Document:

FS Investment Corporation IV 8-K

Exhibit 10.1

 

	Citibank, N.A.

390 Greenwich Street

New York, New York 10013	

 

Execution
Copy

 

		Date:	January 19, 2016 (amended and restated as of October 17, 2019)

 

		To:	Cheltenham Funding LLC

c/o FS Investment Corporation IV

201 Rouse Boulevard

Philadelphia, PA 19112

Attention: William Goebel, Chief Financial Officer

Phone: 215-220-4247

Fax: 215-222-4649

Email:    credit.notices@fsinvestments.com

FSICIVTeam@fsinvestments.com

portfolio_finance@fsinvestments.com

 

		From:	Citibank, N.A.

388 Greenwich Street

11th Floor

New York, New York 10013

Attention: Director Derivative Operations

Facsimile: 212-615-8594

 

Transaction Reference Number:  __________

 

CONFIRMATION

 

Ladies and Gentlemen:

 

The purpose of this letter agreement is
to set forth the terms and conditions of the Transactions entered into between Citibank, N.A. (“Citibank”)
and Cheltenham Funding LLC, a limited liability company formed under the laws of the State of Delaware (“Counterparty”),
on the Trade Date specified below (each, a “Transaction” and, collectively, the “Transactions”).
This letter constitutes a “Confirmation” as referred to in the Master Agreement specified below.

 

The definitions and provisions contained
in the 2000 ISDA Definitions (the “Definitions”), as published by the International Swaps and Derivatives
Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Definitions and this
Confirmation, this Confirmation shall govern. Capitalized terms used but not defined in this Confirmation have the meanings assigned
to them in Annex A. Capitalized terms used but not defined in this Confirmation or in Annex A have the meanings assigned
to them in the Definitions or (if not defined as aforesaid) in the Master Agreement referred to below.

 

With effect from and after the Twelfth
Amendment Effective Date specified below, this Confirmation amends and restates the prior Confirmation dated as of January 19,
2016 and amended and restated as of April 12, 2016, June 3, 2016, June 30, 2016, January 19, 2017, July 19, 2017, September 5,
2017, January 19, 2018, July 19, 2018, January 19, 2019, April 19, 2019 and June 28, 2019 (the “Original Confirmation”)
relating to the Transactions described herein, which Original Confirmation (with respect to the period from and after the Twelfth
Amendment Effective Date) is hereby superseded and shall be of no further force or effect.

 

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1.           Agreement

 

This Confirmation supplements, forms a
part of and is subject to, the ISDA 2002 Master Agreement, dated as of January 19, 2016 (as amended, supplemented and otherwise
modified and in effect from time to time, the “Master Agreement”), between Citibank and Counterparty.
All provisions contained in the Master Agreement govern this Confirmation except as expressly modified below.

 

FS Investment Corporation IV (“Guarantor”)
has guaranteed all of the present and future obligations of Counterparty under the Master Agreement pursuant to a guarantee dated
as of the date hereof (the “Guarantee”) between Guarantor and Citibank. Guarantor will be a Credit Support
Provider, and the Guarantee will be a Credit Support Document, with respect to Counterparty. The obligations of the Guarantor under
the Guarantee shall, so long as no Event of Default in relation to Counterparty as Defaulting Party has occurred and is then continuing
and no Early Termination Date has been designated by Citibank, terminate and be of no further force of effect on the Portfolio
Criteria Satisfaction Date.

 

2.           Terms
of Transactions

 

The terms of the particular Transactions
to which this Confirmation relates are as follows:

 

	General Terms:	 
	Trade Date:	January 19, 2016
	Effective Date:	January 19, 2016
	Amendment Effective Date:	April 12, 2016
	Second Amendment Effective Date:	June 3, 2016
	Third Amendment Effective Date:	June 30, 2016
	Fourth Amendment Effective Date:	January 19, 2017
	Fifth Amendment Effective Date:	July 19, 2017
	Sixth Amendment Effective Date:	September 5, 2017
	Seventh Amendment Effective Date:	January 19, 2018
	Eighth Amendment Effective Date:	July 19, 2018
	Ninth Amendment Effective Date:	January 19, 2019
	Tenth Amendment Effective Date:	April 19, 2019
	Eleventh Amendment Effective Date:	June 28, 2019

 

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	Twelfth Amendment Effective Date:	October 17, 2019
	Scheduled Termination Date:	The latest date for the final scheduled payment (or, if there is only one scheduled payment, for the scheduled payment) of principal of any Reference Obligation at any time included in the Reference Portfolio.
	Termination Date:	The final Scheduled Settlement Date (as defined in the Master Agreement) with respect to all Transactions (other than (i) any Citibank Fixed Amount Payer Payment Date that occurs after the final Obligation Termination Date and (ii) any Counterparty Fourth Floating Rate Payer Payment Date).  The obligations of the parties to make payments required to be made hereunder shall survive the Termination Date.
	Obligation Termination Date:	
        (a) In relation to any Repaid Obligation,
        the related Repayment Date; and

         

        (b) In relation to any Terminated
        Obligation, the related Termination Settlement Date.

         

	Reference Portfolio:	As of any date of determination, all Reference Obligations with respect to all Transactions outstanding on such date.
	Reference Obligation:	Each obligation listed on Annex I from time to time having a Reference Amount equal to the “Reference Amount” indicated on Annex I for such obligation (and, in the case of a Committed Obligation, having an Outstanding Principal Amount equal to the “Outstanding Principal Amount” indicated on Annex I for such Committed Obligation), in each case, subject to adjustment by the Calculation Agent in accordance with the terms of this Confirmation.
	 	
        Counterparty may, by notice to Citibank
        on any Business Day on or after the Trade Date (each, an “Obligation Trade Date”), designate that any
        obligation (each, a “Reference Obligation”) shall become the subject of a Transaction hereunder. Any
        such notice shall specify the proposed Reference Obligation and the proposed Reference Amount, Reference Entity and Initial Price
        in relation to such Transaction.

         

        Notwithstanding the foregoing, no such
        designation by Counterparty will be effective unless:

         

        (a)           Citibank
consents on or prior to the Obligation Trade Date to the relevant Reference Obligation becoming the subject of a Transaction hereunder
(having the proposed Reference Amount and Initial Price in the notice of designation from Counterparty);

 

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	 	(b)           on
        the Obligation Trade Date (i) the relevant Reference Obligation satisfies the Obligation Criteria set forth in Annex II
        and (ii) on and after the Portfolio Criteria Satisfaction Date, the Portfolio Criteria set forth in Annex II are satisfied
        (or, if any Portfolio Criterion is not satisfied immediately prior to such designation, then the extent of compliance with such
        Portfolio Criterion is improved); and

         

        (c)           if
        the relevant Reference Obligation would be a Specified Reference Obligation, Counterparty gives notice of such fact to Citibank
        in such notice of designation (provided that any failure to give such notice shall not affect the effectiveness of such designation).

         

        Without limiting the generality of the
        foregoing clause (a), Citibank may withhold its consent to any such designation based on any legal, accounting, tax or other similar
        issues that are adverse to Citibank in any material respect and that would or could reasonably be expected to arise as a result
        of the entry into such Transaction or any purchase by the Citibank Holder of such Reference Obligation as a hedge for such Transaction.
        In the event that Citibank determines not to hold, or cause to be held, all or any portion of any such Reference Obligation as
        a hedge for such Transaction on the Obligation Settlement Date for such Transaction, Citibank shall give prompt notice thereof
        to Counterparty.

         

        The “Obligation Settlement
        Date” for a Transaction shall be the date following the Obligation Trade Date for such Transaction that is customary
        for settlement of the related Reference Obligation substantially in accordance with the then-current market practice in the principal
        market for the related Reference Obligation (as determined by the Calculation Agent).

         

        On the Obligation Trade Date for a Transaction,
        the Reference Amount of such Transaction shall, for all purposes hereof (including the determination of the “Maximum Portfolio
        Notional Amount”) other than calculating Rate Payments, be increased by the “Reference Amount” specified in such
        notice from Counterparty. On the Obligation Settlement Date for a Transaction, the Reference Amount of such Transaction shall,
        solely for the purposes of calculating Rate Payments, be increased by the “Reference Amount” specified in such notice
        from Counterparty.

 

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	 	Once a Reference Obligation becomes the
        subject of a Transaction hereunder, Citibank shall promptly prepare and deliver to Counterparty a revised Annex I reflecting
        the Reference Portfolio as of the related Obligation Trade Date.

         

        If any payment of interest on a Reference
        Obligation that would otherwise be made during the period from and including the Obligation Trade Date to but excluding the Termination
        Trade Date is not made but is capitalized as additional principal (without default), then the amount of interest so capitalized
        as principal shall become a new Transaction hereunder (a “PIK Transaction”) having the same terms and
        conditions as the Transaction relating to the Reference Obligation in respect of which such interest is capitalized, except that
        (1) the Initial Price in relation to such PIK Transaction shall be zero, (2) the Obligation Trade Date and Obligation
        Settlement Date for such PIK Transaction shall be the date on which such interest is capitalized and (3) the Reference Amount
        of such PIK Transaction will be the amount of interest so capitalized as principal. Citibank shall give notice to Counterparty
        after a PIK Transaction becomes outstanding as provided above, which notice shall set forth the information in the foregoing clauses
        (2) and (3).

         

	Reference Entity:	The borrower of the Reference Obligation identified as such in Annex I hereto.  In addition, “Reference Entity”, unless the context otherwise requires, shall also refer to any guarantor of or other obligor on the Reference Obligation.
	Ramp-Up Period:	The period from and including the Effective Date and ending on and including the date occurring 90 days after the Effective Date.
	Ramp-Down Period:	The period from and including the date 60 days prior to the Scheduled Termination Date and ending on and including the Scheduled Termination Date.
	Portfolio Notional Amount:	As of any date of determination, the sum of the Notional Amounts for all Reference Obligations as of such date.

 

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	Notional Amount:	
        (a) In relation to any Transaction (other
        than with respect to any Terminated Obligation or Repaid Obligation), as of any date of determination, the Reference Amount of
        the related Reference Obligation as of such date multiplied by the Initial Price in relation to such Reference Obligation;
        and

         

        (b) In relation to any Transaction
        with respect to a Terminated Obligation or Repaid Obligation, the amount of the reduction in the Reference Amount of the related
        Reference Obligation determined, in the case of a Terminated Obligation, pursuant to Clause 3 or, in the case of a Repaid
        Obligation, pursuant to Clause 5, in each case multiplied by the Initial Price in relation to the related Reference
        Obligation.

         

	Outstanding Principal Amount:	In relation to any Reference Obligation as of any date of determination, the outstanding principal amount of such obligation as shown in the then-current Annex I, as increased pursuant to this Clause 2 (or, in the case of any Committed Obligation, pursuant to any borrowing in respect of such Committed Obligation after the Obligation Trade Date) and reduced pursuant to Clauses 3 and 5.  Except as otherwise expressly provided below with respect to Counterparty First Floating Amounts, the principal amount of any Committed Obligation outstanding on any date shall include the aggregate stated face amount of all letters of credit, bankers’ acceptances and other similar instruments issued in respect of such Committed Obligation to the extent that the holder of such Committed Obligation is obligated to extend credit in respect of any drawing or other similar payment thereunder.
	Commitment Amount:	In relation to any Reference Obligation that is a Committed Obligation (and the related Transaction) as of any date of determination, the maximum outstanding principal amount of such Reference Obligation that a registered holder thereof would on such date be obligated to fund (including all amounts previously funded and outstanding, whether or not such amounts, if repaid, may be reborrowed).

 

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	Notional Funded Amount:	
        In relation to any Reference Obligation
        that is a Committed Obligation (and to the related Transaction) as of any date of determination, the greater of (a) zero and
        (b) the sum of (i) the Outstanding Principal Amount of such Reference Obligation as of the Obligation Trade Date multiplied
        by the Initial Price in relation to such Reference Obligation minus (ii) the product of (x) the excess, if any, of the
        Commitment Amount of such Reference Obligation as of the Obligation Trade Date over the Outstanding Principal Amount of such Reference
        Obligation as of the Obligation Trade Date multiplied by (y) 100% minus the Initial Price in relation to such Reference Obligation
        plus (iii) any increase in the Outstanding Principal Amount of such Reference Obligation during the period from but excluding
        the Obligation Trade Date to and including such date of determination minus (iv) any decrease in the Outstanding Principal
        Amount of such Reference Obligation during the period from but excluding the Obligation Trade Date to and including such date of
        determination.

         

        In relation to any Reference Obligation
        that is a Term Obligation (and the related Transaction) as of any date of determination, the Notional Amount of such Reference
        Obligation.

         

	Portfolio Notional Funded Amount:	As of any date of determination, the aggregate of all Notional Funded Amounts with respect to all Reference Obligations in the Reference Portfolio on such date of determination.
	Reference Amount:	In relation to (a) any Term Obligation, the Outstanding Principal Amount thereof and (b) any Committed Obligation, the Commitment Amount thereof.
	Maximum Portfolio Notional Amount:	USD175,000,000
	Minimum Portfolio Notional Amount:	85% of the Maximum Portfolio Notional Amount
	Utilization Amount:	In relation to any Calculation Period, the daily average of the Portfolio Notional Funded Amount during such Calculation Period.
	Business Day:	New York
	Business Day Convention:	
        Following (which shall apply to any date
        specified herein for the making of any payment or determination or the taking of any action which falls on a day that is not a
        Business Day).

         

        If any anniversary date specified
herein would fall on a day on which there is no corresponding day in the relevant calendar month, then such anniversary date shall
be the last day of such calendar month.

 

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	Floating Rate Index:	Whenever in this Confirmation reference is made to USD-LIBOR-BBA (a “Floating Rate Index”), in no event may such Floating Rate Index be less than zero
	Monthly Period:	Each period from but excluding the last day of any calendar month to and including the last day of the immediately succeeding calendar month.
	Calculation Agent:	Citibank; provided that, if an Event of Default described in Section 5(a)(i) or Section 5(a)(vii) occurs with respect to Citibank as Defaulting Party and no Event of Default has occurred and is continuing with respect to Counterparty as Defaulting Party, then Counterparty may designate any of Bank of America, NA, The Bank of Montreal, Barclays Bank plc, Canadian Imperial Bank of Commerce, Credit Suisse, Deutsche Bank AG, JPMorgan Chase Bank, N.A., UBS AG and Wells Fargo Bank, National Association as Calculation Agent, which designation shall be effective only (a) if such designated entity accepts such appointment and agrees to perform the duties of the Calculation Agent hereunder and (b) so long as such Event of Default with respect to Citibank as Defaulting Party continues.  Unless otherwise specified, the Calculation Agent shall make all determinations, calculations and adjustments required pursuant to this Confirmation in good faith and on a commercially reasonable basis.
	Calculation Agent City:	New York
	Initial Price:	In relation to any Reference Obligation (and the related Transaction), the Initial Price specified in Annex I.  The Initial Price (a) will be expressed exclusive of accrued interest, (b) will be expressed as a percentage of the Reference Amount, (c) will be determined exclusive of Costs of Assignment that would be incurred by a buyer in connection with any purchase of the Reference Obligation and exclusive of any Delay Compensation and (d) will be, as of the related Obligation Trade Date, the “Initial Price” specified by Counterparty to Citibank in the notice of designation referred to above and consented to by Citibank.

 

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	Payments by Counterparty	 
	Counterparty First Floating Amounts:	 
	First Floating Amount Payer:	Counterparty
	First Floating Amount:	In relation to any First Floating Rate Payer Payment Date, the sum, for each Transaction, of the products of (a) the First Floating Rate Payer Calculation Amount for such Transaction for the related First Floating Rate Payer Calculation Period multiplied by (b) the Floating Rate Option for such Transaction during the related First Floating Rate Payer Calculation Period plus the Spread multiplied by (c) the Floating Rate Day Count Fraction; provided that, for purposes of the foregoing calculation, the percentage specified in the foregoing clause (b) shall be the Spread (and not the Floating Rate Option plus the Spread) with respect to any portion of a First Floating Rate Payer Calculation Amount constituting the undrawn stated face amount of all letters of credit, bankers’ acceptances and other similar instruments issued in respect of a related Committed Obligation.
	
        First Floating Rate Payer

        Calculation Amount:

         
	In relation to any First Floating Rate Payer Calculation Period and any Transaction, the daily average of the Notional Funded Amount of such Transaction during such First Floating Rate Payer Calculation Period.
	
        First Floating Rate Payer

        Calculation Period:

         
	In relation to any Transaction, each Monthly Period, except that (a) the initial First Floating Rate Payer Calculation Period will commence on, and include, the related Obligation Settlement Date and (b) the final First Floating Rate Payer Calculation Period will end on, but exclude, the related Obligation Termination Date.
	
        First Floating Rate

        Payer Payment Date:

         
	
        (a) In relation to any Transaction (other
        than with respect to any Terminated Obligation or Repaid Obligation), the tenth Business Day following the last day of any Monthly
        Period, commencing with the first such date after the Obligation Settlement Date for such Transaction and ending with the last
        such date occurring prior to the related Obligation Termination Date; and

         

        (b) In relation to any Terminated
        Obligation or Repaid Obligation, the related Total Return Payment Date.

         

	Floating Rate Option:	In relation to any Transaction, USD-LIBOR-BBA.
	Designated Maturity:	In relation to any Transaction, one month.

 

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	Spread:	(a) Prior to the Portfolio Criteria Satisfaction Date, 1.60%; and (b) on or after the Portfolio Criteria Satisfaction Date, 1.50%.
	
        Floating Rate Day

        Count Fraction:

         
	In relation to any Transaction, Actual/360.
	Reset Dates:	The first day of each First Floating Rate Payer Calculation Period.
	Compounding:	Inapplicable
	 	 
	Counterparty Second Floating Amounts:	 
	Second Floating Amount Payer:	Counterparty
	Second Floating Amount:	
        In relation to any Second Floating Rate
        Payer Payment Date, the product of (a) the Second Floating Rate Payer Calculation Amount for the related Second Floating Rate
        Payer Calculation Period multiplied by (b) the Spread multiplied by (c) the Floating Rate Day Count Fraction.

         

        Notwithstanding the foregoing,
no Second Floating Amount shall be payable on any Second Floating Rate Payer Payment Date, (a) on or following the Termination
Date if the Termination Date results from the designation of an Early Termination Date pursuant to Section 6(a) of the Master
Agreement by reason of an Event of Default under Section 5(a)(i) or 5(a)(vii) of the Master Agreement in relation to Citibank
as the Defaulting Party or (b) on or following any date on which each of the following two conditions has been satisfied: (i) Counterparty
has designated at least 20 Designated Reference Obligations to become the subject of Transactions hereunder (as contemplated opposite
the caption “Reference Obligation” above) and (ii) the aggregate Notional Amount of all Designated Reference
Obligations as to which Citibank has not given its consent to such Designated Reference Obligations becoming the subject of Transactions
hereunder (as contemplated opposite the caption “Reference Obligation” above) exceeds 50% of the aggregate Notional
Amount of all Designated Reference Obligations that Counterparty has designated are to become the subject of Transactions hereunder
(as contemplated opposite the caption “Reference Obligation” above).

 

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        Second Floating Rate Payer

        Calculation Amount:
	In relation to any Second Floating Rate Payer Calculation Period, the excess, if any, of (a) the Minimum Portfolio Notional Amount over (b) the Utilization Amount for such Second Floating Rate Payer Calculation Period.
	
        Second Floating Rate Payer

        Calculation Period:
	Each Monthly Period; provided that (a) the initial Second Floating Rate Payer Calculation Period shall begin on the first day following the last day of the Ramp-Up Period and (b) the final Second Floating Rate Payer Calculation Period shall end on the last Second Floating Rate Payer Payment Date.
	
        Second Floating Rate

        Payer Payment Dates:
	The tenth Business Day following the last day of each Monthly Period; provided that (a) the initial Second Floating Rate Payer Payment Date will be the first such Business Day after the last day of the Ramp-Up Period and (b) the final Second Floating Rate Payer Payment Date will be the day preceding the first day of the Ramp-Down Period.
	Spread:	(a) Prior to the Portfolio Criteria Satisfaction Date, 1.60%; and (b) on or after the Portfolio Criteria Satisfaction Date, 1.50%.
	
        Floating Rate Day

        Count Fraction:

         
	Actual/360.
	Compounding:	Inapplicable
	 	 
	Counterparty Third Floating Amounts:	 
	Third Floating Amount Payer:	Counterparty
	Third Floating Amount:	In relation to any Third Floating Rate Payer Payment Date, the product of (a) the Third Floating Rate Payer Calculation Amount for the related Third Floating Rate Payer Calculation Period multiplied by (b) the Spread multiplied by (c) the Floating Rate Day Count Fraction.
	
        Third Floating Rate Payer

        Calculation Amount:

         
	In relation to any Third Floating Rate Payer Calculation Period, the excess, if any, of (a) the Maximum Portfolio Notional Amount over (b) the greater of (i) the Minimum Portfolio Notional Amount and (ii) the daily average Portfolio Notional Funded Amount for such Third Floating Rate Payer Calculation Period.

 

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        Third Floating Rate Payer

        Calculation Period:

         
	Each Monthly Period; provided that (a) the initial Third Floating Rate Payer Calculation Period shall begin on the first day following the last day of the Ramp-Up Period and (b) the final Third Floating Rate Payer Calculation Period shall end on the last Third Floating Rate Payer Payment Date.
	
        Third Floating Rate

        Payer Payment Dates:

         
	The tenth Business Day following the last day of each Monthly Period; provided that (a) the initial Third Floating Rate Payer Payment Date will be the first such Business Day after the last day of the Ramp-Up Period and (b) the final Third Floating Rate Payer Payment Date will be the day preceding the first day of the Ramp-Down Period.
	Spread:	0.15%.
	
        Floating Rate Day

        Count Fraction:

         
	Actual/360.
	Compounding:	Inapplicable
	 	 
	Counterparty Fourth Floating Amounts:	 
	Fourth Floating Amount Payer:	Counterparty
	Fourth Floating Amount:	Each Expense or Other Payment.
	
        Fourth Floating Rate

        Payer Payment Dates:
	In relation to any Transaction, (a) the tenth Business Day following the last day of each Monthly Period, beginning with the first such Business Day after the Obligation Settlement Date for such Transaction, (b) the related Obligation Termination Date and (c) after the related Obligation Termination Date, the tenth Business Day after notice of a Fourth Floating Amount from Citibank to Counterparty; provided that, prior to the tenth Business Day after the related Obligation Termination Date, if Counterparty has received less than ten Business Days’ notice from Citibank that such Fourth Floating Amount is due and payable, such Fourth Floating Rate Payer Payment Date shall be the tenth Business Day following the last day of the next succeeding Monthly Period.  The obligation of Counterparty to pay Fourth Floating Amounts in respect of any Transaction shall survive the related Obligation Termination Date.

 

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	Counterparty Fifth Floating Amounts:	 
	Fifth Floating Amount Payer:	Counterparty
	Fifth Floating Amount:	In relation to any Terminated Obligation or Repaid Obligation, Capital Depreciation, if any.
	
        Fifth Floating Rate

        Payer Payment Dates:

         
	Each Total Return Payment Date.
	 	 
	Payments by Citibank:	 
	Citibank Fixed Amounts:	 
	Fixed Amount Payer:	Citibank
	Fixed Amount:	In relation to any Transaction, the Interest and Fee Amount with respect to such Transaction for the related Fixed Amount Payer Payment Date.
	Fixed Amount Payer Calculation Periods:	In relation to each Reference Obligation in the Reference Portfolio, each period from and including any date upon which a payment of interest is made on such Reference Obligation to but excluding the next such date; provided that (a) the initial Fixed Amount Payer Calculation Period shall commence on and include the Obligation Settlement Date for such Reference Obligation and (b) the final Fixed Amount Payer Calculation Period shall end on, but exclude, the related Obligation Termination Date.
	Fixed Amount Payer Payment Dates:	
        (a) In relation to any Transaction (other
        than with respect to any Terminated Obligation or Repaid Obligation), the tenth Business Day following the last day of any Monthly
        Period, commencing with the first such date after the Obligation Settlement Date for such Transaction and ending with the last
        such date occurring prior to the related Obligation Termination Date; and

         

        (b) In relation to any Transaction
with respect to any Terminated Obligation or Repaid Obligation, the related Total Return Payment Date; provided that, if interest
on the Reference Obligation is actually paid on the scheduled interest payment date next succeeding the related Obligation Termination
Date, then the final Fixed Amount Payer Payment Date shall be the tenth Business Day next succeeding the last day of the Monthly
Period during which such scheduled interest payment date occurs.

 

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	Citibank Floating Amounts:	 
	 	 
	Floating Amount Payer:	Citibank
	 	 
	Floating Amount:	In relation to any Terminated Obligation or Repaid Obligation, Capital Appreciation, if any.
	 	 
	Floating Rate Payer Payment Dates:	Each Total Return Payment Date.

 

3.           Reference
Obligation Removal; Accelerated Termination.

 

Reference Obligation Removal

 

(a)          A
Transaction may be terminated in whole by either party (or in part by Counterparty) in accordance with this Clause 3 by the
giving of notice (an “Accelerated Termination Notice”) to the other party (each such termination, an
“Accelerated Termination”).

 

		(i)	Counterparty shall be entitled to terminate any Transaction or any portion thereof by delivering
an Accelerated Termination Notice to Citibank that is given (i) no later than the proposed Termination Trade Date and (ii) no
more than 30 days, and no less than 10 days, prior to the proposed Termination Settlement Date; provided that, except in
the case of the termination of all Transactions in connection with the occurrence of the Scheduled Termination Date, (x) on
and after the Portfolio Criteria Satisfaction Date, the Portfolio Criteria set forth in Annex II would be satisfied on the
proposed Termination Trade Date after giving effect to such termination (or, if any Portfolio Criterion is not satisfied immediately
prior to such termination, the extent of compliance therewith would be maintained or improved after giving effect to such termination)
and (y) after giving effect to such termination, no Delivery Amount (as defined in the Credit Support Annex) would be required
under the Credit Support Annex to be transferred by Counterparty. The Accelerated Termination Notice shall specify the Reference
Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the proposed Termination
Trade Date and the proposed Termination Settlement Date.

 

		(ii)	Following the occurrence of a Credit Event (as determined by the Calculation Agent) with respect
to the related Reference Entity (including any guarantor or other obligor referred to in the definition thereof), Citibank will
have the right, but not the obligation, to request that Counterparty agree to increase the Independent Amount Percentage with respect
to the related Transaction to (i) 100% minus (ii) the Supplemental Independent Amount Percentage. If Counterparty does not
agree to such request within one Business Day after notice of such request from Citibank, then Citibank will have the right, but
not the obligation, to terminate the related Transaction by delivering an Accelerated Termination Notice to Counterparty no less
than 10 days prior to the proposed Termination Trade Date. The Accelerated Termination Notice shall specify the Reference Obligation
that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the proposed Termination Trade Date
and the proposed Termination Settlement Date.

 

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Elective Termination by Citibank due
to Certain Events

 

(b)          If:

 

		(i)	any Reference Obligation (including any Exchange Consideration) fails to satisfy the Obligation
Criteria at any time, or

 

		(ii)	the Portfolio Criteria are not satisfied at any time on or after the Portfolio Criteria Satisfaction
Date,

 

then Citibank may notify
Counterparty in writing of such event. In the case of the foregoing clause (i), if such event continues for 30 days following the
delivery of such notice, then Citibank will have the right but not the obligation to terminate the related Transaction. In the
case of the foregoing clause (ii), if such event continues for 30 days following the delivery of such notice, then Citibank will
have the right but not the obligation to terminate each Transaction that is the subject of this Confirmation. Citibank may exercise
this termination right with respect to each Terminated Obligation by delivering an Accelerated Termination Notice to Counterparty
that is given, as to any Terminated Obligation, (1) on the proposed Termination Trade Date and (2) no less than 10 days
prior to the proposed Termination Settlement Date for the related Terminated Obligation. The Accelerated Termination Notice shall
specify each Reference Obligation that is the subject of such Accelerated Termination and, with respect to each such Reference
Obligation, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination Settlement
Date.

 

Citibank Optional Termination Date

 

(c)          Citibank
will have the right, but not the obligation, to terminate each Transaction that is the subject of this Confirmation, effective
on any Business Day occurring on or after December 19, 2019 (such date, the “Citibank Optional Termination Date”).
Citibank can exercise this termination right by delivering an Accelerated Termination Notice to Counterparty that is given no less
than 30 days prior to the first proposed Termination Trade Date specified in the related Accelerated Termination Notice. The Accelerated
Termination Notice shall specify, as to each Reference Obligation, the amount of the Terminated Obligation, the proposed Termination
Trade Date and the proposed Termination Settlement Date. If Citibank does not exercise its right to terminate each Transaction
that is the subject of this Confirmation on or before the date occurring 30 days prior to the Citibank Optional Termination Date,
then Citibank will have the right, but not the obligation, to propose, by notice to Counterparty, to amend and restate one or more
material terms of the Transactions, including, without limitation, the Spread, the Independent Amount Percentage, the Supplemental
Independent Amount Percentage and the application of the Obligation Criteria and Portfolio Criteria to the Transactions. If Citibank
provides a notice to Counterparty proposing to amend and restate one or more material terms of the Transactions as provided above
and Counterparty does not agree in writing to such amended and restated terms within 10 Business Days after Citibank provides such
notice to Counterparty, each Transaction shall terminate, and the Termination Trade Date shall be such tenth Business Day. In the
event of any such termination, Citibank shall deliver an Accelerated Termination Notice to Counterparty, which shall specify, as
to each Reference Obligation, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination
Settlement Date. Even if a Termination Trade Date has been designated with respect to each Transaction pursuant to this Clause 3(c),
such designation will not prevent Citibank or Counterparty from subsequently designating an earlier Termination Trade Date in relation
to any Transaction to the extent Citibank or Counterparty, as the case may be, is entitled to designate such earlier Termination
Trade Date pursuant to this Confirmation. Notwithstanding anything in this Confirmation to the contrary:

 

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		(i)	if Citibank elects to exercise its termination right under this Clause 3(c), then each reference
to the term “Scheduled Termination Date” in Clauses 4 (other than Clause 4(c)) and 5 and in the definitions
of “Ramp-Down Period” and “Termination Trade Date” will instead be a reference to the date 60 days after
the first proposed Termination Trade Date specified in such notice; and

 

		(ii)	whether or not Citibank elects to exercise its termination right under this Clause 3(c), each
reference to the term “Scheduled Termination Date” in the provisions of Clause 4(c) dealing with the payment of
Counterparty Second Floating Amounts, and each reference to the day preceding the first day of the Ramp-Down Period in the definitions
of “Counterparty Second Floating Rate Payer Payment Date” and “Counterparty Third Floating Rate Payer Payment
Date”, will instead be a reference to the date occurring 60 days prior to the Citibank Optional Termination Date.

 

Early Termination Date under Master
Agreement

 

(d)          If
there is effectively designated an Early Termination Date under the Master Agreement, then (i) each Transaction will be terminated
in its entirety (but without limiting Clause 4(c)), (ii) notwithstanding any contrary or otherwise inconsistent provision
of the Master Agreement, the provisions set forth in Section 6(e) of the Master Agreement shall not apply to any Transaction
(except that amounts that become due and payable on or prior to such Early Termination Date with respect to any Transaction as
provided in this Confirmation will constitute Unpaid Amounts) and (iii) the Termination Trade Date for each Transaction will
be the date specified by the Calculation Agent occurring on or promptly after such Early Termination Date; provided that,
if such Early Termination Date is designated by reason of an Event of Default as to which Citibank is the Defaulting Party, Counterparty
may specify the Termination Trade Date with respect to any Transaction as to which the Calculation Agent has not specified the
Termination Trade Date within 10 days after such Early Termination Date. The Calculation Agent shall give notice (an “Accelerated
Termination Notice”) to each party (such termination, an “Accelerated Termination”) on
or prior to such Early Termination Date, which Accelerated Termination Notice shall specify each Reference Obligation that is the
subject of such Accelerated Termination and, with respect to each such Reference Obligation, the amount of the Terminated Obligation,
the proposed Termination Trade Date and the proposed Termination Settlement Date. The amount, if any, payable in respect of such
Early Termination Date will be determined in accordance with Clause 4(b) of this Confirmation based upon the delivery of such
Accelerated Termination Notice.

 

Effect of Termination

 

(e)          With
respect to any Transaction terminated in whole pursuant to this Clause 3, (i) as of the relevant Termination Trade Date
the Reference Amount shall, for all purposes hereof (including the determination of the “Maximum Portfolio Notional Amount”)
other than calculating Rate Payments, be reduced to zero (and, in the case of a Committed Obligation, the Outstanding Principal
Amount thereof shall be reduced to zero) and (ii) as of the relevant Termination Settlement Date the Reference Amount, for
purposes of calculating Rate Payments, shall be reduced to zero (and, in the case of a Committed Obligation, the Outstanding Principal
Amount thereof shall be reduced to zero). With respect to any Transaction terminated in part pursuant to this Clause 3, (i) as
of the relevant Termination Trade Date the Reference Amount shall, for all purposes hereof (including the determination of the
“Maximum Portfolio Notional Amount”) other than calculating Rate Payments, be reduced by the amount of the reduction
of the Reference Amount specified in the Accelerated Termination Notice (and, in the case of a Committed Obligation, the Outstanding
Principal Amount shall be reduced by an amount equal to the product of the Outstanding Principal Amount in effect immediately prior
to such reduction multiplied by the amount of the reduction of the Reference Amount divided by the Reference Amount in effect immediately
prior to such reduction) and (ii) as of the relevant Termination Settlement Date the Reference Amount shall, for purposes
of calculating Rate Payments, be reduced by the amount of the reduction of the Reference Amount specified in the Accelerated Termination
Notice (and, in the case of a Committed Obligation, the Outstanding Principal Amount shall be reduced by an amount equal to the
product of the Outstanding Principal Amount in effect immediately prior to such reduction multiplied by the amount of the reduction
of the Reference Amount divided by the Reference Amount in effect immediately prior to such reduction). Following any Termination
Trade Date (other than the Termination Trade Date in respect of the Termination Date), Citibank shall promptly prepare and deliver
to Counterparty a revised Annex I.

 

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4.            Final
Price Determination

 

Following the termination of any Transaction
in whole or in part pursuant to Clause 3 or by reason of the occurrence of the Scheduled Termination Date (other than in connection
with a Repayment), the Final Price for the relevant Terminated Obligation will be determined in accordance with this Clause 4.

 

Determination by Counterparty

 

(a)          In
order to determine the Final Price for any Terminated Obligation then held by or on behalf of Citibank as a hedge for the related
Transaction if such determination is being made as the result of a termination pursuant to Clause 3(a), Counterparty may arrange
for the sale of such Terminated Obligation by giving notice of such sale to Citibank; provided that Counterparty shall have
no right to arrange a sale of a Terminated Obligation pursuant to this Clause 4(a) if, as a result of such termination and
the termination of all other Transactions as to which the Total Return Payment Date has not yet occurred, after giving effect to
such termination, a Delivery Amount (as defined in the Credit Support Annex) would be required under the Credit Support Annex to
be transferred by Counterparty. Such notice must be given at least three Business Days prior to the related Termination Settlement
Date in the case of any Terminated Obligation and at least 10 days prior to the Scheduled Termination Date if all Transactions
are to be terminated in connection with the Scheduled Termination Date. Any sale (i) must be to an Approved Buyer or another
buyer approved in advance by Citibank, such approval not to be unreasonably withheld or delayed, and (ii) must be scheduled
to occur no later than the date customary for settlement, substantially in accordance with the then-current market practice in
the principal market for such Terminated Obligation (as determined by the Calculation Agent), following the Termination Trade Date
and prior to the Scheduled Termination Date if all Transactions are to be terminated in connection with the Scheduled Termination
Date. If Counterparty so arranges any sale, the net cash proceeds received from the sale of any Terminated Obligation, net of the
related Costs of Assignment and adjusted by any Delay Compensation as provided in Clause 6(b), shall be the “Final
Price” for that Terminated Obligation.

 

Determination by Calculation Agent

 

(b)          If
the Final Price for any Terminated Obligation is not determined according to Clause 4(a), the Calculation Agent shall attempt
to obtain Firm Bids for such Terminated Obligation with respect to the applicable Termination Trade Date from two or more Dealers.
The Calculation Agent will give Counterparty notice of its intention to obtain Firm Bids pursuant to this Clause 4(b) (such
notice to be given telephonically and via electronic mail) not later than two hours prior to the bid submission deadline specified
below. By notice to Citibank not later than the bid submission deadline specified below, Counterparty may, but shall not be obligated
to, designate up to three Approved Buyers each of which shall provide a Firm Bid (and the Calculation Agent will seek a Firm Bid
from any such designee so designated by Counterparty on a timely basis). A “Firm Bid” shall be a good
and irrevocable bid for value, to purchase all or a portion of the applicable Terminated Obligation, expressed as a percentage
of the Reference Amount of such Terminated Obligation and exclusive of accrued interest, for scheduled settlement substantially
in accordance with the then-current market practice in the principal market for such Terminated Obligation, as determined by the
Calculation Agent, submitted as of 11 a.m. New York time or as soon as practicable thereafter. If there is more than one Terminated
Obligation at any time, then the Calculation Agent shall obtain Firm Bids solely with respect to each separate Terminated Obligation
(but not with respect to any group or groups of such Terminated Obligations). Citibank may, but is not obligated to, sell or cause
the sale of any portion of any Terminated Obligation to any Dealer that provides a Firm Bid.

 

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If the Calculation Agent is unable to obtain
from Dealers at least one Firm Bid or combination of Firm Bids for all of the Reference Amount of any Terminated Obligation with
respect to the relevant Termination Trade Date, the Calculation Agent will attempt to obtain a Firm Bid or combination of Firm
Bids for all of the Reference Amount of such Terminated Obligation from two or more Dealers until the earlier of (i) the second
Business Day (inclusive) following such Termination Trade Date and (ii) the date a Firm Bid or combination of Firm Bids is
obtained for all of the Reference Amount of such Terminated Obligation.

 

If the Calculation Agent is able to obtain
at least one Firm Bid or combination of Firm Bids for all or any portion of the Reference Amount of any Terminated Obligation,
the Final Price for such Terminated Obligation or portion thereof shall be determined by reference to such Firm Bid or Firm Bids
pursuant to the last paragraph of this Clause 4(b). If no Firm Bids are obtained on or before such second Business Day for
all or a portion of the applicable Terminated Obligation, the Final Price shall be deemed to be zero with respect to each portion
of such Terminated Obligation for which no Firm Bid was obtained. The Calculation Agent will conduct the bid process in accordance
with the procedures set forth in this Clause 4(b) and otherwise in good faith and in a commercially reasonable manner. Other
than in the case of a termination pursuant to Clause 3(b) or 3(d), Citibank and Counterparty will make commercially reasonable
efforts to accomplish the assignment to Counterparty (free of payment by Counterparty except for the prior payment when due of
any related Counterparty Fifth Floating Amount) of the related Terminated Obligation or portion thereof held by or on behalf of
Citibank as a hedge for the related Transaction for which the Final Price is deemed to be zero (including as provided below); provided
that Citibank shall not be liable for any losses related to any delay in or failure of such assignment beyond its control.

 

Notwithstanding anything to the contrary
herein,

 

		(i)	the Calculation Agent shall be entitled to disregard any Firm Bid submitted by a Dealer if, in
the Calculation Agent’s commercially reasonable judgment, (x) such Dealer is ineligible to accept assignment or transfer
of the related Terminated Obligation or portion thereof, as applicable, substantially in accordance with the then-current market
practice in the principal market for the Terminated Obligation, as determined by the Calculation Agent, or (y) as a result
of the terms of any agreement or instrument governing the related Terminated Obligation or any order of a court of competent jurisdiction
relating to such Terminated Obligation, such Dealer is prohibited or restricted from obtaining any consent required for the assignment
or transfer of the related Terminated Obligation or portion thereof, as applicable, to it; and

 

		(ii)	if the Calculation Agent determines that the highest Firm Bid obtained in connection with any Termination
Trade Date is not bona fide as a result of (x) the occurrence of an Event of Default described in Section 5(a)(vii)
with respect to the bidder, (y) the inability, failure or refusal of the bidder to settle the purchase of the related Terminated
Obligation or portion thereof, as applicable, or otherwise settle transactions in the relevant market or perform its obligations
generally or (z) the Calculation Agent not having pre-approved trading lines with the bidder that would permit settlement
of the purchase of the related Terminated Obligation or portion thereof, as applicable, that Firm Bid shall be disregarded and
the next highest Firm Bid that is not disregarded shall be used to determine the Final Price.

 

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If there is no such Firm Bid, then the
Calculation Agent shall designate a new Termination Trade Date; provided that the Calculation Agent shall designate a new
Termination Trade Date pursuant to this paragraph only once. If the highest Firm Bid for any portion of the related Terminated
Obligation determined in connection with the second Termination Trade Date is disregarded pursuant to this paragraph, the Calculation
Agent shall have no obligation to obtain further bids, and the applicable “Final Price” for the portion
which was so disregarded shall be deemed to be zero.

 

If Citibank transfers, or causes the transfer
of, all or any portion of the Terminated Obligation to the Dealer or Dealers providing the highest Firm Bid or highest combination
of Firm Bids for such Terminated Obligation (or portion thereof) or to such other party as provided above, the net cash proceeds
received from the sale of such Terminated Obligation or portion thereof (which sale shall be scheduled to settle substantially
in accordance with the then-current market practice in the principal market for the related Reference Obligation as determined
by the Calculation Agent), net of the related Costs of Assignment and adjusted by any Delay Compensation as provided in Clause 6(b),
shall be the “Final Price” for that Terminated Obligation (or the portion thereof that is sold).

 

If Citibank has determined not to hold,
or cause to be held, all or any portion of any Terminated Obligation as a hedge for the related Transaction or otherwise determines,
in its sole discretion, not to sell or cause the sale of any portion of any Terminated Obligation to a Dealer providing the highest
Firm Bid or combination of Firm Bids, the “Final Price” for such Terminated Obligation or portion thereof
shall be equal to the highest Firm Bid (or highest combination of Firm Bids) for such Terminated Obligation (or portion thereof)
multiplied by the Reference Amount of such Terminated Obligation (or the respective portions of the Reference Amount to which such
Firm Bids relate). The Calculation Agent may perform any of its duties under this Clause 4(b) through any Affiliate designated
by it, but no such designation shall relieve the Calculation Agent of its duties under this Clause 4(b).

 

Early Termination of Facility

 

(c)          For
the avoidance of doubt (and subject to paragraph (ii) of the last sentence of Clause 3(c) and the definition of “Second
Floating Amount” above), if the Termination Date occurs prior to the Citibank Optional Termination Date, each Counterparty
Second Floating Amount shall continue to be payable by Counterparty on each subsequent Second Floating Rate Payer Payment Date
occurring on or prior to the Scheduled Termination Date; provided that, if either party shall so specify in writing to the
other party prior to any final Termination Trade Date, then on such final Termination Trade Date (i) the obligation of Counterparty
to continue to pay each Counterparty Second Floating Amount on each subsequent Second Floating Rate Payer Payment Date occurring
on or prior to the Scheduled Termination Date shall terminate and be replaced by the obligation in the following clause and (ii) Counterparty
shall pay to Citibank an amount equal to the present value (as calculated by the Calculation Agent with discounting on a continuous
basis) discounted to such final Termination Trade Date of each Counterparty Second Floating Amount payable (without regard to the
termination of such obligation under the foregoing clause) on each subsequent Second Floating Rate Payer Payment Date occurring
on or prior to the Scheduled Termination Date, at a discount rate per annum equal to the Discount Rate. For this purpose, the “Discount
Rate” means the zero coupon swap rate (as determined by the Calculation Agent) implied by the fixed rate offered
to be paid by Citibank under a fixed for floating interest rate swap transaction with a remaining Term equal to the period from
such final Termination Trade Date to the Scheduled Termination Date in exchange for the receipt of payments indexed to USD-LIBOR-BBA.

 

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5.           Repayment.

 

If all or a portion of the Reference Amount
of any Reference Obligation is repaid or otherwise reduced (in the case of a Committed Obligation, only if the Reference Amount
thereof is permanently reduced) (including, without limitation, through any exercise of any right of set-off, reduction, or counterclaim
that results in the satisfaction of the obligations of such Reference Entity to pay any principal owing in respect of such Reference
Obligation) on or prior to the Scheduled Termination Date (the amount of such repayment or other reduction, a “Repayment”;
the portion of the related Reference Obligation so repaid or otherwise reduced, a “Repaid Obligation”;
and the date of such Repayment, the “Repayment Date”):

 

		(a)	the Total Return Payment Date with respect to the Repaid Obligation will be the tenth Business
Day next succeeding the last day of the Monthly Period in which the Repayment Date occurred;

 

		(b)	as of the related Repayment Date, the Reference Amount of such Reference Obligation shall be decreased
by an amount equal to the principal amount of the Repaid Obligation; and

 

		(c)	the related Final Price in relation to the Repaid Obligation shall be (i) in the case of a
Committed Obligation, the portion of the Reference Amount that is permanently reduced (excluding any such reduction below the Outstanding
Principal Amount thereof) on such Repayment Date and (ii) in the case of a Term Obligation, the amount of principal and premium
in respect of principal paid by such Reference Entity on the Repaid Obligation to holders thereof (or the amount by which the Reference
Obligation was otherwise reduced) on such Repayment Date. Following any Repayment Date, Citibank shall promptly prepare and deliver
to Counterparty a revised Annex I showing the revised Reference Amount for the related Reference Obligation.

 

6.           Adjustments.

 

(a)          If
any Reference Obligation or portion thereof is irreversibly converted or exchanged into or for any securities, obligations or other
assets or property (“Exchange Consideration”), thereafter such Exchange Consideration will constitute
such Reference Obligation or portion thereof, and, unless Citibank shall otherwise agree in writing, (i) if such Exchange
Consideration fails to satisfy the Obligation Criteria, then Clause 3(b)(i) shall apply and (ii) if, on and after the
Portfolio Criteria Satisfaction Date, the Portfolio Criteria set forth in Annex II would not be satisfied after giving effect
to such exchange, then Clause 3(b)(ii) shall apply.

 

(b)          Delay
Compensation (as defined below) shall result in an adjustment (i) as contemplated by the definition of “Interest and
Fee Amount” in connection with the establishment by the Citibank Holder of a related hedge in respect of a Transaction, if
the actual settlement of the purchase of the related hedge occurs after the Obligation Settlement Date and (ii) of a Final
Price with respect to a Terminated Obligation in connection with the termination by the Citibank Holder of a related hedge, if
the actual settlement of the sale of the related hedge occurs after the Termination Settlement Date. “Delay Compensation”
shall accrue (x) in the case of clause (i) above, from and including the Obligation Settlement Date to but excluding
the actual settlement of the purchase effected to establish the related hedge (and, during such period, (A) the Counterparty
First Floating Amount shall be calculated by reference to the Spread and not the Floating Rate Option and (B) Interest and
Fee Amounts will be determined without regard to payments in respect of the interest rate index, but will be determined inclusive
of the applicable spread above such interest rate index, used in the Reference Obligation Credit Agreement to calculate interest
payments in respect of the related Reference Obligation and in effect during such period) and (y) in the case of clause (ii) above,
from and including the Termination Settlement Date to but excluding the actual settlement of the sale effected to terminate the
related hedge (and, during such period, (A) the Counterparty First Floating Amount shall be calculated by reference to the
Floating Rate Option and not the Spread and (B) Interest and Fee Amounts shall be reduced by interest accrued during such
period in excess of the interest rate index used in the Reference Obligation Credit Agreement to calculate interest payments in
respect of the related Reference Obligation and in effect during such period). In connection with any adjustment by reason of Delay
Compensation, (i) any initial Payment Date in this Confirmation determined by reference to the “Obligation Settlement
Date” shall be determined as if the Obligation Settlement Date were the actual settlement of the purchase of the related
hedge and (ii) any final Payment Date in this Confirmation determined by reference to the “Termination Settlement Date”
shall be determined as if the Termination Settlement Date were the actual settlement of the termination of the related hedge.

 

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(c)          If
(i) Citibank elects to establish a hedge as a result of the addition or increase in the Reference Amount of any Reference
Obligation that is the subject of a Transaction and (ii) the Citibank Holder is unable after using commercially reasonable
efforts to effect the settlement of such hedge, then, by notice to Counterparty, Citibank may in its sole discretion, specify that
such addition or increase in the Reference Amount of such Reference Obligation shall be of no force or effect (retroactive to the
Obligation Trade Date or the Obligation Settlement Date, as the case may be).

 

(d)          Counterparty
will give prompt notice to Citibank of the occurrence of the Portfolio Criteria Satisfaction Date (which notice shall specify such
date).

 

7.           Representations,
Warranties and Agreements.

 

(a)          Each
party hereby agrees as follows, so long as either party has or may have any obligation under any Transaction.

 

		(i)	Non-Reliance. It is acting for its own account, and it has made its own independent decisions
to enter into such Transaction and as to whether such Transaction is appropriate or proper for it based upon its own judgment and
upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into such Transaction; it being understood that information and explanations
related to the terms and conditions of such Transaction shall not be considered investment advice or a recommendation to enter
into such Transaction. It has not received from the other party any assurance or guarantee as to the expected results of such Transaction;

 

		(ii)	Evaluation and Understanding. It is capable of evaluating and understanding (on its own
behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of such Transaction.
It is also capable of assuming, and assumes, the financial and other risks of such Transaction;

 

		(iii)	Status of Parties. The other party is not acting as a fiduciary or an advisor for it in
respect of such Transaction; and

 

		(iv)	Reliance on its Own Advisors. Without limiting the generality of the foregoing, in making
its decision to enter into, and thereafter to maintain, administer or terminate, such Transaction, it will not rely on any communication
from the other party as, and it has not received any representation or other communication from the other party constituting, legal,
accounting, business or tax advice, and it will consult its own legal, accounting, business and tax advisors concerning the consequences
of such Transaction.

 

(b)          Each
party acknowledges and agrees that, so long as either party has or may have any obligation under any Transaction:

 

		(i)	such Transaction does not create any direct or indirect obligation of any Reference Entity or any
direct or indirect participation in any Reference Obligation or any other obligation of any Reference Entity;

 

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		(ii)	each party and its Affiliates may deal in any Reference Obligation and may accept deposits from,
make loans or otherwise extend credit to, and generally engage in any kind of commercial or investment banking or other business
with any Reference Entity, any Affiliate of any Reference Entity, any other person or entity having obligations relating to any
Reference Entity and may act with respect to such business in the same manner as if such Transaction did not exist and may originate,
purchase, sell, hold or trade, and may exercise consensual or remedial rights in respect of, obligations, securities or other financial
instruments of, issued by or linked to any Reference Entity, regardless of whether any such action might have an adverse effect
on such Reference Entity, the value of the related Reference Obligation or the position of the other party to such Transaction
or otherwise;

 

		(iii)	except as provided in Clause 7(d)(iii), each party and its Affiliates and the Calculation
Agent may, whether by virtue of the types of relationships described herein or otherwise, at the date hereof or at any time hereafter,
be in possession of information regarding any Reference Entity or any Affiliate of any Reference Entity that is or may be material
in the context of such Transaction and that may or may not be publicly available or known to the other party. In addition, except
as provided in Clause 7(b)(vii), this Confirmation does not create any obligation on the part of such party and its Affiliates
to disclose to the other party any such relationship or information (whether or not confidential);

 

		(iv)	neither Citibank nor any of its Affiliates shall be under any obligation to hedge such Transaction
or to own or hold any Reference Obligation as a result of such Transaction, and Citibank and its Affiliates may establish, maintain,
modify, terminate or re-establish any hedge position or any methodology for hedging at any time without regard to Counterparty.
Counterparty acknowledges and agrees that it is not relying on any representation, warranty or statement by Citibank or any of
its Affiliates as to whether, at what times, in what manner or by what method Citibank or any of its Affiliates may engage in any
hedging activities;

 

		(v)	notwithstanding any other provision in this Confirmation or any other document, Citibank and Counterparty
(and each employee, representative, or other agent of Citibank or Counterparty) may each disclose to any and all persons, without
limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transaction and all materials of any kind (including
opinions or other tax analyses) that are provided to them relating to such U.S. tax treatment and U.S. tax structure (as those
terms are used in Treasury Regulations under Sections 6011, 6111 and 6112 of the U.S. Internal Revenue Code of 1986, as amended
(the “Code”)), other than any information for which nondisclosure is reasonably necessary in order to
comply with applicable securities laws. To the extent not inconsistent with the previous sentence, Citibank and Counterparty will
each keep confidential (except as required by law) all information unless the other party has consented in writing to the disclosure
of such information;

 

		(vi)	if Citibank chooses to hold a Reference Obligation as a result of any Transaction, Citibank shall
hold such Reference Obligation directly or through an Affiliate (the “Citibank Holder”). The Citibank
Holder may deal with such Reference Obligation as if the related Transaction did not exist, provided that, so long as the
Citibank Holder remains the lender of record with respect to such Reference Obligation, upon any occasion permitting the Citibank
Holder to exercise any right in relation to such Reference Obligation to give or withhold consent (an “Election”)
to an action proposed to be taken (or to be refrained from being taken), the Citibank Holder shall, insofar as permitted under
(x) applicable laws, rules and regulations and (y) each provision of any agreement or instrument evidencing or governing
such Reference Obligation (and, in the case of any participation interest, governing such participation interest), give its consent
to the action proposed to be taken (or to be refrained from being taken), unless (A) Counterparty, by timely notice to Citibank,
requests (a “Counterparty Election Request”) that the Citibank Holder withhold such consent and (B) the
Citibank Holder, in its sole discretion, elects to withhold such consent in accordance with the Counterparty Election Request.
Notwithstanding the foregoing: (1) the Citibank Holder shall have no obligation to respond to, or consult with Counterparty
in relation to, a Counterparty Election Request (failure to respond to a Counterparty Election Request being deemed a denial);
(2) the Citibank Holder shall have no other duties or obligations to Counterparty of any nature with respect to any Election
or any Counterparty Election Request; (3) the Citibank Holder shall not be liable to Counterparty or any of its Affiliates
for the consequences of any consent given or withheld by the Citibank Holder in connection with such Reference Obligation (whether
or not pursuant to a Counterparty Election Request); and (4) if the Citibank Holder elects in its sole discretion to withhold
its consent in accordance with a Counterparty Election Request, the Citibank Holder may subsequently determine to give such consent
at any time without notice to Counterparty; and

 

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		(vii)	in connection with each Reference Obligation that is held by a Citibank Holder as a result of any
Transaction, the Citibank Holder will promptly (and in any event within one Business Day after receipt) deliver or cause to be
delivered to Counterparty the following information and documentation, in each case, to the extent actually received by the Citibank
Holder from the Reference Entity or its agents under the related Reference Obligation Credit Agreement: all notices of any borrowings,
prepayments and interest rate settings, all amendments, consents, waivers and other modifications (whether final or proposed) in
relation to the terms of the Reference Obligation; and all notices given by the Reference Entity to the lenders or their agent
or by the lenders or their agent to the Reference Entity in relation to the exercise of remedies.

 

(c)          Each
of the parties hereby represents that, on each date on which a Transaction is entered into hereunder:

 

		(i)	it is entering into such Transaction for investment, financial intermediation, hedging or other
commercial purposes; and

 

		(ii)	(x) it is an “eligible contract participant” as defined in Section 1a(18)
of the U.S. Commodity Exchange Act, as amended (the “CEA”), (y) the Master Agreement and each Transaction
are subject to individual negotiation by each party, and (z) neither the Master Agreement nor any Transaction will be executed
or traded on a “trading facility” within the meaning of Section 1a(51) of the CEA.

 

(d)          Counterparty
hereby represents to Citibank that:

 

		(i)	its financial condition is such that it has no need for liquidity with respect to its investment
in any Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness.
Its investments in and liabilities in respect of any Transaction, which it understands is not readily marketable, is not disproportionate
to its net worth, and it is able to bear any loss in connection with any Transaction, including the loss of its entire investment
in such Transaction;

 

		(ii)	it understands no obligations of Citibank to it hereunder will be entitled to the benefit of deposit
insurance and that such obligations will not be guaranteed by any Affiliate of Citibank or any governmental agency;

 

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		(iii)	as of (x) the relevant Obligation Trade Date and (y) any date on which a sale is effected
pursuant to Clause 4(a) or on which the Calculation Agent solicits Firm Bids pursuant to Clause 4(b), neither Counterparty
nor any of its Affiliates, whether by virtue of the types of relationships described herein or otherwise, is on such date in possession
of information regarding any related Reference Entity or any Affiliate of such Reference Entity that is or may be material in the
context of such Transaction or the purchase or sale of any related Reference Obligation unless such information either (x) is
publicly available or (y) has been made available to each registered owner of such Reference Obligation on a basis that permits
such registered owner to disclose such information to any assignee of or participant (whether on a funded or unfunded basis) in,
or any prospective assignee of or participant (whether on a funded or unfunded basis) in, any rights or obligations under the related
Reference Obligation Credit Agreement;

 

		(iv)	Counterparty is a wholly owned subsidiary of a United States person, within the meaning of Section 7701(a)(30)
of the Code, and has elected to be treated as a disregarded entity for U.S. Federal income tax purposes;

 

		(v)	it has delivered to Citibank on or prior to the Trade Date (and it will, prior to any expiration
of any such form previously so delivered, deliver to Citibank) a United States Internal Revenue Service Form W-9 (or applicable
successor form), properly completed and signed (which representation shall also be made for purposes of Section 3(f) of the
Master Agreement);

 

		(vi)	it could have received all payments on the Reference Obligation without U.S. Federal or foreign
withholding tax if it owned the Reference Obligation (which representation shall also be made for purposes of Section 3(f)
of the Master Agreement);

 

		(vii)	it is not, for U.S. Federal income tax purposes, a tax-exempt organization; and

 

		(viii)	it is not an Affiliate of the Reference Entity.

 

(e)          Except
for any disclosure authorized pursuant to Clause 7(b)(v), Counterparty agrees to be bound by the confidentiality provisions
of the related Reference Obligation Credit Agreement with respect to all information and documentation in relation to a Reference
Entity or a Reference Obligation delivered to Counterparty hereunder. Counterparty acknowledges that such information may include
material non-public information concerning the Reference Entity or its securities and agrees to use such information in accordance
with applicable law, including Federal and State securities laws.

 

(f)           Multiple
Transaction Payment Netting under Section 2(c) of the Master Agreement will apply to the Transactions to which this Confirmation
relates.

 

(g)          Notwithstanding
anything in the Master Agreement to the contrary, Citibank will not be required to pay any additional amount under Section 2(d)(i)
of the Master Agreement in respect of any deduction or withholding for or on account of any Tax in relation to any payment under
any Transaction that is determined by reference to interest or fees payable with respect to any Reference Obligation. If Citibank
is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction
or withholding for or on account of any Tax in relation to any payment under any Transaction that is determined by reference to
interest or fees payable with respect to any Reference Obligation and Citibank does not so deduct or withhold, then Section 2(d)(ii)
of the Master Agreement shall be applicable.

 

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8.           Adjustments
Relating to Certain Unpaid or Rescinded Payments.

 

(a)          If
(i) Citibank makes any payment to Counterparty as provided under Clause 2 and the corresponding Interest and Fee Amount
is not paid (in whole or in part) when due or (ii) any Interest and Fee Amount in respect of a Reference Obligation is required
to be returned (in whole or in part) by a holder of such Reference Obligation (including, without limitation, the Citibank Holder)
to the applicable Reference Entity or paid to any other person or entity or is otherwise rescinded pursuant to any bankruptcy or
insolvency law or any other applicable law, then Counterparty will pay to Citibank, upon request by Citibank, such amount (or portion
thereof) so not paid or so required to be returned, paid or otherwise rescinded. If such returned, paid or otherwise rescinded
amount is subsequently paid, Citibank shall pay such amount (subject to Clause 8(c)) to Counterparty within ten Business Days
after the date of such subsequent payment.

 

(b)          If,
with respect to any Repaid Obligation, the corresponding payment of principal of the Repaid Obligation is required to be returned
(in whole or in part) by a holder thereof (including, without limitation, the Citibank Holder) to the applicable Reference Entity
or paid to any other person or entity or is otherwise rescinded pursuant to any bankruptcy or insolvency law or any other applicable
law, then (i) the parties hereto shall be restored severally and respectively to their former positions hereunder and thereafter
all rights and obligations of the parties hereunder shall continue as though no Repayment had occurred and (ii) without limiting
the generality of the foregoing, if either party has made a payment to the other party in respect of Capital Appreciation or Capital
Depreciation related to such Repayment as provided under Clause 2, then the party that received the payment in respect of
such Capital Appreciation or Capital Depreciation, as applicable, shall repay such amount (subject to Clause 8(c)) to the
other party. If such returned, paid or otherwise rescinded amount is subsequently paid by the related Reference Entity or any such
other person or entity, then the relevant party shall pay the amount of such Capital Appreciation or Capital Depreciation, as applicable,
within ten Business Days after the date of such subsequent payment.

 

(c)          Amounts
payable pursuant to this Clause 8 shall be subject to adjustment by the Calculation Agent in good faith and on a commercially
reasonable basis, as agreed by Citibank and Counterparty, in order to preserve for the parties the intended economic risks and
benefits of the relevant Transaction.

 

(d)          The
payment obligations of Citibank and Counterparty pursuant to this Clause 8 shall survive the termination of all Transactions.

 

9.           Credit
Support.

 

Notwithstanding anything in the Credit
Support Annex (the “Credit Support Annex”) to the Schedule to the Master Agreement to the contrary,
the following collateral terms shall apply to each Transaction to which this Confirmation relates (capitalized terms used in this
Clause 9 but not otherwise defined in this Confirmation have the respective meanings given to such terms in the Credit Support
Annex):

 

		(a)	With respect to each Transaction to which this Confirmation relates, a single “Independent
Amount” shall be applicable to Counterparty in an amount equal to the Notional Amount with respect to such Transaction (or,
in the case of any increase of the Notional Amount under any Transaction, the amount of such increase) multiplied by the
percentage set forth in Clause 9(b) under the caption “Independent Amount Percentage”.

 

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		(b)	With respect to each Transaction to which this Confirmation relates, the “Independent Amount
Percentage” applicable to such Transaction will be equal to:

 

	Condition	Independent Amount Percentage
	(i) Prior to the Portfolio Criteria Satisfaction Date:	Such percentage as Citibank shall specify on or prior to the Obligation Trade Date for such Transaction; provided that such percentage specified shall not be less than 22.5%.
	(ii) Except as provided in clause (iv) below, on or after the Portfolio Criteria Satisfaction Date, with respect to any Transaction not relating to a Specified Reference Obligation:	17.5%
	(iii) Except as indicated in clause (iv) below, on or after the Portfolio Criteria Satisfaction Date, with respect to any Transaction relating to a Specified Reference Obligation:	Such percentage as Citibank shall specify for such Transaction on or within five Business Days after Counterparty gives notice to Citibank of the occurrence of the Portfolio Criteria Satisfaction Date
	(iv) On or after the Portfolio Criteria Satisfaction Date, with respect to any Transaction relating to a Reference Obligation whose Reference Entity is the subject of a Credit Event:	Such percentage (not to exceed 100% minus the Supplemental Independent Amount Percentage) as Citibank shall specify from time to time in its sole discretion in a notice to Counterparty

 

		(c)	With respect to each Transaction to which this Confirmation relates, a single “Supplemental
Independent Amount” shall be applicable to Counterparty in an amount equal to the Notional Amount with respect to such Transaction
multiplied by 2.5% (the “Supplemental Independent Amount Percentage”).

 

		(d)	For purposes of calculating “Exposure” with respect to any Transaction to which this
Confirmation relates, (i) Citibank shall be the sole Valuation Agent and shall determine any Close-out Amount in relation
to such Transaction, (ii) such Close-out Amount will be determined by the Valuation Agent using its estimate of the amount
that would be paid to or by the Secured Party based on the application of Section 6(e)(ii)(1) of the Master Agreement, (iii) such
Close-out Amount may from time to time be determined by the Valuation Agent in its sole discretion and without notice to Counterparty
solely in respect of payments in respect of Capital Appreciation or Capital Depreciation that would have been required in respect
of a Transaction after the relevant Early Termination Date (provided that the Valuation Agent will not thereafter be precluded
from making such determination with respect to all payments and deliveries that would have been required after the relevant Early
Termination Date, regardless of the absence of notice thereof to Counterparty) and (iv) if Counterparty disputes the calculation
of Exposure with respect to such Transaction, the Valuation Agent will recalculate Exposure for such Transaction on the basis that
the market value of the related Reference Obligation is equal to its Current Price.

 

		(e)	Neither party shall have any rights under Paragraph 5 of the Credit Support Annex with respect
to the determination of “Exposure” in respect of any Transaction to which this Confirmation relates. The foregoing
will not limit the rights of Counterparty as provided in the definition of “Current Price” set forth in this Confirmation.

 

		(f)	Notwithstanding anything in this Confirmation to the contrary, a Secured Party’s Exposure
with respect to any Terminated Transaction will, during the period from and including the related Termination Trade Date to but
excluding the date on which the amount required to be paid on the related Total Return Payment Date is actually paid, be equal
to the amount of Capital Appreciation or Capital Depreciation, if any, that would be payable on such Total Return Payment Date
to the Secured Party (expressed as a positive number) or by the Secured Party (expressed as a negative number).

 

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10.         Notice
and Account Details.

 

	Notices to Citibank:
	 	
        Citibank, N.A., New York Branch

        390 Greenwich Street, 4th Floor

        New York, New York 10013

        Tel: (212) 723-6181

        Fax: (646) 291-5779

        Attn: Mitali Sohoni

         

        with a copy to:

         

        Office of the General Counsel

        Fixed Income and Derivatives Sales
and Trading

        Citibank, N.A., New York Branch

        388 Greenwich Street, 17th Floor

        New York, New York 10013

        Tel: (212) 816-2121

        Fax: (646) 862-8431

        Attn: Craig Seledee

	 	 
	Notices to Counterparty:
	 	As set forth in Part 4 of the Schedule to the Master Agreement
	Payments to Citibank:
	 	
        Citibank, N.A., New York

        ABA No.: 021-000-089

        Account No.: 00167679

        Ref: Financial Futures

	 	 
	Payments to Counterparty:
	 	Any payment to be made to Counterparty shall be subject to the condition that Citibank shall have received notice of the account to which such payment is to be made not less than three Local Business Days prior to the date of such payment.

 

11.         Offices.

 

		(a)	The Office of Citibank for each Transaction:

 

New York, NY

 

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		(b)	The Office of Counterparty for each Transaction:

 

Philadelphia, PA

 

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Please confirm that the foregoing correctly
sets forth the terms of our agreement by having a duly authorized officer of Counterparty execute this Confirmation and return
the same by facsimile to the attention of the individual at Citibank indicated on the first page hereof.

 

	Very truly yours,	 
	 	 	 
	CITIBANK, N.A.	 
	 	 	 
	By: 	/s/ Donald Merritt	 
	 	Name: Merritt, Donald	 
	 	Title: Vice President	 

 

	CONFIRMED AND AGREED

AS OF THE DATE FIRST ABOVE WRITTEN:	 
	 	 	 
	CHELTENHAM
FUNDING LLC	 
	 	 	 
	By: 	/s/ William Goebel	 
	 	Name: William Goebel	 
	 	Title: Chief Financial
Officer	 

 

TRS Confirmation – Signature Page

 

     

     

    

 

ANNEX A

 

ADDITIONAL
DEFINITIONS

 

“Adjusted Notional Funded Amount”
means (A) in relation to any Reference Obligation that is a Committed Obligation (and the related Transaction) as of any date of
determination, the greater of (a) zero and (b) the sum of (i) the Outstanding Principal Amount of such Reference
Obligation as of such date of determination multiplied by the Current Price minus (ii) the product of (x) the
excess, if any, of the Commitment Amount of such Reference Obligation as of such date over the Outstanding Principal Amount of
such Reference Obligation as of such date multiplied by (y) 100% minus the Current Price; and (B) in relation
to any Reference Obligation that is a Term Obligation (and the related Transaction) as of any date of determination, the Reference
Amount of the related Reference Obligation as of such date multiplied by the Current Price in relation to such Reference
Obligation.

 

“Affiliate”,
for purposes of this Confirmation only, has the meaning given to such term in Rule 405 under the Securities Act of 1933, as
amended.

 

“Approved Buyer”
means (a) any entity listed in Annex III hereto (as such Annex may be amended by mutual written consent of the parties
hereto from time to time) so long as its long-term unsecured and unsubordinated debt obligations on the “trade date”
for the related purchase or submission of a Firm Bid contemplated hereby are rated at least “A2” by Moody’s and
at least “A” by S&P and (b) if an entity listed in Annex III hereto is not the principal banking or securities
Affiliate within a financial holding company group, the principal banking or securities Affiliate of such listed entity within
such financial holding company group so long as such obligations of such Affiliate have the rating indicated in clause (a) above.

 

“Capital Appreciation”
and “Capital Depreciation” mean, for any Total Return Payment Date, the amount determined according to
the following formula for the applicable Terminated Obligation or Repaid Obligation:

 

Final Price – Applicable Notional
Amount

 

where

 

“Final Price”
means (a) in the case of any Terminated Obligation, the amount determined pursuant to Clause 4, and (b) in the case
of any Repaid Obligation, the amount determined pursuant to Clause 5, and

 

“Applicable Notional
Amount” means the Notional Funded Amount (determined immediately prior to the related Repayment Date or Termination
Trade Date) for such Terminated Obligation or Repaid Obligation, as applicable.

 

If such amount is positive, such amount
is “Capital Appreciation” and if such amount is negative, the absolute value of such amount is “Capital
Depreciation”.

 

“Committed Obligation”
means (a) any Delayed Drawdown Reference Obligation and (b) any Revolving Reference Obligation.

 

“Costs of Assignment”
means, in the case of any Terminated Obligation, the sum of (a) any actual costs of transfer or assignment paid by the seller
under the terms of any Terminated Obligation or otherwise actually imposed on the seller by any applicable administrative agent,
borrower or obligor incurred in connection with the sale of such Terminated Obligation and (b) any reasonable expenses incurred
by the seller in connection with such sale and, if transfers of the Terminated Obligation are subject to the Standard Terms and
Conditions for Distressed Trade Confirmations, as published by the LSTA and as in effect on the Obligation Trade Date, reasonable
legal costs incurred by the seller in connection with such sale, in each case to the extent not already reflected in the Final
Price.

 

     

     

    

 

“Credit Event”
means the occurrence of a Bankruptcy or Failure to Pay. For purposes of the determination of whether a Credit Event has occurred,
the Obligation Category will be Borrowed Money, the Payment Requirement will be USD1,000,000 and no Obligation Characteristics
will be specified. Capitalized terms used in this definition but not defined in this Confirmation shall have the meanings specified
in the 2003 ISDA Credit Derivatives Definitions.

 

“Current Price”
means, with respect to any Reference Obligation on any date of determination, the Calculation Agent’s determination of the
net cash proceeds that would be received from the sale on such date of determination of such Reference Obligation, net of the related
Costs of Assignment. If Counterparty disputes the Calculation Agent’s determination of the Current Price of any Reference
Obligation, then Counterparty may, no later than two hours after Counterparty is given notice of such determination, (a) designate
up to two entities, each of which shall be either (i) an Approved Buyer or (ii) a Dealer of credit standing acceptable to
Citibank in the exercise of its reasonable discretion and (b) provide to Citibank within such two-hour period with respect
to each such Approved Buyer or Dealer a Firm Bid with respect to the entire Reference Amount of the Reference Obligation. The higher
of such two Firm Bids will be the Current Price. The “Current Price” shall be expressed as a percentage of par and
will be determined exclusive of accrued interest.

 

“Dealer” means
(a) any nationally recognized independent dealer in the related Reference Obligation chosen by the Calculation Agent or its
designated Affiliate, (b) any Approved Buyer or other entity designated by the Calculation Agent and having a credit standing
acceptable to Citibank and (c) any Approved Buyer designated by Counterparty pursuant to Clause 4(b).

 

“Delayed Drawdown Reference
Obligation” means a Reference Obligation that (a) requires the holder thereof to make one or more future advances
to the borrower under the instrument or agreement pursuant to which such Reference Obligation was issued or created, (b) specifies
a maximum amount that can be borrowed on one or more fixed borrowing dates and (c) does not permit the re-borrowing of any
amount previously repaid; provided that, on any date on which all commitments by the holder thereof to make advances to
the borrower under such Delayed Drawdown Reference Obligation expire or are terminated or reduced to zero, such Reference Obligation
shall cease to be a Delayed Drawdown Reference Obligation.

 

“Designated Reference Obligation”
means any Reference Obligation that (a) is not a Specified Reference Obligation, (b) has as of the Obligation Trade Date
a Moody’s Rating of at least B2 and an S&P Rating of at least B, (c) is on the Obligation Trade Date part of a fungible
class of debt obligations (as to issuance date and all economic terms) of at least USD500,000,000, (d) has an Initial Price
as of the Obligation Trade Date of at least 90% and (e) is on the Obligation Trade Date the subject of at least five bid quotations
from nationally recognized independent dealers in the related obligation as reported on a nationally recognized pricing service.

 

“Expense or Other Payment”
means the aggregate amount of any payments (other than extensions of credit) due from the lender(s) in respect of any Reference
Obligation, including, without limitation, (a) any expense associated with any amendment, modification or waiver of the provisions
of a credit agreement, (b) any reimbursement of any agents under the provisions of a credit agreement, and (c) any indemnity
or other similar payment, including amounts owed on or after the related Obligation Termination Date in respect of amounts incurred
or any event that occurred before the related Obligation Termination Date.

 

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“Financial Sponsor”
means any entity, including any subsidiary of another entity, whose principal business activity is acquiring, holding and selling
investments (including controlling interests) in otherwise unrelated companies that each are distinct legal entities with separate
management, books and records and bank accounts, whose operations are not integrated one with another and whose financial condition
and creditworthiness are independent of the other companies so owned by such entity.

 

“Interest and Fee Amount”
means, for any Citibank Fixed Amount Payer Payment Date and any Transaction, the aggregate amount of interest (including interest
breakage costs), fees (including, without limitation, amendment, consent, tender, facility, letter of credit and other similar
fees) and other amounts (other than in respect of principal and premium paid in respect of principal) paid with respect to the
related Reference Obligation (after deduction of any withholding taxes for which the Reference Entities are not obligated to reimburse
holders of the related Reference Obligation, if applicable) during the relevant Citibank Fixed Amount Payer Calculation Period;
provided that Interest and Fee Amounts:

 

		(a)	in the case of “Interest and Accruing Fees” (as defined in the “Standard Terms
and Conditions for Par/Near Par Trade Confirmations” or “Standard Terms and Conditions for Distressed Trade Confirmations”,
as applicable to the relevant Reference Obligation, most recently published by the LSTA prior to the Trade Date), shall not include
any amounts that accrue prior to the Obligation Settlement Date for the related Reference Obligation or that accrue on or after
the Obligation Termination Date for the related Reference Obligation or portion thereof;

 

		(b)	in the case of “Non-Recurring Fees” (as so defined), shall not include any amounts
that (i) accrue prior to the Obligation Trade Date for the related Reference Obligation or that accrue on or after the Termination
Trade Date for the related Reference Obligation or portion thereof or (ii) to the extent that such amounts are payable contingent
upon whether a consent is given or withheld by the record owner of the related Reference Obligation, accrue with respect to the
related Reference Obligation that is not held by or on behalf of Citibank as a hedge for the related Transaction;

 

		(c)	shall be determined after deducting any Costs of Assignment that would be incurred by a buyer in
connection with any purchase of the Reference Obligation as a hedge for such Transaction and, in connection with the establishment
by the Citibank Holder of a related hedge in respect of such Transaction, shall be adjusted by any Delay Compensation as provided
in Clause 6(b);

 

		(d)	in the case of any Transaction as to which the related Reference Obligation is a Committed Obligation,
shall include only 75% of fees that are stated to accrue on or in respect of the unfunded portion of any Commitment Amount; and

 

		(e)	with respect to any Terminated Transaction, if any interest on the Terminated Obligation accrued
prior to the related Obligation Termination Date is actually paid on the scheduled interest payment date next succeeding the Obligation
Termination Date, then the Interest and Fee Amount shall include the portion of such interest so paid (as determined by the Calculation
Agent) that accrued with respect to the period ending on but excluding the Obligation Termination Date.

 

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

 

“LSTA” means
The Loan Syndications and Trading Association, Inc. and any successor thereto.

 

“Moody’s”
means Moody’s Investors Service, Inc. or any successor thereto.

 

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“Moody’s Rating”
means, with respect to a Reference Obligation, as of any date of determination:

 

		(i)	if the Reference Obligation itself is rated by Moody’s (including pursuant to any credit
estimate), such rating,

 

		(ii)	if the foregoing paragraph is not applicable, then, if the Reference Obligation is a Loan and the
related Reference Entity has a corporate family rating by Moody’s, the rating specified in the applicable row of the table
below under “Relevant Rating” opposite the row in the table below that describes such Loan:

 

	Loan 	Relevant Rating
	The Loan is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating by Moody’s that is one rating subcategory above such corporate family rating
	The Loan is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating by Moody’s that is one rating subcategory below such corporate family rating
	The Loan is Subordinate	The rating by Moody’s that is two rating subcategories below such corporate family rating

 

		(iii)	if the foregoing paragraphs are not applicable, but there is a rating by Moody’s on a secured
obligation of the Reference Entity that is not a Second Lien Obligation and is not Subordinate (the “other obligation”),
the rating specified in the applicable row of the table below under “Relevant Rating” opposite the row in the table
below that describes such Reference Obligation:

 

	Reference Obligation	Relevant Rating
	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating assigned by Moody’s to the other obligation
	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating by Moody’s that is one rating subcategory below the rating assigned by Moody’s to the other obligation
	The Reference Obligation is Subordinate	The rating by Moody’s that is two rating subcategories below the rating assigned by Moody’s to the other obligation

 

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		(iv)	if the foregoing paragraphs are not applicable, but there is a rating by Moody’s on an unsecured
obligation of the Reference Entity (or, failing that, an obligation that is a Second Lien Obligation) but is not Subordinate (the
“other obligation”), the rating specified in the applicable row of the table below under “Relevant Rating”
opposite the row in the table below that describes such Reference Obligation:

 

	Reference Obligation	Relevant Rating
	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating by Moody’s that is one rating subcategory above the rating assigned by Moody’s to the other obligation
	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating assigned by Moody’s to the other obligation
	The Reference Obligation is Subordinate	The rating by Moody’s that is one rating subcategory below the rating assigned by Moody’s to the other obligation

 

		(v)	if the foregoing paragraphs are not applicable, but there is a rating by Moody’s on an obligation
of the Reference Entity that is Subordinate (the “other obligation”), the rating specified in the applicable row of
the table below under “Relevant Rating” opposite the row in the table below that describes such Reference Obligation:

 

	Reference Obligation	Relevant Rating
	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating by Moody’s that is two rating subcategories above the rating assigned by Moody’s to the other obligation
	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating by Moody’s that is one rating subcategory above the rating assigned by Moody’s to the other obligation
	The Reference Obligation is Subordinate	The rating assigned by Moody’s to the other obligation

 

		(vi)	if a rating cannot be assigned pursuant to clauses (i) through (v), the Moody’s Rating
may be determined using any of the methods below:

 

		(A)	for up to 5% of the Portfolio Target Amount, Counterparty may apply to Moody’s for a shadow
rating or public rating of such Reference Obligation, which shall then be the Moody’s Rating (and Counterparty may deem the
Moody’s Rating of such Reference Obligation to be “B3” pending receipt of such shadow rating or public rating,
as the case may be); provided that (x) a Reference Obligation will not be included in the 5% limit of the Portfolio
Target Amount if Counterparty has assigned a rating to such Reference Obligation in accordance with clause (B) below and (y) upon
receipt of a shadow rating or public rating, as the case may be, such Reference Obligation will not be included in the 5% limit
of the Portfolio Target Amount;

 

		(B)	for up to 5% of the Portfolio Target Amount, if there is a private rating of an obligor that has
been provided by Moody’s to Citibank and Counterparty, Counterparty may impute a Moody’s Rating that corresponds to
such private rating; provided that a Reference Obligation will not be included in the 5% limit of the Portfolio Target Amount
if Counterparty has applied to Moody’s for a shadow rating; or

 

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		(C)	for up to 10% of the Portfolio Target Amount, the Moody’s Rating may be determined in accordance
with the methodologies for establishing the S&P Rating except that the Moody’s Rating of such obligation will be (1) one
sub-category below the Moody’s equivalent of the S&P Rating if such S&P Rating is “BBB-” or higher and
(2) two sub-categories below the Moody’s equivalent of the S&P Rating if such S&P Rating is “BB+”
or lower.

 

For purposes of the foregoing,
a “private rating” shall refer to a rating obtained by Citibank, by Counterparty or by or on behalf of an obligor on
a Reference Obligation that is not disseminated publicly; whereas a “shadow rating” shall refer to a credit estimate
obtained upon application of Counterparty or a holder of a Reference Obligation. Any private rating or shadow rating shall be required
to be refreshed annually. If Counterparty applies to Moody’s for a shadow rating or public rating of a Reference Obligation,
Counterparty shall provide evidence to Citibank of such application and shall notify Citibank of the expected rating. Counterparty
shall notify Citibank of the shadow rating or public rating assigned by Moody’s to a Reference Obligation.

 

“Portfolio Criteria Satisfaction
Date” means the first date on which the Reference Portfolio satisfies the Portfolio Criteria; provided that,
solely for purposes of this definition, the Portfolio Target Amount shall at all times be equal to the Portfolio Notional Amount.

 

“Portfolio Target Amount”
means (a) during the Ramp-Up Period and the Ramp-Down Period, the Maximum Portfolio Notional Amount and (b) at any other
time, the Portfolio Notional Amount.

 

“Rate Payments”
means Counterparty First Floating Amounts, Counterparty Second Floating Amounts, Counterparty Third Floating Amounts and Citibank
Fixed Amounts.

 

“Reference Obligation Credit
Agreement” means any term loan agreement, revolving loan agreement or other similar credit agreement governing a
Reference Obligation.

 

“Revolving Reference Obligation”
means a Reference Obligation that (a) requires the holder thereof to make one or more future advances to the borrower under
the instrument or agreement pursuant to which such Reference Obligation was issued or created, (b) specifies a maximum aggregate
amount that can be borrowed and (c) permits, during any period on or after the date on which the holder thereof acquires such
Reference Obligation, the re-borrowing of any amount previously repaid; provided that, on the date that all commitments
by the holder thereof to make advances to the borrower under such Revolving Reference Obligation expire or are terminated or reduced
to zero, such Reference Obligation shall cease to be a Revolving Reference Obligation.

 

“S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, or any successor thereto.

 

“S&P Rating”
means, with respect to a Reference Obligation:

 

		(i)	if the Reference Obligation itself is rated by S&P (including pursuant to any credit estimate),
such rating,

 

    Page 35

     

    

 

		(ii)	if the foregoing paragraph is not applicable, then, if the Reference Obligation is a Loan and the
related Reference Entity has a corporate issuer rating by S&P, the rating specified in the applicable row of the table below
under “Relevant Rating” opposite the row in the table below that describes such Loan:

 

	Loan 	Relevant Rating
	The Loan is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating by S&P that is one rating subcategory above such corporate issuer rating
	The Loan is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating by S&P that is one rating subcategory below such corporate issuer rating
	The Loan is Subordinate	The rating by S&P that is two rating subcategories below such corporate issuer rating

 

		(iii)	if the foregoing paragraphs are not applicable, but there is a rating by S&P on a secured obligation
of the Reference Entity that is not a Second Lien Obligation and is not Subordinate (the “other obligation”), the rating
specified in the applicable row of the table below under “Relevant Rating” opposite the row in the table below that
describes such Reference Obligation:

 

	Reference Obligation	Relevant Rating
	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating assigned by S&P to the other obligation
	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating by S&P that is one rating subcategory below the rating assigned by S&P to the other obligation
	The Reference Obligation is Subordinate	The rating by S&P that is two rating subcategories below the rating assigned by S&P to the other obligation

 

    Page 36

     

    

 

		(iv)	if the foregoing paragraphs are not applicable, but there is a rating by S&P on an unsecured
obligation of the Reference Entity (or, failing that, an obligation that is a Second Lien Obligation) but is not Subordinate (the
“other obligation”), the rating specified in the applicable row of the table below under “Relevant Rating”
opposite the row in the table below that describes such Reference Obligation:

 

	Reference Obligation	Relevant Rating
	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating by S&P that is one rating subcategory above the rating assigned by S&P to the other obligation
	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating assigned by S&P to the other obligation
	The Reference Obligation is Subordinate	The rating by S&P that is one rating subcategory below the rating assigned by S&P to the other obligation

 

		(v)	if the foregoing paragraphs are not applicable, but there is a rating by S&P on an obligation
of the Reference Entity that is Subordinate (the “other obligation”), the rating specified in the applicable row of
the table below under “Relevant Rating” opposite the row in the table below that describes such Reference Obligation:

 

	Reference Obligation	Relevant Rating
	The Reference Obligation is a secured obligation, but is not a Second Lien Obligation and is not Subordinate	The rating by S&P that is two rating subcategories above the rating assigned by S&P to the other obligation
	The Reference Obligation is an unsecured obligation or is a Second Lien Obligation, but is not Subordinate	The rating by S&P that is one rating subcategory above the rating assigned by S&P to the other obligation
	The Reference Obligation is Subordinate	The rating assigned by S&P to the other obligation

 

		(vi)	if the foregoing paragraphs are not applicable, then the S&P Rating shall be “CC”;
provided that:

 

(A) if application
has been made to S&P to rate a Reference Obligation and such Reference Obligation has a Moody’s Rating, then the S&P
Rating with respect to such Reference Obligation shall, pending the receipt of such rating from S&P, be equal to the S&P
Rating that is equivalent to such Moody’s Rating and (y) Reference Obligations in the Reference Portfolio constituting
no more, by aggregate Notional Amount, than 10% of the Portfolio Target Amount may be given a S&P Rating based on a rating
given by Moody’s as provided in clause (x) (after giving effect to the addition of the relevant Reference Obligation,
if applicable); and

 

(B) for up
to 10% of the Portfolio Target Amount, the S&P Rating may be determined in accordance with the methodologies for establishing
the Moody’s Rating except that the S&P Rating of such obligation will be (1) one sub-category below the S&P
equivalent of the Moody’s Rating if such Moody’s Rating is “Baa3” or higher and (2) two sub-categories
below the S&P equivalent of the Moody’s Rating if such Moody’s Rating is “Ba1” or lower.

 

    Page 37

     

    

 

“Second Lien Obligation”
means a Loan that is secured by collateral, but as to which the beneficiary or beneficiaries of such collateral security agree
for the benefit of the holder or holders of other indebtedness secured by the same collateral (“First Lien Debt”)
as to one or more of the following: (1) to defer their right to enforce such collateral security either permanently or for
a specified period of time while First Lien Debt is outstanding, (2) to permit a holder or holders of First Lien Debt to sell
such collateral free and clear of the security in favor of such beneficiary or beneficiaries, (3) not to object to sales of
assets by the obligor on such Loan following the commencement of a bankruptcy or other insolvency proceeding with respect to such
obligor or to an application by the holder or holders of First Lien Debt to obtain adequate protection in any such proceeding and
(4) not to contest the creation, validity, perfection or priority of First Lien Debt.

 

“Specified Reference Obligation”
means any Reference Obligation whose inclusion in the Reference Portfolio (other than as a “Specified Reference Obligation”)
would not on the related Obligation Trade Date satisfy:

 

		(a)	prior to the Portfolio Criteria Satisfaction Date, clause
(xiii) of the Obligation Criteria; and

 

		(b)	on or after the Portfolio Criteria Satisfaction Date, one or more of clauses (ix) through
(xiii) of the Obligation Criteria.

 

“Subordinate”
means, with respect to an obligation (the “Subordinated Obligation”) and another obligation of the obligor
thereon to which such obligation is being compared (the “Senior Obligation”), a contractual, trust or
similar arrangement (without regard to the existence of preferred creditors arising by operation of law or to collateral, credit
support, lien or other credit enhancement arrangements or provisions regarding the application of proceeds of any of the foregoing)
providing that (i) upon the liquidation, dissolution, reorganization or winding up of the obligor, claims of the holders of
the Senior Obligation will be satisfied prior to the claims of the holders of the Subordinated Obligation or (ii) the holders
of the Subordinated Obligation will not be entitled to receive or retain payments in respect of their claims against the obligor
at any time that the obligor is in payment arrears or is otherwise in default under the Senior Obligation.

 

“Term Obligation”
means any Reference Obligation that is not a Committed Obligation.

 

“Terminated Obligation”
means any Reference Obligation or portion of any Reference Obligation that is terminated pursuant to Clause 3.

 

“Termination Settlement Date”
means, for any Terminated Obligation, the date customary for settlement, substantially in accordance with the then-current market
practice in the principal market for such Terminated Obligation (as determined by the Calculation Agent), of the sale of such Terminated
Obligation with the trade date for such sale occurring on the related Termination Trade Date.

 

“Termination Trade Date”
means, with respect to any Terminated Obligation, the date so designated in the related Accelerated Termination Notice; provided
that:

 

		(a)	except as provided in the following clause (b), if the related Final Price is not determined
in accordance with Clause 4(a), the “Termination Trade Date” will be the bid submission deadline for the Firm
Bid or combination of Firm Bids for all of the Reference Amount of such Terminated Obligation that are to be the basis for determining
the Final Price of such Terminated Obligation as designated by the Calculation Agent in order to cause the related Total Return
Payment Date to occur as promptly as practicable (in the discretion of the Calculation Agent) after the date originally designated
as the “Termination Trade Date” in the related Accelerated Termination Notice; and

 

    Page 38

     

    

 

		(b)	in respect of the Scheduled Termination Date, if the related Final Price is not determined in accordance
with Clause 4(a), the “Termination Trade Date” will be the date so designated by the Calculation Agent in its
discretion, occurring during the 30 calendar days preceding the Scheduled Termination Date (or earlier in the case of any Terminated
Obligation determined by the Calculation Agent in its sole discretion to be a distressed loan or other obligation) in a manner
reasonably likely to cause the final Total Return Payment Date to occur on the Scheduled Termination Date.

 

The Calculation Agent shall notify the
parties of any Termination Trade Date designated by it pursuant to the foregoing proviso.

 

“Total Return Payment Date”
means, with respect to any Terminated Obligation or Repaid Obligation, the tenth Business Day next succeeding the last day of the
Monthly Period during which the related Obligation Termination Date occurs.

 

    Page 39

     

    

 

ANNEX I

 

	Reference 

Obligation	Reference 

Entity	Reference 

Amount	Outstanding 

Principal 

Amount	Initial 

Price 

(%)	Obligation 

Trade Date	Obligation 

Settlement 

Date
	 	 	 	 	 	 	 

 

    Page 40

     

    

 

ANNEX II

 

Obligation
Criteria

 

The “Obligation Criteria”
are as follows:

 

		(i)	The obligation is a Loan.

 

		(ii)	The obligation is denominated in USD.

 

		(iii)	The obligation is secured.

 

		(iv)	The obligation is not Subordinate.

 

		(v)	The obligation constitutes a legal, valid, binding and enforceable obligation of the applicable
Reference Entity, enforceable against such person in accordance with its terms.

 

		(vi)	Except for any Delayed Drawdown Reference Obligation or Revolving Reference Obligation, the obligation
does not require any future advances to be made to the related issuer or obligor on or after the relevant Obligation Trade Date.

 

		(vii)	On the relevant Obligation Trade Date for the Transaction relating to the obligation, the obligation
is in the form of, and is treated as, indebtedness for U.S. Federal income tax purposes.

 

		(viii)	Transfers thereof on the Obligation Trade Date may be effected pursuant to the Standard Terms and
Conditions for Par/Near Par Trade Confirmations and not the Standard Terms and Conditions for Distressed Trade Confirmations, in
each case as published by the LSTA and as in effect on the Obligation Trade Date.

 

		(ix)	Except for any Specified Reference Obligation, the obligation is not a Second Lien Obligation.

 

		(x)	Except for any Specified Reference Obligation, on the Obligation Trade Date the obligation is part
of a fungible class of debt obligations (as to issuance date and all economic terms) of at least USD125,000,000.

 

		(xi)	Except for any Specified Reference Obligation, the obligation has as of the Obligation Trade Date
a Moody’s Rating of at least B3 and an S&P Rating of at least B-.

 

		(xii)	Except for any Specified Reference Obligation, the obligation has an Initial Price as of the Obligation
Trade Date of at least 80%.

 

		(xiii)	Except for any Specified Reference Obligation,

 

		(I)	prior to the Portfolio Criteria Satisfaction Date, the obligation is on the Obligation Trade Date
the subject of at least three bid quotations from nationally recognized independent dealers in the related obligation as reported
on a nationally recognized pricing service; and

 

		(II)	on or after the Portfolio Criteria Satisfaction Date, either (x) the obligation is on the
Obligation Trade Date the subject of at least two bid quotations from nationally recognized independent dealers in the related
obligation as reported on a nationally recognized pricing service or (y) the obligation satisfies each of the following four
conditions: (A) the obligation was originated not more than 30 days prior to the Obligation Trade Date, (B) the obligation
is on the Obligation Trade Date the subject of at least one bid quotation from a nationally recognized independent dealer in the
related obligation as reported on a nationally recognized pricing service, (C) on the Obligation Trade Date the obligation
is part of a fungible class of debt obligations (as to issuance date and all economic terms) of at least USD150,000,000 and (D) the
obligation has as of the Obligation Trade Date a Moody’s Rating of at least B2 and an S&P Rating of at least B.

 

    Page 41

     

    

 

Portfolio
Criteria

 

The “Portfolio Criteria”
are as follows:

 

		(i)	The Portfolio Notional Amount does not exceed the Maximum Portfolio Notional Amount.

 

		(ii)	The sum of the Notional Amounts for all Reference Obligations that are Specified Reference Obligations
does not exceed 20% of the Portfolio Target Amount.

 

		(iii)	The sum of the Notional Amounts for all Reference Obligations that are Committed Obligations does
not exceed 10% of the Portfolio Target Amount.

 

		(iv)	The sum of the Notional Amounts for Reference Obligations of any single Reference Entity or any
of its Affiliates does not exceed 5% of the Portfolio Target Amount; provided that sum of the Notional Amounts for Reference
Obligations of up to three single Reference Entities or any of its Affiliates may be up to 7.5% of the Portfolio Target Amount.

 

		(v)	The sum of the Notional Amounts for Reference Obligations of Reference Entities in any single Moody’s
Industry Classification Group does not exceed 15% of the Portfolio Target Amount.

 

		(vi)	After the Ramp-Up Period and prior to (A) in the case of termination of all Transactions by Counterparty
pursuant to Clause 3(a)(i) or by Citibank pursuant to its election to exercise its rights under Clause 3(c), the first proposed
Termination Trade Date specified in the related Accelerated Termination Notice and (B) otherwise, the Ramp-Down Period, the Reference
Portfolio has a Weighted Average Rating of at most 2,720.

 

		(vii)	Prior to the Portfolio Criteria Satisfaction Date, the Reference Portfolio contains Reference Obligations
of at least three separate Reference Entities (and, for this purpose, a Reference Entity and its Affiliates will be deemed to constitute
a single Reference Entity).

 

For purposes hereof:

 

“Moody’s Industry Classification
Groups” means each of the categories set forth in Table 1 below.

 

“Weighted Average Rating”
means, as of any date of determination, the number obtained by (a) multiplying the Notional Amount of each Reference Obligation
by the applicable Rating Factor (as set forth in Table 2 below) for the related Reference Entity; (b) summing the products
obtained in clause (a) for all Reference Obligations; and (c) dividing the sum obtained in clause (b) by the aggregate
of the Notional Amounts of all Reference Obligations.

 

    Page 42

     

    

 

Table 1

 

Moody’s
Industry Classification Groups

 

Aerospace & Defense

Automotive

Banking, Finance, Insurance
and Real Estate

Beverage, Food, & Tobacco

Capital Equipment

Chemicals, Plastics, & Rubber

Construction & Building

Consumer goods: durable

Consumer goods: non-durable

Containers, Packaging, &
Glass

Energy: Electricity

Energy: Oil & Gas

Environmental Industries

Forest Products & Paper

Healthcare & Pharmaceuticals

High Tech Industries

Hotel, Gaming, & Leisure

Media: Advertising, Printing
& Publishing

Media: Broadcasting & Subscription

Media: Diversified & Production

Metals & Mining

Retail

Services: Business

Services: Consumer

Sovereign & Public Finance

Telecommunications

Transportation: Cargo

Transportation: Consumer

Utilities: Electric

Utilities: Oil & Gas

Utilities: Water

Wholesale

 

    Page 43

     

    

 

Table 2

 

Rating Factors

 

	Moody’s Rating	 	Rating Factor
	Aaa	 	1
	Aa1	 	10
	Aa2	 	20
	Aa3	 	40
	A1	 	70
	A2	 	120
	A3	 	180
	Baa1	 	260
	Baa2	 	360
	Baa3	 	610
	Ba1	 	940
	Ba2	 	1,350
	Ba3	 	1,766
	B1	 	2,220
	B2	 	2,720
	B3	 	3,490
	Caa1	 	4,770
	Caa2	 	6,500
	Caa3 or below	 	10,000

 

    Page 44

     

    

 

Annex III

 

Approved
Buyers

 

Bank of America, NA

The Bank of Montreal

The Bank of New York Mellon, N.A.

Barclays Bank plc

BNP Paribas

Calyon

Canadian Imperial Bank of Commerce

Citibank, N.A.

Credit Agricole S.A.

Credit Suisse

Deutsche Bank AG

Dresdner Bank AG

Goldman Sachs & Co.

HSBC Bank

JPMorgan Chase Bank, N.A.

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Morgan Stanley & Co.

Natixis

Northern Trust Company

Royal Bank of Canada

The Royal Bank of Scotland plc

Societe Generale

The Toronto-Dominion Bank

UBS AG

U.S. Bank, National Association

Wachovia Bank National Association

Wells Fargo Bank, National Association

 

    Page 45trtc_ex41.htm

EXHIBIT 4.1
 
EXECUTION COPY
 
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
	Original Issue Date: October 21, 2019
Original Conversion Price (subject to adjustment herein): $4.50
	Principal Amount: $1,500,000

 
7.5% SENIOR CONVERTIBLE PROMISSORY NOTE
DUE APRIL 21, 2021
 
THIS 7.5% SENIOR CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued convertible promissory notes of Terra Tech Corp., a Nevada corporation, (the “Company”), having its principal place of business at 2040 Main Street, Suite 225, Irvine, California 92614, designated as its 7.5% Senior Convertible Promissory Note due April 21, 2021 (this “Note”, or the “Note” and collectively with the other Notes of such series, the “Notes”).
 
FOR VALUE RECEIVED, the Company promises to pay to ___________ or its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $1,500,000 on April 21, 2021 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:
 
Section 1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:
 
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act. 
 
“Alternate Consideration” shall have the meaning set forth in Section 5(e).
  
	 
	1
	
 
	 

 
“Alternate Conversion Price” means 70% of the average of the three (3) lowest VWAPs in the twenty (20) consecutive Trading Days prior to the Conversion Date.
 
“Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Subsidiary thereof, (b) there is commenced against the Company or any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) the Company or any Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
 
“Base Conversion Price” shall have the meaning set forth in Section 5(b).
 
“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(e). 
 
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any other day on which the Federal Reserve Bank of New York is closed.
 
“Buy-In” shall have the meaning set forth in Section 4(d)(v).
 
“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of one-third (1/3rd) of the aggregate votes of the then-issued and outstanding voting securities of the Company on such basis as is then required by the Company’s charter documents (other than by means of conversion or exercise of the Notes and the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than two-thirds (2/3rds) of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction own less than two-thirds (2/3rds) of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more than one-half (1/2) of the members of the Board of Directors which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
  	 
	2
	
 
	 

 
“Common Stock Equivalents” means any securities of the Company or any of its subsidiaries which would entitle the holder thereof to acquire at any time shares of Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the Holder to receive, Common Stock.
 
“Conversion Date” shall have the meaning set forth in Section 4(a).
 
“Conversion Price” shall have the meaning set forth in Section 4(b).
 
“Conversion Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.
 
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.
 
“Default Redemption Amount” means the product of (i) 130% multiplied by (ii) the sum of (x) the aggregate principal amount outstanding of this Note through and including the Default Redemption Payment Date; (y) all accrued but unpaid principal due on this Note, including, but not limited to, as provided in the last sentence of Section 6 hereof, and (z) all other amounts owed under this Note including, but not limited to, Late Fees and liquidated damages, all through and including the date all amounts herein are paid in cash to the Holder.
 
“Dilutive Issuance” shall have the meaning set forth in Section 5(b).
 
“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b).
 
“DTC” means the Depository Trust Company.
 
“DTC/FAST Program” means the DTC’s Fast Automated Securities Transfer Program.
 
“DWAC Eligible” means that (a) the Common Stock is eligible at DTC for full services pursuant to DTC’s Operational Arrangements, including, without limitation, transfer through DTC’s DWAC system, (b) the Company has been approved (without revocation) by the DTC’s underwriting department, (c) the Transfer Agent is approved as an agent in the DTC/FAST Program, (d) the Conversion Shares are otherwise eligible for delivery via DWAC, and (e) the Transfer Agent does not have a policy prohibiting or limiting delivery of the Conversion Shares via DWAC.
  
	 
	3
	
 
	 

 
“Event of Default” shall have the meaning set forth in Section 6(a).
 
“Exempt Issuance” means the issuance of (a) shares of Common Stock, options or other equity awards (including, without limitation, restricted awards) to employees, consultants, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose and subsequently ratified by the Shareholders of the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued pursuant to the Purchase Agreement and/or other securities directly or indirectly exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the Original Issue Date, provided that such securities have not been amended since the Original Issue Date to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, financings, commercial property lease transactions or similar transactions, (c) shares issued pursuant to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial institution approved by the Company’s board of directors, (d) securities issued pursuant to mergers, consolidations, acquisitions, similar business combinations or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, or (e) securities to the Holder or an Affiliate of the Holder.
 
“Fundamental Transaction” shall have the meaning set forth in Section 5(e). 
 
“Late Fees” shall have the meaning set forth in Section 2(c).
 
“Mandatory Default Amount” means the payment of 130% of the outstanding principal amount of this Note and accrued and unpaid interest hereon, in addition to the payment of all other amounts, costs, expenses, late fees, and liquidated damages due in respect of this Note.
 
“New York Courts” shall have the meaning set forth in Section 8(d).
 
“Note Register” shall have the meaning set forth in Section 2(b).
 
“Notice of Conversion” shall have the meaning set forth in Section 4(a).
 
“Original Issue Date” means the date of the first issuance of this Note, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.
  
	 
	4
	
 
	 

 
“Purchase Agreement” means the Securities Purchase Agreement, dated as of March 12, 2018 by and among the Company, the original Holder, and the other parties named therein, if any, as amended, modified or supplemented from time to time in accordance with its terms. 
 
“Registration Statement” means a registration statement covering the resale of the Underlying Securities by each Holder.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
“Share Delivery Date” shall have the meaning set forth in Section 4(d)(ii).
 
“Successor Entity” shall have the meaning set forth in Section 5(e). 
 
“Trading Day” means a day on which the Company’s principal Trading Market is open for trading; provided that, in the event that the Common Stock is not listed or quoted for trading on a Trading Market on the date in question, then Trading Day shall mean a Business Day.
 
“Trading Market” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any other Person that references the Trading Market for its common stock) is listed or quoted for trading on the date in question: the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York Stock Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the OTCPink Marketplace or any other tier operated by OTC Markets Group Inc. (or any successor to any of the foregoing).
 
“Transaction Documents” shall have the meaning set forth in the Purchase Agreement.
 
“VWAP” means, for or as of any date, the dollar volume-weighted average price for such security on the Trading Market (or, if the Trading Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “HP” function (set to weighted average) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
 
	 
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Section 2. Interest.
 
a) Payment of Interest in Cash or Kind. The Company shall pay interest to the Holder in an amount equal to the product of 7.5% (which interest rate may be increased as provided elsewhere herein), multiplied by the original principal amount (the “Original Principal Amount”), for the 18-month period beginning on the Original Issue Date. All interest provided for in this Section (2)(a) shall be due and payable on the Maturity Date (the Fixed Interest Payment Date”); provided, however, notwithstanding anything to the contrary provided herein or elsewhere, interest due hereunder will be due and payable prior to the Fixed Interest Payment Date, upon any conversion, prepayment, Event of Default, and/or other acceleration of principal outstanding on this Note, with respect to the interest relating to the principal so converted, prepaid and/or accelerated whether as a result of an Event of Default, or otherwise. All interest payments hereunder will be payable in cash or Common Stock in the Company’s discretion. Interest paid in Common Stock will be paid at the Conversion Price or Alternate Conversion Price, as applicable. 
 
b) Interest Calculations. Interest shall be calculated on the basis of a 360-day year, consisting of twelve 30-calendar day periods, and shall accrue commencing on the Original Issue Date until payment in full of the outstanding principal, together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Note is registered on the records of the Company regarding registration and transfers of this Note (the “Note Register”).
 
c) Late Fees. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law (the “Late Fees”) that shall accrue daily from the date such interest is due hereunder through and including the date of actual payment in full. 
 
Section 3. Registration of Transfers and Exchanges. 
 
a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
 
b) Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with therewith and applicable federal and state securities laws and regulations. 
 
c) Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.
  	 
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Section 4. Conversion.
 
a) Voluntary Conversion. At any time after the Original Issue Date until all amounts due under this Note have been paid in full, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time (subject to the conversion limitations set forth in Section 4(e) hereof). The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note and/or any other amounts due under this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, all accrued and unpaid interest thereon and all other amounts due under this Note have been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion amount. The Holder and the Company shall maintain a Conversion Schedule showing the principal amount(s) and/or any other amounts due under this Note converted and the date of such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof.
 
b) Conversion Price. The conversion price in effect on any Conversion Date shall be equal to the lesser of the Original Conversion Price or 87% of the average of the two (2) lowest daily VWAPs in the thirteen (13) Trading Days prior to the Conversion Date (“Conversion Price”). Should an Event of Default occur pursuant to Section 6 hereof, the Conversion Price will automatically be replaced by the Alternate Conversion Price and remain in effect as long as the Event of Default remains. All such foregoing determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. 
  	 
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c) Optional Company Conversion. At any time that (i) the daily VWAP for the prior ten (10) consecutive Trading Days is $10.50 or more and (ii) the average daily trading value is greater than $2,500,000 for the prior ten (10) consecutive Trading Days (as reported by Bloomberg through its “HP” function) (the “Conditions”), then the Company can demand, upon one (1) day’s notice that the Holder convert the Note, pursuant to Section 4(d) hereof and subject to the limitations of Section 4(e), as long as the Conditions remain in effect. The conversion referenced in this Section 4(c) shall be at the Conversion Price.
 
d) Mechanics of Conversion.
 
i. Conversion Shares Issuable Upon a Conversion. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the sum of all outstanding (i) principal, (ii) interest, and (iii) any other amount due under this Note to be converted as provided in the applicable Notice of Conversion by (y) the Conversion Price.
 
ii. Delivery of Certificate Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder (A) a certificate or certificates representing the Conversion Shares, which, on or after the date on which the resale of such Conversion Shares are covered by and are being sold pursuant to an effective Registration Statement or such Conversion Shares are eligible to be sold under Rule 144 (as defined below) without the need for current public information and the Company has received an opinion of counsel to such effect reasonably acceptable to the Company (which opinion the Company will be responsible for obtaining at its own cost) shall be free of restrictive legends and trading restrictions (other than those which may then be required by the Purchase Agreement) representing the number of Conversion Shares being acquired or being sold, as the case may be, upon the conversion of this Note, and (B) a bank check in the amount of accrued and unpaid interest (if the Company has elected to pay accrued interest in cash). All certificate or certificates required to be delivered by the Company under this Section 4(d) shall be delivered electronically through DTC or another established clearing corporation performing similar functions, unless the Company or its Transfer Agent does not have an account with DTC and/or is not participating in the DTC Fast Automated Securities Transfer Program; in which case, the Company shall then issue and deliver to the address as specified in such Notice of Conversion, a certificate (or certificates), registered in the name of the Holder or its designee, for the number of Conversion Shares to which the Holder shall be entitled. If the Conversion Shares are not being sold pursuant to an effective Registration Statement or if the Conversion Date is prior to the date on which such Conversion Shares are eligible to be sold under Rule 144, as promulgated under the Securities Act (“Rule 144”), without the need for current public information, the Conversion Shares shall bear a restrictive legend in the following form, as appropriate:
  	 
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“THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
 
Notwithstanding the foregoing, commencing on such date that the Conversion Shares are eligible for sale under Rule 144 subject to current public information requirements, the Company, upon request and at the Company’s expense, shall obtain a legal opinion to allow for such sales under Rule 144.
 
iii. Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Notice of Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Notice of Conversion. 
 
iv. Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the Holder of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Note shall have been sought. If the injunction is not granted, the Company shall promptly comply with all conversion obligations herein. If the injunction is obtained, the Company must post a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of seeking such injunction, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(d)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Liquidated Damages that arise from this Note are to be capped at $150,000.
  	 
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v. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(d)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(d)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.
 
vi. Reservation of Shares Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to 100% of the Required Minimum (as defined below) for the sole purpose of issuance upon conversion of this Note and payment of interest on this Note, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 5, but ignoring any Beneficial Ownership Limitations or other restrictions and/or limitations on conversions set forth herein or elsewhere) upon the conversion of the then-outstanding principal amount of this Note and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, and, at such times as a Registration Statement covering such shares is then effective under the Securities Act, will be registered for public resale in accordance with such Registration Statement. For purposes of this Note, the “Required Minimum” shall be defined as all outstanding debt plus interest and any fees divided by the Conversion Price or the Alternate Conversion Price then in effect, as applicable. The Company shall be required to calculate the Required Minimum on the first Trading Day of each month that the Note is outstanding and provide such calculation to the Holder and the Transfer Agent promptly. For purposes of calculating the Required Minimum, the Company shall assume that all then-outstanding principal will remain outstanding until the Maturity Date, all accrued but unpaid interest hereon accrues at the rate of 7.5% per annum and is paid on the Maturity Date and all amounts convert into shares of Common Stock at the Conversion Price or Alternate Conversion Price then in effect.
  	 
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vii. Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share that the Holder would otherwise be entitled to purchase upon such conversion, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.
 
viii. Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.
 
e) Holder’s Conversion Limitations. The Company shall not effect any conversion of principal and/or interest of this Note, and a Holder shall not have the right to convert any principal and/or interest of this Note, to the extent that, after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock that are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(e) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(e), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days’ prior written notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 4(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership Limitation provisions of this Section 4(e) shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.
  	 
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Section 5. Certain Adjustments.
 
a) Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest on, the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
 
b) Subsequent Equity Sales. If, at any time while this Note is outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced and only reduced to equal the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.
  	 
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c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights that the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
 
d) Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation.
  	 
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e) Fundamental Transaction. The Company shall not, directly or indirectly, in one or more related transactions, effect any merger or consolidation of the Company and/or or any of its Subsidiaries with and/or into another Person, without the express written consent of 90% of the then-issued and outstanding principal amount of Notes (the “90% Amount”). If, subject to the Company obtaining written consent of the 90% Amount, at any time while this Note is outstanding (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person, whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each, a “Fundamental Transaction”), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(e) on the conversion of this Note). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Note and the other Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note that is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
 
f) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
  	 
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g) Notice to the Holder.
 
i. Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 
 
ii. Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding-up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice, stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein. 
  	 
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Section 6. Events of Default. 
 
a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
 
i. any default in the payment of (A) the principal amount of any Note or (B) interest, liquidated damages, Late Fees and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three (3) Trading Days;
 
ii. the Company shall fail to observe or perform any other material covenant or agreement contained in the Notes (and other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (x) below), which failure is not cured, if possible to cure, within the earlier to occur of (A) five (5) Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) ten (10) Trading Days after the Company has become or should have become aware of such failure;
 
iii. a material default or material event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company or any Subsidiary is obligated and/or which any of their respective assets are subject to or bound by (and not covered by clause (vi) below); 
 
iv. any representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date when made or deemed made or the Company has failed to fulfill any material covenant contained in this Note, any other Transaction Documents, or any written statement pursuant hereto or thereto;
 
v. the Company or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;
  	 
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vi. the Company or any Subsidiary shall default on any of its obligations under any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $50,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable; 
 
vii. the Common Stock shall not be eligible for listing or quotation for trading on a Trading Market and shall not be eligible to resume listing or quotation for trading thereon within five (5) Trading Days or the transfer of shares of Common Stock through the DTC System is no longer available, “frozen” or “chilled”;
 
viii. the Company shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose of all or a portion of its assets in one transaction or a series of related transactions, without the approval of the Holder or Holders as provided in the Purchase Agreement (whether or not such sale would constitute a Change of Control Transaction);
 
ix. the Company does not meet the current public information requirements under Rule 144;
 
x. the Company shall fail for any reason to deliver certificates to a Holder prior to the third (3rd) Trading Day after a Conversion Date pursuant to Section 4(d) or the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof; 
 
xi. the Company fails to file with the Commission any required reports under Section 13 or 15(d) of the Exchange Act such that it is not in compliance with Rule 144(c)(1) (or Rule 144(i)(2), if applicable);
 
xii. the Company or any Subsidiary shall: (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of it or any of its properties, (ii) admit in writing its inability to pay its debts as they mature, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated a bankrupt or insolvent or be the subject of an order for relief under Title 11 of the United States Code or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute of any other jurisdiction or foreign country, or (v) file a voluntary petition in bankruptcy, or a petition or an answer seeking reorganization or an arrangement with creditors or to take advantage or any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute, or an answer admitting the material allegations of a petition filed against it in any proceeding under any such law, or (vi) take or permit to be taken any action in furtherance of or for the purpose of effecting any of the foregoing;
  	 
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xiii. if any order, judgment or decree shall be entered, without the application, approval or consent of the Company or any Subsidiary, by any court of competent jurisdiction, approving a petition seeking liquidation or reorganization of the Company or any Subsidiary, or appointing a receiver, trustee, custodian or liquidator of the Company or any Subsidiary, or of all or any substantial part of its assets, and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;
 
xiv. the occurrence of any levy upon or seizure or attachment of, or any uninsured loss of or damage to, any property of the Company or any Subsidiary having an aggregate fair value or repair cost (as the case may be) in excess of $100,000 individually or in the aggregate, and any such levy, seizure or attachment shall not be set aside, bonded or discharged within thirty (30) days after the date thereof;
 
xv. the Company shall fail to maintain sufficient reserved shares pursuant to the Purchase Agreement; 
 
xvi. any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of forty-five (45) calendar days; 
 
xvii. the Company, without the written consent of the Holders, shall enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind for more than $50,000, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom; or
 
xviii. the Company enters into any transaction with any Affiliate of the Company that would be required to be disclosed in any public filing with the Commission.
 
b) Remedies Upon Event of Default. Subject to the Beneficial Ownership Limitation as set forth in Section 4(e), if any Event of Default occurs, then the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. After the occurrence of any Event of Default that results in the eventual acceleration of this Note, the interest rate on this Note shall accrue at an additional interest rate equal to the lesser of 1.5% per month (18% per annum) or the maximum rate permitted under applicable law. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 6(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon. Alternatively, at the election of the Holder, the Holder may require the Company to redeem all of the Notes then held by such Holder through the issuance to such Holder of such number of shares of Common Stock equal to the quotient of (x) the Default Redemption Amount, divided by (y) Alternate Conversion Price percentage rate. The Default Redemption Amount, whether payable in cash or in shares, shall be due and payable or issuable, as the case may be, within five (5) Trading Days of the date on which the notice for the payment therefor is provided by a Holder (the “Default Redemption Payment Date”). If the Company fails to pay in full the Default Redemption Amount hereunder on the date such amount is due in accordance with this Section (whether in cash or shares of Common Stock), the Company will pay interest thereon at a rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law, accruing from such date until the Default Redemption Amount, plus all such interest thereon, is paid in full. 
  	 
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Section 7. Prepayment.
 
At any time upon ten (10) days’ prior written notice to the Holder, but subject to the Holder’s conversion rights set forth herein, the Company may prepay any portion of the principal amount of this Note, all accrued and unpaid interest relating to such prepaid portion of the principal and all other amounts due under this Note. The written notice shall, among other items, state the date such Prepayment Amount (as defined below) is to be paid to the Holder, which shall not in any event be later than ten (10) calendar days from the date of mailing of the prepayment notice to the Holder (the “Prepayment Date”). If the Company exercises its right to prepay the Note, the Company shall make payment to the Holder of an amount in cash equal to the product of (i) the sum of (x) the then-outstanding principal amount of this Note and (y) all accrued but unpaid interest, multiplied by (ii) (x) 110%, if the Prepayment Date is within 90 days of the Original Issue Date, (y) 115%, if the Prepayment Date is between 91 days and 180 days following the Original Issue Date or (z) 125%, if the Prepayment Date is after the 180th day following the Original Issue Date, to which calculated amount the Company shall add all other amounts owed pursuant to this Note, including, but not limited to, all Late Fees and liquidated damages (collectively, the “Prepayment Amount”). The Holder may continue to convert the Note from the date notice of the prepayment is given until the date the Holder receives in full, the Prepayment Amount. 
 
Section 8. Miscellaneous. 
 
a) Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at Terra Tech Corp., 2040 Main Street, Suite 225, Irvine, California 92614, fax no. 888-330-6883, or such other facsimile number or address as the Company may specify for such purposes by notice to the Holder delivered in accordance with this Section 8(a). Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of the Holder appearing on the books of the Company, or if no such facsimile number or address appears on the books of the Company, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 12:00 noon (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00 noon (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.
  	 
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b) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein. 
 
c) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
 
d) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
 
e) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing. 
  	 
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f) Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such power as though no such law has been enacted.
 
g) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note.
 
h) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
 
i) Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to limit or affect any of the provisions hereof.
 
Section 9. Disclosure. Upon receipt or delivery by the Company of any notice in accordance with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries, the Company shall within two (2) Business Days after such receipt or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company or its Subsidiaries, the Company so shall indicate to the Holder contemporaneously with delivery of such notice, and in the absence of any such indication, upon the passage of two (2) Business Days, the Holder shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic information relating to the Company or its Subsidiaries.
 
*********************
 
(Signature Pages Follow)
 
	 
	21
	
 
	 

 
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
 
	 
	TERRA TECH CORP.
	 

	 
	    
		 

	 
	By: 
	 
	 

	 
	Name:
	 
	 

	 
	Title:
		 

	 
	Facsimile No. for delivery of Notices: ___________________
	 

 
	
	
	

	

ANNEX A
 
NOTICE OF CONVERSION
 
The undersigned hereby elects to convert principal, accrued but unpaid interest and/or any of amounts due under the 7.5% Senior Convertible Promissory Note due April 21, 2021 of Terra Tech Corp., a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.
 
By the delivery of this Notice of Conversion, the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
 
The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock, if the resale of any such shares of Common Stock are covered by and are being sold pursuant to an effective Registration Statement. 
 
Conversion calculations: 
Date to Effect Conversion: __________________________
 
Principal Amount of Note to be Converted: ______________
 
Payment of Interest in Common Stock __ yes __ no
If yes, $_____ of Interest Accrued on Account of Conversion at Issue.
 
Other Amounts Owed Under this Note to be Converted including Late Fees: __________
 
Number of shares of Common Stock to be issued: __________
 
Signature: ________________________________________
 
Name: ___________________________________________
 
Delivery Instructions:
 
	
	
	

	

 
Schedule 1
 
CONVERSION SCHEDULE
 
This 7.5% Senior Convertible Promissory Note due on April 21, 2021 in the principal amount of $1,500,000 is issued by Terra Tech Corp., a Nevada corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note. 
 
Dated: 
 
	 
Date of Conversion
(or for first entry, Original Issue Date)
	 
Amount of Conversion
	 
Aggregate Principal Amount Remaining Subsequent to Conversion
(or original Principal Amount)
	 
Company Attest

				
				
				
				
				
				
				
				
				

 
	 
	22

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