment Calculation Report 

delivered to, and approved by, the Controlling Party in accordance with the 

Administration Agreement prior to such Payment Date, in the following order of 

priority, subject to clause (c) of this Section: 

first, to pay any Costs and Expenses then due and payable, any 

Fees then due and payable and any indemnity amounts and any other 

amounts then owing under any of the Transaction Documents to any 

Person (except as otherwise provided for in this Section 5 and in 

accordance with Proper Instructions), in each case, to the extent such 

Costs and Expenses, Fees and indemnity and other amounts, as applicable, 

have been incurred no later than two Business Days prior to the Payment 

Determination Date immediately preceding such Payment Date and have 

been invoiced no later than such Payment Determination Date, which 

payments shall be distributed to the Persons to whom such amounts are 

owing; provided that to the extent that amounts on deposit in the Collateral 

Account (other than amounts on deposit in the Loan Proceeds Account) 

are insufficient to pay all amounts that are owing pursuant to this clause 

first on any Payment Date, amounts will be distributed ratably to the 

Persons to whom such amounts are owed pursuant to this clause first; 

second, to fund the Expense Reimbursement Account until the 

balance thereof is equal to $15,000,000, or such other amount as may be 

specified by the Controlling Party and the Subordinated Lender pursuant 

to a Proper Instruction; 

third, to pay the outstanding principal amount of the Senior Loans 

until such outstanding principal amount shall have been paid in full; 

fourth, on or prior to the last day of the Senior Loan Availability 

Period, to fund the Cash Collateral Account until the balance thereof is 

equal to the amount of the Available Senior Loan Commitment, or such 

lesser amount as may be specified by the Controlling Party pursuant to a 

Proper Instruction; 

fifth, to pay the outstanding principal amount of the Subordinated 

Loans until such outstanding principal amount shall have been paid in full; 

sixth, to pay the accrued but unpaid interest (including PostPetition Amounts, to the fullest extent permitted by applicable law, but 

excluding Contingent Interest) outstanding on the Senior Loans, until such 

accrued but unpaid interest shall have been paid in full; 
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seventh, to pay the accrued but unpaid interest (including PostPetition Amounts, to the fullest extent permitted by applicable law, but 

excluding Contingent Interest) outstanding on the Subordinated Loans, 

until such accrued but unpaid interest shall have been paid in full; 

eighth, to pay any other Secured Obligations (other than 

Contingent Interest) then outstanding; 

ninth, to pay (x) 90% of all remaining amounts to the Subordinated 

Lender as Contingent Interest, and (y) 10% of all remaining amounts to 

the Senior Lender as Contingent Interest. 

(c) Expense Reimbursement Account. The Collateral Agent shall, from 

time to time, credit any proceeds from the Collateral promptly upon receipt of 

such proceeds to the Expense Reimbursement Account (up to the maximum 

amount set forth in Section 5(b)). Amounts available in the Expense 

Reimbursement Account shall be distributed by the Collateral Agent, at any time 

and from time to time pursuant to Proper Instructions from the Controlling Party 

or its designee, (i) to pay investment execution expenses incurred by the 

Collateral Agent pursuant to a Proper Instruction or the Investment Manager in 

connection with investments made on behalf of the Borrower pursuant to the 

Investment Manager Agreement, including third party commissions, (ii) to 

reimburse the Securities Intermediary for any monies improperly credited to the 

Collateral Account or in connection with failed trades, assumed settlements, 

returned funds, bounced checks, other account overdrafts or advances of cash or 

securities pursuant to the Collateral Account Control Agreement and (iii) other 

Costs and Expenses incurred by, or in the name of, the Borrower that are due and 

payable between Payment Dates; provided, that the Expense Reimbursement Sub 

Account will not be used to pay Costs and Expenses (other than any Costs and 

Expenses referred to in this Section 5(c)). 

(d) Funding of Purchases. In accordance with Proper Instructions 

received from the Controlling Party from time to time, the Collateral Agent shall 

withdraw amounts available in the Cash Collateral Account and the Loan 

Proceeds Account to fund, on the date of such withdrawal, Purchases by the 

Borrower of Purchased Assets pursuant to the Put Option Agreement; provided, 

that amounts may not be withdrawn from the Loan Proceeds Account pursuant to 

this Section 5(d) at any time when funds are available in the Cash Collateral 

Account (unless all such funds available in the Cash Collateral Account shall be 

simultaneously withdrawn pursuant to this Section 5(d)). 

(e) Notice of Adverse Claims. The Collateral Agent shall give the 

Borrower, the Investment Manager, the Senior Lender, the Subordinated Lender 

and the Controlling Party prompt notice if (x) the Collateral Agent receives 

written notice or (y) (i) any officer or employee of the Collateral Agent involved 

with the administration of the transactions and agreements contemplated by this 

Agreement and the other Transaction Documents and the Collateral, (ii) any 
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officer or employee within the Collateral Agent’s office of the general counsel or 

office of the corporate secretary, (iii) any officer or employee employed in the 

corporate trust division or to whom corporate trust matters are generally referred 

or (iv) any other officer of the Collateral Agent otherwise becomes aware that the 

Collateral Account or any Financial Assets held therein or credited thereto or any 

Securities Entitlement in respect thereof become subject to any writ, order, 

judgment, warrant of attachment, execution or similar process. 

(f) Permitted Investments of Funds in the Collateral Account. Any 

funds held in the Collateral Account shall be invested, and the proceeds of 

investments shall be reinvested, by the Collateral Agent in Permitted Investments 

in accordance with Proper Instructions from the Controlling Party or its designee. 

The Collateral Agent (x) shall be entitled to rely on instructions with respect to 

investments contained in any such Proper Instruction and shall have no obligation 

to confirm that such investments are Permitted Investments and (y) shall not be 

responsible or liable for any loss resulting from the investment performance of an 

investment or reinvestment of funds held in the Collateral Account and shall not 

be responsible for giving any investment advice. In the absence of any Proper 

Instruction from the Controlling Party or its designee, the Collateral Agent shall 

be under no obligation or duty to invest (or pay interest on) funds held in the 

Collateral Account. 

(g) Statement of Account. The Collateral Agent from time to time shall 

provide the Borrower, the Investment Manager, the Controlling Party, the Senior 

Lender and the Subordinated Lender upon written request with statements of 

account relative to the Collateral Account in accordance with the Collateral 

Agent’s customary practices; provided that (x) statements of account shall be 

provided to each of the foregoing Persons not less frequently than monthly 

notwithstanding the lack of a written request and (y) to the extent that the 

information contained in such statements of account is supplied by an institution 

or institutions other than the Collateral Agent, the Collateral Agent shall not be 

responsible for the correctness or accuracy of the information received by it 

except to the extent that such information is manifestly incorrect and/or is not 

provided to the Collateral Agent by the time specified in this Agreement or in the 

other Transaction Documents and/or where relevant, is not substantially in the 

form set out in the relevant Transaction Document. If such information is not 

provided to the Collateral Agent by the time specified in this Agreement or in the 

other Transaction Documents and, where relevant, in the form set out in the 

relevant Transaction Document, or if such information is manifestly incorrect, the 

Collateral Agent shall use reasonable efforts to make the necessary calculations 

and shall incur no liability hereunder for any consequence resulting from making 

such calculations other than as a result of its negligence, bad faith, willful 

misconduct or fraudulent actions. 

(h) Instructions for Payment. Any Officer’s Certificate and Proper 

Instruction given to the Collateral Agent for payment out of the Collateral 

Account pursuant to this Agreement, including the Payment Calculation Report, 
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shall set forth on the face thereof the specific amounts of the allocations, 

payments, amounts, deposits, transfers or withdrawals addressed therein and such 

other information as shall be sufficient to enable the Collateral Agent to carry out 

the instruction and take the related actions in accordance with this Agreement. 

The Collateral Agent shall promptly comply with any such Proper Instruction 

made in accordance with the provisions of this Agreement. 

Section 6. Certain Agreements Among Secured Parties. 

(a) Priorities; Additional Collateral. Each Secured Party, by 

acceptance of the benefits of this Agreement and the other Transaction 

Documents agrees that such Secured Party will not hold, take, accept or obtain 

any Lien upon any of the Collateral to secure the payment and performance of the 

Secured Obligations, except the Security Interest. 

(b) Turnover of Collateral. If a Secured Party acquires custody, control 

or possession of any Collateral or the proceeds therefrom other than pursuant to 

the terms of this Agreement, such Secured Party shall promptly (but in any event 

within five Business Days) cause such Collateral or proceeds to be delivered to 

the Collateral Agent in accordance with the provisions of this Agreement. Until 

such time as such Secured Party shall have complied with the provisions of the 

immediately preceding sentence, such Secured Party shall be deemed to hold such 

Collateral and proceeds in trust for the benefit of the Collateral Agent and the 

other Secured Parties. 

(c) Cooperation of Secured Parties. Each Secured Party will cooperate 

with the Collateral Agent and with each other Secured Party as reasonably 

requested at Borrower’s cost and expense in the enforcement of the Security 

Interest in the Collateral and otherwise in order to accomplish the purposes of this 

Agreement and the Security Documents. 

(d) Limitation upon Certain Independent Actions by Secured Parties. 

No Secured Party other than the Controlling Party shall have any right to institute 

any action or proceeding to enforce any term or provision of the Security 

Documents or to enforce any of its rights in respect of the Collateral or to exercise 

any other remedy pursuant to the Security Documents or at law or in equity for 

the purpose of realizing on the Collateral, or by reason of jeopardy of any 

Collateral, or for the execution of any trust or power hereunder (collectively, the 

“Specified Actions”). The Controlling Party may act on behalf of the Secured 

Parties or any of them and shall be entitled to commence proceedings in any court 

of competent jurisdiction or to take any other Specified Actions as the Collateral 

Agent might have taken pursuant to this Agreement or the Security Documents. 

The Borrower acknowledges and agrees that should the Controlling Party act in 

accordance with this provision, the Controlling Party will have all the rights, 

remedies, benefits and powers as are granted to the Collateral Agent pursuant this 

Agreement and the other Security Documents. 
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(e) No Challenges. In no event shall any Secured Party take any action 

to challenge, contest or dispute the validity, extent, enforceability or priority of 

the Security Interest hereunder or under any other Security Document with 

respect to any of the Collateral, or that would have the effect of invalidating the 

Security Interest or support any Person who takes any such action. Each of the 

Secured Parties agrees that it will not take any action to challenge, contest or 

dispute the validity, enforceability or secured status of any other Secured Party’s 

claims against the Borrower (other than any such claim resulting from a breach of 

this Agreement by a Secured Party, or any challenge, contest or dispute alleging 

arithmetical error in the determination of a claim), or that would have the effect of 

invalidating any such claim, or support any Person who takes any such action. 

Section 7. The Collateral Agent. 

(a) Employment of Collateral Agent and Property to be Held. 

(i) Each Secured Party hereby appoints the Collateral Agent as 

an agent, and custodian of assets, of the Borrower and authorizes the 

Collateral Agent (A) to sign and deliver the Security Documents as 

Collateral Agent and (B) to take such actions on its behalf and to exercise 

such powers as are delegated to the Collateral Agent by the terms of the 

Transaction Documents, together with such actions and powers as are 

reasonably incidental thereto. 

(ii) Concurrently with the execution of this Agreement, and 

from time to time thereafter, as appropriate, the Controlling Party and the 

Subordinated Lender shall each deliver to the Collateral Agent, duly 

certified by an authorized officer of the Controlling Party or the 

Subordinated Lender, as the case may be, a certificate substantially in the 

form set forth in Exhibit B hereof setting forth the names, titles, signatures 

and scope of authority of all persons authorized to give Proper Instructions 

or any other notice, request, direction, instruction, certificate or instrument 

on behalf of such Person. Such certificate may be accepted and relied 

upon by the Collateral Agent as conclusive evidence of the facts set forth 

therein and shall be considered to be in full force and effect until receipt 

by the Collateral Agent of a similar certificate to the contrary. 

(iii) “Proper Instructions,” as such term is used throughout 

this Agreement and other Transaction Documents, means a writing signed 

by the Controlling Party or by one or more person or persons as the 

Controlling Party shall have from time to time authorized to give 

instructions to the Collateral Agent and, to the extent expressly required 

by the terms of this Agreement, also by the Subordinated Lender or by one 

or more person or persons as the Subordinated Lender shall have from 

time to time authorized to give instructions to the Collateral Agent. 

Proper Instructions may be standing instructions. Each such writing shall 

set forth the specific transaction or type of transaction involved and may 
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set forth any appropriate procedures to be followed. Proper Instructions 

may include communications effected (x) directly between electromechanical or electronic devices in accordance with security procedures 

agreed to by the Controlling Party in any such writing or (y) by other 

means if and to the extent that the Controlling Party, the Subordinated 

Lender and the Collateral Agent shall have agreed in writing to permit 

such other means. 

(b) Limited Duties and Responsibilities. The Collateral Agent shall not 

have any duties or obligations except those expressly set forth in this Agreement 

and the other Transaction Documents to which it is a party. Without limiting the 

generality of the foregoing, (i) the Collateral Agent shall not be subject to any 

fiduciary or other implied duties, implied covenants or implied obligations 

pursuant to this Agreement or any other Transaction Document, regardless of 

whether an Event of Default has occurred and is continuing, (ii) the Collateral 

Agent shall not have any duty to take any discretionary action or exercise any 

discretionary powers, except discretionary action and discretionary powers 

expressly contemplated by the Transaction Documents that the Collateral Agent is 

required to exercise by Proper Instructions and (iii) except as expressly set forth 

in the Transaction Documents, the Collateral Agent shall not have any duty to 

disclose, and shall not be liable for any failure to disclose, any information 

relating to the Borrower that is communicated to or obtained by the Collateral 

Agent or any of its Affiliates in any capacity other than its Administrator capacity. 

The Collateral Agent shall not be liable for (A) any action taken or not taken by it 

in accordance with Proper Instructions or (B) any action taken or not taken by it 

with the consent or at the request of the Controlling Party or in accordance with 

this Agreement or any of the Transaction Documents or in the absence of its own 

negligence, bad faith, willful misconduct or fraudulent actions. The Collateral 

Agent shall be deemed not to have knowledge of any Event of Default unless and 

until written notice thereof is given to the Collateral Agent by the Borrower or the 

Controlling Party or any Lender, and the Collateral Agent shall not be responsible 

for or have any duty to ascertain or inquire into (A) any statement, warranty or 

representation made in or in connection with any Transaction Document, the 

contents of any certificate, report or other document delivered thereunder or in 

connection therewith or (B) the performance or observance of any of the 

covenants, agreements or other terms or conditions set forth in any Transaction 

Document, the validity, enforceability, effectiveness or genuineness of any 

Transaction Document or any other agreement, instrument or document, other 

than to confirm receipt of items expressly required to be delivered to the 

Collateral Agent. The Collateral Agent shall not be responsible for the existence, 

genuineness or value of any Collateral or for the validity, perfection, priority or 

enforceability of the Security Interest, whether impaired by operation of law or by 

reason of any action or omission to act on its part under the Security Documents, 

absent its own negligence, bad faith, willful misconduct or fraudulent actions. 
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(c) Duties of the Collateral Agent with Respect to Property of the 

Borrower. 

(i) Holding Securities. The Collateral Agent shall hold and 

segregate for the account of the Borrower all non-cash property to be held 

by it, including all securities owned by the Borrower, other than securities 

which are maintained in a clearing agency which acts as a securities 

depository or in a book-entry system authorized by the U.S. Department of 

the Treasury and certain federal agencies (each, a “Securities System”). 

(ii) Delivery of Securities. The Collateral Agent shall release 

and deliver securities owned by the Borrower held by the Collateral Agent 

in a Securities System account of the Collateral Agent only upon receipt of 

Proper Instructions, which may be continuing instructions when deemed 

appropriate by the parties, and: 

(A) To the issuer thereof or its agent when such 

securities are called, redeemed, retired or otherwise become 

payable; provided that in any such case, the cash or other 

consideration payable in connection therewith is to be delivered to 

the Collateral Agent; 

(B) To the issuer thereof, or its agent, for transfer into 

the name of the Borrower or into the name of any nominee or 

nominees of the Collateral Agent; or for exchange for a different 

number of bonds, certificates or other evidence representing the 

same aggregate face amount or number of units; provided that in 

any such case, the new securities are to be delivered to the 

Collateral Agent; 

(C) For any other purpose, but only upon receipt of 

Proper Instructions specifying the securities to be delivered and 

the person(s) to whom delivery of such securities shall be made. 

(iii) “Financial Assets” Election. The Collateral Agent and the 

Borrower agree that each item of property (whether Investment Property, 

Financial Asset, Security, Instrument, cash or other property) credited to 

the Collateral Account shall be treated as a “Financial Asset” within the 

meaning of Sections 8 102(a)(9) and 8 103 of the UCC. 

(iv) Registration of Securities. All securities accepted by the 

Collateral Agent on behalf of the Borrower under the terms of this 

Agreement shall be in “street name” or other good delivery form. If, 

however, the Borrower (or the Controlling Party) directs the Collateral 

Agent to maintain securities in “street name”, the Collateral Agent shall 

utilize its best efforts only to timely collect income due the Borrower on 

such securities and to notify the Borrower, the Controlling Party and the 
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Investment Manager on a best efforts basis only of relevant corporate 

actions including, without limitation, pendency of calls, maturities, tender 

or exchange offers. The Borrower and Collateral Agent shall cooperate to 

cause (i) Securities in certificated form held by the Collateral Agent to be 

in suitable form for transfer by delivery, or accompanied by duly executed 

instruments of transfer or assignment in blank, with signatures 

appropriately guaranteed, all in form and substance satisfactory to the 

Controlling Party and (ii) securities that are “uncertificated securities” (as 

defined in Section 8-102 of the UCC) that are not registered in the name of 

the Collateral Agent to be subject to a control agreement whereby the 

issuer of the uncertificated securities agrees to comply with any 

“instruction” (as defined in Section 8-102 of the UCC) originated by the 

Collateral Agent and relating to such securities without further consent by 

the Borrower or any other person. 

(v) Bank Accounts. The Collateral Agent shall open and 

maintain a separate bank account or accounts in the United States in the 

name of the Borrower, subject only to draft or order by the Collateral 

Agent acting pursuant to the terms of this Agreement, and shall hold in 

such account or accounts, subject to the provisions hereof, all cash 

received by it from or for the account of the Borrower. Any such bank 

account shall, absent a Proper Instruction to the contrary, be held as a subaccount of the Collateral Account. 

(vi) Collection of Income. The Collateral Agent shall collect on 

a timely basis all income and other payments with respect to registered 

securities held hereunder to which the Borrower shall be entitled either by 

law or pursuant to custom in the securities business, and shall collect on a 

timely basis all income and other payments with respect to bearer 

securities if, on the date of payment by the issuer, such securities are held 

by the Collateral Agent or its agent thereof, and shall credit such income, 

as collected, to the Collateral Account. Such amounts shall be invested 

pending application thereof in accordance with Section 5 as directed under 

a Proper Instruction. Without limiting the generality of the foregoing, the 

Collateral Agent shall detach and present for payment all coupons and 

other income items requiring presentation as and when they become due 

and shall collect interest when due on securities held hereunder. 

(vii) Payment of Borrower Monies. Upon receipt of Proper 

Instructions, which may be continuing instructions if so specified in such 

Proper Instructions, the Collateral Agent shall pay out monies of the 

Borrower in accordance with Section 5 hereof. 

(viii) Deposit of Borrower Assets in Securities Systems. The 

Collateral Agent may deposit and/or maintain securities owned by the 

Borrower in a Securities System in accordance with applicable Board of 

Governors of the Federal Reserve System and Securities and Exchange 
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Commission rules and regulations, if any, and to the extent applicable 

hereto. 

(ix) Ownership Certificates for Tax Purposes. The Collateral 

Agent shall execute ownership and other certificates and affidavits for all 

federal and state tax purposes in connection with receipt of income or 

other payments with respect to securities of the Borrower held by it and in 

connection with transfers of such securities. 

(x) Communications Relating to Borrower Securities. The 

Collateral Agent shall forward promptly to the Borrower (with a copy to 

the Controlling Party and the Investment Manager all written information 

and communications (including, without limitation, pendency of calls, 

solicitations for amendments, modifications, consents, waivers and 

maturities of securities) received by the Collateral Agent from issuers of 

the securities being held for the Borrower and shall, in accordance with 

Proper Instructions, transmit promptly to such issuers instructions, 

directions and notes relating to such securities. 

(xi) Reports to the Borrower, the Controlling Party, the 

Lenders and the Investment Manager by Independent Public Accountants. 

The Collateral Agent shall provide the Borrower, the Controlling Party, 

each Lender that is not the Controlling Party and the Investment Manager 

at such times as such Persons may reasonably require, with reports by 

independent public accountants on the accounting system, internal 

accounting control and procedures for safeguarding securities, including 

securities deposited and/or maintained in a Securities System, relating to 

the services provided by the Collateral Agent under this Agreement. Such 

reports shall be of sufficient scope and in sufficient detail, as may 

reasonably be required by the Borrower (or the Controlling Party, each 

Lender that is not the Controlling Party or the Investment Manager) to 

provide reasonable assurance that any material inadequacies would be 

disclosed by such examination, and, if there are no such inadequacies, the 

reports shall so state. 

(d) Evidence of Authority. Absent negligence, bad faith, willful 

misconduct or fraudulent actions, the Collateral Agent shall be entitled to rely on, 

and shall not incur any liability for relying on, any notice, request, certificate, 

consent, statement, instrument, document or other writing believed by it to be 

genuine and to have been signed or sent by the proper Person. The Collateral 

Agent may receive and accept a certificate of a Responsible Officer of the 

Controlling Party as conclusive evidence of the authority of any person to act in 

accordance with such certificate or of a Responsible Officer of the Managing 

Member as conclusive evidence of any determination or of any action by the 

Managing Member pursuant to the LLC Agreement as described in such 

certificate, and such certificate may be considered as in full force and effect until 

receipt by the Collateral Agent of written notice to the contrary. The Collateral 
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Agent may consult with legal counsel (who may be counsel for the Borrower), 

independent accountants and other experts selected by it, and shall not be liable 

for any action taken or not taken by it in reasonable reliance upon the advice of 

any such counsel, accountants or experts. 

(e) Duties of Collateral Agent with Respect to the Books of Account and 

Calculation of Net Asset Value and Net Income. The Collateral Agent shall 

cooperate with and supply necessary information to the entity or entities 

appointed by the Borrower or the Administrator to keep the books of account of 

the Borrower and/or compute the net asset value per Membership Interest of the 

Borrower of the outstanding Membership Interests of the Borrower or, if directed 

in writing to do so by the Borrower (or the Controlling Party), shall itself keep 

such books of account and/or compute such net asset value per Membership 

Interest of the Borrower. 

(f) Other Custody Services. The Collateral Agent shall provide such 

other services customarily provided by a collateral agent in connection with the 

holding of collateral as specifically requested by Proper Instructions. 

(g) Information as to Secured Obligations. For all purposes of the 

Security Documents, including determining the aggregate amount of Secured 

Obligations or the amount of Secured Obligations owed to the Senior Lender, the 

Subordinated Lender or any other Secured Party, the Collateral Agent will be 

entitled to rely on information from any such Lender as to amounts owned to such 

Lender, the Controlling Party, the Borrower, the Administrator or its own records 

(or such party as the Controlling Party may direct in a Proper Instruction with 

respect to other amounts). 

(h) Resignation; Successor Collateral Agent. The Collateral Agent may 

resign at any time for any reason, and the Controlling Party may, in its sole 

discretion, remove the Collateral Agent at any time for any reason, in each case 

upon not less than 30 days’ prior written notice to each other Party; provided that 

no resignation of the Collateral Agent shall be effective until the Controlling Party 

shall have appointed a successor Collateral Agent to which the Subordinated 

Lender shall not have reasonably objected within five Business Days after having 

been given written notice thereof. If the Controlling Party shall fail to appoint 

such successor within 90 days after notice of resignation or removal, as the case 

may be, then the Collateral Agent may petition any court of competent 

jurisdiction for the appointment of such successor at the sole cost and expense of 

the Controlling Party. The indemnity provided to the Collateral Agent under 

Section 12 shall survive its resignation or removal under this Agreement with 

respect to any indemnified liabilities to the extent incurred or arising, or relating 

to events occurring, before such resignation or removal. Upon acceptance in 

writing of its appointment as Collateral Agent hereunder by a successor, such 

successor shall succeed to and become vested with all the rights, powers, 

privileges and duties of the retiring Collateral Agent, and the retiring Collateral 

Agent shall be, upon transfer of the Collateral Account and possession of all 
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Collateral in its control to such successor, discharged from its duties hereunder. 

As of the resignation date, fees and reimbursement expenses shall be paid to the 

Collateral Agent in accordance with the Waterfall on the next succeeding 

Payment Date. The fees payable by the Borrower to a successor Collateral Agent 

shall be the same as those payable to its predecessor unless otherwise agreed by 

the Borrower and such successor. After the Collateral Agent’s resignation 

hereunder, the provisions of this clause shall continue in effect for the benefit of 

such retiring Collateral Agent and its respective Related Parties in respect of any 

actions taken or omitted to be taken by any of them while the retiring Collateral 

Agent was acting as Collateral Agent. 

(i) Authority to Administer Collateral. Without derogation of the 

Collateral Agent’s duties under this Section, as further security for the Secured 

Obligations, the Borrower hereby appoints the Collateral Agent as its true and 

lawful attorney, with full power of substitution, in the name of the Borrower, the 

Collateral Agent or otherwise, for the sole use and benefit of the Collateral Agent, 

but at the expense of the Borrower, to the extent permitted by law, for the purpose 

of taking such action and executing agreements, instruments and other documents, 

in the name of the Borrower, as expressly provided herein and as the Collateral 

Agent or the Controlling Party may deem necessary or advisable to accomplish 

the purposes hereof, including to exercise, at any time and from time to time, all 

or any of the following powers with respect to all or any of the Collateral: 

(i) to demand, sue for, collect, receive and give acquittance for 

any and all monies due or to become due upon or by virtue thereof; 

(ii) to settle, compromise, compound, prosecute or defend any 

action or proceeding with respect thereto; 

(iii) to sell, lease, license or otherwise dispose of the same or 

the proceeds or avails thereof, as fully and effectually as if the Collateral 

Agent were the absolute owner thereof; and 

(iv) to extend the time of payment of any or all thereof and to 

make any allowance or other adjustment with reference thereto; 

provided that with respect to dispositions of any Collateral under this Agreement 

after the occurrence of an Event of Default, except in the case of Collateral that 

threatens to decline speedily in value or is of a type customarily sold on a 

recognized market, the Collateral Agent will give the Controlling Party and the 

Borrower at least ten days prior written notice of the time and place of any public 

sale thereof or the time after which any private sale or other intended disposition 

thereof will be made. Any such notice shall (x) contain the information specified 

in UCC Section 9-613, (y) be Authenticated and (z) be sent to the Parties required 

to be notified pursuant to UCC Section 9-611(c); provided further that if the 

Collateral Agent fails to comply with this sentence in any respect, its liability for 

such failure shall be limited to the liability (if any) imposed on it as a matter of 
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law under the UCC; and provided further that in taking, or refusing to take, any 

action pursuant to this Section 7(i), the Collateral Agent shall not take any action 

contrary to any Proper Instruction. 

Section 8. Waivers; Amendment. 

(a) No failure or delay of the Collateral Agent or any other Party in 

exercising any power or right hereunder or under any other Security Document 

shall operate as a waiver thereof, nor shall any single or partial exercise of any 

such right or power, or any abandonment or discontinuance of steps to enforce 

such a right or power, preclude any other or further exercise thereof or the 

exercise of any other right or power. The rights and remedies hereunder and 

under the other Security Documents are cumulative and are not exclusive of any 

rights or remedies that it would otherwise have. No waiver of any provision of 

this Agreement or any other Security Document or consent to any departure by 

the Collateral Agent or any other Party shall in any event be effective unless the 

same shall be by paragraph (b) below, and then such waiver or consent shall be 

effective only in the specific instance and for the purpose for which given. No 

notice or demand on the Collateral Agent in any case shall entitle the Collateral 

Agent to any other or further notice or demand in similar or other circumstances. 

(b) Neither this Agreement nor any provision hereof may be waived, 

amended or modified except in accordance with the provisions of Section 9.01 of 

the Credit Agreement; provided that without the consent of the Collateral Agent, 

no modification, supplement or waiver of the Agreement may modify the terms of 

Section 7 or any other term or provision that materially and adversely affects the 

rights, immunity, indemnity, duties, obligations liabilities or protection of the 

Collateral Agent hereunder. Any such amendment, supplement, modification or 

waiver shall be binding upon the Collateral Agent, each other Secured Party and 

the Borrower. Any purported amendment, waiver, supplement or modification 

not complying with the terms of this Section shall be null and void. 

Section 9. Notices. Each notice, request or other communication given to 

the Borrower, the Senior Lender, the Subordinated Lender or the Controlling 

Party hereunder shall be given in accordance with Section 9.02 of the Credit 

Agreement (or to such other recipient or address as may be hereafter notified by 

the respective parties hereto). Each notice, request or other communication given 

to the Collateral Agent hereunder shall be addressed as follows or to such other 

recipient or address as may be hereafter notified by the respective parties hereto: 

The Bank of New York Mellon 

QSR Administration 

101 Barclay Street, 4E 

New York, New York 10286 
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Section 10. Binding Effect. This Agreement shall become effective when 

a counterpart hereof shall have been executed by each of the Parties and delivered 

to the Controlling Party. 

Section 11. Survival of Agreement. All covenants, agreements, 

representations and warranties made by the Collateral Agent herein and in the 

certificates or other instruments prepared or delivered in connection with or 

pursuant to this Agreement or any other Transaction Document shall be 

considered to have been relied upon by each Secured Party, regardless of any 

investigation made by any such Secured Party or on its behalf, and shall continue 

in full force and effect until the Borrower is liquidated in accordance with the 

LLC Agreement. Notwithstanding anything to the contrary herein, the provisions 

of this Section shall remain operative and in full force and effect regardless of the 

termination of this Agreement, the repayment in full of all of the Secured 

Obligations and the termination of all commitments to make Loans under the 

Credit Agreement, the invalidity or unenforceability of any term or provision of 

this Agreement or any other Transaction Document or any investigation made by 

or on behalf of any Party. 

Section 12. Expenses; Indemnity. 

(a) The Borrower agrees to pay in accordance with the Waterfall (i) all 

reasonable out-of-pocket expenses incurred by the Collateral Agent in connection 

with the administration and enforcement of this Agreement and the other 

Transaction Documents (including such reasonable expenses as are incurred in 

connection with the collection, sale or other disposition of any Collateral or to 

preserve the value of the Collateral or the validity, perfection, rank or value of the 

Security Interest), any amendments, modifications or waivers of the provisions 

hereof or thereof, or incurred by the Collateral Agent in connection with the 

enforcement or protection of their rights in connection with this Agreement and 

the other Transaction Documents, including in each case the reasonable fees, 

charges and disbursements of counsel, accountants, financial advisers and other 

experts engaged by the Collateral Agent; provided that no such expenses, fees, 

charges and disbursements shall be charged separately to the extent they are 

covered as part of the agreed payments of periodic fees to the Collateral Agent or 

the Administrator under the Fee Letter (or otherwise). 

(b) The Borrower agrees to indemnify the Collateral Agent and each of 

its Related Parties, to the extent that such Related Party is acting in accordance 

with this Agreement or any other Transaction Document, including in accordance 

with a Proper Instruction (each such Person being called an “Indemnitee”) 

against, and to hold each Indemnitee harmless from, any and all losses, claims, 

damages, liabilities and related expenses, including reasonable counsel fees, 

charges and disbursements, incurred by or asserted against any Indemnitee arising 

out of, in any way connected with or as a result of (i) the execution or delivery of 

this Agreement or any other Transaction Document or any agreement or 
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instrument contemplated thereby, the performance by the parties thereto of their 

respective obligations thereunder or the consummation of the transactions 

contemplated hereby or (ii) any claim, litigation, investigation or proceeding 

relating to the foregoing, whether or not any Indemnitee is a party thereto (and 

regardless of whether such matter is initiated by a third party or by the Borrower 

or any of its Affiliates); provided that such indemnity shall not, as to any 

Indemnitee, be available to the extent that such losses, claims, damages, liabilities 

or related expenses are determined by a court of competent jurisdiction by final 

and nonappealable judgment to have resulted primarily from the bad faith, 

negligence, fraudulent actions or willful misconduct of such Indemnitee; provided 

further that the Borrower shall not be obligated to pay, indemnify or hold 

harmless any Indemnitee if such Indemnitee (A) does not provide reasonably 

prompt notice to the Borrower (with a copy to the Managing Member) of any 

claim for which indemnification is sought or (B) admits any liability or incurs any 

significant expenses after receiving actual written notice of the claim, or agrees to 

any settlement without the prior written consent of the Borrower. The Borrower 

may, in its sole discretion and at its expense, control the defense of the claim 

including, without limitation, designating counsel for the Indemnitees and 

controlling all negotiations, litigation, arbitration, settlements, compromises and 

appeals of any claim; provided, that if in the reasonable determination of an 

Indemnitee there exists a conflict of interest by reason of common representation 

such Indemnitee shall have the right to appoint separate counsel. In order to be 

paid any amount under this Section on any particular Payment Date in respect of 

any losses, claims, damages, liabilities or related expenses, in each case incurred 

no later than two Business Days prior to the Payment Determination Date 

immediately preceding such Payment Date, the request for payment under this 

Section must be received by the Borrower, the Managing Member and the 

Administrator no later than such Payment Determination Date. 

(c) To the extent permitted by applicable law, no party shall assert, and 

each hereby waives, and no party shall have any indemnity obligation with 

respect to, any claim against any other party, on any theory of liability, for special, 

indirect, consequential or punitive damages (as opposed to direct or actual 

damages) arising out of, in connection with, or as a result of, this Agreement or 

any agreement or instrument contemplated hereby, or the transactions 

contemplated hereby. 

(d) The provisions of this Section shall remain operative and in full 

force and effect regardless of the expiration of the term of this Agreement, the 

repayment of any of the Secured Obligations, the reduction or termination of the 

commitments to make Loans under the Credit Agreement, the invalidity or 

unenforceability of any term or provision of this Agreement, the Credit 

Agreement or any other Transaction Document or any investigation made by or 

on behalf of any party hereto. 

(e) If any transfer tax, documentary stamp tax or other tax is payable in 

connection with the Collateral or the Security Interest, the Borrower will pay such 
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tax and provide any required tax stamps to the Collateral Agent or as otherwise 

required by law. 

Section 13. Successors and Assigns. 

(a) This Agreement shall be binding upon and inure to the benefit of the 

Parties and their respective successors and assigns permitted hereby, except that 

(i) the Collateral Agent may not assign or otherwise transfer any of its rights or 

obligations hereunder without the prior written consent of the Controlling Party 

and the Subordinated Lender (and any attempted assignment or transfer by the 

Collateral Agent without such consent shall be null and void), (ii) no other 

Secured Party (other than the Senior Lender) may assign or otherwise transfer 

(including through participation) any of its rights or obligations hereunder without 

the prior written consent of Federal Reserve Bank of New York (and any 

attempted assignment or transfer by any such Secured Party without such consent 

shall be null and void) and (iii) the Senior Lender may not assign or otherwise 

transfer (including through participation) any of its rights or obligations hereunder 

without the prior written consent of the Subordinated Lender (and any attempted 

assignment or transfer by the Senior Lender without such consent shall be null 

and void). If all or any part of any Secured Party’s interest in any Secured 

Obligation is assigned or otherwise transferred, the transferor’s rights hereunder, 

to the extent applicable to the obligation so transferred, shall be automatically 

transferred with such Secured Obligation. 

(b) Any Person (i) into which the Collateral Agent may be merged or 

consolidated, (ii) which may result from any merger, conversion or consolidation 

to which the Collateral Agent shall be a party or (iii) succeeding to the business of 

the Collateral Agent, which Person, in any of the foregoing cases executes an 

agreement of assumption to perform every obligation of the Collateral Agent 

hereunder, shall be the successor to the Collateral Agent under this Agreement 

without the execution or filing of any paper or any further act on the part of any of 

the Parties to this Agreement, notwithstanding anything in this Agreement to the 

contrary. The Collateral Agent shall provide prior written notice of any merger, 

consolidation or succession pursuant to this clause to the Borrower and the 

Controlling Party. 

Section 14. Counterparts. This Agreement may be executed in 

counterparts (and by different Parties on different counterparts), each of which 

shall constitute an original but all of which when taken together shall constitute a 

single contract, and shall become effective as provided in Section 10. Delivery of 

an executed signature page to this Agreement by facsimile transmission shall be 

as effective as delivery of a manually signed counterpart of this Agreement. 

Section 15. Severability. If any one or more of the provisions contained 

in this Agreement or in any other Transaction Document should be held invalid, 

illegal or unenforceable in any respect to the extent permitted by applicable law, 

the validity, legality and enforceability of the remaining provisions contained 
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herein and therein shall not in any way be affected or impaired thereby (it being 

understood that the invalidity of a particular provision in a particular jurisdiction 

shall not in and of itself affect the validity of such provision in any other 

jurisdiction). The Parties shall endeavor in good-faith negotiations to replace the 

invalid, illegal or unenforceable provisions with valid provisions the economic 

effect of which comes as close as possible to that of the invalid, illegal or 

unenforceable provisions. 

Section 16. Integration. This Agreement and the other Transaction 

Documents represent the entire agreement of the Parties with respect to the 

subject matter hereof and thereof, and there are no promises, undertakings, 

representations or warranties by the Borrower, any Secured Party or the 

Controlling Party relative to the subject matter hereof not expressly set forth or 

referred to herein or in the other Transaction Documents. 

Section 17. Applicable Law. THIS AGREEMENT WILL BE 

GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE 

FEDERAL LAW OF THE UNITED STATES IF AND TO THE EXTENT 

SUCH LAW IS APPLICABLE, AND OTHERWISE IN ACCORDANCE WITH 

THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO 

CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH 

STATE. 

Section 18. Submission to Jurisdiction; Venue; Etc. Each of the Parties 

hereby irrevocably and unconditionally: (a) submits for itself and its property in 

any legal action or proceeding relating to this Agreement, or for recognition and 

enforcement of any judgment in respect thereof, to the exclusive jurisdiction of 

the courts of the United States for the Southern District of New York, and 

appellate courts thereof; provided that, notwithstanding the foregoing, if there is 

no basis for federal jurisdiction in respect of any such legal action or proceeding 

or recognition and enforcement action, then each party submits for itself and its 

property in any such legal action or proceeding or recognition and enforcement 

action to the exclusive jurisdiction of the courts of the State of New York located 

in the Borough of Manhattan in New York City, and appellate courts thereof; (b) 

consents that any such action or proceeding may be brought only in such courts 

and waives, to the maximum extent not prohibited by law, any objection that it 

may now or hereafter have to the venue of any such action or proceeding in any 

such court or that such action or proceeding was brought in an inconvenient court 

and agrees not to plead or claim the same; (c) agrees that service of process in any 

such action or proceeding may be effected by mailing a copy thereof by registered 

or certified mail (or any substantially similar form of mail), postage prepaid return 

receipt requested, in accordance with Section 9 of this Agreement; (d) agrees that 

nothing herein shall affect the right to effect service of process in any other 

manner permitted by law; (e) agrees that a final judgment in any such action or 

proceeding shall be conclusive and may be enforced in another jurisdiction by suit 

on the judgment or in any other matter provided by law; and (f) waives, to the 

maximum extent not prohibited by law, any right it may have to claim or recover 
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in any legal action or proceeding any special, indirect, exemplary, punitive or 

consequential damages of any kind whatsoever (including for lost profits).

Section 19. Confidentiality. The Lenders and the Collateral Agent agree 

to keep confidential all nonpublic information provided to them by the Borrower 

(or the Administrator on behalf of the Borrower), the Collateral Agent, the 

Investment Manager, the Controlling Party or any other Person pursuant to or in 

connection with this Agreement, the other Transaction Documents or the MLSA 

in accordance with the confidentiality provisions applicable to the Lenders set 

forth in Section 9.14 of the Credit Agreement. 

Section 20. WAIVERS OF JURY TRIAL. EACH PARTY HERETO 

HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY 

AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, 

COUNTERCLAIM, OR CROSS CLAIM ARISING IN CONNECTION 

WITH, OUT OF, OR OTHERWISE RELATING TO THIS AGREEMENT, 

THE COLLATERAL, OR ANY OTHER TRANSACTION DOCUMENT, 

OR ANY TRANSACTION OR AGREEMENT ARISING THEREFROM 

OR RELATED THERETO.

Section 21. Limited Recourse. Notwithstanding anything to the contrary 

contained in this Agreement and the other Transaction Documents, the obligations 

of the Borrower under this Agreement and all other Transaction Documents are 

solely the obligations of the Borrower and shall be payable solely to the extent of 

funds received by and available to the Borrower in accordance with this 

Agreement and the other Transaction Documents. No recourse shall be had for 

the payment of any amount owing in respect of any obligation of, or claim against, 

the Borrower arising out of or based upon this Agreement or any other 

Transaction Document against any holder of a membership interest, employee, 

officer or Affiliate thereof and, except as specifically provided herein and in the 

other Transaction Documents, no recourse shall be had for the payment of any 

amount owing in respect of any obligation of, or claim against, the Borrower 

arising out of or based upon this Agreement against the Administrator, the 

Investment Manager or any holder of the membership interests of the Borrower or 

any Related Party of any thereof; provided that the foregoing shall not relieve any 

such person or entity from any liability they might otherwise have as a result of 

willful misconduct, gross negligence or fraudulent actions taken or omissions by 

them or, in the case of the Administrator or the Investment Manager or any 

Related Party thereof, the foregoing or its negligence in the performance of its 

duties under the Administration Agreement or the Investment Manager 

Agreement, as the case may be. The provisions of this Section 21 shall survive 

the termination or expiration of this Agreement and payment in full of all the 

Secured Obligations. 

Section 22. Headings. Article and Section headings used herein are for 

convenience of reference only, are not part of this Agreement and are not to affect 
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the construction of, or to be taken into consideration in interpreting, this 

Agreement. 

Section 23. Waiver of Right of Setoff. The Collateral Agent waives all of 

its rights to set off and apply any Collateral at any time held and other obligations 

at any time owing by the Collateral Agent to or for the credit or the account of the 

Borrower or any Secured Party against the obligations of the Borrower or any 

Secured Party hereunder and under the other Transaction Documents, irrespective 

of whether or not the Collateral Agent shall have made any demand thereunder 

and although such obligations may be unmatured. 

Section 24. Instructions. It is understood that any instruction required to 

be given, prepared and/or delivered by the Controlling Party or its designee 

pursuant to this Agreement will be given, prepared and/or delivered pursuant to a 

Proper Instruction. 

Section 25. Further Assurances. Each Party agrees to do such further acts 

and things and to execute and deliver to the Borrower (or to the Controlling Party) 

such additional assignments, agreements, powers and instruments, as may be 

reasonably necessary to carry into effect the purposes of this Agreement. 

Section 26. Internal Controls. The Collateral Agent shall provide its 

relevant SAS-70 reports to the Borrower on an annual basis, along with quarterly 

attestations that pertinent controls remain in place, and such Sarbanes-Oxley subcertifications as are customarily provided by the Collateral Agent to its other 

customers similarly situated. 

Section 27. Role of the Controlling Party. Each party agrees that, except 

as otherwise set forth in this Agreement and the other Transaction Documents, the 

Controlling Party has ultimate authority with respect to all decisions regarding the 

management of the Collateral (which it may delegate, in whole or in part, to the 

Investment Manager or otherwise). 

Section 28. No Petitions. The Collateral Agent and each other Secured 

Party, by accepting the benefits hereof, hereby covenants and agrees that it will 

not at any time prior to a year and a day after all of the Secured Obligations are 

repaid in full, (a) commence or institute against the Borrower or join with or 

facilitate any other Person in commencing or instituting against the Borrower, any 

bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, 

receivership, insolvency or liquidation proceedings, or other similar proceedings 

under any United States Federal or state, or other jurisdiction, bankruptcy or 

similar law or statute now or hereafter in effect or (b) participate in any 

assignment for benefit of creditors, compositions, or arrangements with respect to 

the Borrower’s debts. 

Section 29. Maintenance of Books and Records. 
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(a) For the term of this Agreement, the Collateral Agent shall keep and 

retain all information, materials and records in whatever format (collectively, 

“Records”) which it has or which come into its possession in connection with the 

services provided under this Agreement, in each case to the extent consistent with 

the Collateral Agent’s internal records maintenance and records retention policy; 

provided that prior to any destruction of any Records by the Collateral Agent in 

accordance with such policy, the Collateral Agent shall notify the Controlling 

Party and provide the Controlling Party with an opportunity to retrieve such 

Records from the Collateral Agent. Upon the termination of this Agreement or its 

services hereunder, the Collateral Agent and the Controlling Party shall, in good 

faith, agree on the timing and mechanism for transferring all Records to the 

Controlling Party. In transferring such Records, the Collateral Agent shall 

provide an Officer’s Certificate certifying that (i) it has kept and retained the 

Records in accordance with the requirements set forth herein and (ii) the Records 

being transferred represent all of the Records that have not been previously 

delivered or destroyed in compliance with this Section. Notwithstanding the 

foregoing, the Collateral Agent may make and retain copies of Records to satisfy 

existing internal audit, compliance or record retention requirements, provided that 

the Officer’s Certificate includes information as to the copies of Records that it is 

retaining. 

(b) The Collateral Agent agrees to afford the Borrower, the Controlling 

Party, any Lender, the Investment Manager and the Administrator, and their 

respective authorized agents reasonable access during normal business hours to 

make examinations of the Records and to cause its personnel to assist in any such 

examinations of the Records, make extracts and allow copies of the Records to be 

made. Such examinations will be conducted in a manner which does not 

unreasonably interfere with the normal operations or employee relations of the 

Collateral Agent. The Collateral Agent shall, at the request of the Borrower, the 

Controlling Party, any Lender, the Investment Manager or the Administrator, 

supply such Person with a tabulation of securities owned by the Borrower and 

held by the Collateral Agent in connection with this Agreement and shall, when 

requested to do so and for such compensation as shall be agreed upon between the 

Borrower and the Collateral Agent, include certificate or CUSIP numbers in such 

tabulations. In addition, the Collateral Agent shall permit any Person designated 

by the Controlling Party, the Borrower, any Lender, the Administrator or the 

Investment Manager to discuss matters that fall within the scope of this 

engagement. Notwithstanding the foregoing but subject to the proviso at the end 

of this sentence, the Collateral Agent shall not be required to disclose (and agrees 

not to disclose or to permit the disclosure of) any information to the extent setting 

forth the unredacted identities of the borrowers of TALF Loans pursuant to this 

Section 29(b) without the consent of the Managing Member; provided, that the 

Collateral Agent may, to the extent it is authorized to do so under Section 19 

hereof, disclose any information referred to in this sentence to the Board of 

Governors of the Federal Reserve System and any other U.S. regulatory 

authorities with direct supervisory authority over it. 
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(c) The Collateral Agent shall use commercially reasonable efforts to 

provide access to the Records by means of providing access to a suitable reporting 

platform. 

Section 30. Termination. This Agreement and the Security Interest 

created or granted hereby shall terminate on the first date on which (x) (i) no 

Lender has any remaining commitment to make any Loans or (ii) the TALF 

Termination Date has occurred and (y) all Collateral has been fully liquidated and 

Disposed of and all proceeds thereof, including all amounts on deposit in the 

Collateral Account, have been distributed in accordance with the Waterfall. 

[signature pages follow]