Document:

EX-10.11

 CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED (INDICATED BY: [ *** ]) FROM THE EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. 
  

 Exhibit 10.11 

ORIGINAL 
 EXCLUSIVE
PATENT LICENSE AGREEMENT 
 by and between 

PURETECH VENTURES LLC 

and 
 KARUNA
PHARMACEUTICALS, INC. 

  
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 CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED (INDICATED BY: [ *** ]) FROM THE EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. 
  

 EXCLUSIVE PATENT LICENSE AGREEMENT 

This Agreement, effective as of the date set forth above the signatures of the parties below (the “Effective Date”), is
between PureTech Ventures LLC, a Delaware limited liability company (“PureTech”), and Karuna Pharmaceuticals, Inc., a Delaware corporation (the “Company”). PureTech and the Company are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.” 
 RECITALS 

WHEREAS, PureTech is the owner of certain Patent Rights (as later defined herein) and has the right to grant licenses under said Patent
Rights; 
 WHEREAS, PureTech desires to have the Patent Rights developed and commercialized by the Company and is willing to grant a license
thereunder; and 
 WHEREAS, the Company desires to obtain a license under the Patent Rights and PureTech is willing to grant the same to the
Company upon the terms and conditions hereinafter set forth. 
 NOW, THEREFORE, PureTech and the Company hereby agree as follows: 

1.    DEFINITIONS 

1.1    “Affiliate” shall mean any legal entity (such as a corporation, partnership, or limited liability
company) that is controlled by a Party. For purposes of this definition, the term “control” means as to such entity, direct or indirect ownership of (i) more than fifty percent (50%) in the aggregate of the voting power of all
outstanding shares entitled to vote at a general election of directors of such entity, (H) more than fifty percent (50%) of the equity interests in such entity, or (iii) more than fifty percent (50%) of the assets of such entity.

 1.2    “Field” shall mean all uses and applications. 

1.3    “Licensed Product” shall mean any product that cannot be manufactured, used, leased or sold, in
whole or in part, without infringing one or more Valid Claims under the Patent Rights. 
 1.4    “Net
Sales” means [ *** ]. 

  

 [ *** ] 

1.5    “Patent Rights” shall mean all of PureTech’s right, title and interest in: 

(a)    the United States patent applications listed on Appendix A, their foreign counterparts, and the resulting
patents; 
 (b)    any divisionals, continuations, continuation-in-part applications, continued prosecution
applications, or any other application claiming priority to one or more of the patent applications listed on Appendix A to the extent the claims are directed to subject matter specifically described in the patent applications listed on
Appendix A, and the resulting patents; and 
 (c)    any patents resulting from reissues, reexaminations,
extensions, or restorations (and their relevant international equivalents) of the patents described in (a) and (b) above. 

1.6    “Reporting Period” shall begin on the first day of each calendar quarter and end on the last day
of such calendar quarter. 
 1.7    “Sublicense Income” shall mean all consideration received by the
Company or any of its Affiliates from Sublicensees in exchange for the sublicensing of rights granted to the Company pursuant to Article 2 herein, but specifically excluding royalties. Sublicensing Income includes, without limitation, upfront
payments, milestone payments, license maintenance fees, research and development funding (subject to (a), below) and equity investments (whether in the form of stock purchase, options, warrants, convertible debt or other forms) (subject to (a),
below) paid directly or indirectly to the Company (or any of its Affiliates) from (or on behalf of) any Sublicensee. Notwithstanding the foregoing: 

(a)    funding of activities directly in furtherance of Licensed Product research and clinical, regulatory and
manufacturing process development are excluded from Sublicense Income; and 

  
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 (b)    Sublicense Income shall not include amounts paid to the Company
as an equity investment in the Company or any of its Affiliates (whether in the form of stock purchase, options, warrants or other forms) to the extent that the amount of such investment (calculated in case of options, warrants and the like as if
exercised and including all amounts due on exercise) does not involve any premium over fair market value of the equity investment. 
 To avoid any doubt,
Sublicensing Income extends to and includes consideration that is paid on the basis of rights (including covenants not to sue) under any intellectual property licensed to the Company pursuant to Article 2 of this Agreement even if the Company
structures its grant of rights to the Sublicensee so that the grant of rights under the Patent Rights formally occurs in a separate written agreement from the grant of rights under other intellectual property of the Company relating to the Licensed
Product. 
 1.8    “Sublicensee” shall mean any non-Affiliate sublicensee of the rights granted the
Company under Section 2.2. 
 1.9    “Term” shall mean the term of this Agreement, which shall
commence on the Effective Date and shall remain in effect until the expiration or abandonment of all issued patents and filed patent applications within the Patent Rights, unless earlier terminated in accordance with the provisions of this
Agreement. 
 1.10    “Territory” shall mean worldwide. 

1.11    “Valid Claim” shall mean a claim of any filed patent application included within the Patent
Rights which has not been held finally revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction and which (i) has not been admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise, (ii) has not been withdrawn or abandoned, or (iii) has not been lost through an interference proceeding. 

2.    GRANT OF RIGHTS. 

2.1    License Grants. Subject to the terms of this Agreement, PureTech hereby grants to the Company for the Term a
royalty-bearing exclusive license (even as against PureTech) under the Patent Rights to research, develop, make, have made, use, offer for sale, sell, lease, import and otherwise exploit Licensed Products in the Field in the Territory. 

2.2    Sublicenses. The Company shall have the right to grant sublicenses of its rights hereunder. The Company
shall incorporate terms and conditions into such sublicense agreements sufficient to enable the Company to comply with this Agreement. Within [ *** ] following the execution thereof, the Company shall furnish PureTech with a fully signed photocopy
of any sublicense agreement. 
 2.3    No Additional Rights. Nothing in this Agreement shall be construed to
confer any rights upon the Company by implication, estoppel or otherwise as to any technology or patent rights of PureTech or any other entity other than the Patent Rights, regardless of whether such technology or patent rights shall be dominant or
subordinate to any Patent Rights. 

  
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 2.4    Due Diligence Obligations. The Company shall use diligent
efforts, and shall cause its Affiliates and any Sublicensees to use diligent efforts, to develop Licensed Products and to introduce Licensed Products into the commercial market; thereafter, the Company and its Affiliates and any Sublicensees shall
maximize the commercial sales of such Licensed Products. Specifically, the Company and its Affiliates and any Sublicensees shall fulfill the following obligations: 

(a)    Within [ *** ] of the Effective Date, the Company shall initiate, defined as first dosing of patient, a trial using
a Licensed Product where the primary outcome measure is a statistically significant separation by a Licensed Product from placebo on the positive and negative symptom scale (PANSS) or equivalent scale that has previously been used as a primary
endpoint for U.S. Food and Drug Administration registration for the treatment of schizophrenia and the total number of patients that will enroll in the study is greater than [ *** ]. 

(b)    At any time prior to approval of a Licensed Product by the U.S. Food and Drug Administration, the Company shall
not, for any consecutive [ *** ] period, fail to initiate, defined as first dosing of patient, a human clinical study with a Licensed Product or make a regulatory submission to the U.S. Food and Drug Administration, the European Medicines Evaluation
Agency, or the Japanese Ministry of Health and Welfare seeking the marketing of a License Product for the treatment of a disease. 

(c)    The Company shall not (i) become insolvent; (ii) make an assignment for the benefit of creditors;
(iii) have a bona fide petition in bankruptcy filed for or against it, which petition is withdrawn or dismissed within [ *** ] of its filing; or (iv) cease operations (at an activity level sufficient for the continued development of
Products) for more than one [ *** ]. 
 In the event that PureTech determines that the Company (or an Affiliate or Sublicensee) has failed to fulfill its
obligations under this Section 2.4, then PureTech may treat such failure as a material breach in accordance with Section 11.2(b). 

3.    ROYALTIES AND PAYMENT TERMS. 

3.1    Consideration for Grant of Rights. 

(a)    Running Royalties. The Company shall pay to PureTech a running royalty of [ *** ] of annual Net Sales by the
Company, its Affiliates and any Sublicensees. Running royalties shall be payable for each Reporting Period and shall be due to PureTech within [ *** ] of the end of each Reporting Period. 

(b)    Milestone Payments. The Company shall pay to PureTech the following milestone payments in connection with
the achievement of the following events by the Company, any of its Affiliates or any Sublicensee (each such event is hereafter referred to as a “Milestone”): 

(i)    [ *** ] within [ *** ] following the commencement of a Phase III Clinical Trial of a Licensed Product; 

  
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 (ii)    [ *** ] within [ *** ] following approval by the U.S. Food and
Drug Administration, or any successor thereto, to offer for sale and sell (including any necessary price approvals) any Licensed Product; 

(iii)    [ *** ] within [ *** ] following approval by the European Medicines Evaluation Agency or any other European
regulatory authority, or any successor thereto, to offer for sale and sell (including any necessary price approvals) any Licensed Product; and 

(iv)    [ *** ] within [ *** ] following approval by the Japanese Ministry of Health and Welfare or, any successor entity
to offer for sale and sell (including any necessary price approvals) any Licensed Product. 
 (c)    Sharing of
Sublicense Income. The Company shall pay PureTech [ *** ] all Sublicense Income received by the Company or its Affiliates, excluding running royalties on Net Sales of Sublicensees. Such amount shall he payable for each Reporting Period and shall
be due to PureTech within [ *** ] of the end of each Reporting Period. 
 3.2    Payments. 

(a)    Method of Payment. All payments under this Agreement shall be made payable to PureTech and sent to the
address identified in Section 13.1. Each payment should reference this Agreement and identify the obligation under this Agreement that the payment satisfies. 

(b)    Payments in U.S. Dollars. All payments due under this Agreement shall be payable in United States dollars.
Conversion of foreign currency to U.S. dollars shall be made at the conversion rate existing in the United States (as reported in The Wall Street Journal) for the last working day of the calendar quarter of the applicable Reporting Period.
Such payments shall be without deduction of exchange, collection or other charges. Each Party is solely responsible for timely and properly filing and payment of its own taxes of any kind and in any jurisdiction. All payments under this Agreement
shall be made in full without any deduction or withholding for or on account of any tax unless such deduction or withholding is required by applicable governmental laws, tax treaty, or regulations. Any tax required to be withheld by the Company
under the laws of any foreign country for the account of PureTech shall be promptly paid by the Company for and on behalf of PureTech to the appropriate governmental authority, and the Company shall use its best efforts to furnish PureTech with
proof of payment of such tax together with official or other appropriate evidence issued by the applicable government authority. Any such tax actually paid on PureTech’s behalf shall be deducted from royalty payments due PureTech. 

(c)    Late Payments. Any payments by the Company that are not paid on or before the date such payments are
due under this Agreement shall bear interest, to the extent permitted by law, at [ *** ] above the Prime Rate of interest as reported in The Wall Street Journal on the date payment is due. 

  
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 4.    REPORTS AND RECORD KEEPING. 

4.1    Frequency of Reports. 

(a)    Before First Commercial Sale. Prior to the first commercial sale of any Licensed Product, the Company shall
deliver reports to PureTech annually, within [ *** ] the end of each calendar year, containing information concerning the progress of research and development pertaining to the Licensed Product. 

(b)    Upon First Commercial Sale. The Company shall report to PureTech the date of first commercial sale of a
Licensed Product within [ *** ] of occurrence thereof in each country. 
 (c)    After First Commercial Sale.
After the first commercial sale of a Licensed Product, the Company shall deliver reports to PureTech within [ *** ] of the end of each Reporting Period, containing information concerning the immediately preceding Reporting Period, as further
described in Section 4.2. 
 4.2    Content of Reports and Payments. Each report delivered by the Company to
PureTech shall contain at least the following information for the immediately preceding Reporting Period: 
 (a)    the
number of Licensed Products sold, leased or distributed by the Company, its Affiliates and any Sublicensees to independent third parties in each country; 

(b)    the gross price charged by the Company, its Affiliates and any Sublicensees for each Licensed Product; 

(c)    the calculation of Net Sales for the applicable Reporting Period in each country, including a listing of applicable
deductions; 
 (d)    the total royalty payable on Net Sales in U.S. dollars, together with the exchange rates used for
conversion; 
 (e)    the amount of Sublicense Income received by the Company from each Sublicensee and the amount due
to PureTech from such Sublicense Income, including an itemized breakdown of the sources of income comprising the Sublicense Income; and 

(f)    the number of sublicenses entered into for the Patent Rights and/or Licensed Products. 

If no amounts are due to PureTech for any Reporting Period, the report shall so state. 

4.3    Financial Statements. On or before the [ *** ] following the close of the Company’s fiscal year, the
Company shall provide PureTech with the Company’s financial statements for the preceding fiscal year including, at a minimum, a balance sheet and an income statement, certified by the Company’s treasurer or chief financial officer or by an
independent auditor. 

  
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 4.4    Record Keeping. The Company shall maintain, and shall
require its Affiliates and any Sublicensees to maintain, complete and accurate records relating to research and development under this Agreement and any amounts payable to PureTech in relation to this Agreement, which records shall contain
sufficient information to permit PureTech to confirm the accuracy of any reports delivered to PureTech and compliance in other respects with this Agreement. The relevant party shall retain such records for at least [ *** ] following the end of the
calendar year to which they pertain, during which time PureTech, or PureTech’s appointed agents, shall have the right, at PureTech’s expense, to inspect such records during normal business hours upon minimum advance notice of [ *** ] to
verify any reports and payments made or compliance in other respects under this Agreement. Any person inspecting the books and records of the Company on behalf of PureTech pursuant to this Section 4.4 shall enter into a confidentiality
agreement with the Company in its standard form covering the receipt of confidential information from the Company. In the event that any audit performed under this Section reveals an underpayment in excess of [ *** ] the Company shall bear the full
cost of such audit. Any auditor shall report to PureTech only the amount of any underpayment or overpayment to PureTech or that the payments made by the Company were correct. The auditor shall deliver a copy of its audit report to the Company at the
same time it remits such audit report to PureTech. The Company shall remit any amounts due to PureTech. and PureTech shall refund any overpayment to the Company, within [ *** ] of receiving the report of the auditor. 

5.    PATENT PROSECUTION. 

5.1    Responsibility for Patent Rights. The Company shall prepare, file, diligently prosecute and maintain all of
the Patent Rights. PureTech shall have reasonable opportunities to advise the Company with respect to such preparation, filing, prosecution and maintenance and PureTech arid the Company shall cooperate with each other (any each other’s
respective legal counsel) in such filing, prosecution and maintenance. 
 5.2    Payment of Expenses. Payment of
all fees and costs, including attorneys fees, incurred after the Effective Date relating to the filing, prosecution and maintenance of the Patent Rights shall be the responsibility of the Company. 

5.3    Reversion of Patent Rights. In its sole discretion, the Company may elect not to prosecute certain of the
Patent Rights (including rights in certain countries or territories) if and only if the Company shall notify PureTech of such decision within [ *** ] prior to any filing deadline in respect of such Patent Rights; provided however that it the Company
elects not to prosecute such Patent Rights, such Patent Rights shall revert to PureTech and shall automatically be excluded from the definition of “Patent Rights” hereunder. 

6.    INFRINGEMENT. 

6.1    Notification of Infringement. Each Party agrees to provide written notice to the other Party promptly after
becoming aware of any infringement of the Patent Rights. 

  
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 6.2    Right to Prosecute Infringements. 

(a)    Company Right to Prosecute. So long as the Company remains the exclusive licensee of the Patent Rights in the
Field in the Territory, the Company, to the extent permitted by law, shall have the right, under its own control and at its own expense, to prosecute any third party infringement of the Patent Rights in the Field in the Territory, subject to
Section 6.4. If required by law, PureTech shall permit any action under this Section 6.2 to be brought in its name, including being joined as a party-plaintiff, provided that the Company shall hold PureTech harmless from, and indemnify
PureTech against, any costs, expenses, or liability that PureTech incurs in connection with such action. Prior to commencing any such action, the Company shall consult with PureTech and shall consider the views of PureTech regarding the advisability
of the proposed action and its effects. The Company shall not enter into any settlement, consent judgment, or other voluntary final disposition of any infringement action under this Section 6.2 which admits the invalidity or unenforceability of
any Patent Rights without the prior written consent of PureTech. If the Company does not take commercially reasonable steps to abate the infringement of such Patent Rights within [ *** ] from any infringement notice from PureTech, based upon the
Company’s determination that such action would be commercially unreasonable and the Company provides PureTech its reasons therefor in writing, then the Company shall not have the obligation to take any such action or institute any proceeding.
In this regard, the Company shall be entitled to use its reasonable commercial discretion in determining (a) whether to contact and/or institute any action or proceeding against an alleged infringer; (b) the timing of any contact with an
alleged infringer or action or proceeding to be instituted against an alleged infringer; (c) the location of any action or proceeding to be instituted against an alleged infringer; and (d) if there is more than one alleged infringer, which
alleged infringer to contact regarding its alleged infringement or against which any action or proceeding is to be brought. It is further understood and agreed that, during such time as the Company is pursuing any action or proceeding against one
alleged infringer, the Company shall have no obligation to contact or pursue additional alleged infringers. 

(b)    PureTech Right to Prosecute. In the event that the Company is unsuccessful in persuading the alleged
infringer to desist or fails to have initiated an infringement action within the time provided in Section 6.2(a) above and the infringement is open, obvious and financially material, PureTech shall have the right, at its sole discretion, to
prosecute such infringement under its sole control and at its sole expense, and any recovery obtained shall belong to PureTech. 

6.3    Declaratory Judgment Actions. In the event that a declaratory judgment action is brought against PureTech or
the Company by a third party alleging invalidity, unenforceability, or non-infringement of the Patent Rights, PureTech, at its option, shall have the right within [ *** ] commencement of such action to take over the sole defense of the action at its
own expense. If PureTech does not exercise this right, the Company may take over the sole defense of the action at the Company’s sole expense, subject to Section 6.4. 

6.4    Recovery. Any recovery obtained in an action brought by the Company under Sections 6.2 or 6.3 shall be
distributed as follows: (i) each Party shall be reimbursed [ *** ] for any expenses incurred in the action from the proceeds of such action or settlement, (ii) as to 

  
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ordinary damages, such amount shall be treated as Net Sales, and the Company shall pay to PureTech based upon such amount a reasonable approximation of the royalties and other amounts that the
Company would have paid to PureTech if the Company had sold the infringing products, processes and services rather than the infringer, and (iii) as to special or punitive damages, the parties shall share equally in any award. Any recovery
obtained in an action brought by PureTech under Sections 6.2 or 6.3 shall be distributed as follows: (i) each Party shall be reimbursed [ *** ] for any expenses incurred in the action from the proceeds of such action or settlement and
all remaining amounts shall be shared [ *** ] to PureTech and [ *** ] to the Company. 
 6.5    Cooperation.
Each party agrees to cooperate in any action under this Article which is controlled by the other party, provided that the controlling party reimburses the cooperating party promptly for any costs and expenses incurred by the cooperating party in
connection with providing such assistance. 
 6.6    Right to Sublicense. So long as the Company remains the
exclusive licensee of the Patent Rights in the Field in the Territory, the Company shall have the sole right to sublicense any alleged infringer in the Field in the Territory for use of the Patent Rights in accordance with the terms and conditions
of this Agreement relating to sublicenses. 
 7.    INDEMNIFICATION 

7.1    Indemnity. 

(a)    By the Company. The Company shall indemnify, defend, and hold harmless PureTech and its members, directors,
officers, employees, agents and Affiliates and their respective successors, heirs and assigns (the “PureTech Indemnitees”), against any liability, damage, loss, or expense (including reasonable attorneys fees and expenses) incurred
by or imposed upon any of the PureTech Indemnitees in connection with any third party claims, suits, actions, demands or judgments arising out of any theory of liability (including without limitation actions in the form of tort, warranty, or strict
liability and regardless of whether such action has any factual basis) (a “Loss”) (i) concerning any product, process or service that is made, used, sold, imported or performed pursuant to any right or license granted under
this Agreement or (ii) due to a breach of this Agreement by the Company; provided, however, that the foregoing indemnification shall not apply to any Loss to the extent such Loss is caused by the breach of this Agreement or the gross negligence
or willful misconduct of a PureTech Indemnitee. 
 7.2    Procedures. A party seeking indemnification pursuant to
Section 7.1 shall provide the indemnifying Party with prompt written notice of any claim, suit, action, demand, or judgment for which indemnification is sought under this Agreement. The indemnifying Party, at its own expense, shall provide
attorneys reasonably acceptable to the indemnified party to defend against any such claim. The indemnified party shall cooperate fully with the indemnifying Party in such defense and shall permit the indemnifying Party to conduct and control such
defense and the disposition of such claim, suit, or action (including all decisions relative to litigation, appeal, and settlement); provided, however, that any indemnified party shall have the right to retain its own counsel, at the expense of the
indemnifying Party, if representation of such indemnified party by the counsel retained by the indemnifying Party would be inappropriate because of actual 

  
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legal conflicts between such indemnified party and any other party represented by such counsel. The indemnifying Party agrees to keep the other Party informed of the progress in the defense and
disposition of such claim and to consult with such Party with regard to any proposed settlement. 

7.3    Insurance. Beginning at such time as any such product, process or service is being commercially distributed,
sold, leased or otherwise transferred, or performed or used, by the Company, an Affiliate or any Sublicensee, the Company shall, at its sole cost and expense, procure and maintain commercial general liability insurance in amounts not less than [ ***
] per incident and [ *** ] annual aggregate and naming the Indemnitees as additional insureds. Such commercial general liability insurance shall provide (i) product liability coverage and (ii) broad form contractual liability coverage for
Company’s indemnification under Section 7.1 of this Agreement. If Company elects to self-insure all or part of the limits described above (including deductibles or retentions which are in excess of [ *** ] annual aggregate) such
self-insurance program must be acceptable to the PureTech. The minimum amounts of insurance coverage required under this Section 7.3 shall not be construed to create a limit of the Company’s liability with respect to its indemnification
under Section 7.1 of this Agreement. The Company shall provide PureTech with written evidence of such insurance upon request of PureTech. The Company shall provide PureTech with written notice at least [ *** ] prior to the cancellation,
non-renewal or material change in such insurance; if the Company does obtain replacement insurance providing comparable coverage prior to the expiration of such [ *** ] period. PureTech shall have the right to terminate this Agreement effective at
the end of such [ *** ] period without notice or any additional waiting periods. The Company shall maintain such commercial general liability insurance beyond the expiration or termination of this Agreement during (i) the period that any such
product, process, or service is being commercially distributed, sold, leased or otherwise transferred, or performed or used (other than for the purpose of obtaining regulatory approvals), by the Company or by a licensee, affiliate or agent of
Company and (ii) a reasonable period after the period referred to in (i) above which in no event shall be less than [ *** ] This section 7.3 shall survive expiration or termination of this Agreement. 

8.    REPRESENTATIONS, WARRANTIES AND COVENANTS 

8.1    Representations and Warranties by each Party. Each of PureTech and the Company, with respect to itself,
represents, warrants and covenants to the other that: 
 (a)    it is a corporation or entity duly organized and validly
existing under the laws of the state or jurisdiction of its incorporation; 
 (b)    the execution, delivery and
performance of this Agreement has been duly authorized by all requisite corporate or other action and does not require any shareholder or member action or approval; 

(c)    it has the full right, power, and authority to enter into and deliver this Agreement, and that the execution of
this Agreement creates a valid and binding Agreement enforceable against it in accordance with its terms; 

  
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 (d)    the execution, delivery, and performance of this Agreement and
its compliance with the terms and provisions hereof does not, and will not, conflict with or result in a breach of any of the terms or provisions of, or constitute a default under (i) a loan agreement, guaranty, financing agreement, agreement
affecting a product or other agreement or instrument binding or affecting it or its property; (ii) the provisions of its charter or operative documents or by-laws; or (iii) any order, writ, injunction, or decree of any court or
governmental authority entered against it or by which any of its property is bound; and 
 (e)    to its knowledge,
there are no existing or threatened actions, suits or claims pending against it with respect to its right to enter into and perform its obligations under this Agreement. 

8.2    No Further Representations or Warranties; Damages. EXCEPT AS MAY OTHERWISE BE EXPRESSLY SET FORTH IN THIS
AGREEMENT, PURETECH MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY KIND CONCERNING (A) THE PATENT RIGHTS, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY
OF PATENT RIGHTS CLAIMS, WHETHER ISSUED OR PENDING, (2) THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, (3) REGARDING THE VALIDITY OR SCOPE OF THE PATENT RIGHTS OR (4) THAT THE EXPLOITATION OF THE PATENT RIGHTS OR
ANY LICENSED PRODUCT WILL NOT INFRINGE ANY PATENTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY. 
 IN NO EVENT SHALL EITHER PARTY, ITS MEMBERS,
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING ECONOMIC DAMAGES FOR INJURY TO PROPERTY AND LOST PROFITS, REGARDLESS OF WHETHER SUCH PARTY SHALL BE ADVISED, SHALL HAVE
OTHER REASON TO KNOW, OR IN FACT SHALL KNOW OF THE POSSIBILITY OF THE FOREGOING. 
 9.    ASSIGNMENT. 

Neither Party may assign this Agreement without the written consent of the other Party, which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, upon written notice to the other Party, either Party may assign this Agreement to a successor to its business (whether by merger, a sale or other transfer of all or substantially all of its assets, a sale of a
controlling interest of its capital stock, or otherwise) which agrees in writing to assume its obligations hereunder. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
assigns. 
 10.    COVENANTS 

10.1    Compliance with Laws. The Company and its Affiliates and any Sublicensees shall comply in all material
respects with all commercially material applicable local, state, federal, and foreign laws and regulations relating to the development, manufacture, use, and sale of Licensed Products. 

  
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 10.2    Export Control. The Company and its Affiliates and any
Sublicensees shall comply with all United States laws and regulations controlling the export of certain commodities and technical data, including without limitation all Export Administration Regulations of the United States Department of Commerce.
Among other things, these laws and regulations prohibit or require a license for the export of certain types of commodities and technical data to specified countries. The Company hereby gives written assurance that it will comply with, and will
require its Affiliates and any Sublicensees to comply with, all United States export control laws and regulations, that it bears sole responsibility for any violation of such laws and regulations by itself or its Affiliates or any Sublicensees, and
that it will indemnify, defend, and hold PureTech harmless (in accordance with Section 7) for the consequences of any such violation. 

10.3    Non-Use of PureTech Name. The Company and its Affiliates and any Sublicensees shall not use the name of
PureTech or any variation, adaptation, or abbreviation thereof, or of any of its employees, or agents, or any trademark owned by PureTech, or any terms of this Agreement in any promotional material or other public announcement or disclosure without
the prior written consent of PureTech, except as may be required by law, stock exchange rule or other securities trading system rule. 

10.4    Marking of Licensed Products. To the extent commercially feasible and consistent with prevailing business
practices, the Company shall mark, and shall cause its Affiliates and any Sublicensees to mark, all Licensed Products that are manufactured or sold under this Agreement with the number of each issued patent under the Patent Rights that applies to
such Licensed Product. 
 11.    TERMINATION 

11.1    Voluntary Termination by the Company. The Company shall have the right to terminate this Agreement, for any
reason, from time to time upon at least [ *** ] prior written notice to PureTech, such notice to state the date at least [ *** ] in the future upon which termination is to be effective. Within [ *** ] following such termination effective date, the
Company shall pay to PureTech all amounts due to PureTech through such termination effective date. 

11.2    Termination for Default. 

(a)    Nonpayment. In the event the Company fails to pay any amounts due and payable to PureTech hereunder, and
fails to make such payments within [ *** ] after receiving written notice (by certified US mail) of such failure, PureTech may terminate this Agreement immediately upon written notice to the Company. 

(b)    Material Breach by the Company. In the event the Company commits a material breach of its obligations under
this Agreement, including a breach of any of the obligations set forth in Section 2.4 and not including for a breach as described in Section 11.2(a), and fails to cure that breach within [ *** ] after receiving written notice thereof (by
certified US mail), PureTech may terminate this Agreement immediately upon written notice to the Company. 

  
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 (c)    Material Breach by PureTech. In the event PureTech commits
a material breach of its obligations under this Agreement and fails to cure that breach within [ *** ] after receiving written notice thereof (by certified US mail), the Company may terminate this Agreement immediately upon written notice to
PureTech. 
 11.3    Effect of Termination. 

(a)    Survival. The following provisions shall survive the expiration or termination of this Agreement: Articles 1,
3 (to the extent necessary to satisfy Section 11.3(b) and (c)), (4 to the extent necessary to provide final reports), 7, 9, 10, 11, 12 and 13. 

(b)    Inventory. Upon the early termination of this Agreement, the Company and its Affiliates and any Sublicensees
may complete and sell any work-in-progress and inventory of Licensed Products that exist as of the Effective Date of termination, provided that (i) the Company pays PureTech the applicable running royalty or other amounts due on such sales of
Licensed Products in accordance with the terms and conditions of this Agreement, and (ii) the Company and its Affiliates and any Sublicensees shall complete and sell all work-in-progress and inventory of Licensed Products within six
(6) months after the Effective Date of termination. 
 (c)    Pre-termination Obligations. In no event shall
termination of this Agreement release the Company, its Affiliates, or any Sublicensees from the obligation to pay any amounts that became due on or before the effective date of such termination. 

12.    DISPUTE RESOLUTION. 

12.1    Mandatory Procedures. The Parties agree that any dispute arising out of or relating to this Agreement shall
be resolved solely by means of the procedures set forth in this Article, and that such procedures constitute legally binding obligations that are an essential provision of this Agreement. If either Party fails to observe the procedures of this
Article, as may be modified by their written agreement, the other Party may bring an action for specific performance of these procedures in any court of competent jurisdiction. 

12.2    Equitable Remedies. Although the procedures specified in this Article are the sole and exclusive procedures
for the resolution of disputes arising out of or relating to this Agreement, either Party may seek a preliminary injunction or other provisional equitable relief if, in its reasonable judgment, such action is necessary to avoid irreparable harm to
itself or to preserve its rights under this Agreement. 
 12.3    Dispute Resolution Procedures. 

(a)    Negotiation. In the event of any dispute arising out of or relating to this Agreement, the affected Party
shall notify the other Party, and the Parties shall attempt in good faith to resolve the matter within [ *** ] after the date of such notice (the “Notice Date”). Any disputes not resolved by good faith discussions shall be referred
to senior executives of each Party, who shall meet at a mutually acceptable time and location within [ *** ] after the Notice Date and attempt to negotiate a settlement. 

  
 13 

 (b)    Arbitration. If the matter remains unresolved within [ ***
] after the Notice Date, or if the senior executives fail to meet within [ *** ] after the Notice Date, either Party shall be entitled to submit the matter to binding arbitration under the commercial arbitration rules of the American Arbitration
Association. Any such arbitration shall be conducted by a panel of three arbitrators (the “Arbitration Panel”) and shall be conducted in Boston, Massachusetts. PureTech on the one hand, and the Company on the other, shall each
appoint one arbitrator, and the third arbitrator shall be appointed by the two arbitrators appointed by PureTech and the Company. The Arbitration Panel shall have the authority to grant specific performance and to allocate between the parties the
costs of arbitration in such equitable manner as it shall determine. Judgments upon the award so rendered may be entered in any court having jurisdiction or application may be made to such court for judicial acceptance of any award and an order of
enforcement, as the case may be. 
 13.    MISCELLANEOUS. 

13.1    Notice. Any notices required or permitted under this Agreement shall be in writing, shall specifically
refer to this Agreement, and shall be sent by hand, recognized national overnight courier, confirmed facsimile transmission or registered or certified mail, postage prepaid, return receipt requested, to the following addresses or facsimile numbers
of the parties: 
 If to PureTech:            Daphne Zohar 

PureTech Ventures, LLC 
 500
Boylston Street, Suite 1400 
 Boston, Massachusetts 02116 

Tel: 617.482.2333 
 Fax:
617.482.3337 
 If to the Company:      President 

Karuna Pharmaceuticals, Inc. 

500 Boylston Street, Suite 1040 

Boston, Massachusetts 02116 

Tel: 617.482.2333 
 Fax:
617.482.3337 
 All notices under this Agreement shall be deemed effective upon receipt. A party may change its contact information
immediately upon written notice to the other party in the manner provided in this Section 13.1. 

13.2    Governing Law. This Agreement and all disputes arising out of or related to this Agreement, or the
performance, enforcement, breach or termination hereof, and any remedies relating thereto, shall be construed, governed, interpreted and applied in accordance with the laws of the Commonwealth of Massachusetts, U.S.A., without regard to conflict of
laws principles, except that questions affecting the construction and effect of any patent shall be determined by the law of the country in which the patent shall have been granted. 

13.3    Force Majeure. Neither party will be responsible for delays resulting from causes beyond the reasonable
control of such party, including without limitation fire, explosion, flood, 

  
 14 

 
war, strike, or riot, provided that the nonperforming party uses commercially reasonable efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement
with reasonable dispatch whenever such causes are removed. 
 13.4    Amendment and Waiver. This Agreement may be
amended, supplemented, or otherwise modified only by means of a written instrument signed by both Parties. Any waiver of any rights or failure to act in a specific instance shall relate only to such instance and shall not be construed as an
agreement to waive any rights or fail to act in any other instance, whether or not similar. 

13.5    Severability. In the event that any provision of this Agreement shall be held invalid or unenforceable for
any reason, such invalidity or unenforceability shall not affect any other provision of this Agreement, and the parties shall negotiate in good faith to modify the Agreement to preserve (to the extent possible) their original intent. If the Parties
fail to reach a modified agreement within thirty (30) days after the relevant provision is held invalid or unenforceable, then the dispute shall be resolved in accordance with the procedures set forth in Article 13. While the dispute is pending
resolution, this Agreement shall be construed as if such provision were deleted by agreement of the parties. 

13.6    Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their
respective permitted successors and assigns. 
 13.7    Headings. All headings are for convenience only and shall
not affect the meaning of any provision of this Agreement. 
 13.8    Entire Agreement. This Agreement
constitutes the entire agreement between the parties with respect to its subject matter and supersedes all prior agreements or understandings between the parties relating to its subject matter. 

  
 15 

 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives. 
 The Effective Date of this Agreement is March 4, 2011. 

 

									
	PURETECH VENTURES LLC	 		 	KARUNA PHARMACEUTICALS, INC.
					
	By:	 	 /s/ Daphne Zdhar
	 		 	By:	 	 /s/ Edmund Harrigan 

	Name:	 	Daphne Zdhar	 		 	Name:	 	Edmund Harrigan MD
	Title:	 	Managing Partner	 		 	Title:	 	Chief Executive Officer

  
 16 

 CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED (INDICATED BY: [ *** ]) FROM THE EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. 
  

 AMENDMENT NO. 1 TO EXCLUSIVE PATENT LICENSE AGREEMENT 

This Amendment No. 1 (“Amendment No. 1”) to the Exclusive Patent License Agreement dated as of
March 1, 2011 (the “Agreement”) by and among PureTech Ventures, LLC, (the “Company”), and Karuna Pharmaceuticals, Inc. (the “licensee”) is entered into on this 1st day of February, 2013 (the
“Amendment No. 1 Effective Date”). For purposes hereof, all capitalized terms used herein but not defined herein shall have the meanings given to them in the Agreement. 

Pursuant to Section 13.4 of the Agreement, the Company and the Licensee hereby agree as follows: 

1. Section 2.4 of the Agreement is hereby deleted and replaced in its entirety as follows: 

Due Diligence Obligations. The Company shall use diligent efforts, and shall cause its Affiliates and any Sublicensees to use diligent
efforts, to develop Licensed Products and to introduce Licensed Products into the commercial market; thereafter, the Company and its Affiliates and any Sublicensees shall maximize the commercial sales of such Licensed Products. Specifically, the
Company and its Affiliates and any Sublicensees shall fulfill the following obligations: 
  

	 	a.	 Within [ *** ] of the Amendment No. 1 Effective Date, the Company shall initiate, defined as first dosing
of patient, a trial using a Licensed Product. 

  

	 	b.	 At any time prior to approval of a Licensed Product by the U.S. Food and Drug Administration, the Company shall
not, for any consecutive [ *** ] period, fail to initiate, defined as first dosing of patient, a human clinical study with a Licensed Product or make a regulatory submission to the U.S. Food and Drug Administration, the European Medicines Evaluation
Agency, or the Japanese Ministry of Health and Welfare seeking the marketing of a License Product for the treatment of a disease. 

  

	 	c.	 The Company shall not (i) become insolvent; (ii) make an assignment for the benefit of creditors; or
(iii) have a bona fide petition in bankruptcy filed for or against it, which petition is withdrawn or dismissed within [ *** ] of its filing. 

In the event that PureTech determines that the Company (or an Affiliate or Sublicensee) has failed to fulfill its obligations under this Section 2.4,
then PureTech may treat such failure as a material breach in accordance with Section 11.2(b). 
 2. The parties agree that the Agreement
is in full force and effect as of the Amendment No. 1 Effective Date, as amended as set forth above. 
 IN WITNESS WHEREOF, the parties
have caused this Amendment No. 1 to be executed by their duly authorized representatives as of the Amendment No. 1 Effective Date. 

 
			
	Karuna Pharmaceuticals, Inc.
		
	By:	 	 /s/ Eric Elenko

	Name:	 	Eric Elenko
	Title:	 	Director
	
	PureTech Ventures, LLC
		
	By:	 	 /s/ Stephen Muniz

	Name:	 	Stephen Muniz
	Title:	 	Partner

 CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED (INDICATED BY: [ *** ]) FROM THE EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. 
  

 AMENDMENT NO. 2 TO EXCLUSIVE PATENT LICENSE AGREEMENT 

This Amendment No. 2 (“Amendment No. 2”) to the Exclusive Patent License Agreement dated as of
March 4, 2011 (the “Agreement”) by and among PureTech Ventures, LLC (the “Company”), and Karuna Pharmaceuticals, Inc. (the “licensee”) is entered into on this 25th day of February, 2015 (the “Amendment No. 2 Effective Date”). For purposes hereof, all capitalized terms used herein but not defined herein shall have the
meanings given to them in the Agreement. 
 Pursuant to Section 13.4 of the Agreement, the Company and the Licensee hereby agree as
follows: 
 1. Section 2.4 of the Agreement, which was first amended by Amendment No. 1 to Exclusive License Agreement dated
February 1, 2013 (“Amendment No. 1”), which Amendment No. 1 deleted and replaced Section 2.4 in its entirety is hereby deleted and replaced in its entirety a second time to read as follows: 

Due Diligence Obligations. The Company shall use diligent efforts, and shall cause its Affiliates and any Sublicensees to use diligent
efforts, to develop Licensed Products and to introduce Licensed Products into the commercial market; thereafter, the Company and its Affiliates and any Sublicensees shall maximize the commercial sales of such Licensed Products. Specifically, the
Company and its Affiliates and any Sublicensees shall fulfill the following obligations: 
  

	 	a.	 Within [ *** ] of the Amendment No. 2 Effective Date, the Company shall initiate, defined as first dosing
of patient, a trial using a Licensed Product. 

  

	 	b.	 At any time prior to approval of a Licensed Product by the U.S. Food and Drug Administration, the Company shall
not, for any consecutive [ *** ] period, fail to initiate, defined as first dosing of patient, a human clinical study with a Licensed Product or make a regulatory submission to the U.S. Food and Drug Administration, the European Medicines Agency, or
the Japanese Ministry of Health, Labour and Welfare seeking the marketing of a Licensed Product for the treatment of a disease. 

  

	 	c.	 The Company shall not (i) become insolvent; (ii) make an assignment for the benefit of creditors; or
(iii) have a bona fide petition in bankruptcy filed for or against it, which petition is withdrawn or dismissed within [ *** ] of its filing. 

In the event that PureTech determines that the Company (or an Affiliate or Sublicensee) has failed to fulfill its obligations under this Section 2.4,
then PureTech may treat such failure as a material breach in accordance with Section 11.2(b).” 
 2. The parties agree that the
Agreement is in full force and effect as of the Amendment No. 2 Effective Date, as amended as set forth above. 
 IN WITNESS WHEREOF,
the parties have caused this Amendment No. 2 to be executed by their duly authorized representatives as of the Amendment No. 2 Effective Date. 

  
 19 

 
			
	Karuna Pharmaceuticals, Inc.
		
	By:	 	 /s/ Eric Elenko

	Name:	 	Eric Elenko
	Title:	 	Director
	
	PureTech Ventures, LLC
		
	By:	 	 /s/ Stephen Muniz

	Name:	 	Stephen Muniz
	Title:	 	Partner

 CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED (INDICATED BY: [ *** ]) FROM THE EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. 
  

 AMENDMENT NO. 3 TO EXCLUSIVE PATENT LICENSE AGREEMENT 

This Amendment No. 3 (“Amendment No. 3”) to the Exclusive Patent License Agreement dated as of March 4, 2011
(the “Agreement”) by and among PureTech Health LLC (f/k/a PureTech Ventures, LLC) (“PureTech”), and Karuna Pharmaceuticals, Inc. (the “Company”), as previously amended by Amendment No. 1 to
Exclusive License Agreement dated February 1, 2013 (“Amendment No. 1”) and Amendment No. 2 to Exclusive License Agreement dated February 25, 2015 (“Amendment
No. 2”), is entered into effective as of July 31, 2015 (the “Amendment No. 3 Effective Date”). For purposes hereof, all capitalized terms used herein but not defined herein shall have
the meanings given to them in the Agreement. 
 Pursuant to Section 13.4 of the Agreement, PureTech and the Company hereby agree as follows: 

1. Section 5.3 of the Agreement, as amended pursuant to Amendment 1 and Amendment 2, is hereby deleted and replaced in its entirety to read as
follows: 
 “5.3 Reversion of Patent Rights. The Company may elect not to prosecute certain of the Patent Rights (including
rights in certain countries or territories). If (i) the Company has elected not to prosecute any such Patent Rights, and (ii) any third party with a binding contractual right to prosecute such Patent Rights on behalf of the Company has
waived or otherwise affirmatively elected not to exercise such right, then the Company may notify PureTech of the same and upon such notice such Patent Rights shall automatically revert to PureTech and be excluded from the definition of “Patent
Rights” hereunder.” 
 2. PureTech and the Company agree that the Agreement, as amended by Amendment No. 1 and Amendment
No. 2, is in full force and effect as of the Amendment No. 3 Effective Date as amended as set forth herein. 
 IN WITNESS WHEREOF, the undersigned
parties have caused this Amendment No. 3 to be executed by their duly authorized representatives as of the Amendment No. 3 Effective Date. 
  

			
	KARUNA PHARMACEUTICALS, INC.
		
	By:	 	 /s/ Eric Elenko

	Name: Eric Elenko
	Title: President
	
	PURETECH HEALTH LLC
		
	By:	 	 /s/ Stephen Muniz

	Name: Stephen Muniz
	Title: EVP, Legal, Finance & OperationsExhibit 10.1

 

EXECUTION VERSION

	
 
    

 

INDENTURE AND SECURITY AGREEMENT

 

by and among

 

OWL ROCK CLO I, LTD.
  Issuer

 

OWL ROCK CLO I, LLC
  Co-Issuer

 

and

 

STATE STREET BANK AND TRUST COMPANY

 

Collateral Trustee

 

Dated as of May 28, 2019

	
 
    

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    
	
ARTICLE I   DEFINITIONS
    	
2
    
	
 
    	
 
    
	
Section 1.1
    	
Definitions
    	
2
    
	
Section 1.2
    	
Usage of Terms
    	
67
    
	
Section 1.3
    	
Assumptions as to   Assets
    	
67
    
	
 
    	
 
    	
 
    
	
ARTICLE II   THE SECURED DEBT
    	
70
    
	
 
    	
 
    
	
Section 2.1
    	
Forms Generally
    	
70
    
	
Section 2.2
    	
Forms of Secured Debt
    	
70
    
	
Section 2.3
    	
Authorized Amount;   Stated Maturity; Denominations
    	
71
    
	
Section 2.4
    	
Additional Debt or   Subordinated Securities
    	
72
    
	
Section 2.5
    	
Execution,   Authentication, Delivery and Dating
    	
74
    
	
Section 2.6
    	
Registration,   Registration of Transfer and Exchange
    	
75
    
	
Section 2.7
    	
Mutilated, Defaced,   Destroyed, Lost or Stolen Note
    	
88
    
	
Section 2.8
    	
Payment of Principal   and Interest and Other Amounts; Principal and Interest Rights Preserved
    	
89
    
	
Section 2.9
    	
Persons Deemed Owners
    	
92
    
	
Section 2.10
    	
Cancellation
    	
92
    
	
Section 2.11
    	
DTC Ceases to be   Depository
    	
92
    
	
Section 2.12
    	
Non-Permitted Holders
    	
93
    
	
Section 2.13
    	
Treatment and Tax   Certification
    	
95
    
	
 
    	
 
    	
 
    
	
ARTICLE III   CONDITIONS PRECEDENT
    	
96
    
	
 
    	
 
    
	
Section 3.1
    	
Conditions to Issuance   of Notes and Incurrence of Loans on Closing Date
    	
96
    
	
Section 3.2
    	
Conditions to Issuance   of Additional Debt
    	
100
    
	
Section 3.3
    	
Custodianship; Delivery   of Collateral Obligations and Eligible Investments
    	
101
    
	
 
    	
 
    	
 
    
	
ARTICLE IV   SATISFACTION AND DISCHARGE
    	
102
    
	
 
    	
 
    
	
Section 4.1
    	
Satisfaction and   Discharge of Indenture
    	
102
    
	
Section 4.2
    	
Application of Trust   Money
    	
104
    
	
Section 4.3
    	
Repayment of Monies   Held by Paying Agent
    	
105
    
	
Section 4.4
    	
Limitation on   Obligation to Incur Administrative Expenses
    	
105
    
	
 
    	
 
    	
 
    
	
ARTICLE V   REMEDIES
    	
105
    
	
 
    	
 
    
	
Section 5.1
    	
Events of Default
    	
105
    

 

i

 

	
Section 5.2
    	
Acceleration of   Maturity; Rescission and Annulment
    	
107
    
	
Section 5.3
    	
Collection of   Indebtedness and Suits for Enforcement by Trustee
    	
109
    
	
Section 5.4
    	
Remedies
    	
110
    
	
Section 5.5
    	
Optional Preservation   of Assets
    	
113
    
	
Section 5.6
    	
Collateral Trustee   May Enforce Claims Without Possession of Notes
    	
114
    
	
Section 5.7
    	
Application of Money   Collected
    	
114
    
	
Section 5.8
    	
Limitation on Suits
    	
115
    
	
Section 5.9
    	
Unconditional Rights of   Holders to Receive Principal, Interest and other Distributions
    	
115
    
	
Section 5.10
    	
Restoration of Rights   and Remedies
    	
116
    
	
Section 5.11
    	
Rights and Remedies   Cumulative
    	
116
    
	
Section 5.12
    	
Delay or Omission Not   Waiver
    	
116
    
	
Section 5.13
    	
Control by Majority of   Controlling Class
    	
116
    
	
Section 5.14
    	
Waiver of Past Defaults
    	
117
    
	
Section 5.15
    	
Undertaking for Costs
    	
117
    
	
Section 5.16
    	
Waiver of Stay or   Extension Laws
    	
118
    
	
Section 5.17
    	
Sale of Assets
    	
118
    
	
Section 5.18
    	
Action on the Notes
    	
119
    
	
 
    	
 
    	
 
    
	
ARTICLE VI   THE TRUSTEE
    	
119
    
	
 
    	
 
    
	
Section 6.1
    	
Certain Duties and   Responsibilities
    	
119
    
	
Section 6.2
    	
Notice of Event of   Default
    	
121
    
	
Section 6.3
    	
Certain Rights of   Trustee
    	
121
    
	
Section 6.4
    	
Not Responsible for   Recitals or Issuance of Notes
    	
124
    
	
Section 6.5
    	
May Hold Secured   Debt or Subordinated Securities
    	
124
    
	
Section 6.6
    	
Money Held in Trust
    	
125
    
	
Section 6.7
    	
Compensation and   Reimbursement
    	
125
    
	
Section 6.8
    	
Corporate Trustee   Required; Eligibility
    	
126
    
	
Section 6.9
    	
Resignation and   Removal; Appointment of Successor
    	
126
    
	
Section 6.10
    	
Acceptance of   Appointment by Successor
    	
128
    
	
Section 6.11
    	
Merger, Conversion,   Consolidation or Succession to Business of Trustee
    	
128
    
	
Section 6.12
    	
Co-Trustees
    	
129
    
	
Section 6.13
    	
Certain Duties of Trustee   Related to Delayed Payment of Proceeds and the Assets
    	
130
    
	
Section 6.14
    	
Authenticating Agents
    	
130
    
	
Section 6.15
    	
Withholding
    	
131
    
	
Section 6.16
    	
Fiduciary for Holders   Only; Agent for each other Secured Party
    	
132
    
	
Section 6.17
    	
Representations and Warranties   of the Bank
    	
132
    
	
 
    	
 
    	
 
    
	
ARTICLE VII   COVENANTS
    	
133
    
	
 
    	
 
    
	
Section 7.1
    	
Payment of Principal   and Interest
    	
133
    
	
Section 7.2
    	
Maintenance of Office   or Agency
    	
133
    

 

ii

 

	
Section 7.3
    	
Money for Note Payments   to be Held in Trust
    	
134
    
	
Section 7.4
    	
Existence of the   Issuers
    	
136
    
	
Section 7.5
    	
Protection of Assets
    	
137
    
	
Section 7.6
    	
Opinions as to Assets
    	
138
    
	
Section 7.7
    	
Performance of   Obligations
    	
138
    
	
Section 7.8
    	
Negative Covenants
    	
139
    
	
Section 7.9
    	
Statement as to   Compliance
    	
142
    
	
Section 7.10
    	
The Issuer   May Consolidate, etc.
    	
142
    
	
Section 7.11
    	
Successor Substituted
    	
145
    
	
Section 7.12
    	
No Other Business
    	
146
    
	
Section 7.13
    	
[Reserved]
    	
146
    
	
Section 7.14
    	
Annual Rating Review
    	
146
    
	
Section 7.15
    	
Reporting
    	
147
    
	
Section 7.16
    	
Calculation Agent
    	
147
    
	
Section 7.17
    	
Certain Tax Matters
    	
148
    
	
Section 7.18
    	
Effective Date;   Purchase of Additional Collateral Obligations
    	
153
    
	
Section 7.19
    	
Representations   Relating to Security Interests in the Assets
    	
156
    
	
Section 7.20
    	
Limitation on Long   Dated Obligations
    	
158
    
	
Section 7.21
    	
Proceedings
    	
159
    
	
Section 7.22
    	
Involuntary Bankruptcy   Proceedings
    	
159
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII   SUPPLEMENTAL INDENTURES
    	
159
    
	
 
    	
 
    
	
Section 8.1
    	
Supplemental Indentures   Without Consent of Holders
    	
159
    
	
Section 8.2
    	
Supplemental Indentures   With Consent of Holders
    	
163
    
	
Section 8.3
    	
Execution of   Supplemental Indentures
    	
165
    
	
Section 8.4
    	
Effect of Supplemental   Indentures
    	
167
    
	
Section 8.5
    	
Reference in Notes to   Supplemental Indentures
    	
167
    
	
Section 8.6
    	
Hedge Agreements
    	
167
    
	
 
    	
 
    	
 
    
	
ARTICLE IX   REDEMPTION OF NOTES
    	
168
    
	
 
    	
 
    
	
Section 9.1
    	
Mandatory Redemption
    	
168
    
	
Section 9.2
    	
Optional Redemption
    	
168
    
	
Section 9.3
    	
Tax Redemption
    	
171
    
	
Section 9.4
    	
Redemption Procedures
    	
172
    
	
Section 9.5
    	
Secured Debt or   Subordinated Securities Payable on Redemption Date
    	
174
    
	
Section 9.6
    	
Special Redemption
    	
174
    
	
Section 9.7
    	
Optional Re-Pricing
    	
175
    
	
Section 9.8
    	
Clean-Up Call   Redemption
    	
178
    
	
 
    	
 
    	
 
    
	
ARTICLE X   ACCOUNTS, ACCOUNTINGS AND RELEASES
    	
179
    
	
 
    	
 
    
	
Section 10.1
    	
Collection of Money
    	
179
    
	
Section 10.2
    	
Collection Account
    	
180
    

 

iii

 

	
Section 10.3
    	
Transaction Accounts
    	
182
    
	
Section 10.4
    	
The Revolver Funding   Account
    	
184
    
	
Section 10.5
    	
Contributions
    	
185
    
	
Section 10.6
    	
Reinvestment of Funds   in Accounts; Reports by Trustee
    	
185
    
	
Section 10.7
    	
Accountings
    	
187
    
	
Section 10.8
    	
Release of Assets
    	
194
    
	
Section 10.9
    	
Reports by Independent   Accountants
    	
195
    
	
Section 10.10
    	
Reports to Rating   Agency and Additional Recipients
    	
196
    
	
Section 10.11
    	
Procedures Relating to   the Establishment of Accounts Controlled by the Collateral Trustee
    	
197
    
	
Section 10.12
    	
Section 3(c)(7) Procedures
    	
197
    
	
 
    	
 
    	
 
    
	
ARTICLE XI   APPLICATION OF MONIES
    	
200
    
	
 
    	
 
    
	
Section 11.1
    	
Disbursements of Monies   from Payment Account
    	
200
    
	
 
    	
 
    	
 
    
	
ARTICLE XII   SALE OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS
    	
205
    
	
 
    	
 
    
	
Section 12.1
    	
Sales of Collateral   Obligations
    	
205
    
	
Section 12.2
    	
Purchase of Additional   Collateral Obligations
    	
207
    
	
Section 12.3
    	
Optional Purchase or   Substitution of Collateral Obligations
    	
209
    
	
Section 12.4
    	
Conditions Applicable   to All Sale and Purchase Transactions
    	
212
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII   HOLDERS’ RELATIONS
    	
212
    
	
 
    	
 
    
	
Section 13.1
    	
Subordination
    	
212
    
	
Section 13.2
    	
Standard of Conduct
    	
213
    
	
 
    	
 
    	
 
    
	
ARTICLE XIV   MISCELLANEOUS
    	
213
    
	
 
    	
 
    
	
Section 14.1
    	
Form of Documents   Delivered to Trustee
    	
213
    
	
Section 14.2
    	
Acts of Holders
    	
214
    
	
Section 14.3
    	
Notices, etc
    	
215
    
	
Section 14.4
    	
Notices to Holders;   Waiver
    	
217
    
	
Section 14.5
    	
Effect of Headings and   Table of Contents
    	
218
    
	
Section 14.6
    	
Successors and Assigns
    	
219
    
	
Section 14.7
    	
Severability
    	
219
    
	
Section 14.8
    	
Benefits of Indenture
    	
219
    
	
Section 14.9
    	
Liability of Issuers
    	
219
    
	
Section 14.10
    	
Governing Law
    	
219
    
	
Section 14.11
    	
Submission to   Jurisdiction
    	
219
    
	
Section 14.12
    	
WAIVER OF JURY TRIAL
    	
220
    
	
Section 14.13
    	
Counterparts
    	
220
    
	
Section 14.14
    	
Acts of Issuer
    	
220
    
	
Section 14.15
    	
Confidential   Information
    	
220
    

 

iv

 

	
Section 14.16
    	
17g-5 Information
    	
222
    
	
 
    	
 
    	
 
    
	
ARTICLE XV   ASSIGNMENT OF CERTAIN AGREEMENTS
    	
224
    
	
 
    	
 
    
	
Section 15.1
    	
Assignment of   Collateral Management Agreement
    	
224
    

 

Schedules and Exhibits

 

	
Schedule 1
    	
List of Collateral   Obligations
    
	
Schedule 2
    	
[Reserved]
    
	
Schedule 3
    	
S&P Industry   Classifications
    
	
Schedule 4
    	
Moody’s Rating   Definitions
    
	
Schedule 5
    	
S&P Recovery Rate Tables
    
	
Schedule 6
    	
Diversity Score   Classification
    
	
 
    	
 
    
	
Exhibit A
    	
Forms of Notes
    
	
A-1
    	
Form of   Global Secured Note
    
	
A-2
    	
Form of   Certificated Secured Note
    
	
 
    	
 
    
	
Exhibit B
    	
Forms   of Transfer and Exchange Certificates
    
	
B-1
    	
Form of   Transferor Certificate for Transfer of Rule 144A Global Note or   Certificated Note to Regulation S Global Note
    
	
B-2
    	
Form of   Purchaser Representation Letter for Certificated Notes
    
	
B-3
    	
Form of   Transferee Representation Letter for Subordinated Securities
    
	
B-4
    	
Form of   Transferor Certificate for Transfer of Regulation S Global Note or   Certificated Note to Rule 144A Global Note
    
	
B-6
    	
Form of   Transferee Certificate of Rule 144A Global Note
    
	
B-7
    	
Form of   Transferee Certificate of Regulation S Global Note
    
	
 
    	
 
    
	
Exhibit C
    	
[Reserved]
    
	
Exhibit D
    	
Form of Note Owner   Certificate
    
	
Exhibit E
    	
Form of Weighted   Average S&P Recovery Rate Notice
    
	
Exhibit F
    	
Form of Notice of   Substitution
    

 

v

 

INDENTURE AND SECURITY AGREEMENT, dated as of May 28, 2019, by and among OWL ROCK CLO I, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (together with its permitted successors and assigns, the “Issuer”), OWL ROCK CLO I, LLC, a limited liability company organized under the laws of the State of Delaware (together with its permitted successors and assigns, the “Co-Issuer” and together with the Issuer, the “Issuers”) and STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as collateral trustee (herein, together with its permitted successors and assigns in the trusts hereunder, the “Collateral Trustee”).

 

PRELIMINARY STATEMENT

 

The Issuers are duly authorized to execute and deliver this Indenture to provide for the Notes issuable as provided herein. The Issuers are entering into this Indenture, and the Collateral Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged.

 

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

 

GRANTING CLAUSES

 

The Issuer hereby Grants to the Collateral Trustee, for the benefit and security of the Holders of the Secured Debt, the Collateral Trustee, the Loan Agent, the Collateral Manager, the Collateral Administrator and the Retention Holder (collectively, the “Secured Parties”), all of its right, title and interest in, to and under, in each case, whether now owned or existing on the Closing Date, or thereafter acquired or arising, (a) the Collateral Obligations (listed, as of the Closing Date, in Schedule 1 to this Indenture) and all payments thereon or with respect thereto, any Closing Date Participation Interests and all payments thereon or with respect thereto, and all Collateral Obligations acquired by the Issuer in the future and all payments thereon or with respect thereto, (b) each of the Accounts, and any Eligible Investments purchased with funds on deposit in any of the Accounts, and all income from the investment of funds therein, (c) the Collateral Management Agreement as set forth in Article XV hereof, the EU Retention Undertaking Letter, the Securities Account Control Agreement, the Collateral Administration Agreement, the Credit Agreement, and the Loan Sale Agreement, (d) all Cash or Money owned by the Issuer, (e) any Equity Securities received by the Issuer, (f) all accounts, chattel paper, deposit accounts, financial assets, general intangibles, instruments, investment property, letter-of-credit rights and other supporting obligations relating to the foregoing (in each case as defined in the UCC), (g) any other property of the Issuer (whether or not constituting Collateral Obligations or Eligible Investments); and (h) all proceeds with respect to the foregoing (the assets referred to in (a) through (i) are collectively referred to as the “Assets”); provided that such grants shall not include (a) the U.S.$250 transaction fee paid to the Issuer in consideration of the issuance and incurrence of the Secured Debt and Subordinated Securities, (b) the proceeds of the issuance and allotment of the Issuer’s ordinary shares, (c) the membership interests of the Co-Issuer, (d) any account in the Cayman Islands or elsewhere maintained in respect of the funds referred to in items (a) and (b), together with any interest thereon and (e) the Preferred Shares 

 

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Payment Account and any funds deposited in or credit to such account (the “Excluded Property”).

 

The above Grant is made in trust to secure the Secured Debt and certain other amounts payable by the Issuer as described herein. Except as set forth in the Priority of Payments and Article XIII of this Indenture, the Secured Debt is secured by the Grant equally and ratably without prejudice, priority or distinction between any Secured Debt and any other Secured Debt by reason of difference in time of issuance or otherwise. The Grant is made to secure, in accordance with the priorities set forth in the Priority of Payments and Article XIII of this Indenture, (i) the payment of all amounts due on the Secured Debt in accordance with their terms, (ii) the payment of all other sums (other than in respect of the Subordinated Securities) payable under this Indenture, (iii) the payment of amounts owing by the Issuer under the Credit Agreement, the Collateral Management Agreement, the Collateral Administration Agreement and the Loan Sale Agreement and (iv) compliance with the provisions of this Indenture, all as provided herein. The foregoing Grant shall, for the purpose of determining the property subject to the lien of this Indenture, be deemed to include any debt and any investments granted to the Collateral Trustee by or on behalf of the Issuer, whether or not such debt or investments satisfy the criteria set forth in the definitions of “Collateral Obligation” or “Eligible Investments”, as the case may be.

 

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

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1            Definitions. Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms. The word “including” shall mean “including without limitation”. All references herein to designated “Articles”, “Sections”, “sub-Sections” and other subdivisions are to the designated articles, sections, sub-sections and other subdivisions of this Indenture. The words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular article, section, sub-Section or other subdivision. References to (i) the “redemption” of Secured Debt shall be understood to refer, in the case of the Class A Loans, to the repayment of the Class A Loans by the Co-Issuers and (ii) the “issuance” of Secured Debt or to the “execution,” “authentication” and/or “delivery” of Secured Debt shall be understood to refer, in the case of Class A Loans, to the incurrence of Class A Loans by the Co-Issuers, in each case pursuant to the Credit Agreement.

 

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

 

“17g-5 Website”:  A password-protected website which shall initially be located at https://17g5.com/datarooms/owlrockcloiltd. Any change of the 17g-5 Website shall only occur 

 

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after notice has been delivered by the Issuer to the Information Agent, the Collateral Trustee, the Collateral Administrator, the Collateral Manager, the Placement Agent, the Co-Placement Agent, and the Rating Agency setting the date of change and new location of the 17g-5 Website.

 

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

 

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

 

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

 

“Accountants’ Report”:  A certificate of the firm or firms appointed by the Issuer pursuant to Section 10.9(a).

 

“Accounts”:  (i) The Payment Account, (ii) the Collection Account, (iii) the Ramp-Up Account, (iv) the Revolver Funding Account, (v) the Expense Reserve Account, (vi) the Interest Reserve Account and (vii) the Custodial Account, each of which shall be comprised of a Securities Account, a related Deposit Account, and such subaccounts as the Collateral Trustee or Custodian, as the case may be, shall determine.

 

“Accredited Investor”:  The meaning set forth in Rule 501(a) under the Securities Act.

 

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

 

“Additional Debt”:  Any Secured Debt issued pursuant to Section 2.4.

 

“Additional Debt Closing Date”:  The closing date for the issuance of any Additional Debt pursuant to Section 2.4.

 

“Adjusted Class Break-even Default Rate”:  The rate equal to (a)(i) the Class Break-even Default Rate multiplied by (ii)(x) the Target Initial Par Amount divided by (y) the Collateral Principal Amount plus the S&P Collateral Value of all Defaulted Obligations plus (b)(i)(x) the Collateral Principal Amount plus the S&P Collateral Value of all Defaulted Obligations minus (y) the Target Initial Par Amount, divided by (ii)(x) the Collateral Principal Amount plus the S&P Collateral Value of all Defaulted Obligations multiplied by (y) 1 minus the Weighted Average S&P Recovery Rate.

 

“Adjusted Collateral Principal Amount”:  As of any date of determination, (a) the Aggregate Principal Balance of the Collateral Obligations (other than Defaulted Obligations, Discount Obligations, Long Dated Obligations and any Closing Date Participation Interests), plus (b) without duplication, the amounts on deposit in the Accounts (including Eligible Investments therein) representing Principal Proceeds, plus (c) the aggregate of the Defaulted Obligation Balances for each Defaulted Obligation and each Long Dated Obligation, plus (d) the aggregate of the purchase prices for each Discount Obligation, excluding accrued interest, expressed as a percentage of par and multiplied by the Principal Balance thereof, for such Discount Obligation, plus (e) with respect to any Closing Date Participation Interest, on or prior 

 

3

 

to the first Payment Date, its Principal Balance, and anytime thereafter, its S&P Recovery Amount, minus (f) the Excess CCC Adjustment Amount; provided that, with respect to any Collateral Obligation that satisfies more than one of the definitions of Defaulted Obligation, Long Dated and Discount Obligation, or any asset that falls into the Excess CCC Adjustment Amount, such Collateral Obligation shall, for the purposes of this definition, be treated, in each case without duplication, as belonging to the category of Collateral Obligations which results in the lowest Adjusted Collateral Principal Amount on any date of determination.

 

“Administration Agreement”:  The Administration Agreement, dated the Closing Date, between the Issuer and the Administrator, providing for the administrative functions of the Issuer, as modified, amended, and supplemented and in effect from time to time.

 

“Administrative Expense Cap”:  An amount equal on any Payment Date (when taken together with any Administrative Expenses paid during the period since the preceding Payment Date or in the case of the first Payment Date, the period since the Closing Date), to the sum of (a) 0.025% per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year and the actual number of days elapsed) of the Fee Basis Amount on the related Determination Date and (b) U.S.$250,000 per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year consisting of twelve (12) 30-day months); provided that (1) in respect of any Payment Date after the third Payment Date following the Closing Date, if the aggregate amount of Administrative Expenses paid pursuant to Section 11.1(a)(i)(A), Section 11.1(a)(ii)(A) and Section 11.1(a)(iii)(A) (including any excess applied in accordance with this proviso) on the three immediately preceding Payment Dates and during the related Collection Periods is less than the stated Administrative Expense Cap (without regard to any excess applied in accordance with this proviso) in the aggregate for such three preceding Payment Dates, then the excess may be applied to the Administrative Expense Cap with respect to the then-current Payment Date; and (2) in respect of the third Payment Date following the Closing Date, such excess amount shall be calculated based on the Payment Dates preceding such Payment Date.

 

“Administrative Expenses”:  The fees, expenses (including indemnities) and other amounts due or accrued with respect to any Payment Date (including, with respect to any Payment Date, any such amounts that were due and not paid on any prior Payment Date in accordance with the Priority of Payments) and payable in the following order by the Issuer:  first, to the Collateral Trustee and the Loan Agent pursuant to Section 6.7 and the other provisions of this Indenture and the Credit Agreement, second, to the Fiscal Agent and the Collateral Administrator pursuant to the Fiscal Agency Agreement and the Collateral Administration Agreement, respectively, and the Bank in any of its other capacities, third, to the Administrator, the fees and expenses payable under the Administration Agreement and the Registered Office Agreement (including all filing, registration and annual return fees payable to the Cayman Islands government and registered office fees) and to the AML Services Provider under the AML Services Agreement, fourth, on a pro rata basis, the following amounts to the following parties:  (i) Independent accountants, agents (other than the Collateral Manager), the remaining officers and managers of the Issuers (if any) and counsel of the Issuers for fees and expenses; (ii) the Rating Agency for fees and expenses (including any annual fee, amendment fees and surveillance fees) in connection with any rating of the Secured Debt or in connection with the rating of (or provision of credit estimates in respect of) any Collateral Obligations; (iii) the Collateral Manager for fees and expenses under the Collateral Management Agreement but 

 

4

 

excluding the Collateral Management Fee; (iv) any other Person in respect of any other fees or expenses permitted under this Indenture and the documents delivered pursuant to or in connection with this Indenture (including without limitation the payment of all legal and other fees and expenses incurred in connection with the purchase or sale of any Collateral Obligations and any other expenses incurred in connection with the Collateral Obligations), the Credit Agreement and the Secured Debt and Subordinated Securities, including but not limited to, any amounts due in respect of the listing of the Notes on any stock exchange or trading system; and (v) Independent accountants, the Administrator under the Administration Agreement, registered office fees, Tax Account Reporting Rules Compliance Costs, agents (other than the Collateral Manager) and counsel of the Issuers for indemnities payable to such Person and fifth, on a pro rata basis and without duplication, indemnities payable to any Person pursuant to any Transaction Document; provided that (x) amounts due in respect of actions taken on or before the Closing Date shall not be payable as Administrative Expenses but shall be payable only from the Expense Reserve Account pursuant to Section 10.3(d) and (y) for the avoidance of doubt, amounts that are expressly payable to any Person under the Priority of Payments in respect of an amount that is stated to be payable as an amount other than as Administrative Expenses (including, without limitation, interest and principal in respect of the Secured Debt and distributions in respect of the Subordinated Securities) shall not constitute Administrative Expenses.

 

“Administrator”:  MaplesFS Limited (or any successor or assign thereto), in its capacity as an administrator under the Administration Agreement.

 

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

 

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

 

“Affiliate”:  With respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is a director, Officer, employee or general partner (a) of such Person, (b) of any subsidiary or parent company of such Person or (c) of any Person described in clause (i) above. For the purposes of this definition, “control” of a Person shall mean the power, direct or indirect, (x) to vote more than 50% of the securities having ordinary voting power for the election of directors of such Persons or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.  With respect to the Issuers, this definition shall exclude the Administrator or any other entity to which the Administrator is or will be providing administrative services or acting as share trustee.

 

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

 

“Aggregate Funded Spread”:  As of any Measurement Date, the sum of:  (a) in the case of each Floating Rate Obligation (other than a Defaulted Obligation) that bears interest at a spread over a London interbank offered rate based index (including, for any Permitted Deferrable Obligation, only the excess of the required current cash pay interest required by the Underlying Documents thereon over the applicable index and excluding the unfunded portion of any 

 

5

 

Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation), (i) the stated interest rate spread paid in Cash on such Collateral Obligation above such index multiplied by (ii) the Principal Balance of such Collateral Obligation; provided that, (i) with respect to any LIBOR Floor Obligation, the stated interest rate spread paid in Cash on such Collateral Obligation over the applicable index shall be deemed to be equal to the sum of (x) the stated interest rate spread paid in Cash over the applicable index and (y) the excess, if any, of the specified “floor” rate relating to such Collateral Obligation over the applicable index and (ii) the interest rate of each Step-Up Obligation will be deemed to be its current rate of interest and the interest rate of each Step-Down Obligation will be deemed to be the lowest rate of interest that such Collateral Obligation will by its terms pay in the future solely as a function of the passage of time; and (b) in the case of each Floating Rate Obligation (including, for any Permitted Deferrable Obligation, only the required current cash pay interest required by the Underlying Documents thereon and excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation) that bears interest at a spread over an index other than a London interbank offered rate based index, (i) the excess of the sum of such spread and such index paid in Cash over LIBOR as of the immediately preceding Interest Determination Date (which spread or excess may be expressed as a negative percentage) multiplied by (ii) the Principal Balance of each such Collateral Obligation.  Notwithstanding the foregoing, if a Base Rate Amendment has been adopted and the Alternative Base Rate is the same benchmark rate currently in effect for determining interest on a Floating Rate Obligation, references to “London interbank offered rate based index” in this definition of Aggregate Funded Spread with respect to such Floating Rate Obligation shall be deemed to be a reference to such benchmark rate that is the same as the Alternative Base Rate.

 

“Aggregate Outstanding Amount”:  With respect to (i) any of the Secured Debt as of any date, the aggregate unpaid principal amount of such Secured Debt Outstanding on such date and (ii) the Subordinated Securities as of any date, the notional amount represented by such Outstanding Subordinated Securities, assuming a notional amount of $1,000 per share.

 

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

 

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

 

“Alternative Base Rate”:  The meaning specified in Section 8.1(a)(xxiv).

 

“AML Compliance”: Compliance with the Cayman AML Regulations.

 

“AML Services Agreement”:  The AML Services Agreement dated as of the Closing Date (as amended from time to time) between the Issuer and the AML Services Provider (as defined below) for the provision of services to the Issuer to enable the Issuer to achieve AML Compliance.

 

6

 

“AML Services Provider”: Maples Compliance Services (Cayman) Limited, a company incorporated in the Cayman Islands with its principal office at PO Box 1093, Boundary Hall, Cricket Square, Grand Cayman, KY1-1102, Cayman Islands.

 

“Applicable Issuer”:  With respect to (a) the Co-Issued Debt, the Issuers and (b) the ERISA Restricted Securities, the Issuer.

 

“Appraised Value”:  With respect to any Collateral Obligation beneficially owned by the Issuer, the value of such Collateral Obligation, as determined by the applicable Approved Appraisal Firm, as set forth in the related appraisal (or, if a range of values is set forth therein, the midpoint of such values).

 

“Approved Appraisal Firm”: (a) Any of the following firms: Houlihan Lokey, Inc., Duff & Phelps LLC, Lincoln Advisors, Murray, Devine and Company and Valuation Research Corporation and (b) each Independent financial adviser of recognized standing retained by the Issuer, the Collateral Manager or the agent or lenders under any Collateral Obligation, as approved by the Collateral Manager and, with respect to this clause (b), consent to such approval has been obtained from a Majority of the Controlling Class.

 

“ARRC”: The Alternative Reference Rates Committee of the Federal Reserve Bank of New York.

 

“Assets”:  The meaning specified in the Granting Clauses.

 

“Assumed Reinvestment Rate”:  LIBOR (as determined on the most recent Interest Determination Date relating to an Interest Accrual Period beginning on a Payment Date or the Closing Date) minus 0.25% per annum; provided that the Assumed Reinvestment Rate shall not be less than 0.00%.

 

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

 

“Authorized Officer”:  With respect to the Issuer or the Co-Issuer, any Officer or any other Person who is authorized to act for the Issuer or the Co-Issuer, as applicable, in matters relating to, and binding upon, the Issuer or the Co-Issuer, or, in the case of the Issuer, an Officer, employee or agent of the Collateral Manager who is authorized to act for the Collateral Manager in matters for which the Collateral Manager has authority to act on behalf of the Issuer and, for the avoidance of doubt, any appointed attorney-in-fact of the Issuer.  With respect to the Collateral Manager, any Officer, employee or agent of the Collateral Manager who is authorized to act for the Collateral Manager in matters relating to, and binding upon, the Collateral Manager with respect to the subject matter of the request, certificate or order in question.  With respect to the Retention Holder, any Officer, employee or agent of the Retention Holder who is authorized to act for the Retention Holder in matters relating to, and binding upon, the Retention Holder with respect to the subject matter of the request, certificate or order in question.  With respect to the Collateral Trustee or any other bank or trust company acting as trustee of an express trust or as custodian, a Trust Officer.  With respect to the Loan Agent, a Trust Officer.  Each party may receive and accept a certification of the authority of any other party as conclusive evidence of the 

 

7

 

authority of any Person to act, and such certification may be considered to be in full force and effect until receipt by such other party of written notice to the contrary.

 

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

 

“Bank”:  State Street Bank and Trust Company, in its individual capacity and not as Collateral Trustee, or any successor thereto.

 

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

 

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

 

“Bankruptcy Subordination Agreement”:  The meaning specified in Section 5.4(f).

 

“Base Management Fee”:  The fee payable to the Collateral Manager in arrears on each Payment Date pursuant to Section 8(a) of the Collateral Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.15% per annum, calculated on the basis of the actual number of days in the applicable Interest Accrual Period divided by 360, of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date.

 

“Base Rate Amendment”:  The meaning specified in Section 8.1(a)(xxiv).

 

“Base Rate Modifier”: A modifier applied to a reference or base rate in order to cause such rate to be comparable to three month LIBOR, that (i) with respect to a Designated Base Rate recognized or acknowledged by the LSTA, is equal to the corresponding modifier recognized or acknowledged by LSTA, (ii) with respect to a Designated Base Rate recognized or acknowledged by the ARRC, is equal to the corresponding modifier recognized or acknowledged by the ARRC, (iii) with respect to a Market Replacement Rate, corresponds to such Market Replacement Rate, as determined by the Collateral Manager in its reasonable discretion, or (iv) with respect to any other Alternative Base Rate, such modifier selected by the Collateral Manager and consented to by a Majority of the Controlling Class (but without the consent of any other Holders of the Secured Debt or Subordinated Securities), and, in each of the foregoing cases, which modifier may include an addition or subtraction to the unadjusted reference or base rate; provided that if no such modifier is capable of being determined (as determined by the Collateral Manager, in its sole discretion), the Base Rate Modifier shall be deemed to be zero.

 

“Beneficial Ownership Certificate”:  The meaning specified in Section 14.2(e).

 

8

 

“Benefit Plan Investor”:  (i) Any employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (ii) any “plan” subject to Section 4975 of the Code, or (iii) any entity whose underlying assets are deemed to include “plan assets” (as defined by the Plan Asset Regulation) by reason of such an employee benefit plan’s or a plan’s investment in such entity.

 

“Bond”:  A debt security (that is not a Loan) that is (a) issued by a corporation, limited liability company, partnership or trust and (b) secured by an interest on specified collateral.

 

“Book Value”:  “Book value” within the meaning of Treasury Regulations Section 1.704-1(b)(2)(iv), adjusted (to the extent permitted under Treasury Regulations Section 1.704-1(b)(2)(iv)(f)) as necessary to reflect the relative economic interests of the beneficial owners of the Subordinated Securities (as determined for U.S. federal income tax purposes).

 

“Bridge Loan”:  Any loan or other obligation that (x) is incurred in connection with a merger, acquisition, consolidation, or sale of all or substantially all of the assets of a Person or similar transaction and (y) by its terms, is required to be repaid within one year of the incurrence thereof with proceeds from additional borrowings or other refinancings (it being understood that any such loan or debt security that has a nominal maturity date of one year or less from the incurrence thereof but has a term-out or other provision whereby (automatically or at the sole option of the Obligor thereof) the maturity of the indebtedness thereunder may be extended to a later date is not a Bridge Loan).

 

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

 

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

 

“Cash”:  Such funds denominated in currency of the United States as at the time shall be legal tender for payment of all public and private debts, including funds standing to the credit of an Account.

 

“Cause”:  The meaning set forth in the Collateral Management Agreement.

 

“Cayman AML Regulations”: The Anti-Money Laundering Regulations (2018 Revision) and The Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands, each as amended from time to time.

 

“Cayman FATCA Legislation”:  The Cayman Islands Tax Information Authority Law (2018 Revision) together with regulations and guidance notes made pursuant to such law.

 

“CCC Excess”:  The amount equal to the excess, if any, of the Aggregate Principal Balance of all S&P CCC Collateral Obligations over an amount equal to 17.5% of the Collateral Principal Amount as of such date of determination; provided that in determining which of the S&P CCC Collateral 

 

9

 

Obligations shall be included in the CCC Excess, the S&P CCC Collateral Obligations with the lowest Market Value (expressed as a percentage of the Principal Balance of such Collateral Obligations as of such date of determination) shall be deemed to constitute such CCC Excess.

 

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

 

“Certificated Note”:  Any Certificated Secured Note.

 

“Certificated Secured Note”:  The meaning specified in Section 2.2(b)(iii).

 

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

 

“Class”:  In the case of (i) the Secured Debt, all of the Secured Debt having the same Interest Rate, Stated Maturity and class designation and (ii) the Subordinated Securities, all of the Subordinated Securities.  With respect to any exercise of voting rights, any Pari Passu Classes of Secured Debt that are entitled to vote on a matter will vote together as a single Class, except as expressly provided otherwise herein or in the Credit Agreement.  The Class A Notes, the Class A-F Notes and the Class A Loans will be treated as a single Class, except as expressly provided otherwise herein or in the Credit Agreement.

 

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

 

“Class A/B Interest Coverage Test”:  The Interest Coverage Test as applied with respect to the Class A Debt and the Class B Notes.

 

“Class A/B Overcollateralization Ratio Test”:  The Overcollateralization Ratio Test as applied with respect to the Class A Debt and the Class B Notes.

 

“Class A Debt”: Collectively, the Class A Notes, the Class A-F Notes and the Class A Loans.

 

“Class A Lender”: Each lender party to the Credit Agreement from time to time.

 

“Class A Loans”: The Class A Senior Secured Floating Rate Loans incurred by the Co-Issuers under the Credit Agreement.

 

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

 

“Class A-F Notes”:  The Class A-F Senior Secured Fixed Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

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

 

“Class Break-even Default Rate”:  With respect to the Highest Ranking Class:

 

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(a)           prior to the S&P CDO Monitor Election Date, the rate equal to (a) 0.185819 plus (b) the product of (x) 3.183051 and (y) the Weighted Average Floating Spread plus (c) the product of (x) 1.188971 and (y) the Weighted Average S&P Recovery Rate; or

 

(b)           on and after the S&P CDO Monitor Election Date, the maximum percentage of defaults, at any time, that the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, as determined through application of the applicable S&P CDO Monitor chosen by the Collateral Manager in accordance with this Indenture that is applicable to the portfolio of Collateral Obligations, which, after giving effect to the assumptions on recoveries, defaults and timing and to the Priority of Payments, will result in sufficient funds remaining for the payment of such Class or Classes of Secured Debt in full. After the Effective Date, S&P will provide the Collateral Manager with an input file that incorporates the Class Break-even Default Rates for each S&P CDO Monitor determined by the Collateral Manager (with notice to the Collateral Administrator) pursuant to the definition of “S&P CDO Monitor.” After the S&P CDO Monitor Election Date, S&P will provide the Collateral Manager with the Class Break-even Default Rates for each S&P CDO Monitor input file based upon the Weighted Average Floating Spread and the Weighted Average S&P Recovery Rate to be associated with such S&P CDO Monitor input file as selected by the Collateral Manager from Section 2 of Schedule 5 or any other Weighted Average Floating Spread and Weighted Average S&P Recovery Rate selected by the Collateral Manager from time to time.

 

“Class Default Differential”:  With respect to the Highest Ranking Class, the rate calculated by subtracting the Class Scenario Default Rate at such time for such Class of Secured Debt from (x) prior to the S&P CDO Monitor Election Date, the Adjusted Class Break-even Default Rate or (y) on and after the S&P CDO Monitor Election Date, the Class Break-even Default Rate, in each case, for such Class of Secured Debt at such time.

 

“Class Scenario Default Rate”:  With respect to the Highest Ranking Class:

 

(a)           prior to the S&P CDO Monitor Election Date, the rate at such time equal to (a) 0.329915 plus (b) the product of (x) 1.210322 and (y) the Expected Portfolio Default Rate minus (c) the product of (x) 0.586627 and (y) the Default Rate Dispersion plus (d)(x) 2.538684 divided by (y) the Obligor Diversity Measure plus (e)(x) 0.216729 divided by (y) the Industry Diversity Measure plus (f)(x) 0.0575539 divided by (y) the Regional Diversity Measure minus (g) the product of (x) 0.0136662 and (y) the S&P Weighted Average Life; or

 

(b)           on and after the S&P CDO Monitor Election Date, an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with S&P’s initial rating of such Class or Classes of Secured Debt, determined by application by the Collateral Manager and the Collateral Administrator of the S&P CDO Monitor at such time.

 

“Clean-Up Call Redemption”:  A redemption of the Notes in accordance with Section 9.8.

 

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

 

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

 

“Clearing Corporation Security”:  Securities which are in the custody of or maintained on the books of a Clearing Corporation or a nominee subject to the control of a Clearing Corporation

 

and, if they are Certificated Securities in registered form, properly endorsed to or registered in the name of the Clearing Corporation or such nominee.

 

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

 

“Closing Date”:  May 28, 2019.

 

“Closing Date Participation Interest”:  The participation interests acquired by the Issuer pursuant to the Loan Sale Agreements on the Closing Date.

 

“Code”:  The United States Internal Revenue Code of 1986, as amended, and the Treasury regulations promulgated thereunder.

 

“Co-Issued Debt”:   Collectively, the Co-Issued Notes and the Class A Loans.

 

“Co-Issued Notes”:  The Class A Notes, the Class A-F Notes and the Class B Notes.

 

“Co-Issuer”:  Owl Rock CLO I, LLC, a limited liability company organized under the laws of the State of Delaware, and any successor thereto.

 

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

 

“Collateral Administrator”:  State Street, in its capacity as Collateral Administrator under the Collateral Administration Agreement, and any successor thereto.

 

“Collateral Interest Amount”:  As of any date of determination, without duplication, the aggregate amount of Interest Proceeds that has been received or that is expected to be received (other than Interest Proceeds expected to be received from Defaulted Obligations, but including Interest Proceeds actually received from Defaulted Obligations), in each case during the Collection Period in which such date of determination occurs (or after such Collection Period but on or prior to the related Payment Date if such Interest Proceeds would be treated as Interest Proceeds with respect to such Collection Period).

 

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

 

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“Collateral Management Fee”:  The fee payable to the Collateral Manager in arrears on each Payment Date pursuant to Section 8(a) of the Collateral Management Agreement and Section 11.1 of this Indenture, comprised of (x) the Base Management Fee and (y) the Subordinated Management Fee.

 

“Collateral Manager”:  Owl Rock Capital Advisors LLC, a Delaware limited liability company, until a successor Person shall have become the Collateral Manager pursuant to the  provisions of the Collateral Management Agreement, and thereafter “Collateral Manager” shall mean such successor Person.

 

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

 

“Collateral Obligation”:  A Senior Secured Loan, a First-Lien Last-Out Loan or a Second Lien Loan (including, but not limited to, interests in such loans acquired by way of a purchase or assignment) or a Participation Interest therein that (x) as of the date the Issuer commits to purchase (or ORCC commits to contribute to the Issuer) such obligation or (y) if a portion of the proceeds from a prepayment of a Collateral Obligation are exchanged (other than in connection with a restructuring of a Collateral Obligation due to financial distress or for the purpose of avoiding a payment default) as consideration for a new obligation, as of the date the Issuer commits to such exchange, such obligation:

 

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

 

(ii)           is not (A) a Defaulted Obligation or (B) a Credit Risk Obligation;

 

(iii)          is not a lease;

 

(iv)          if it is a Deferrable Obligation, it is a Permitted Deferrable Obligation;

 

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

 

(vi)          does not constitute Margin Stock;

 

(vii)         gives rise only to payments that are not subject to withholding tax, other than withholding tax as to which the Obligor must make additional payments so that the net amount received by the Issuer after satisfaction of such tax is the amount due to the Issuer before the imposition of any withholding tax;

 

(viii)        has an S&P Rating;

 

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

 

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

 

(xi)          does not have an “f”, “r”, “p”, “sf” or “t” subscript assigned by S&P or, if such obligation is not rated by S&P, does not have an “sf” subscript assigned by any other NRSRO;

 

(xii)         is not a repurchase obligation, a commodity forward contract, a Bond, a High Yield Bond, a Zero Coupon Bond, an Unsecured Loan, a Bridge Loan, a Commercial Real Estate Loan or a Structured Finance Obligation;

 

(xiii)        will not require the Issuer or the pool of Assets to be registered as an investment company under the 1940 Act;

 

(xiv)        is not an Equity Security or by its terms convertible into or exchangeable for an Equity Security;

 

(xv)         is not the subject of an Offer of exchange, or tender by its issuer, for cash, securities or any other type of consideration other than a Permitted Offer;

 

(xvi)        does not have an S&P Rating that is below “CCC-”;

 

(xvii)       does not mature after the earliest Stated Maturity of any Secured Debt Outstanding;

 

(xviii)      other than in the case of a Fixed Rate Obligation, accrues interest at a floating rate determined by reference to (a) the Dollar prime rate, federal funds rate or Libor or (b) a similar interbank offered rate, commercial deposit rate or any other index;

 

(xix)        is Registered;

 

(xx)         is not a Synthetic Security;

 

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

 

(xxii)       is not a letter of credit and does not support a letter of credit;

 

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

 

(xxiv)     is purchased at a price at least equal to 65% of its Principal Balance;

 

(xxv)      is not issued by an Obligor Domiciled in Greece, Italy, Portugal or Spain;

 

(xxvi)     is issued by a Non-Emerging Market Obligor Domiciled in the United States, Canada, a Group I Country, a Group II Country, a Group III Country or a Tax Jurisdiction;

 

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(xxvii)    is an Eligible Asset;

 

(xxviii)   is not a warrant and does not have attached equity warrants;

 

(xxix)     is not a participation interest in a Participation Interest;

 

(xxx)      is issued by an Obligor with a most-recently calculated EBITDA (calculated in accordance with the Underlying Documents) of at least U.S.$5,000,000;

 

(xxxi)     is not an obligation of a Portfolio Company;

 

(xxxii)    if it is a First-Lien Last-Out Loan it is not a Cov-Lite Loan; and

 

(xxxiii)   if it is a Cov-Lite Loan (x) it is not a First-Lien Last-Out Loan and (y) the Obligor with respect to such Cov-Lite Loan has a most recently calculated EBITDA (calculated in accordance with the Underlying Documents) of at least U.S.$40,000,000.

 

“Collateral Principal Amount”:  As of any date of determination, the sum of (a) the Aggregate Principal Balance of the Collateral Obligations (other than Defaulted Obligations except as otherwise expressly set forth herein) and (b) without duplication, the amounts on deposit in any Account (including Eligible Investments therein) representing Principal Proceeds; provided that for purposes of calculating the Concentration Limitations and the CCC Excess, Defaulted Obligations shall be included in the Collateral Principal Amount with a principal balance equal to the Defaulted Obligation Balance thereof.

 

“Collateral Quality Test”:  A test satisfied as of the Effective Date and any other date thereafter on which such test is required to be determined hereunder if, in the aggregate, the Collateral Obligations owned (or in relation to a proposed purchase of a Collateral Obligation,  both owned and proposed to be owned) by the Issuer satisfy each of the tests set forth below (or, after the Effective Date, if any such test is not satisfied at the time of reinvestment, the level of compliance with such test is maintained or improved as described in the Investment Criteria):

 

(i)            the S&P CDO Monitor Test;

 

(ii)           at any time on or after the S&P CDO Monitor Election Date, the Minimum Weighted Average S&P Recovery Rate Test; and

 

(iii)     the Weighted Average Life Test.

 

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

 

“Collection Account”:  The trust account established pursuant to Section 10.2 which consists of the Principal Collection Subaccount and the Interest Collection Subaccount.

 

“Collection Period”:  (i) With respect to the first Payment Date, the period commencing on the Closing Date and ending at the close of business on the date that is 10 Business Days  prior to the first Payment Date; and (ii) with respect to any other Payment Date, the period commencing on the day immediately following the prior Collection Period and ending (a) in the

 

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case of the final Collection Period preceding the latest Stated Maturity of any Class of Secured Debt, on the day of such Stated Maturity, (b) in the case of the final Collection Period preceding an Optional Redemption, Tax Redemption or Clean-Up Call Redemption in whole of the Secured Debt, or an Optional Subordinated Security Redemption on the Redemption Date and (c) in any other case, at the close of business on the date that is 10 Business Days prior to such Payment Date.

 

“Commercial Real Estate Loan”:  Any Loan for which the underlying collateral consists primarily of real property owned by the Obligor and is evidenced by a note or other evidence of indebtedness.

 

“Concentration Limitations”:  Limitations satisfied on each Measurement Date on or after the Effective Date and during the Reinvestment Period if, in the aggregate, the Collateral Obligations owned (or in relation to a proposed purchase of a Collateral Obligation, owned and proposed to be owned) by the Issuer comply with all of the requirements set forth below (or in relation to a proposed purchase after the Effective Date, if any such requirement is not satisfied, the level of compliance with such requirement is maintained or improved after giving effect to the purchase), calculated in each case as required by Section 1.3 herein:

 

(i)            not less than 95.0% of the Collateral Principal Amount may consist of Senior Secured Loans and Eligible Investments;

 

(ii)           not more than 3.0% of the Collateral Principal Amount may consist of obligations issued by a single Obligor and its Affiliates, except that, without duplication, (x) Collateral Obligations issued by up to five (5) Obligors and their respective Affiliates may each constitute up to 4.0% of the Collateral Principal Amount and (y) not more than 2.0% of the Collateral Principal Amount may consist of First-Lien Last Out Loans and Second Lien Loans issued by a single Obligor and its Affiliates; provided, that one obligor shall not be considered an Affiliate of another obligor solely because they are controlled by the same financial sponsor;

 

(iii)          not more than 17.5% of the Collateral Principal Amount may consist of Collateral Obligations with an S&P Rating of “CCC+” or below (other than a Defaulted Obligation);

 

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

 

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

 

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

 

(vii)         (a) excluding, prior to the first Payment Date, any Closing Date Participation Interests, not more than 10% of the Collateral Principal Amount may

 

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consist of Participation Interests and (b) excluding any Closing Date Participation Interests, the Third Party Credit Exposure Limits may not be exceeded with respect to any such Participation Interest;

 

(viii)        not more than 10% of the Collateral Principal Amount may have an S&P Rating derived from a Moody’s Rating as set forth in clause (iii)(a) of the definition of the term “S&P Rating”;

 

(ix)          not more than the percentage listed below of the Collateral Principal Amount may be issued by Obligors Domiciled in the country or countries set forth opposite such percentage:

 

	
% Limit
    	
 
    	
Country or Countries
    
	
 
    	
 
    	
 
    
	
15%
    	
 
    	
All countries (in the aggregate) other than the   United States;
    
	
 
    	
 
    	
 
    
	
10%
    	
 
    	
Canada;
    
	
 
    	
 
    	
 
    
	
10%
    	
 
    	
all countries (in the aggregate) other than the   United States, Canada and the United Kingdom;
    
	
 
    	
 
    	
 
    
	
5%
    	
 
    	
any individual Group I Country;
    
	
 
    	
 
    	
 
    
	
2.5%
    	
 
    	
all Group II Countries in the aggregate;
    
	
 
    	
 
    	
 
    
	
2.5%
    	
 
    	
any individual Group II Country;
    
	
 
    	
 
    	
 
    
	
2%
    	
 
    	
all Group III Countries in the aggregate; and
    
	
 
    	
 
    	
 
    
	
2.5%
    	
 
    	
all Tax Jurisdictions in the aggregate.
    

 

(x)           not more than 12.5% of the Collateral Principal Amount may consist of Collateral Obligations that are issued by Obligors that belong to any single S&P Industry Classification, except that the largest and the second-largest S&P Industry Classifications may each represent up to 15% of the Collateral Principal Amount;

 

(xi)          not more than 10% of the Collateral Principal Amount may consist of Collateral Obligations that pay interest at least semi-annually, but less frequently than quarterly;

 

(xii)         not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations that are Permitted Deferrable Obligations;

 

(xiii)        not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations that are First-Lien Last-Out Loans or Second Lien Loans, collectively;

 

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(xiv)        not more than 10% of the Collateral Principal Amount may consist of Cov-Lite Loans;

 

(xv)         not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations that are DIP Collateral Obligations; and

 

(xvi)        not more than 10% of the Collateral Principal Amount may consist of Collateral Obligations with respect to which the related Obligor had, at the time the Issuer committed to purchase such Collateral Obligation, an EBITDA as most recently calculated (in accordance with the Underlying Documents ) of less than U.S.$15,000,000.

 

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

 

“Controlling Class”:  The Class A Debt so long as any Class A Debt is Outstanding; then the Class B Notes so long as any Class B Notes are Outstanding; and then the Subordinated Securities.

 

“Conversion Option”: The option of a Converting Lender to convert all or a portion of its Class A Loans into an equivalent principal amount of Class A Notes pursuant to the Credit Agreement and this Indenture.

 

“Converting Lender”: A Class A Lender that exercises a Conversion Option.

 

“Co-Placement Agent”: SG Americas Securities, LLC, in its capacity as the Co-Placement Agent of the Secured Debt under the Placement Agreement.

 

“Corporate Trust Office”:  The principal corporate trust office of the Collateral Trustee at which this Indenture is administered, currently located at State Street Bank and Trust Company, 1 Iron Street Boston, Massachusetts 02210 Attention: Structured Credit and Analytics
 Ref:  Owl Rock CLO I, Ltd., or such other address as the Collateral Trustee may designate from time to time by notice to the Holders, the Collateral Manager and the Issuer or the principal corporate trust office of any successor Collateral Trustee.

 

“Cov-Lite Loan”:  A Collateral Obligation the Underlying Documents for which do not (i) contain any financial covenants or (ii) require the Obligor thereunder to comply with any Maintenance Covenant (regardless of whether compliance with one or more Incurrence Covenants is otherwise required by such Underlying Documents); provided that, notwithstanding the foregoing, a Collateral Obligation shall be deemed for all purposes (other than the S&P Recovery Rate for such Collateral Obligation) not to be a Cov-Lite Loan if the Underlying Documents for such Collateral Obligation contain a cross-default or cross acceleration provision to, or such Collateral Obligation is pari passu with, another loan, debt obligation or credit facility of the underlying Obligor that contains one or more Maintenance Covenants.

 

“Coverage Tests”:  The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied to each specified Class or Classes of Secured Debt.

 

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“Credit Agreement”: The Credit Agreement, dated as of the date hereof, among the Issuer, as borrower, the Co-Issuer, as co-borrower, the Loan Agent, the Collateral Trustee and the lenders party thereto, as amended from time to time in accordance with its terms.

 

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

 

(a)           such Collateral Obligation has experienced a reduction in its spread over LIBOR or other reference rate of 10% or more compared to the spread in effect as of the date of purchase by the Issuer of such Collateral Obligation; or

 

(b)           such Collateral Obligation has a Market Value above the higher of (i) par and (ii) the initial purchase price paid by the Issuer for such Collateral Obligation.

 

“Credit Improved Obligation”:  Any Collateral Obligation which, in the judgment of the Collateral Manager (which may not be called into question due to subsequent events or investment determinations made by the Collateral Manager for its other clients or investment vehicles managed by the Collateral Manager), has improved in credit quality after it was acquired by the Issuer; provided, that during a Restricted Trading Period, a Collateral Obligation will qualify as a Credit Improved Obligation only if (i) it has been upgraded by S&P at least one rating sub-category (which rating may include a credit estimate) or has been placed and remains on a credit watch with positive implication by S&P since it was acquired by the Issuer, (ii) the Credit Improved Criteria are satisfied with respect to such Collateral Obligation or (iii) a Majority of the Controlling Class consents to treat such Collateral Obligation as a Credit Improved Obligation..

 

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

 

(a)           the spread over LIBOR or other reference rate for such Collateral Obligation has been increased since the date of purchase by the Issuer by (A) 0.25% or more (in the case of a Collateral Obligation with a spread over the applicable reference rate selected by the Collateral Manager in the exercise of its reasonable business judgment (prior to such increase) less than or equal to 2%), (B) 0.375% or more (in the case of a Collateral Obligation with a spread over the applicable reference rate selected by the Collateral Manager in the exercise of its reasonable business judgment (prior to such increase) greater than 2% but less than or equal to 4%) or (C) 0.5% or more (in the case of a Collateral Obligation with a spread over the applicable reference rate selected by the Collateral Manager in the exercise of its reasonable business judgment (prior to such increase) greater than 4%) due, in each case, to a deterioration in the related Obligor’s financial ratios or financial results in accordance with the Underlying Documents relating to such Collateral Obligation; or

 

(b)           the Market Value of such Collateral Obligation has decreased by at least 2.5% of the price paid by the Issuer for such Collateral Obligation due to a deterioration in the related Obligor’s financial ratios or financial results in accordance with the Underlying Documents relating to such Collateral Obligation.

 

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“Credit Risk Obligation”:  Any Collateral Obligation that, in the judgment of the Collateral Manager (which may not be called into question due to subsequent events or investment determinations made by the Collateral Manager for its other clients or investment vehicles managed by the Collateral Manager),  has a material risk of declining in credit quality or price; provided, that during a Restricted Trading Period, a Collateral Obligation will qualify as a Credit Risk Obligation for purposes of sales of Collateral Obligations only if (i) such Collateral Obligation has been downgraded by S&P at least one rating sub-category (which rating may include a credit estimate) or has been placed and remains on a credit watch with negative implication by S&P since it was acquired by the Issuer, (ii) the Credit Risk Criteria are satisfied with respect to such Collateral Obligation or (iii) a Majority of the Controlling Class consents to treat such Collateral Obligation as a Credit Risk Obligation.

 

“CRS”:  The OECD Standard for Automatic Exchange of Financial Account Information — Common Reporting Standard, as amended from time to time, including any implementing legislation or related regulations or guidance notes.

 

“Current Pay Obligation”:  Any Collateral Obligation that would otherwise be treated as a Defaulted Obligation but as to which no payments are due and payable that are unpaid and with respect to which the Collateral Manager has certified to the Collateral Trustee (with a copy to the Collateral Administrator) in writing that it believes, in its reasonable business judgment, that the Obligor of such Collateral Obligation (a) is current on all interest payments, principal payments and other amounts due and payable thereunder and will continue to make scheduled payments of interest thereon and will pay the principal thereof and all other amounts due and payable thereunder by maturity or as otherwise contractually due, (b) if the Obligor is subject to a bankruptcy proceeding, it has been the subject of an order of a bankruptcy court that permits it to make the scheduled payments on such Collateral Obligation and all interest payments, principal payments and other amounts due and payable thereunder have been paid in Cash when due and (c) the Collateral Obligation has a Market Value of at least 80% of its par value (Market Value being determined, solely for the purposes of clause (c), without taking into consideration clause (iii) of the definition of the term “Market Value”).

 

“Current Portfolio”:  At any time, the portfolio of Collateral Obligations and Cash and Eligible Investments representing Principal Proceeds (determined in accordance with Section 1.3 to the extent applicable), then held by the Issuer.

 

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

 

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

 

“Cut-Off Date”:  Each date on or after the Closing Date on which a Collateral Obligation is transferred to the Issuer.

 

“Debt”: The Secured Debt.

 

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“Debt Interest Amount”:  With respect to any Class of Secured Debt and Any Payment Date, the amount of interest for the related interest accrual Period payable in respect of each U.S.$100,000 of outstanding principal amount of such Class of Secured Debt.

 

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

 

(i) to the payment pro rata and pari passu of principal of the Class A Notes until the Class A Notes have been paid in full, the Class A-F Notes until the Class A-F Notes have been paid in full and the Class A Loans, until the Class A Loans have been paid in full; and

 

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

 

provided that, in connection with any Tax Redemption, Optional Redemption or Clean-Up Call Redemption, holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Debt may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Debt.

 

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

 

“Default Rate Dispersion”:  As of any date of determination, the number obtained by (a) summing the products for each Collateral Obligation (other than Defaulted Obligations) of (i) the absolute value of (x) the S&P Default Rate of such Collateral Obligation minus (y) the Expected Portfolio Default Rate by (ii) the outstanding principal balance at such time of such Collateral Obligation and (b) dividing such sum by the aggregate outstanding principal balance on such date of all Collateral Obligations (other than Defaulted Obligations).

 

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

 

(a)           a default as to the payment of principal and/or interest has occurred and is continuing with respect to such Collateral Obligation (without regard to any grace period applicable thereto (except as otherwise provided in this clause (a)), or waiver or forbearance thereof, after the passage (in the case of a default that in the Collateral Manager’s judgment, as certified to the Collateral Trustee in writing, is not due to credit-related causes) of five (5) Business Days or seven calendar days, whichever is greater, but in no case beyond the passage of any grace period applicable thereto);

 

(b)           the Collateral Manager has knowledge of a default as to the payment of principal and/or interest has occurred and is continuing on another debt obligation of the same Obligor which is senior or pari passu in right of payment to such Collateral Obligation (without regard to any grace period applicable thereto (except as otherwise provided in this clause (b)), or waiver or forbearance thereof, after the passage (in the case of a default that in the Collateral Manager’s judgment, as certified to the Collateral Trustee in writing, is not due to credit-related causes) of three (3) Business Days or five calendar days, whichever is greater, but in no case beyond the passage of any grace period applicable thereto and holders of such other debt obligation of the same issuer

 

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have accelerated the maturity of all or a portion of such other debt obligation; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable Obligor or secured by the same collateral);

 

(c)           other than in the case of DIP Collateral Obligations, the Obligor or others have instituted proceedings to have the Obligor adjudicated as bankrupt or insolvent or placed into receivership and such proceedings have not been stayed or dismissed or such Obligor has filed for protection under Chapter 11 of the Bankruptcy Code;

 

(d)           such Collateral Obligation has an S&P Rating of “SD” or “CC” or lower or had such rating before such rating was withdrawn;

 

(e)           such Collateral Obligation is junior or pari passu in right of payment as to the payment of principal and/or interest to another debt obligation of the same Obligor  which has an S&P Rating of “SD” or “CC” or lower or had such rating before such rating was withdrawn; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable Obligor or secured by the same collateral;

 

(f)            the Collateral Manager has received notice or a Responsible Officer thereof has actual knowledge that a default has occurred under the Underlying Documents and any applicable grace period has expired and the holders of such Collateral Obligation have accelerated the repayment of the Collateral Obligation (but only until such acceleration has been rescinded) in the manner provided in the Underlying Documents;

 

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

 

(h)           such Collateral Obligation is a Participation Interest with respect to which the Selling Institution has defaulted in any respect in the performance of any of its payment obligations under the Participation Interest;

 

(i)            such Collateral Obligation is a Participation Interest in a Loan that would, if such Loan were a Collateral Obligation, constitute a “Defaulted Obligation” or with respect to which the Selling Institution has an S&P Rating of “SD” or “CC” or lower or had such rating before such rating was withdrawn;

 

(j)            such Collateral Obligation is a Deferring Obligation; or

 

(k)           such Collateral Obligation has, since the date it was acquired by the Issuer, become subject to an amendment, waiver or modification that had the effect of reducing the principal amount of such Collateral Obligation;

 

provided that a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to clauses (b) through (e) above if such Collateral Obligation (or, in the case of a Participation Interest, the underlying Loan) is a Current Pay Obligation; provided that the Aggregate Principal

 

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Balance of Current Pay Obligations exceeding 7.5% of the Collateral Principal Amount will be treated as Defaulted Obligations.

 

Notwithstanding anything in this Indenture to the contrary, the Collateral Manager shall give the Collateral Trustee prompt written notice should any Collateral Obligation become a Defaulted Obligation. Until so notified or until a Trust Officer obtains actual knowledge that a Collateral Obligation has become a Defaulted Obligation, the Collateral Trustee shall not be deemed to have any notice or knowledge that a Collateral Obligation has become a Defaulted Obligation. Notwithstanding the foregoing, the Collateral Trustee shall remain obligated to perform its duties set forth in and in accordance with Section 6.13 hereof.

 

“Defaulted Obligation Balance”:  For any Defaulted Obligation or Long Dated Obligation, the S&P Collateral Value of such Defaulted Obligation or Long Dated Obligation; provided (x) that the Defaulted Obligation Balance will be zero if the Issuer has owned such Defaulted Obligation or Long Dated Obligation for more than three years after its default date or modification or amendment date (in the case of Long Dated Obligations) and (y) solely with respect to Long Dated Obligations, the Defaulted Obligation Balance for any portion of Long Dated Obligations  in excess of 5% of the Collateral Principal Amount will be treated as an Equity Security for all purposes under this Indenture.

 

“Deferrable Obligation”:  A Collateral Obligation (including any Permitted Deferrable Obligation) that by its terms permits the deferral or capitalization of payment of accrued, unpaid interest.

 

“Deferred Subordinated Management Fee”:  The amount of the Subordinated Management Fee deferred on a Payment Date for any reason (including a voluntary deferral). Any portion of such amount that is not paid on a Payment Date for any reason other than a voluntary deferral shall accrue interest at a rate per annum equal to LIBOR for the period beginning on the first Payment Date on which the Subordinated Management Fee was due (and not paid) through the Payment Date on which the Deferred Subordinated Management Fee (including accrued interest) is paid.

 

“Deferring Obligation”:  A Deferrable Obligation (other than a Permitted Deferrable Obligation) that is deferring the payment of the cash interest due thereon and has been so deferring the payment of such cash interest due thereon (i) with respect to Collateral Obligations that have an S&P Rating of at least “BBB-”, for the shorter of two consecutive accrual periods or one year, and (ii) with respect to Collateral Obligations that have an S&P Rating of “BB+” or below, for the shorter of one accrual period or six consecutive months, which deferred capitalized interest has not, as of the date of determination, been paid in Cash.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           causing such Securities Intermediary to make entries on its books and records continuously identifying such Security Entitlement as belonging to the Custodian and continuously indicating on its books and records that such Security Entitlement is credited to the Custodian’s securities account, and

 

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

 

(vi)          in the case of Cash or Money,

 

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

 

(b)           if delivered to the Custodian, causing the Custodian to treat such Cash or Money as a Financial Asset causing the Custodian to deposit such Cash or Money to a deposit account over which the Custodian has control (within the meaning of Section 9-104 of the UCC), and

 

(c)           causing the Collateral Trustee or the Custodian, as the case may be, to indicate continuously on its books and records that such Cash or Money is credited to the applicable Account; and

 

(vii)         in the case of each general intangible (including any Participation Interest in which neither the Participation Interest nor the underlying loan is represented by an Instrument),

 

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

 

(b)           taking such other action as may be necessary under the laws of the Cayman Islands in order to ensure that the Collateral Trustee has a perfected security interest therein and obtaining any necessary consent to the security interest of the Collateral Trustee thereunder.

 

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

 

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

 

“Determination Date”:  the date that is 10 Business Days prior to each Payment Date.

 

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

 

“Discount Obligation”:  Any Collateral Obligation forming part of the Assets which was purchased (as determined without averaging prices of purchases on different dates) for less than (a) 85.0% of its Principal Balance, if such Collateral Obligation has an S&P Rating lower than “B-”, or (b) 80.0% of its Principal Balance, if such Collateral Obligation has an S&P Rating of “B-” or higher; provided that: (x) such Collateral Obligation shall cease to be a Discount Obligation at  such time as the Market Value (expressed as a percentage of the par amount of such Collateral Obligation) determined for such Collateral Obligation on each day during any period of 30 consecutive days since the acquisition by the Issuer of such Collateral Obligation, equals or exceeds 90% on each such day.

 

“Dissolution Expenses”:  The amount of expenses reasonably likely to be incurred in connection with the discharge of this Indenture, the liquidation of the Assets and the dissolution of the Issuers, as reasonably calculated by the Collateral Manager or the Issuer, based in part on expenses incurred or anticipated by the Collateral Trustee and reported to the Collateral Manager or the Issuer.

 

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

 

“Diversity Score”:  A single number that indicates collateral concentration in terms of both issuer and industry concentration, calculated as set forth in Schedule 6 hereto.

 

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

 

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

 

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

 

(a)           except as provided in clauses (b) and (c)  below, its country of organization;

 

(b)           if it is organized in a Tax Jurisdiction, each of such jurisdiction and the country in which, in the Collateral Manager’s good faith estimate, a substantial portion of its operations are located or from which a substantial portion of its

 

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revenue is derived, in each case directly or through subsidiaries (which shall be any jurisdiction and country known at the time of designation by the Collateral Manager to be the source of the majority of revenues, if any, of such Obligor); or

 

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

 

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

 

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

 

“EBA”:  The European Banking Authority (including any successor or replacement organization thereto).

 

“Effective Date”:  The earlier to occur of (i) August 20, 2019 and (ii) the first date on which the Collateral Manager certifies to the Collateral Trustee and the Collateral Administrator that the Target Initial Par Condition has been satisfied.

 

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

 

“Effective Date S&P CDO Monitor Assumptions”:  If the S&P CDO Monitor Election Date has not occurred prior to the Effective Date, then, for purposes of determining compliance with the S&P CDO Monitor Test in connection with the Effective Date S&P Conditions, the following rules of construction: (a) the Adjusted Class Break-even Default Rate will be calculated by excluding from the Collateral Principal Amount any amounts in the Ramp-Up Account designated as Interest Proceeds after the Effective Date as described Section 10.3(c) and (b) notwithstanding the definition thereof, the Aggregate Funded Spread of the Collateral Obligations will be calculated without taking into account any applicable “floor” rate specified in the related underlying instruments.

 

“Effective Date S&P Conditions”:  The conditions that are satisfied if (A) in connection with the Effective Date, the S&P CDO Monitor is being calculated in accordance with the Effective Date S&P CDO Monitor Assumptions, (B) the Collateral Manager (on behalf of the Issuer) certifies to S&P that, as of the Effective Date, the S&P CDO Monitor Test and the Target Initial Par Condition are satisfied and (C) the Issuer causes the Collateral Manager to make available to S&P (i) the Effective Date Report showing satisfaction of the S&P CDO Monitor Test and the Target Initial Par Condition and (ii) the Excel Default Model Input File.

 

“Effective Date Tested Items”:  Each component test (other than the S&P CDO Monitor Test) of the Collateral Quality Test, the Overcollateralization Ratio Tests, the Concentration Limitations and the Target Initial Par Condition.

 

“EIOPA”:  The European Insurance and Occupational Pensions Authority (including any successor or replacement organization thereto).

 

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“Eligible Assets”:  Financial assets, either fixed or revolving, that by their terms convert into Cash within a finite time period plus any rights or other assets designed to assure the servicing or timely distribution of proceeds to security holders.

 

“Eligible Institution”: The meaning specified in Section 10.1.

 

“Eligible Investment Required Ratings”:  A long-term debt rating of at least “A+” by S&P or a long-term debt rating of at least “A” by S&P and a short-term debt rating of at least “A-1” by S&P.

 

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

 

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

 

(ii)           (A) demand and time deposits in, certificates of deposit of, trust accounts with, bankers’ acceptances issued by, or federal funds sold by any depository institution or trust company incorporated under the laws of the United States (including the Bank) or any state thereof and subject to supervision and examination by federal and/or state banking authorities, in each case payable within 183 days of issuance, so long as the commercial paper and/or the debt obligations of such depository institution or trust company (or, in the case of the principal depository institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing for such investment have the Eligible Investment Required Ratings or (B) demand or time deposits that are covered by an extended Federal Deposit Insurance Corporation (“FDIC”) insurance program where 100% of the deposits are insured by the FDIC, which is backed by the full faith and credit of the United States, so long as the commercial paper and/or the debt obligations of such depository institution or trust company (or, in the case of the principal depository institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing for such investment have the Eligible Investment Required Ratings;

 

(iii)          commercial paper (excluding extendible commercial paper or asset-backed commercial paper) which satisfies the Eligible Investment Required Ratings; and

 

(iv)          shares or other securities of registered money market funds which funds have, at all times, credit ratings of “AAAm” by S&P and the highest credit rating assigned by another NRSRO (excluding S&P);

 

provided that (A) Eligible Investments purchased with funds in the Collection Account shall be held until maturity except as otherwise specifically provided herein and shall include only such obligations or securities, other than those referred to in clause (iv) above, as mature (or are

 

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putable at par to the issuer thereof) no later than the earlier of 60 days and the Business Day prior to the next Payment Date (unless such Eligible Investments are issued by the Collateral Trustee in its capacity as a banking institution, in which case such Eligible Investments may mature on such Payment Date), (B) Eligible Investments may not include any investments not treated as “cash equivalents” for purposes of Section   .10(c)(8)(iii)(A) of the regulations implementing the Volcker Rule in accordance with any applicable interpretive guidance thereunder, (C) none of the foregoing obligations shall constitute Eligible Investments if (a) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments or (b) such obligation or security has an “f,” “r,” “p,” “sf” or “t” subscript assigned by S&P and (D) Eligible Investments cannot have payments that are subject to withholding tax if owned by the Issuer unless the issuer or obligor or other Person (and guarantor, if any) is required to make “gross-up” payments that cover the full amount of any such withholding taxes. The Collateral Trustee shall not be responsible for determining or overseeing compliance with the foregoing. Eligible Investments may include, without limitation, those investments for which the Bank or the Collateral Trustee or an Affiliate of the Bank or the Collateral Trustee is the obligor or depository institution, or provides services and receives compensation subject to the proviso in the second preceding sentence.

 

“Enforcement Event”:  The meaning specified in Section 11.1(a)(iv).

 

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

 

“Equity Security”:  Any security that by its terms does not provide for periodic payments of interest at a stated coupon rate and repayment of principal at a stated maturity and any other security or other obligation that is not a Collateral Obligation or an Eligible Investment; provided, however, for the purposes hereof, that the Issuer’s ownership interests in the Co-Issuer shall not constitute Equity Securities; it being understood that Equity Securities may not be purchased by the Issuer but may be received by the Issuer in exchange for a Collateral Obligation or a portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof.

 

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

 

“ERISA Restricted Securities”:  The Subordinated Securities.

 

“ESMA”:  the European Securities and Markets Authority (including any successor or replacement organization thereto).

 

“EU Risk Retention Requirements”: Collectively, the EU Securitization Regulation together with any implementing laws or regulations in force in any Member State of the European Union as of the Closing Date, any relevant regulatory and/or implementing technical standards adopted by the European Commission in relation thereto, any relevant regulatory and/or implementing technical standards applicable in relation thereto pursuant to any transitional arrangements made pursuant to the EU Securitization Regulation, and, in each case, any relevant guidance published in relation thereto by the European Banking Authority or the

 

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European Securities and Markets Authority (or, in either case, any predecessor authority) or by the European Commission.

 

“European Supervisory Authorities”: Collectively, the EBA, ESMA and EIOPA.

 

“EU Securitization Regulation”:  Regulation (EU) 2017/2402 of the European Parliament and of the Council of December 12, 2017.

 

“EU Securitization Laws”:  The EU Securitization Regulation together with any relevant implementing and/or regulatory technical standard as well as guidance published in relation thereto by the European Supervisory Authorities as of the Closing Date.

 

“Euroclear”:  Euroclear Bank S.A./N.V.

 

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

 

“Excel Default Model Input File”:  An electronic spreadsheet file in Microsoft Excel format to be provided to S&P, as shall be agreed to by the Collateral Administrator, the Collateral Manager and S&P and which file shall include the following information (if available) with respect to each Collateral Obligation:  (a) the name of the issuer thereof, the country of domicile of the issuer thereof and the particular issue held by the Issuer, (b) the CUSIP, LoanX ID or other applicable identification number associated with such Collateral Obligation, (c) the par value of such Collateral Obligation, (d) the type of issue (including, by way of example, whether such Collateral Obligation is a Senior Secured Loan, Second Lien Loan, Cov-Lite Loan, First-Lien Last-Out Loan, etc.), using such abbreviations as may be selected by the Collateral Administrator, (e) a description of the index or other applicable benchmark upon which the interest payable on such Collateral Obligation is based (including, by way of example, fixed rate, step-up rate, zero coupon and LIBOR) and whether such Collateral Obligation is a LIBOR Floor Obligation and the specified “floor” rate per annum related thereto, (f) the coupon (in the case of a Collateral Obligation which bears interest at a fixed rate) or the spread over the applicable index (in the case of a Collateral Obligation which bears interest at a floating rate), (g) the S&P Industry Classification for such Collateral Obligation, (h) the stated maturity of such Collateral Obligation, (i) the S&P Rating of such Collateral Obligation or the issuer thereof, as applicable, (j)  the trade date and settlement date of each Collateral Obligation, (k) in the case of any purchase which has not settled, the purchase price thereof, and (l) such other information as the Collateral Administrator may determine to include in such file.  In addition, such file shall include a description of any Balance of Cash and other Eligible Investments.  In respect of the file provided to S&P in connection with the Issuer’s request to S&P to confirm its Initial Ratings of each Class of Secured Debt pursuant to Section 7.18, such file shall include a separate breakdown of the Aggregate Principal Balance and identity of all Collateral Obligations with respect to which the Issuer has entered into a binding commitment to acquire but with respect to which no settlement has occurred.

 

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

 

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

 

“Exercise Notice”:  The meaning specified in Section 9.7(c).

 

“Expected Portfolio Default Rate”:  As of any date of determination, the number obtained by (a) summing the products for each Collateral Obligation (other than Defaulted Obligations) of (i) the outstanding principal balance on such date of such Collateral Obligation by (ii) the S&P Default Rate of such Collateral Obligation and (b) dividing such sum by the aggregate outstanding principal balance on such date of all Collateral Obligations (other than Defaulted Obligations).

 

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

 

“Fair Market Value”: With respect to any Collateral Obligation, the Market Value of such Collateral Obligation as determined by the Collateral Manager in its sole discretion in accordance with its valuation policy applicable to the Issuer and ORCC and marked as such on the books and records of ORCC.

 

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

 

“FATCA Services Agreement”: An agreement dated as of the Closing Date among the Issuer and the Collateral Administrator, as amended from time to time in accordance with the terms thereof.

 

“Federal Reserve Board”:  The Board of Governors of the Federal Reserve System.

 

“Fee Basis Amount”:  As of any date of determination, the sum of (a) the Collateral Principal Amount, (b) the Aggregate Principal Balance of all Defaulted Obligations and (c) the aggregate amount of all Principal Financed Accrued Interest.

 

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

 

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

 

“First-Lien Last-Out Loan”:  Any Collateral Obligation that would be a Senior Secured Loan except that, following a default, such Collateral Obligation becomes fully subordinated to other senior secured loans of the same Obligor and is not entitled to any payments until such other senior secured loans are paid in full.

 

“Fiscal Agency Agreement” means the Fiscal Agency Agreement dated as of the Closing Date among the Fiscal Agent, the share registrar and the Issuer, as amended from time to time in accordance with the terms thereof.

 

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“Fiscal Agent”:  State Street, in its capacity as Fiscal Agent and share registrar under the Fiscal Agency Agreement, and any successor thereto.

 

“Fixed Rate Debt”:  Any Secured Debt that bears interest at fixed rates, which on the Closing Date shall consist of the Class A-F Notes.

 

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

 

“Floating Rate Debt”:  Any Secured Debt that bears interest at floating rates, which on the Closing Date shall consist of the Class A Notes, the Class B Notes and the Class A Loans.

 

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

 

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

 

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

 

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

 

“Group I Country”:  The Netherlands, Australia, New Zealand and the United Kingdom.

 

“Group II Country”:  Germany, Ireland, Sweden and Switzerland.

 

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

 

“High Yield Bond”:  A publicly issued or privately placed debt security of a corporation or other entity (other than a Loan or Bond).

 

“Highest Ranking Class”:  Any outstanding Class rated by S&P with respect to which there is no Priority Class.

 

“Holder” or “holder”:  With respect to (i) any Secured Note, the Person whose name appears on the Register as the registered holder of such Note kept at the offices of the Collateral Trustee, and, in the context of any risk involved in purchasing, holding or transferring any of the Secured Notes or any representation, warranty or covenant required or deemed to be made by an investor in any of the Secured Notes, “Holder” or “holder” will include the beneficial owner of such security, except as otherwise provided herein, (ii) any Class A Loans, the Person in whose

 

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name a Class A Loan is registered pursuant to the Credit Agreement and (iii) any Preferred Shares, the Pesron whose name appears on the Share Register as the registered holder of such Preferred Shares.

 

“Holder AML Obligations”: Information and documentation, and any updates, replacement or corrections of such information or documentation, requested by the Issuer (or its agent) to be provided by the Holders to the Issuer (or its agent) that may be required for the Issuer to achieve AML Compliance.

 

“Incurrence Covenant”:  A covenant by any borrower to comply with one or more financial covenants (including without limitation any covenant relating to a borrowing base, asset valuation or similar asset-based requirement) only upon the occurrence of certain actions of the borrower, including a debt issuance, drawing a revolver, dividend payment, share purchase, merger, acquisition or divestiture.

 

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

 

“Independent”:  As to any Person, any other Person (including, in the case of an accountant or lawyer, a firm of accountants or lawyers, and any member thereof, or an investment bank and any member thereof) who (i) does not have and is not committed to acquire any material direct or any material indirect financial interest in such Person or in any Affiliate of such Person, and (ii) is not connected with such Person as an Officer, employee, promoter, underwriter, voting trustee, partner, manager, director or Person performing similar functions. “Independent” when used with respect to any accountant may include an accountant who audits the books of such Person if in addition to satisfying the criteria set forth above, the accountant is independent with respect to such Person within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants. For purposes of this definition, no special member, manager, director or independent review party of any Person will fail to be Independent solely because such Person acts as an independent special member, independent manager, independent director or independent review party thereof or of any such Person’s affiliates.

 

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

 

Any pricing service, certified public accountant or legal counsel that is required to be Independent of another Person under this Indenture must satisfy the criteria above with respect to the Issuer, the Collateral Manager and their Affiliates.

 

“Index Maturity”:  With respect to any Class of Secured Debt, the period indicated with respect to such Class in Section 2.3.

 

“Industry Diversity Measure”:  As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each S&P Industry Classification, obtained by dividing (i) the aggregate outstanding principal balance at such time

 

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of all Collateral Obligations (other than Defaulted Obligations) issued by Obligors that belong to such S&P Industry Classification by (ii) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

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

 

“Information Agent”:  The meaning specified in Section 14.16.

 

“Initial Rating”:  With respect to the Secured Debt, the rating or ratings, if any, indicated in Section 2.3.

 

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

 

“Interest Accrual Period”:  (i) With respect to the initial Payment Date (or, in the case of a Re-Priced Class or a Class that is subject to Refinancing, the first Payment Date following the Re-Pricing Date or the date of the Refinancing, respectively), the period from and including the Closing Date (or, in the case of (x) a Re-Pricing, the applicable Re-Pricing Date or (y) a Refinancing, the date of such Refinancing) to but excluding such Payment Date; and (ii) with  respect to each succeeding Payment Date, the period from and including the immediately preceding Payment Date to but excluding the following Payment Date until the principal of the Secured Debt and notional amount of the Subordinated Securities is paid or made available for payment.  For purposes of determining any Interest Accrual Period in the case of the Fixed Rate Debt, the Payment Date will be assumed to be the 20th day of the relevant month (irrespective of whether such day is a Business Day).

 

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

 

“Interest Coverage Ratio”:  For any designated Class or Classes of Secured Debt, as of any date of determination, the percentage derived from the following equation:  (A — B) / C, where:

 

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

 

B = Amounts payable (or expected as of the date of determination to be payable) on the following Payment Date as set forth in clauses (A) and (B) (excluding any Base Management Fee waived by the Collateral Manager) in Section 11.1(a)(i); and

 

C = Interest due and payable on the Secured Debt of such Class or Classes and each Class of Secured Debt that ranks senior to or pari passu with such Class or Classes on such Payment Date.

 

“Interest Coverage Test”:  A test that is satisfied with respect to any Class or Classes of Secured Debt as of the Interest Coverage Test Effective Date and any other date thereafter on which such test is required to be determined hereunder if (i) the Interest Coverage Ratio for such Class or Classes on such date is at least equal to the Required Interest Coverage Ratio for such Class or Classes or (ii) such Class or Classes of Secured Debt are no longer outstanding.

 

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“Interest Coverage Test Effective Date”:  The Determination Date relating to the second Payment Date after the Closing Date.

 

“Interest Determination Date”:  The second London Banking Day preceding the first day of each Interest Accrual Period.

 

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

 

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

 

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

 

(iii)                               all amendment and waiver fees, late payment fees and other fees received by the Issuer during the related Collection Period, except for those in connection with (a) the lengthening of the maturity of the related Collateral Obligation or (b) except with respect to call premiums or prepayment fees, the reduction of the par amount of the related Collateral Obligation; provided that amendment and waiver fees received by the Issuer in connection with a Specified Amendment will be Principal Proceeds, in each case as determined by the Collateral Manager with notice to the Collateral Trustee, the Fiscal Agent and the Collateral Administrator;

 

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

 

(v)                                 any amounts deposited in the Expense Reserve Account pursuant to Section 3.1(xi)(B);

 

(vi)                              any amounts deposited in the Collection Account from the Expense Reserve Account and/or the Ramp-Up Account that are designated as Interest Proceeds in the sole discretion of the Collateral Manager pursuant to Section 10.3(c) or Section 10.3(d), as applicable, in respect of the related Determination Date and/or the Effective Date;

 

(vii)                           any contributions made to the Issuer which are designated as Interest Proceeds as permitted by this Indenture; and

 

(viii)                        any amounts deposited in the Collection Account from the Interest Reserve Account that are designated as Interest Proceeds in the sole discretion of the Collateral Manager pursuant to Section 10.3(e);

 

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provided that any amounts received in respect of any Defaulted Obligation (including interest received on Defaulted Obligations and proceeds of Equity Securities and other assets received by the Issuer in lieu of a current or prior Defaulted Obligation or a portion thereof in connection with a workout, restructuring or similar transaction of the obligor thereof) will constitute Principal Proceeds (and not Interest Proceeds) until, so long as a such Collateral Obligation remains a Defaulted Obligation, the aggregate of all collections in respect of such Defaulted Obligation since it became a Defaulted Obligation equals the Principal Balance of such Collateral Obligation at the time it became a Defaulted Obligation; provided, further, that capitalized interest shall not constitute Interest Proceeds.  Notwithstanding the foregoing, in the Collateral Manager’s sole discretion, Interest Proceeds may be classified as Principal Proceeds; provided that such designation will not result in non-payment of interest on any Class of Secured Debt.

 

“Interest Rate”:  With respect to each Class of Secured Debt, the per annum stated interest rate payable on such Class with respect to each Interest Accrual Period equal to (i) with respect to any Class of Floating Rate Debt, LIBOR for such Interest Accrual Period plus the spread specified in Section 2.3 or (ii) with respect to any Class of Fixed Rate Debt, the fixed rate of interest specified in Section 2.3; provided that with respect to any Interest Accrual Period during which a Re-Pricing has occurred, the applicable Interest Rate of any Re-Priced Class shall reflect the applicable Re-Pricing Rate from, and including, the applicable Re-Pricing Date.

 

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

 

“Interest Reserve Amount”:  U.S.$0.

 

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

 

“Issuer”:  The Person named as such on the first page of this Indenture until a successor Person shall have become the Issuer pursuant to the applicable provisions of this Indenture, and thereafter “Issuer” shall mean such successor Person.

 

“Issuer Order” and “Issuer Request”:  A written order or request (which may be a standing order or request) dated and signed in the name of the Issuer or the Co-Issuer or by a Responsible Officer of the Issuer or the Co-Issuer or by the Collateral Manager by a Responsible Officer thereof, on behalf of the Issuer or the Co-Issuer.

 

“Issuers”:  The Issuer and the Co-Issuer.

 

“Issuers’ Notice Agent”:  Any agent in the Borough of Manhattan, the City of New York appointed by the Issuer or the Co-Issuer where notices and demands to or upon the Issuer or the Co-Issuer, respectively, in respect of the Secured Debt and Subordinated Securities or this Indenture may be served, which shall initially be CT Corporation.

 

“Junior Class”:  With respect to a particular Class of Secured Debt, the Subordinated Securities and each Class of Secured Debt that is subordinated to such Class, as indicated in Section 2.3.

 

“Junior Mezzanine Debt”:  The meaning specified in Section 2.4.

 

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“LIBOR”: With respect to the Floating Rate Debt, for any Interest Accrual Period will equal the greater of (i) zero and (ii) (a) the rate appearing on the Reuters Screen for deposits with a term of three months; provided that LIBOR for the first Interest Accrual Period will equal the rate determined by interpolating between the rate appearing on the Reuters Screen for deposits with a term of three months and the rate appearing on the Reuters Screen for deposits with a term of six months or (b) if such rate is unavailable at the time LIBOR is to be determined, LIBOR shall be determined on the basis of the rates at which deposits in U.S. Dollars are offered by four major banks in the London market selected by the Calculation Agent after consultation with the Collateral Manager (the “Reference Banks”) at approximately 11:00 a.m., London time, on the Interest Determination Date to prime banks in the London interbank market for a period approximately equal to such Interest Accrual Period and an amount approximately equal to the Aggregate Outstanding Amount of the Floating Rate Debt. The Calculation Agent will request the principal London office of each Reference Bank to provide a quotation of its rate. If at least two such quotations are provided, LIBOR shall be the arithmetic mean of such quotations (rounded upward to the next higher 1/100). If fewer than two quotations are provided as requested, LIBOR with respect to such Interest Accrual Period will be the arithmetic mean of the rates quoted by three major banks in New York, New York selected by the Calculation Agent after consultation with the Collateral Manager at approximately 11:00 a.m., New York time, on such Interest Determination Date for loans in U.S. Dollars to leading European banks for a term approximately equal to such Interest Accrual Period and an amount approximately equal to the Aggregate Outstanding Amount of the Floating Rate Debt. If the Calculation Agent is required but is unable  to determine a rate in accordance with at least one of the procedures described above, LIBOR will be LIBOR as determined on the previous Interest Determination Date. “LIBOR”, when used with respect to a Collateral Obligation, means the “libor” rate determined in accordance with the terms of such Collateral Obligation, as such rate may be modified or replaced in accordance with the terms of such Collateral Obligation and all references to “LIBOR” with respect to such Collateral Obligation shall mean such modified or replacement rate.

 

Notwithstanding anything to the contrary in this definition, if, at any time while the Secured Debt is outstanding, a LIBOR Event occurs, the Collateral Manager (on behalf of the Issuer) may (or, in the event there is a material disruption to LIBOR, a change in the methodology of calculating LIBOR or LIBOR ceasing to exist or be reported or actively updated on the Reuters Screen or any equivalent reporting service, shall) select (with notice to the Calculation Agent, the Collateral Administrator, the Collateral Trustee and the Loan Agent, as applicable (which shall notify each Holder) and without any amendment or supplement to this Indenture) (1) the Designated Base Rate, (2) the Market Replacement Rate or (3) with the consent of a Majority of the Controlling Class (but without the consent of any other Holders of the Secured Debt and Subordinated Securities), any other Alternative Base Rate, in each case, as a successor or replacement benchmark to LIBOR for purposes of the interest rate calculation for the Floating Rate Debt, and all references in this Indenture to “LIBOR” will mean, with respect to the Floating Rate Debt for any Interest Accrual Period, such alternative base rate selected by the Collateral Manager until such time, if any, the definition of LIBOR is amended as permitted under this Indenture, including by a Base Rate Amendment..

 

“LIBOR Event”:  The meaning specified in Section 8.1(a)(xxiv).

 

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“LIBOR Floor Obligation”:  As of any date of determination, a Floating Rate Obligation (a) the interest in respect of which is paid based on LIBOR and (b) that provides that such LIBOR is (in effect) calculated as the greater of (i) a specified “floor” rate per annum and (ii) LIBOR for the applicable interest period for such Collateral Obligation.

 

“Lien”:  Any grant of a security interest in, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing (including any UCC financing statement or any similar instrument filed against a Person’s assets or properties).

 

“Limited Liability Company Agreement”:  The Limited Liability Company Agreement of the Co-Issuer, between the sole member and the independent manager, dated as of the Closing Date.

 

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

 

“Loan Agent”: State Street Bank and Trust Company, in its capacity as loan agent under the Credit Agreement.

 

“Loan Register”: The loan register maintained by the Loan Agent pursuant to the Credit Agreement.

 

“Loan Sale Agreement”:  That certain Loan Sale Agreement, dated as of the Closing Date, as amended from time to time in accordance with the terms thereof, by and between ORCC or ORCC Financing Subsidiary, as applicable, and the Issuer whereby ORCC or ORCC Financing Subsidiary, as applicable, will sell to the Issuer, without recourse, all of the right, title and interest of ORCC or ORCC Financing Subsidiary, as applicable, in and to any Collateral Obligations and the proceeds thereof.

 

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

 

“Long Dated Obligation”: Any Collateral Obligation, the stated maturity date of which is extended to occur after the earliest Stated Maturity of any Secured Debt Outstanding pursuant to an amendment or modification of its terms following its acquisition by the Issuer.

 

“LSTA”: The Loan Syndications and Trading Association (or any successor organization thereto).

 

“Maintenance Covenant”:  A covenant by any borrower to comply with one or more financial covenants (including without limitation any covenant relating to a borrowing base, asset valuation or similar asset-based requirement) during each reporting period, that exists

 

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regardless of whether or not such borrower has taken any specified action and includes a covenant that applies only when the related loan is funded.

 

“Majority”:  With respect to (a) any Class or Classes of Secured Debt, the Holders of more than 50% of the Aggregate Outstanding Amount of the Secured Debt of such Class or Classes, as applicable, and (b) the Subordinated Securities, the Holders of more than 50% of the Subordinated Securities.

 

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

 

“Market Replacement Rate”: The base rate, other than LIBOR, that is used in (x) more than 50% (by principal amount) of the Floating Rate Obligations and such rate is a monthly or quarterly floating rate; provided that if less than 50% (by principal amount) of the Floating Rate Obligations use a quarterly rate option at such time, consent to such rate has been obtained from a Majority of the Controlling Class, or (y) at least 50% (by principal amount) of the quarterly pay floating rate securities issued in the new-issue U.S. collateralized loan obligation market in the prior three months provided that there have been in such period at least five new issuances by at least three different collateral managers (in each case, as determined by the Collateral Manager in its reasonable discretion), which in each case shall include a Base Rate Modifier that corresponds to the selected rate.

 

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

 

(i) the bid price determined by (A) the Loan Pricing Corporation, LoanX Inc., Markit Group Limited, Mergent, IDC or, in each case, any successor thereto or (B) any other nationally recognized loan or bond pricing service selected by the Collateral Manager (with notice to the Rating Agency); provided that, with respect to this clause (B), consent to each such other nationally recognized loan or bond pricing service has been obtained from a Majority of the Controlling Class;

 

(ii) if the price described in clause (i) is not available or the Collateral Manager makes a commercially reasonable determination that it does not reflect the value of such Asset pursuant to the Collateral Manager’s valuation policy, (A) the average of the bid prices determined by three Qualified Broker-Dealers active in the trading of such asset that are Independent from each other and the Issuer and the Collateral Manager or (B) if only two such bids can be obtained, the lower of the bid prices of such two bids;

 

(iii) if the Market Value of an asset cannot be determined in accordance with clause (i) or (ii) above, then the Market Value shall be the Appraised Value; provided that the Appraised Value of such Collateral Obligation has been obtained or updated within the immediately preceding four months;

 

(iv) if a price or such bid described in clause (i), (ii) or (iii) is not available, then the Market Value of an asset will be the lower of (x) such asset’s S&P Recovery Rate and (y) the price at

 

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which the Collateral Manager reasonably believes such asset could be sold in the market within 30 days, as certified by the Collateral Manager to the Collateral Trustee and determined by the Collateral Manager consistent with the manner in which it would determine the market value of an asset for purposes of other funds or accounts managed by it; or

 

(v) if the Market Value of any loan or other asset is not determined in accordance with clauses (i)- (iv) above, then such Market Value shall be deemed zero until such determination is made in accordance with clauses (i), (ii), (iii) or (iv) above.

 

“Material Change”:  An event that occurs with respect to a Collateral Obligation upon the occurrence of any of the following (a) non-payment of interest or principal, (b) the rescheduling of any interest or principal, (c) any covenant breach, (d) any restructuring of debt with respect to the Obligor of such Collateral Obligation, (e) the addition of payment in kind terms, change in maturity date or any change in coupon rates and (f) the occurrence of the significant sale or acquisition of assets by the Obligor.

 

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

 

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

 

“Measurement Date”:  (i) Any day on which a purchase of a Collateral Obligation occurs, (ii) any Determination Date, (iii) the date as of which the information in any Monthly Report is  calculated, (iv) with five (5) Business Days’ prior written notice, any Business Day requested by the Rating Agency and (v) the Effective Date.

 

“Member State”:  Any member state of the European Union.

 

“Memorandum and Articles”:  The Amended and Restated Memorandum and Articles of Association of the Issuer, as originally adopted and as amended and restated from time to time in accordance with their terms.

 

“Minimum Denominations”:  As defined in Section 2.3.

 

“Minimum Weighted Average S&P Recovery Rate Test”:  The test that will be satisfied on any date of determination on and after the S&P CDO Monitor Election Date if the Weighted Average S&P Recovery Rate for the Highest Ranking Class equals or exceeds the S&P Minimum Weighted Average Recovery Rate for such Class of Secured Debt selected by the Collateral Manager in connection with the definition of S&P CDO Monitor. On or prior to the later of (x) the S&P CDO Monitor Election Date and (y) the Effective Date, the Collateral Manager will elect the Weighted Average S&P Recovery Rate that will apply on and after such date to the Collateral Obligations for purposes of determining compliance with the Minimum Weighted Average S&P Recovery Rate Test, and the Collateral Manager will so notify the

 

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Collateral Trustee and the Collateral Administrator. Thereafter, at any time on written notice to the Collateral Trustee, the Collateral Administrator and S&P, the Collateral Manager may elect a different Weighted Average S&P Recovery Rate to apply to the Collateral Obligations; provided that if (i) the Collateral Obligations are currently in compliance with the Weighted Average S&P Recovery Rate case then applicable to the Collateral Obligations but the Collateral Obligations would not be in compliance with the Weighted Average S&P Recovery Rate case to which the Collateral Manager desires to change, then such changed case shall not apply or (ii) the Collateral Obligations are not currently in compliance with the Weighted Average S&P Recovery Rate case then applicable to the Collateral Obligations and would not be in compliance with any other Weighted Average S&P Recovery Rate case, the Weighted Average S&P Recovery Rate to apply to the Collateral Obligations shall be the lowest Weighted Average S&P Recovery Rate in Section 2 of Schedule 5. If the Collateral Manager does not notify the Collateral Trustee and the Collateral Administrator that it will alter the Weighted Average S&P Recovery Rate in the manner set forth in this Indenture, the Weighted Average S&P Recovery Rate chosen as of the S&P CDO Monitor Election Date or the Effective Date, as applicable, shall continue to apply.

 

“Money”:  The meaning specified in Section 1-201(24) of the UCC.

 

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

 

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

 

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

 

“Moody’s Rating”:  With respect to any Collateral Obligation, the rating determined pursuant to Schedule 4 hereto.

 

“Moody’s Senior Secured Loan”:  The meaning specified in Schedule 4 (or such other schedule provided by Moody’s to the Issuer, the Collateral Trustee and the Collateral Manager).

 

“Natixis”:  Natixis Securities Americas LLC.

 

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

 

“Non-Call Period”:  The period from the Closing Date to May 28, 2021.

 

“Non-Emerging Market Obligor”:  An Obligor that is Domiciled in (a) the United States or Canada, (b) any country that has a foreign currency issuer credit rating of at least “AA-” by S&P, or (c) a Tax Jurisdiction.

 

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“Non-Permitted AML Holder”: Any Holder that fails to comply with the Holder AML Obligations.

 

“Non-Permitted ERISA Holder”:  As defined in Section 2.12(c).

 

“Non-Permitted Holder”:  As defined in Section 2.12(b).

 

“Holder”:  With respect to any Note, the Holder of such Note.

 

“Notes”:  The Secured Notes.

 

“Notice of Substitution”:  The meaning specified in Section 12.3(a)(ii).

 

“NRSRO”:  Any nationally recognized statistical rating organization, other than the Rating Agency.

 

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

 

“Obligor”:  With respect to any Collateral Obligation, any Person or Persons obligated to make payments pursuant to or with respect to such Collateral Obligation, including any guarantor thereof, but excluding, in each case, any such Person that is an obligor or guarantor that is in addition to the primary obligors or guarantors with respect to the assets, cash flows or credit on which the related Collateral Obligation is principally underwritten.

 

“Obligor Diversity Measure”:  As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each Obligor, obtained by dividing  (i) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by such Obligor by (ii) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

“Offer”:  As defined in Section 10.8(c).

 

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

 

“Offering Circular”:  Each offering circular relating to the offer and sale of the Secured Notes, including any supplements thereto.

 

“Officer”:  (a) With respect to the Issuer and any corporation, the Chairman of the Board of Directors, the President, any Vice President, the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of such entity, (b) with respect to the Co-Issuer and any limited liability company, any managing member or manager thereof or any person to whom the rights and powers of management thereof are delegated in accordance with the limited liability company agreement of such limited liability company and (c) with respect to the Collateral Manager, any manager or member of the Collateral Manager or any duly authorized officer of

 

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the Collateral Manager with direct responsibility for the administration of the Collateral Management Agreement and this Indenture and also, with respect to a particular matter, any other duly authorized officer of the Collateral Manager to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

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

 

“Optional Redemption”:  A redemption of the Secured Debt in accordance with Section 9.2.

 

“Optional Subordinated Security Redemption”: The meaning specified in Section 9.2(k).

 

“ORCC”:  Owl Rock Capital Corporation, a Maryland corporation, in its capacity as seller under the Loan Sale Agreement.

 

“ORCC Financing Subsidiary”:  ORCC Financing II LLC, a Delaware limited liability company, in its capacity as seller under the Loan Sale Agreement.

 

“Organizational Documents”:  With respect to (a) the Issuer, its Memorandum and Articles and (b) the Co-Issuer, its Certificate of Formation and Limited Liability Company Agreement, in each case, as originally executed and as supplemented, amended and restated from time to time in accordance with their terms.

 

“Other Plan Law”:  Any state, local, other federal or non-U.S. laws or regulations that are substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code.

 

“Outstanding”:  With respect to

 

(a)                                 the Secured Debt or the Secured Debt of any specified Class, as of any date of determination, all of the Secured Debt or all of the Secured Debt of such Class, as the case may be, theretofore authenticated and delivered under this Indenture or incurred under the Credit Agreement, as applicable, except (i) Notes theretofore canceled by the Collateral Trustee or delivered to the Collateral Trustee for cancellation in accordance with the terms of Section 2.10, and Class A Loans that

 

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are prepaid or repaid in accordance with the Credit Agreement; (ii) Secured Debt or portions thereof for whose payment or redemption funds in the necessary amount have been theretofore irrevocably deposited with the Collateral Trustee or any Paying Agent in trust for the Holders of such Secured Debt pursuant to Section 4.1(a)(i)(B); provided that if such Secured Debt or portions thereof are to be redeemed or prepaid, as applicable, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Collateral Trustee has been made; (iii) Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, unless proof satisfactory to the Collateral Trustee is presented that any such Notes are held by a “protected purchaser” (within the meaning of Section 8-303 of the UCC); and (iv) Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.7; and

 

(b)                                 Subordinated Securities, all of such Preferred Shares shown as issued and outstanding in the Share Register;

 

provided that in determining whether the Holders of the requisite Aggregate Outstanding Amount have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (a) Secured Debt and Subordinated Securities owned by the Issuer or the Co-Issuer or (only in the case of a vote on (i) the removal of the Collateral Manager for Cause or (ii) the waiver of any event constituting “Cause”) Secured Debt and Subordinated Securities owned by the Collateral Manager, an Affiliate thereof, or an account, fund, client or portfolio established and controlled by the Collateral Manager or an Affiliate thereof or for which the Collateral Manager or an Affiliate thereof acts as the investment adviser or with respect to which it or an Affiliate exercises discretionary authority shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Collateral Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Secured Debt and Subordinated Securities that a Trust Officer of the Collateral Trustee actually knows to be so owned shall be so disregarded and (b) Secured Debt and Subordinated Securities so owned that have been pledged in good faith shall be regarded as Outstanding if the pledgee establishes to the reasonable satisfaction of the Collateral Trustee the pledgee’s right so to act with respect to such Secured Debt or Subordinated Securities and that the pledgee is not one of the Persons specified above.

 

“Overcollateralization Ratio”:  With respect to any specified Class or Classes of Secured Debt as of any date of determination, the percentage derived from:  (i) the Adjusted Collateral Principal Amount on such date divided by (ii) the Aggregate Outstanding Amount on such date of the Secured Debt of such Class or Classes, each Priority Class of Secured Debt and each Pari Passu Class of Secured Debt.

 

“Overcollateralization Ratio Test”:  A test that is satisfied with respect to any Class or Classes of Secured Debt as of the Effective Date and any other date thereafter on which such test is required to be determined hereunder, if (i) the Overcollateralization Ratio for such Class or Classes on such date is at least equal to the Required Overcollateralization Ratio for such Class or Classes or (ii) such Class or Classes of Secured Debt is no longer outstanding.

 

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

 

“Partial Redemption Date”:  Any date on which a Refinancing of one or more but not all Classes of Secured Debt occurs.

 

“Partial Refinancing Interest Proceeds”:  In connection with a Refinancing in part by Class of one or more Classes of Secured Debt, with respect to each such Class, Interest Proceeds up to the amount of accrued and unpaid interest on such Class, but only to the extent that such Interest Proceeds would be available under the Priority of Payments to pay accrued and unpaid interest on such Class on the date of a Refinancing of such Class (or, in the case of a Refinancing occurring on a date other than a Payment Date, only to the extent that such Interest Proceeds would be available under the Priority of Payments to pay accrued and unpaid interest on such Class on the next Payment Date, taking into account Scheduled Distributions on the Assets that are expected to be received on or prior to the next Determination Date).

 

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

 

“Paying Agent”:  Any Person authorized by the Issuers to pay the principal of or interest on any Secured Debt or distributions to the Subordinated Securities on behalf of the Issuers as specified in Section 7.2.

 

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

 

“Payment Date”:  The 20th day of February, May, August and November of each year (or, if such day is not a Business Day, the next succeeding Business Day) (together with any Redemption Date (other than a Redemption Date in connection with a redemption of Secured Debt in part by Class not occurring on a regularly scheduled Payment Date)), commencing on

 

45

 

the Payment Date in November 2019; provided that (x) the final scheduled Payment Date will be the Stated Maturity (subject to any earlier payment or redemption of the Secured Debt) and (y) for purposes of the Priority of Payments, the Redemption Date with respect to a Clean-Up Call Redemption will be deemed to be a Payment Date.

 

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

 

“Permitted Deferrable Obligation” Any Deferrable Obligation that by the terms of the related Underlying Document carries a current cash pay interest rate of not less than (a) in the case of a Floating Rate Obligation, LIBOR plus 1.00% per annum or (b) in the case of a Fixed Rate Obligation, the zero-coupon swap rate in a fixed/floating interest rate swap with a term equal to five years at the time the Issuer committed to purchase such Deferrable Obligation.

 

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

 

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

 

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

 

“Placement Agent”:  Natixis, in its capacity as the Placement Agent of the Notes under the Placement Agreement.

 

“Placement Agreement”:  The placement agency agreement among the Issuers, the Placement Agent and the Co-Placement Agent, dated as of the Closing Date, as amended.

 

“Plan Asset Regulation”: The regulation promulgated by the United States Department of Labor at 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

 

46

 

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

 

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

 

“Post-Transition S&P CCC Collateral Obligation”:  A Collateral Obligation that, at the time the Issuer committed to purchase such Collateral Obligation, has an application to S&P for a credit estimate pending and that, upon the provision of such credit estimate (after the acquisition of such Collateral Obligation by the Issuer), becomes an S&P CCC Collateral Obligation.

 

“Preferred Shares”:  The Preferred Shares issued by the Issuer (including any additional Preferred Shares issued pursuant to the Memorandum and Articles and in compliance with the terms of this Indenture), recorded as issued and Outstanding in the Share Register.

 

“Preferred Shares Payment Account” means the account established under the Fiscal Agency Agreement.

 

“Principal Balance”:  Subject to Section 1.3, with respect to (a) any Asset other than a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, as of any date of determination, the outstanding principal amount of such Asset (excluding any capitalized interest) and (b) any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, as of any date of determination, the outstanding principal amount of such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation (excluding any capitalized interest), plus (except as expressly set forth herein) any undrawn commitments that have not been irrevocably reduced or withdrawn with respect to such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation; provided that for all purposes the Principal Balance of (1) any Equity Security or interest only strip shall be deemed to be zero and (2) any Defaulted Obligation that is  not sold or terminated within three years after becoming a Defaulted Obligation shall be deemed to be zero.

 

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

 

“Principal Financed Accrued Interest”:  With respect to (a) any Collateral Obligation owned or purchased by the Issuer on the Closing Date, any unpaid interest on such Collateral Obligation that accrued prior to the Closing Date that was owing to the Issuer and remained unpaid as of the Closing Date and (b) any Collateral Obligation purchased after the Closing Date, the amount of Principal Proceeds, if any, applied towards the purchase of accrued interest on such Collateral Obligation.

 

“Principal Proceeds”:  With respect to any Collection Period or Determination Date, all amounts received by the Issuer during the related Collection Period that do not constitute Interest Proceeds and any other amounts that have been designated as Principal Proceeds pursuant to the terms of this Indenture.

 

47

 

“Priority Category”:  With respect to any Collateral Obligation, the applicable category listed in the table under the heading “Priority Category” in clause 1(b) of Schedule 5.

 

“Priority Class”:  With respect to (i) any specified Class of Secured Debt, each Class of Secured Debt that ranks senior to such Class, as indicated in Section 2.3, and (ii) the Subordinated Securities, each Class of Secured Debt.

 

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

 

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

 

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

 

“QIB”:  A Qualified Institutional Buyer.

 

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

 

“QP”:  A Qualified Purchaser.

 

“Qualified Broker/Dealer”:  Any of Bank of America Securities; The Bank of Montreal; The Bank of New York Mellon; Barclays Bank plc; BNP Paribas; Canadian Imperial Bank of Commerce; Citibank, N.A.; Credit Agricole S.A.; Credit Suisse; Deutsche Bank AG; Goldman Sachs & Co.; HSBC Bank; Imperial Capital LLC; Jefferies & Company, Inc.; JPMorgan Chase Bank, N.A.; KeyBank National Association; Lloyds TSB Bank; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co.; Natixis; Royal Bank of Canada; The Royal Bank of Scotland plc; Société Générale; SunTrust Bank, Inc.; The Toronto-Dominion Bank; UBS AG; U.S. Bank National Association; Wells Fargo Bank, National Association.

 

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

 

“Qualified Purchaser”:  The meaning specified in Section 2(a)(51) of the 1940 Act and Rule 2a51-2 or 2a51-3 under the 1940 Act.

 

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

 

“Rating Agency”:  S&P, so long as any Secured Debt is rated thereby, or, with respect to the Secured Debt or the Collateral Obligations, as applicable, if at any time S&P ceases to provide rating services with respect to debt obligations, any other nationally recognized investment rating agency selected by the Issuer (or the Collateral Manager on behalf of the Issuer). If at any time S&P ceases to be the Rating Agency, references to rating categories of such entity herein shall be deemed instead to be references to the equivalent categories (as determined by the Collateral Manager) of such other rating agency as of the most recent date on

 

48

 

which such other rating agency and S&P published ratings for the type of obligation in respect of which such alternative rating agency is used.

 

“Record Date”:  With respect to the Global Notes, the Class A Loans and Certificated Notes, the date 15 days prior to the applicable Payment Date.

 

“Redemption Assets”:  Collectively, the Collateral Obligations and Eligible Investments.

 

“Redemption Date”: Any Business Day specified for a redemption of Secured Debt or Subordinated Securities pursuant to Article IX (other than a Special Redemption).

 

“Redemption Price”:  (a) For each Secured Debt to be redeemed or sold and transferred (or, in the case of the Class A Loans, prepaid) in connection with an Optional Redemption, Re-Pricing, Clean-Up Call Redemption or Tax Redemption (x) 100% of the Aggregate Outstanding Amount of such Secured Debt, plus (y) accrued and unpaid interest thereon to the Redemption Date or Re-Pricing Date, as applicable; and (b) for each Subordinated Security, its proportional share (based on the Aggregate Outstanding Amount of such Subordinated Securities) of the amount of the proceeds of the Assets remaining after giving effect to the Optional Redemption, Clean Up Call Redemption or Tax Redemption of the Secured Debt in whole or after all of the Secured Debt have been repaid in full and payment in full of (and/or creation of a reserve for) all expenses (including, unless waived by the Collateral Manager all Collateral Management Fees and Administrative Expenses) of the Issuers; provided that, in connection with any Tax Redemption, Optional Redemption or Clean-Up Call Redemption, holders of 100% of the Aggregate Outstanding Amount of any such Class of Secured Debt may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Debt.

 

“Refinancing”:  A loan or an issuance of replacement securities, whose terms in each case will be negotiated by the Issuer or, upon request by the Issuer, by the Collateral Manager on behalf of the Issuer, from one or more financial institutions or purchasers to refinance the Secured Debt or Subordinated Securities in connection with an Optional Redemption.

 

“Refinancing Obligations”:  Any loans or replacement securities issued in connection with a Refinancing.

 

“Refinancing Proceeds”:  The net Cash proceeds from a Refinancing.

 

“Regional Diversity Measure”:  As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each S&P Region Classification, obtained by dividing (i) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by Obligors that belong to such S&P Region Classification by (ii) the aggregate outstanding principal balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

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

 

49

 

“Registered”:  In registered form for U.S. federal income tax purposes and issued after July 18, 1984; provided that a certificate of interest in a grantor trust shall not be treated as Registered unless each of the obligations or securities held by the trust was issued after that date.

 

“Registered Investment Adviser”:  A Person duly registered as an investment adviser in accordance with and pursuant to Section 203 of the Advisers Act.

 

“Registered Office Agreement”:  The Terms and Conditions for the Provision of Registered Office Services by MaplesFS Limited (Structured Finance — Cayman Company) as approved and agreed by resolution of the Issuer’s board of directors.

 

“Regulation S”:  Regulation S, as amended, under the Securities Act.

 

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

 

“Reinvestment Period”:  The period from and including the Closing Date to and including the earliest of (i) May 20, 2023, (ii) the date of the acceleration of the Maturity of any Class of Secured Debt pursuant to Section 5.2, (iii) the date on which the Collateral Manager has delivered written notice to the Collateral Trustee, the Loan Agent, the Fiscal Agent and the Rating Agency that it has reasonably determined that it can no longer reinvest in additional Collateral Obligations in accordance with the terms hereof and the Collateral Management Agreement in connection with a Special Redemption pursuant to clause (i) of Section 9.6, (iv) the date of any Tax Redemption, (v) the date of any Clean-Up Call Redemption and (vi) the date of any Optional Redemption of the Secured Debt in whole other than in connection with a Refinancing.

 

“Reinvestment Target Par Balance”:  As of any date of determination, the Target Initial Par Amount minus the amount of any reduction in the Aggregate Outstanding Amount of the Secured Debt and Subordinated Securities through the payment of Principal Proceeds plus the aggregate amount of Principal Proceeds received by the Issuer from the issuance or incurrence of any Additional Debt, additional Subordinated Securities or Junior Mezzanine Debt (after giving effect to such issuance or incurrence of any Additional Debt, additional Subordinated Securities or Junior Mezzanine Debt).

 

“Re-Priced Class”:  The meaning specified in Section 9.7(a).

 

“Re-Pricing”:  The meaning specified in Section 9.7(a).

 

“Re-Pricing Date”:  The meaning specified in Section 9.7(b).

 

“Re-Pricing Eligible Debt”:  The Class B Notes.

 

“Re-Pricing Intermediary”:  The meaning specified in Section 9.7(a).

 

“Re-Pricing Rate”:  The meaning specified in Section 9.7(b)(i).

 

“Reuters Screen”:  Reuters Page LIBOR01 (or such other page that may replace that page on such service for the purpose of displaying comparable rates) as reported by Bloomberg

 

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Financial Markets Commodities News as of 11:00 a.m., London time, on the Interest Determination Date.

 

“Purchase and Substitution Limit”:  The meaning specified in Section 12.3(c).

 

“Required Interest Coverage Ratio”:  For the Class A Debt and the Class B Notes, 120.00%.

 

“Required Overcollateralization Ratio”:  For the Class A Debt and the Class B Notes, 138.46%.

 

“Resolution”:  With respect to the Issuer, a resolution of the board of directors of the Issuer duly appointed by the shareholders of the Issuer or otherwise duly appointed from time to time and, with respect to the Co-Issuer, a duly passed resolution of the manager or the member of the Co-Issuer.

 

“Responsible Officer”:  With respect to any Person, any duly authorized director, officer or manager of such Person with direct responsibility for the administration of the applicable agreement and also, with respect to a particular matter, any other duly authorized director, officer or manager of such Person to whom such matter is referred because of such director’s, officer’s or manager’s knowledge of and familiarity with the particular subject. Each party may receive and accept a certification of the authority of any other party as conclusive evidence of the authority of any Person to act, and such certification may be considered as in full force and effect until receipt by such other party of written notice to the contrary.

 

“Restricted Trading Period”:  The period during which (a) (i) the S&P rating of any of the Class A Debt is one or more sub-categories below its rating on the Closing Date or (ii) the S&P rating of the Class B Notes is two or more sub-categories below its rating on the Closing Date and (b) after giving effect to any sale (and any related reinvestment) or purchase of the relevant Collateral Obligation, (i) the aggregate principal balance of all Collateral Obligations plus, without duplication, amounts on deposit in the Principal Collection Subaccount (including to the extent such amounts have been designated for application as Principal Proceeds in connection with a contribution to the Issuer) and the Ramp-Up Account will be less than the Reinvestment Target Par Balance or (ii) (A) any of the Coverage Tests are not satisfied or (B) solely with respect to any purchase or reinvestment of sale proceeds, the Collateral Quality Test is not satisfied, or if any test thereof is not satisfied, the level of compliance with such test is not maintained or improved unless with respect to any proposed sale of a Collateral Obligation, after giving effect to such sale and application of proceeds on the next succeeding Payment Date such Coverage Tests will be satisfied; provided, that such period will not be a Restricted Trading Period (so long as the S&P rating of the Class A Debt or the Class B Notes has not been further downgraded, withdrawn or put on watch for potential downgrade) upon the direction of the Issuer with the consent of a Majority of the Class A Debt.

 

“Retention Holder”:  Owl Rock Capital Corporation.

 

“Revolver Funding Account”:  The meaning specified in Section 10.4.

 

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

 

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

 

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

 

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

 

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

 

“S&P”:  S&P Global Ratings, a nationally recognized statistical rating organization comprised of:  (a) a separately identifiable business unit within Standard & Poor’s Financial Services LLC, a Delaware limited liability company wholly owned by S&P Global Inc.; and (b) the credit ratings business operated by various other subsidiaries that are wholly-owned, directly or indirectly, by S&P Global Inc.; and, in each case, any successor thereto.

 

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

 

“S&P CDO Monitor”:  The dynamic, analytical computer model developed by S&P and used to calculate the default frequency in terms of the amount of debt assumed to default as a percentage of the original principal amount of the Collateral Obligations consistent with a specified benchmark rating level based upon certain assumptions (including the applicable Weighted Average S&P Recovery Rate) and S&P’s proprietary corporate default studies, as may be amended by S&P from time to time upon notice to the Issuer, the Collateral Trustee, the Collateral Manager and the Collateral Administrator. Each S&P CDO Monitor will be chosen by the Collateral Manager (with notice to the Collateral Administrator) and associated with either (x) a Weighted Average S&P Recovery Rate and a Weighted Average Floating Spread from Section 2 of Schedule 5 or (y) a Weighted Average S&P Recovery Rate and a Weighted Average Floating Spread confirmed by S&P, provided that as of any date of determination the Weighted Average S&P Recovery Rate for the Highest Ranking Class equals or exceeds the Weighted Average S&P Recovery Rate for such Class chosen by the Collateral Manager and the Weighted Average Floating Spread equals or exceeds the Weighted Average Floating Spread chosen by the Collateral Manager. The model version of the S&P CDO Monitor is available at https://www.sp.sfproducttools.com.

 

“S&P CDO Monitor Election Date”:  The date specified by the Collateral Manager, at any time after the Closing Date upon at least five (5) Business Days’ prior written notice to S&P, the Collateral Trustee and the Collateral Administrator, evidencing the Collateral Manager’s

 

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election to utilize the S&P CDO Monitor in determining compliance with the S&P CDO Monitor Test.

 

“S&P CDO Monitor Test”:  A test that will be satisfied on any date of determination (following receipt, at any time on or after the S&P CDO Monitor Election Date, by the Issuer and the Collateral Administrator of the Class Break-even Default Rates for each S&P CDO Monitor input file (in accordance with the definition of “Class Break-even Default Rate”)) if, after giving effect to a proposed sale or purchase of an additional Collateral Obligation, the Class Default Differential of the Highest Ranking Class of the Proposed Portfolio is positive. The S&P CDO Monitor Test will be considered to be improved if the Class Default Differential of the Proposed Portfolio that is not positive is greater than the corresponding Class Default Differential of the Current Portfolio.

 

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

 

“S&P Default Rate”:  With respect to a Collateral Obligation, the default rate as determined in accordance with Section 4 of Schedule 5 hereto

 

“S&P Equivalent Diversity Score”:  A single number that indicates collateral concentration in terms of both issuer and industry concentration, calculated as set forth in Schedule 6 hereto.

 

“S&P Equivalent Weighted Average Rating Factor”:  The number (rounded up to the nearest whole number) determined by:

 

(a)                                                                                 summing the products of (i) the principal balance of each Collateral Obligation (excluding Equity Securities and Defaulted Obligations) multiplied by (ii) the Rating Factor of such Collateral Obligation (as described below) and

 

(b)                                                                                 dividing such sum by the principal balance of all such Collateral Obligations.

 

The “Rating Factor” for each Collateral Obligation, is the number set forth in the table below opposite the S&P Rating of such Collateral Obligation.

 

	
S&P Rating
    	
 
    	
Rating Factor
    	
 
    	
S&P Rating
    	
 
    	
Rating Factor
    
	
AAA
    	
 
    	
1
    	
 
    	
BB+
    	
 
    	
940
    
	
AA+
    	
 
    	
10
    	
 
    	
BB
    	
 
    	
1,350
    
	
AA
    	
 
    	
20
    	
 
    	
BB-
    	
 
    	
1,766
    
	
AA-
    	
 
    	
40
    	
 
    	
B+
    	
 
    	
2,220
    
	
A+
    	
 
    	
70
    	
 
    	
B
    	
 
    	
2,720
    
	
A
    	
 
    	
120
    	
 
    	
B-
    	
 
    	
3,490
    
	
A-1
    	
 
    	
180
    	
 
    	
CCC+
    	
 
    	
4,770
    
	
BBB+
    	
 
    	
260
    	
 
    	
CCC
    	
 
    	
6,500
    
	
BBB
    	
 
    	
360
    	
 
    	
CCC-
    	
 
    	
8,070
    
	
BBB-
    	
 
    	
610
    	
 
    	
CC+ or lower
    	
 
    	
10,000
    

 

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“S&P Industry Classification”:  The S&P Industry Classifications set forth in Schedule 3 hereto, which industry classifications may be updated at the option of the Collateral Manager if S&P publishes revised industry classifications.

 

“S&P Minimum Weighted Average Recovery Rate”:  As of any date of determination and with respect to the Controlling Class, the recovery rate applicable to such Class of Secured Debt determined by reference to the “Recovery Rate Case” as set forth in the table in Section 2 of Schedule 5 chosen by the Collateral Manager (with prior notification to the Collateral Administrator and S&P) as currently applicable to the Collateral Obligations.

 

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

 

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

 

(ii)                                  with respect to any Collateral Obligation that is a DIP Collateral Obligation, the S&P Rating thereof shall be the credit rating assigned to such issue by S&P, or if such DIP Collateral Obligation was assigned a point-in-time rating by S&P that was withdrawn, such withdrawn rating may be used for 12 months after the assignment of such rating; provided that, if the Collateral Manager is or becomes aware of a Specified Amendment with respect to the DIP Collateral Obligation that, in the Collateral Manager’s reasonable judgment, would have a material adverse impact on the value of the DIP Collateral Obligation, such withdrawn rating may not be used unless S&P otherwise confirms the rating or provides an updated one; provided further that if any such Collateral Obligation that is a DIP Collateral Obligation is newly issued and the Collateral Manager expects an S&P credit rating within 90 days, the S&P Rating of such Collateral Obligation shall be “CCC-” until such credit rating is obtained from S&P;

 

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

 

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(a)                                 if an obligation of the issuer is publicly rated by Moody’s Investors Service, Inc. or, with the written consent of S&P, any successor-in-interest to Moody’s Investors Service, Inc., then the S&P Rating will be the S&P equivalent to the Moody’s Rating of such obligation, 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 (for the avoidance of doubt, if S&P does not provide consent in connection with a successor of Moody’s, the S&P Rating may be determined pursuant to clauses (b) through (c) below, to the extent applicable);

 

(b)                                 the S&P Rating may be based on a credit estimate provided by S&P, and in connection therewith, the Issuer, the Collateral Manager on behalf of the Issuer or the issuer of such Collateral Obligation will, prior to or within thirty (30) days after the acquisition of such Collateral Obligation, apply (and concurrently submit all available Information in respect of such application) to S&P for a credit estimate which shall be its S&P Rating; provided that, until the receipt from S&P of such estimate, such Collateral Obligation will have an S&P Rating as determined by the Collateral Manager in its sole discretion if the Collateral Manager certifies to the Collateral Trustee that it believes that such S&P Rating determined by the Collateral Manager is commercially reasonable and will be at least equal to such rating; provided further that if such Information is not submitted within such thirty (30) day period, then, pending receipt from S&P of such estimate, the Collateral Obligation will have (1) the S&P Rating as determined by the Collateral Manager for a period of up to ninety (90) days after the acquisition of such Collateral Obligation and (2) an S&P Rating of “CCC-”following such ninety day period; unless, during such ninety day period, the Collateral Manager has requested the extension of such period and S&P, in its sole discretion, has granted such request; provided further that with respect to any Collateral Obligation for which S&P has provided a credit estimate, the Collateral Manager (on behalf of the Issuer) shall request that S&P confirm or update such estimate annually (and pending receipt of such confirmation or new estimate, the Collateral Obligation shall have the prior estimate); provided further that such credit estimate shall expire 12 months after the acquisition of such Collateral Obligation, following which such Collateral Obligation shall have an S&P Rating of “CCC-” unless, during such 12-month period, the Issuer applies for renewal thereof in accordance with Section 7.14(b), in which case such credit estimate shall continue to be the S&P Rating of such Collateral Obligation until S&P has confirmed or revised such credit estimate, upon which such confirmed or revised credit estimate shall be the S&P Rating of such Collateral Obligation; provided further that such confirmed or revised credit estimate shall expire on the next succeeding 12-month anniversary of the date of the acquisition of such Collateral Obligation and (when renewed annually in accordance with Section 7.14(b)) on each 12-month anniversary thereafter; provided further that the Issuer will submit all available Information in respect of such Collateral Obligation to S&P notwithstanding that the Issuer is not applying to S&P for a credit estimate; provided further that the Issuer will promptly notify S&P of any material events

 

55

 

effecting any such Collateral Obligation if the Collateral Manager reasonably determines that such notice is required in accordance with S&P’s published criteria for credit estimates titled “What Are Credit Estimates And How Do They Differ From Ratings?” dated April 2011 (as the same may be amended or updated from time to time);

 

(c)                                  with respect to a DIP Collateral Obligation, if the S&P Rating cannot otherwise be determined pursuant to this definition, the S&P Rating of such Collateral Obligation will be “CCC-”; and

 

(d)                                 with respect to a Collateral Obligation that is not a Defaulted Obligation, the S&P Rating of such Collateral Obligation will at the election of the Issuer (at the direction of the Collateral Manager) be “CCC-”; provided that (i) neither the issuer of such Collateral Obligation nor any of its Affiliates are subject to any bankruptcy or reorganization proceedings and (ii) the issuer has not defaulted on any payment obligation in respect of any debt security or other obligation of the issuer at any time within the two year period ending on such date of determination, all such debt securities and other obligations of the issuer that are pari passu with or senior to the Collateral Obligation are current and the Collateral Manager reasonably expects them to remain current; provided that the Issuer will submit all available Information in respect of such Collateral Obligation to S&P as if the Issuer is were applying to S&P for a credit estimate; provided further that, if there is a Material Change with respect to any Collateral Obligation with an S&P Rating of “CCC-” determined pursuant to this clause, the Issuer, or the Collateral Manager on behalf of the Issuer, shall, upon notice or knowledge thereof, notify S&P and provide available Information with respect thereto via email to CreditEstimates@spglobal.com; or

 

(iv)                              with respect to a Current Pay Obligation that is rated “D” or “SD” by S&P, the S&P Rating of such Current Pay Obligation will be, at the election of the Issuer (at the direction of the Collateral Manager), “CCC-” or the S&P Rating determined pursuant to clause (iii)(b) above; provided that the Collateral Manager may not determine such S&P Rating pursuant to clause (iii)(b)(1) above;

 

provided that for purposes of the determination of the S&P Rating, (x) if the applicable rating assigned by S&P to an obligor or its obligations is on “credit watch positive” by S&P, such rating will be treated as being one sub-category above such assigned rating and (y) if the applicable rating assigned by S&P to an obligor or its obligations is on “credit watch negative” by S&P, such rating will be treated as being one sub-category below such assigned rating.

 

“S&P Rating Condition”:  With respect to any action taken or to be taken by or on behalf of the Issuer, a condition that is satisfied if S&P provides written confirmation (including by means  of electronic message, facsimile transmission, press release or posting to its website) to the Issuer and the Collateral Trustee (unless in the form of a press release or posted to its website) that no immediate withdrawal or reduction with respect to its then-current rating by S&P of any Class of Secured Debt will occur as a result of such action; provided that the S&P Rating Condition will be deemed to be satisfied if no Class of Secured Debt then Outstanding is

 

56

 

rated by S&P and provided further that such rating condition shall be deemed inapplicable with respect to such event or circumstance if (i) S&P has given written notice to the effect that it will no longer review events or circumstances of the type requiring satisfaction of the S&P Rating Condition for purposes of evaluating whether to confirm the then-current ratings (or initial ratings) of obligations rated by S&P; or (ii) S&P has given written notice to the Issuer, the Collateral Manager or the Collateral Trustee (or their counsel) that it will not review such event or circumstance for purposes of evaluating whether to confirm the then-current ratings (or Initial Ratings) of the Secured Debt then rated by S&P.

 

“S&P Recovery Amount”:  With respect to any Collateral Obligation, an amount equal to:  (a) the applicable S&P Recovery Rate multiplied by (b) the Principal Balance of such Collateral Obligation.

 

“S&P Recovery Rate”:  With respect to a Collateral Obligation, the recovery rate set forth in Section 1 of Schedule 5 using the Initial Rating of the most senior Class of Secured Debt Outstanding at the time of determination.

 

“S&P Recovery Rating”:  With respect to a Collateral Obligation for which an S&P Recovery Rate is being determined, the “Recovery Rating” assigned by S&P to such Collateral Obligation based upon the tables set forth in Schedule 5 hereto.

 

“S&P Region Classification”:  With respect to a Collateral Obligation, the applicable classification set forth in the table titled “S&P Region Classification” in Section 3 of Schedule 5.

 

“S&P Weighted Average Life”:  As of any date of determination, with respect to all Collateral Obligations other than Defaulted Obligations, the number of years following such date obtained by dividing (a) the sum of the products of (i) the number of years (rounded to the nearest one-hundredth thereof) from such date of determination to the date of each Scheduled Distribution of Principal of each such Collateral Obligation multiplied by (ii) the outstanding principal balance of such Collateral Obligation by (b) the aggregate remaining principal balance at such time of all Collateral Obligations other than Defaulted Obligations.

 

“Sale”:  The meaning specified in Section 5.17.

 

“Sale Proceeds”:  All proceeds (excluding accrued interest, if any) received with respect to Assets as a result of sales of such Assets in accordance with the restrictions described in Article XII less any reasonable expenses incurred by the Collateral Manager, the Collateral Administrator or the Collateral Trustee (other than amounts payable as Administrative Expenses) in connection with such sales. Sale Proceeds will include Principal Financed Accrued Interest received in respect of such sale.

 

“Schedule of Collateral Obligations”:  The schedule of Collateral Obligations attached as Schedule 1 hereto, which schedule shall include the borrower and Principal Balance of each  Collateral Obligation included therein, as amended from time to time (without the consent of or any action on the part of any Person) to reflect the release of Collateral Obligations pursuant to Article X hereof and the inclusion of additional Collateral Obligations as provided in Section 12.2 and Section 12.3 hereof.

 

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“Scheduled Distribution”:  With respect to any Collateral Obligation, each payment of principal and/or interest scheduled to be made by the related Obligor under the terms of such Collateral Obligation (determined in accordance with the assumptions specified in Section 1.3 hereof) after (a) in the case of the initial Collateral Obligations, the Closing Date or (b) in the case of Collateral Obligations added or substituted after the Closing Date, the related trade date for such Collateral Obligation, as adjusted pursuant to the terms of the related Underlying Documents.

 

“Second Lien Loan”:  Any Loan that:  (a) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the Obligor of the Loan (other than with respect to liquidation, trade claims, capitalized leases or similar obligations) but which is subordinated (with respect to liquidation preferences with respect to pledged collateral) to a Senior Secured Loan of the Obligor; (b) is secured by a valid second-priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under the Loan (subject to customary exceptions for permitted liens, including, without limitation, tax liens); (c) the value of the collateral securing the Loan at the time of purchase together with other attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal or higher seniority secured by a lien or security interest in the same collateral; and (d) is not secured solely or primarily by common stock or other equity interests; provided that the limitation set forth in this clause (d) shall not apply with respect to a Loan made to a parent entity that is secured solely or primarily by the stock of one or more of the subsidiaries of such parent entity to the extent that the granting by any such subsidiary of a lien on its own property would violate law or regulations applicable to such subsidiary (whether the obligation secured is such Loan or any other similar type of indebtedness owing to third parties).

 

“Secured Debt”:  Collectively, the Secured Notes and the Class A Loans.

 

“Secured Notes”: The Class A Notes, the Class A-F Notes and the Class B Notes, authorized by, and authenticated and delivered under, this Indenture (as specified in Section 2.3) together with any additional Secured Notes issued pursuant to and accordance with this Indenture.

 

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

 

“Securities Account Control Agreement”:  The Securities Account Control Agreement dated as of the Closing Date among the Issuer, the Collateral Trustee and State Street Bank and Trust Company, as custodian.

 

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

 

“Securities Intermediary”:  As defined in Section 8-102(a)(14) of the UCC.

 

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

 

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

 

“Senior Secured Loan”:  Any assignment of or Participation Interest in a Loan that:  (a) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the obligor of the Loan (other than with respect to trade claims, capitalized leases or similar obligations); (b) is secured by a valid first-priority perfected security interest or lien in, to or on specified collateral securing the obligor’s obligations under the Loan (subject to customary exceptions for permitted liens, including, without limitation, tax liens); (c) the value of the collateral securing the Loan at the time of purchase together with other attributes of the obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal seniority secured by a first lien or security interest in the same collateral; and (d) is not secured solely or primarily by common stock or other equity interests; provided that, if such Loan is made to a parent entity that is secured solely or primarily by the stock of one or more of the subsidiaries of such parent entity to the extent that the granting by any such subsidiary of a lien on its own property would violate law or regulations applicable to such subsidiary (whether the obligation secured is such Loan or any other similar type of indebtedness owing to third parties), then the limitation set forth in this clause (d) shall not apply with respect to such Loan.

 

“Share Register” means the register maintained by or on behalf of the Issuer under the Fiscal Agency Agreement.

 

“Sole Equity Owner”: A person who is treated for U.S. federal income tax purposes as the sole owner of the Subordinated Securities and the other securities that are treated as equity of the Issuer for U.S. federal income tax purposes.

 

“Special Redemption”:  As defined in Section 9.6.

 

“Special Redemption Amount”:  As defined in Section 9.6.

 

“Special Redemption Date”:  As defined in Section 9.6.

 

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

 

(a)                                 modify the amortization schedule with respect to such Collateral Obligation in a manner that (i) reduces the dollar amount of any Scheduled Distribution by more than the greater of (x) 15% and (y) U.S.$250,000, (ii) postpones any Scheduled Distribution by more than two payment periods or (iii) causes the Weighted Average Life of the applicable Collateral Obligation to increase by more than 15%;

 

(b)                                 reduce or increase the cash interest rate payable by the Obligor thereunder by more than 50 basis points (excluding any increase in an interest rate arising by operation of a default or penalty interest clause under a Collateral Obligation or as a

 

59

 

result of an  increase in the interest rate index for any reason other than such amendment, waiver or modification or in connection with a change in rate due to a LIBOR Event);

 

(c)                                  extend the stated maturity date of such Collateral Obligation by more than 12 months or beyond the Stated Maturity;

 

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

 

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

 

(f)                                   reduce the principal amount of the applicable Collateral Obligation; or

 

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

 

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

 

“Standby Directed Investment”:  Shall mean, initially, interest bearing time deposit (which investment is, for the avoidance of doubt, an Eligible Investment); provided that the Issuer, or the Collateral Manager on behalf of the Issuer, may by written notice to the Collateral Trustee change the Standby Directed Investment to any other Eligible Investment of the type described in clause (b) of the definition of “Eligible Investments” maturing not later than the earlier of (i) 30 days after the date of such investment (unless putable at par to the issuer thereof) or (ii) the Business Day immediately preceding the next Payment Date (or such shorter maturities expressly provided herein).

 

“State Street”:  State Street Bank and Trust Company.

 

“Stated Maturity”:  With respect to the Secured Debt of any Class, the date specified as such in Section 2.3.

 

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

 

“Step-Up Obligation”:  An obligation or security which by the terms of the related Underlying Documents provides for an increase in the per annum interest rate on such obligation or security (other than by reason of any change in the applicable index or benchmark rate used to determine such interest rate), or in the spread over the applicable index or benchmark rate, solely as a function of the passage of time; provided that an obligation or security providing for

 

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payment of a constant rate of interest at all times after the date of acquisition by the Issuer shall not constitute a Step-Up Obligation.

 

“Structured Finance Obligation”:  Any obligation issued by a special purpose vehicle and secured directly by, referenced to, or representing ownership of, a pool of receivables or other financial assets of any obligor, including collateralized debt obligations and mortgage-backed securities; provided that any asset-based loan facilities and loans directly to financial services companies, factoring businesses, health care providers and other genuine operating businesses do not constitute Structured Finance Obligations.

 

“Subordinated Management Fee”:  The fee payable to the Collateral Manager in arrears on each Payment Date pursuant to Section 8(a) of the Collateral Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.25% per annum, calculated on the basis of the actual number of days in the applicable Interest Accrual Period divided by 360, of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date.

 

“Subordinated Securities”:  The Preferred Shares.

 

“Substitute Collateral Obligations”:  Collateral Obligations conveyed by ORCC to the Issuer as substitute Collateral Obligations pursuant to Section 12.3(a) since the Closing Date.

 

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

 

(i)                                     the Coverage Tests, Collateral Quality Test and Concentration Limitations are satisfied or, if any requirement or test thereof is not satisfied, the level of compliance with such requirement or test is maintained or improved;

 

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

 

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

 

(iv)                              the S&P Rating of each Substitute Collateral Obligation is equal to or higher than the S&P Rating of the Collateral Obligation being substituted for;

 

(v)                                 with respect to any Substitute Collateral Obligation received by the Issuer during the Reinvestment Period, such Substitute Collateral Obligation has the same or shorter maturity than the Collateral Obligation being substituted for or the Weighted Average Life Test is satisfied;

 

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(vi)                              with respect to any Substitute Collateral Obligation received by the Issuer after the end of the Reinvestment Period, such Substitute Collateral Obligation has a maturity no more than one year after the maturity of the Collateral Obligation being substituted for and the Weighted Average Life Test is satisfied; and

 

(vii)                           the obligor of such Substitute Collateral Obligation is not the same as the obligor of the Collateral Obligation being substituted for.

 

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

 

(i)                                     Collateral Obligation that becomes a Defaulted Obligation;

 

(ii)                                  Collateral Obligation that has a Material Covenant Default;

 

(iii)                               Collateral Obligation that becomes subject to a proposed Specified Amendment;

 

(iv)                              Obligation that is an Equity Security or otherwise no longer satisfies the definition of Collateral Obligation;

 

(v)                                 Collateral Obligation that becomes a Post-Transition S&P CCC Collateral Obligation; provided that no more than 10 Collateral Obligations in the aggregate may be substituted solely on the basis of becoming a Post-Transition S&P CCC Collateral Obligation; or

 

(vi)                              Collateral Obligation that becomes a Credit Risk Obligation.

 

“Substitution Period”:  The meaning specified in Section 12.3(a)(ii).

 

“Supermajority”:  with respect to (i) any Class of Secured Debt, the holders of at least 66-2/3% of the Aggregate Outstanding Amount of the Secured Debt of such Class and (ii) the Subordinated Securities, the holders of at least 66-2/3% of the Aggregate Outstanding Amount of the Subordinated Securities.

 

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

 

“Target Initial Par Amount”:  U.S.$600,000,000.

 

“Target Initial Par Condition”:  A condition satisfied as of the Effective Date if the Aggregate Principal Balance of Collateral Obligations (i) that are held by the Issuer and (ii) of which the Issuer has committed to purchase on such date, together with the amount of any proceeds of prepayments, maturities or redemptions of Collateral Obligations purchased by the Issuer prior to such date, will equal or exceed the Target Initial Par Amount.

 

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

 

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“Tax Account Reporting Rules”: FATCA, and any other laws, intergovernmental agreements, administrative guidance or official interpretations, adopted or entered into on, before or after the date of this Indenture, by one or more governments providing for the collection of financial account information and the automatic exchange of such information between or among governments for purposes of improving tax compliance, including but not limited to the Cayman FATCA Legislation and any laws, intergovernmental agreements or other guidance adopted pursuant to the global standard for automatic exchange of financial account information issued by the Organisation for Economic Co-operation and Development (including the CRS).

 

“Tax Account Reporting Rules Compliance”: Compliance with Tax Account Reporting Rules as necessary to avoid (a) fines, penalties, or other sanctions imposed on the Issuer or any of their directors, or (b) the withholding or imposition of tax from or in respect of payments to or for the benefit of the Issuer.

 

“Tax Account Reporting Rules Compliance Costs”:  The costs to the Issuer of achieving Tax Account Reporting Rules Compliance.

 

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

 

“Tax Event”:  (i)(x) Any Obligor under any Collateral Obligation being required to deduct or withhold from any payment under such Collateral Obligation to the Issuer for or on account of any Tax for whatever reason and such Obligor is not required to pay to the Issuer such additional amount as is necessary to ensure that the net amount actually received by the Issuer (free and clear of Taxes, whether assessed against such Obligor or the Issuer (other than withholding tax imposed on commitment fees or similar fees or fees that by their nature are commitment fees or similar fees, to the extent that such withholding tax does not exceed 30% of the amount of such fees)) will equal the full amount that the Issuer would have received had no such deduction or withholding occurred and (y) the total amount of such deductions or withholdings on the Assets results in a payment by, or charge or tax burden to, the Issuer that results or will result in the withholding of 5% or more of the aggregate Scheduled Distributions for all Collateral Obligations for any Collection Period, or (ii) any jurisdiction imposing net income, profits or similar Tax on the Issuer in an aggregate amount in any Collection Period in excess of U.S.$1,000,000.

 

Notwithstanding anything in this Indenture, the Collateral Manager shall give the Collateral Trustee prompt written notice of the occurrence of a Tax Event upon its discovery thereof. Until the Collateral Trustee receives written notice from the Collateral Manager, the Collateral Trustee shall not be deemed to have notice or knowledge to the contrary.

 

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“Tax Jurisdiction”:  The Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, Jersey, Singapore, the U.S. Virgin Islands, Sint Maarten, Saba, Sint Eustatius, Aruba, Bonaire or Curaçao.

 

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

 

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

 

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

 

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

 

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

 

“Trading Plan”:  The meaning specified in Section 12.2(c).

 

“Trading Plan Period”:  The meaning specified in Section 12.2(c).

 

“Transaction Documents”:  This Indenture, the Credit Agreement, the Collateral Management Agreement, the Administration Agreement, the Registered Office Agreement, the AML Services Agreement, the FATCA Services Agreement, the Loan Sale Agreements, the Fiscal Agency Agreement, the Collateral Administration Agreement, the Securities Account Control Agreement and the Placement Agreement.

 

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

 

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

 

“Trust Officer”:  When used with respect to the Collateral Trustee, any officer within the Corporate Trust Office (or any successor group of the Collateral Trustee) including any vice president, assistant vice president or officer of the Collateral Trustee customarily performing

 

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functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such Person’s knowledge of and familiarity with the particular subject and, in each case, having direct responsibility for the administration of this transaction.

 

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

 

“UCITS Directive”:  Directive 2009/65/EC on Undertakings for Collective Investment in Transferrable Securities, including any implementing and/or delegated regulation, technical standards, level 2 measures and/or guidance related thereto, as may be amended, replaced or supplemented from time to time.

 

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

 

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

 

“United States”:  The United States of America, its territories and its possessions.

 

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

 

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

 

“U.S. Person” and “U.S. person”:  The meanings specified in Section 7701(a)(30) of the Code or in Regulation S, as the context requires.

 

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

 

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

 

“Weighted Average Floating Spread”:  As of any Measurement Date, the number obtained by dividing:  (a) the amount equal to (A) the Aggregate Funded Spread plus (B) the Aggregate Unfunded Spread by (b) an amount equal to the lesser of (A) the Aggregate Principal Balance of all Floating Rate Obligations as of such Measurement Date and (B) either (x) with respect to the S&P CDO Monitor Test, the Aggregate Principal Balance and (y) otherwise, the Reinvestment Target Par Balance minus the Aggregate Principal Balance of Fixed Rate Obligations.

 

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

 

(a)                                 the Average Life at such time of each such Collateral Obligation by (b) the Principal Balance of such Collateral Obligation;

 

and dividing such sum by:

 

(b)                                 the Aggregate Principal Balance at such time of all such Collateral Obligations.

 

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

 

“Weighted Average Life Test”:  A test satisfied on any date of determination if the Weighted Average Life of the Collateral Obligations as of such date is less than or equal to the value in the column entitled “Weighted Average Life Value” in the table below corresponding to the immediately preceding Payment Date (or, prior to the first Payment Date following the Closing Date, the Closing Date):

 

	
Weighted Average Life Value
    
	
Closing Date
    	
 
    	
8.00
    
	
November 20, 2019
    	
 
    	
7.50
    
	
February 20, 2020
    	
 
    	
7.25
    
	
May 20, 2020
    	
 
    	
7.00
    
	
August 20, 2020
    	
 
    	
6.75
    
	
November 20, 2020
    	
 
    	
6.50
    
	
February 20, 2021
    	
 
    	
6.25
    
	
May 20, 2021
    	
 
    	
6.00
    
	
August 20, 2021
    	
 
    	
5.75
    
	
November 20, 2021
    	
 
    	
5.50
    
	
February 20, 2022
    	
 
    	
5.25
    
	
May 20, 2022
    	
 
    	
5.00
    
	
August 20, 2022
    	
 
    	
4.75
    
	
Closing Date
    	
 
    	
8.00
    
	
November 20, 2019
    	
 
    	
7.50
    
	
February 20, 2020
    	
 
    	
7.25
    
	
May 20, 2020
    	
 
    	
7.00
    
	
August 20, 2020
    	
 
    	
6.75
    
	
November 20, 2020
    	
 
    	
6.50
    
	
February 20, 2021
    	
 
    	
6.25
    
	
May 20, 2021
    	
 
    	
6.00
    
	
August 20, 2021
    	
 
    	
5.75
    
	
November 20, 2021
    	
 
    	
5.50
    
	
February 20, 2022
    	
 
    	
5.25
    
	
May 20, 2022
    	
 
    	
5.00
    
	
August 20, 2022
    	
 
    	
4.75
    

 

66

 

	
Weighted Average Life Value
    
	
November 20, 2022
    	
 
    	
4.50
    
	
February 20, 2023
    	
 
    	
4.25
    
	
May 20, 2023
    	
 
    	
4.00
    
	
August 20, 2023
    	
 
    	
3.75
    
	
November 20, 2023
    	
 
    	
3.50
    
	
February 20, 2024
    	
 
    	
3.25
    
	
May 20, 2024
    	
 
    	
3.00
    
	
August 20, 2024
    	
 
    	
2.75
    
	
November 20, 2024
    	
 
    	
2.50
    
	
February 20, 2025
    	
 
    	
2.25
    
	
May 20, 2025
    	
 
    	
2.00
    
	
August 20, 2025
    	
 
    	
1.75
    
	
November 20, 2025
    	
 
    	
1.50
    
	
February 20, 2026
    	
 
    	
1.25
    
	
May 20, 2026
    	
 
    	
1.00
    
	
August 20, 2026
    	
 
    	
0.75
    
	
November 20, 2026
    	
 
    	
0.50
    
	
February 20, 2027
    	
 
    	
0.25
    
	
May 20, 2027 and   after
    	
 
    	
0.00
    

 

“Weighted Average S&P Recovery Rate”:  As of any date of determination, the number, expressed as a percentage and determined separately for each Class of Secured Debt that is rated by S&P, obtained by summing the products obtained by multiplying the Principal Balance of each Collateral Obligation (other than Defaulted Obligations) by its corresponding recovery rate as determined in accordance with Section 1 of Schedule 5 hereto, dividing such sum by the Aggregate Principal Balance of all Collateral Obligations (other than Defaulted Obligations), and rounding to the nearest tenth of a percent.

 

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

 

Section 1.2                                    Usage of Terms. With respect to all terms in this Indenture, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all amendments, modifications and supplements thereto or any changes therein entered into in accordance with their respective terms and not prohibited by this Indenture; references to Persons include their permitted successors and assigns; and the term “including” means “including without limitation.”

 

Section 1.3                                    Assumptions as to Assets. In connection with all calculations required to be made pursuant to this Indenture or the Credit Agreement with respect to Scheduled Distributions on any Asset, or any payments on any other assets included in the Assets, with respect to the sale of and reinvestment in Collateral Obligations, and with respect to the income that can be earned on Scheduled Distributions on such Assets and on any other amounts that may be received for deposit in the Collection Account, the provisions set forth in this Section 1.3 shall be applied. The provisions of this Section 1.3 shall be applicable to any determination or calculation that is covered by this Section 1.3, whether or not reference is specifically made to

 

67

 

Section 1.3, unless some other method of calculation or determination is expressly specified in the particular provision.

 

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

 

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

 

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

 

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

 

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

 

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

 

68

 

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

 

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

 

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

 

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

 

(k)                                 Except as expressly set forth in this Indenture, the “outstanding principal balance” and the “principal balance” of a Revolving Collateral Obligation or a Delayed Drawdown Collateral Obligation shall include all unfunded commitments that have not been irrevocably reduced or withdrawn.

 

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

 

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

 

(n)                                 To the extent of any ambiguity in the interpretation of any definition or term contained herein or to the extent more than one methodology can be used to make any of the determinations or calculations set forth herein, the Collateral Administrator shall request direction from the Collateral Manager as to the interpretation and/or methodology to be used, and the Collateral Administrator shall follow such direction, and together with the Collateral Trustee, shall be entitled to conclusively rely thereon without any responsibility or liability therefor.

 

69

 

(o)                                 For purposes of calculating compliance with any tests under this Indenture, the trade date (and not the settlement date) with respect to any acquisition or disposition of a Collateral Obligation or Eligible Investment shall be used to determine whether and when such acquisition or disposition has occurred.

 

(p)                                 For all purposes where expressly used in this Indenture, the “outstanding principal balance” and the “principal balance” shall exclude capitalized interest, if any.

 

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

 

ARTICLE II

 

THE SECURED DEBT

 

Section 2.1                                    Forms Generally. The Notes and the Collateral Trustee’s or Authenticating Agent’s certificate of authentication thereon (the “Certificate of Authentication”) shall be in substantially the forms required by this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be consistent herewith, determined by the Responsible Officers of the Applicable Issuer executing such Notes as evidenced by their execution of such Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.  The Applicable Issuer may assign one or more CUSIPs or similar identifying numbers to Notes for administrative convenience or in connection with Tax Account Reporting Rules Compliance.

 

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

 

(b)                                 Secured Notes.

 

(i)                    The Secured Notes sold to Persons that are not “U.S. Persons” (as defined in Regulation S) shall each be issued initially in the form of one permanent global Note per Class in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-1 hereto (each, a “Regulation S Global Note”), and shall be deposited on behalf of the subscribers for such Secured Notes represented thereby with the Collateral Trustee as custodian for, and registered in the name of a nominee of, DTC for the respective accounts of Euroclear and Clearstream, duly executed by the Applicable Issuer and authenticated by the Collateral Trustee or the Authenticating Agent as hereinafter provided.

 

(ii)                 The Secured Notes sold to Persons that are QIB/QPs shall each be issued initially in the form of one permanent global Note per Class in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-1

 

70

 

hereto (each, a “Rule 144A Global Note”) and shall be deposited on behalf of the subscribers for such Secured Notes represented thereby with the Collateral Trustee as custodian for, and registered in the name of Cede & Co., a nominee of, DTC, duly executed by the Applicable Issuer and authenticated by the Collateral Trustee or the Authenticating Agent as hereinafter provided.

 

(iii)              The Secured Notes sold to persons that are a QIB/QP or any corporation, partnership, limited liability company or other entity (other than a trust), where each shareholder, partner, member or other equity owner of which is a QP, may be issued in the form of one or more definitive, fully registered notes without coupons substantially in the form attached as Exhibit A-2 hereto (a “Certificated Secured Note”) which shall be  registered in the name of the beneficial owner or a nominee thereof, duly executed by the Applicable Issuer and authenticated by the Collateral Trustee or Authenticating Agent as hereinafter provided.

 

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

 

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

 

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

 

Agent Members shall have no rights under this Indenture with respect to any Global Notes held on their behalf by the Collateral Trustee, as custodian for DTC, and DTC may be treated by the Issuers, the Collateral Trustee, and any agent of the Issuers or the Collateral Trustee as the absolute owner of such Note for all payment purposes whatsoever, and for all other purposes except as provided in Section 14.2(e). Notwithstanding the foregoing, nothing herein shall prevent the Issuers, the Collateral Trustee, or any agent of the Issuers or the Collateral Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

 

Section 2.3                                    Authorized Amount; Stated Maturity; Denominations. The aggregate principal amount of Secured Notes that may be authenticated and delivered under this Indenture and the Class A Loans that may be incurred under the Credit Agreement is limited to U.S.$390,000,000 (except for Secured Debt authenticated and delivered or incurred upon registration of transfer of, or in exchange for, or in lieu of, other Secured Debt pursuant to Section 2.4, Section 2.6, Section 2.7 or Section 8.5 of this Indenture).

 

71

 

Such Secured Debt and the Subordinated Securities that will be issued by the Issuer on the Closing Date pursuant to its Memorandum and Articles shall be divided into the Classes, having the designations, original principal amounts and other characteristics as follows:

 

	
Class Designation
    	
 
    	
A Notes
    	
 
    	
A-F Notes
    	
 
    	
A Loans
    	
 
    	
B Notes
    	
 
    	
Subordinated Securities(1)
    	
 
    
	
Applicable Issuer
    	
 
    	
Issuers
    	
 
    	
Issuers
    	
 
    	
Issuers
    	
 
    	
Issuers
    	
 
    	
Issuer
    	
 
    
	
Original Principal Amount(2)
    	
 
    	
U.S.$242,000,000
    	
 
    	
U.S.$30,000,000
    	
 
    	
U.S.$50,000,000
    	
 
    	
U.S.$68,000,000
    	
 
    	
U.S.$206,106,000
    	
 
    
	
Stated Maturity
    	
 
    	
The Payment Date in   May 2031
    	
 
    	
The Payment Date in May 2031
    	
 
    	
The Payment Date in   May 2031
    	
 
    	
The Payment Date in   May 2031
    	
 
    	
N/A
    	
 
    
	
Fixed Rate Debt
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
Interest Rate:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Floating Rate Debt
    	
 
    	
Yes
    	
 
    	
No
    	
 
    	
Yes
    	
 
    	
Yes
    	
 
    	
N/A
    	
 
    
	
Index
    	
 
    	
LIBOR
    	
 
    	
N/A
    	
 
    	
LIBOR
    	
 
    	
LIBOR
    	
 
    	
N/A
    	
 
    
	
Index Maturity(3)
    	
 
    	
3 month
    	
 
    	
N/A
    	
 
    	
3 month
    	
 
    	
3 month
    	
 
    	
N/A
    	
 
    
	
Spread(4)
    	
 
    	
1.80%
    	
 
    	
N/A
    	
 
    	
1.80%
    	
 
    	
2.70%
    	
 
    	
N/A
    	
 
    
	
Fixed Rate of Interest
    	
 
    	
N/A
    	
 
    	
4.165%
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    	
N/A
    	
 
    
	
Initial Rating(s):
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
S&P
    	
 
    	
“AAA(sf)”
    	
 
    	
“AAA(sf)”
    	
 
    	
“AAA(sf)”
    	
 
    	
“AA(sf)”
    	
 
    	
N/A
    	
 
    
	
Priority Class(es)
    	
 
    	
None
    	
 
    	
None
    	
 
    	
None
    	
 
    	
A Notes, A-F Notes, A   Loans
    	
 
    	
A Notes, A-F Notes, A   Loans, B
    	
 
    
	
Pari Passu Class(es)
    	
 
    	
A-F Notes, A Loans
    	
 
    	
A Notes, A Loans
    	
 
    	
A Notes, A-F Notes
    	
 
    	
None
    	
 
    	
None
    	
 
    
	
Junior Class(es)
    	
 
    	
B, Subordinated   Securities
    	
 
    	
B, Subordinated   Securities
    	
 
    	
B, Subordinated   Securities
    	
 
    	
Subordinated Securities
    	
 
    	
None
    	
 
    
	
Interest deferrable
    	
 
    	
No
    	
 
    	
No
    	
 
    	
No
    	
 
    	
No
    	
 
    	
N/A
    	
 
    
	
Form
    	
 
    	
Book-Entry
    	
 
    	
Book-Entry
    	
 
    	
Physical
    	
 
    	
Book-Entry
    	
 
    	
Physical
    	
 
    

 

The Secured Notes shall be issued in minimum denominations of U.S.$250,000 and integral multiples of U.S.$1.00 in excess thereof (the “Minimum Denominations”).

 

Section 2.4                                    Additional Debt or Subordinated Securities. (a) At any time during the Reinvestment Period, (or, in the case of an issuance solely of additional Subordinated Securities or Junior Mezzanine Debt, at any time) subject to the prior consent of a Majority of the Subordinated Securities, the Retention Holder and the Collateral Manager, the Issuers or the Issuer, as applicable may (x) with the consent of a Majority of the Controlling Class (such

 

(1)         On the Closing Date, the Issuer shall also issue U.S.$206,106,000 of Subordinated Securities in the form of 206,106 Preferred Shares, U.S.$0.0001 par value per share pursuant to the Memorandum and Articles at an issue price of U.S.$1,000 per share in minimum denominations of U.S.$2,500,000.  The Preferred Shares shall be subordinated to each Class of Secured Debt, and shall only be transferred or resold in compliance with the terms of this Indenture and the Fiscal Agency Agreement.

 

(2)         As of the Closing Date.  Represents aggregate issue price in the case of the Subordinated Securities.

 

(3)         LIBOR shall be calculated by reference to three-month LIBOR, in accordance with the definition of LIBOR; provided that LIBOR for the first Interest Accrual Period will equal the rate determined by interpolating between the rate appearing on the Reuters Screen for deposits with a term of three months and the rate appearing on the Reuters Screen for deposits with a term of six months.

 

(4)         The spread over LIBOR (or, in the case of any Fixed Rate Debt, the stated rate of interest) with respect to any Class of Re-Pricing Eligible Notes may be reduced in connection with a Re-Pricing of such Class of Re-Pricing Eligible Notes, subject to the conditions set forth in Section 9.7.

 

72

 

consent not to be unreasonably withheld or delayed), issue and sell additional Secured Debt of each existing Class (on a pro rata basis with respect to each Class of Secured Debt); and/or (y) issue and sell additional Subordinated Securities or notes of any one or more new classes of notes that are fully subordinated to the existing Secured Debt (or to the most junior class of securities of the Issuer issued pursuant to this Indenture, if any class of securities issued pursuant to this Indenture other than the Secured Debt is then Outstanding) (such additional debt, “Junior Mezzanine Debt”); provided that (i) in the case of an issuance or incurrence of additional Secured Debt of existing Classes or additional Subordinated Securities, the terms of the Secured Debt or Subordinated Securities issued or incurred must be identical to the respective terms of previously issued or incurred Secured Debt of the applicable Class or previously issued Subordinated Securities, as applicable (except that the interest due on additional Secured Debt will accrue from the issue date of such additional Secured Debt and the spread or fixed rate of interest (after giving effect to any original issue discount) of such Secured Debt may be lower (or higher) than those of the initial Secured Debt of that Class; provided that (x) if such Class is a Class of Floating Rate Debt, such additional Secured Debt must also be Floating Rate Debt and have a floating rate based on the same benchmark rate as the corresponding existing Class of such Floating Rate Debt and (y) if such Class is a Class of Fixed Rate Debt, such additional Secured Debt must also be Fixed Rate Debt), (ii) unless only additional Junior Mezzanine Debt or Subordinated Securities are being issued or incurred, the S&P Rating Condition shall have been satisfied, (iii) the proceeds of any Additional Debt or additional Subordinated Securities (net of fees and expenses incurred in connection with such issuance or incurrence) shall be treated as Principal Proceeds and used to purchase additional Collateral Obligations or as otherwise permitted hereunder; provided that the Collateral Manager may elect to treat any portion of the proceeds from the issuance or incurrence of additional Subordinated Securities or Junior Mezzanine Debt as Interest Proceeds, (iv) the Overcollateralization Ratio with respect to each Class of Secured Debt shall not be reduced after giving effect to such issuance or incurrence unless after giving effect to such issuance the Overcollateralization Ratio is at least equal to the Overcollateralization Ratio as of the Effective Date, (v) only in the case of an issuance or incurrence of additional Secured Debt, Tax Advice shall be delivered to the Collateral Trustee, in form and substance satisfactory to the Collateral Manager and the Collateral Trustee, to the effect that any additional Class A Debt and Class B Notes will be treated as indebtedness for U.S. federal income tax purposes, (vi) any such additional issuance will be issued in a manner that will allow the Issuer to accurately provide the information described in Treasury Regulations section 1.1275 3(b)(1)(i), (vii) the issuance of such additional notes does not cause the Issuer to be treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, (viii) any additional Subordinated Securities are issued only to holders or beneficial owners that are “United States persons” as defined in Section 7701(a)(30) of the Code and agree to provide the Issuer, the Collateral Manager and the Trustee with a correct, complete and properly executed IRS Form W-9 (or applicable successor form) with appropriate attachments (if any), and (ix) an Officer’s certificate of the Issuer shall be delivered to the Collateral Trustee stating that the conditions of this Section 2.4(a) have been satisfied.

 

(b)                                 Interest on the Additional Debt and distributions on additional Subordinated Securities shall be payable commencing on the first Payment Date following the issue date of such Additional Debt or additional Subordinated Securities, as applicable (if issued prior to the applicable Record Date). The Additional Debt of an existing Class shall rank pari

 

73

 

passu in all respects with the initial Secured Debt of that Class and additional Subordinated Securities shall rank pari passu in all respects with the initial Subordinated Securities.

 

(c)                                  Any Additional Debt of each Class issued pursuant to this Section 2.4 and any additional Subordinated Securities issued pursuant to the Issuer’s Memorandum and Articles shall, to the extent reasonably practicable, be offered first to Holders of that Class or to the Holders of the Subordinated Securities, as applicable, in such amounts as are necessary to preserve (on an approximate basis) their pro rata holdings of Secured Debt of such Class or of the Subordinated Securities, as applicable; provided that the Collateral Manager and the Retention Holder and their respective affiliates shall have priority over such existing holders to the extent that the Collateral Manager or the Retention Holder determines in its sole discretion that the purchase of such additional Secured Debt or additional Subordinated Securities, as applicable, is required to satisfy the U.S. Risk Retention Rules.

 

Section 2.5                                    Execution, Authentication, Delivery and Dating. (a)  The Notes shall be executed on behalf of the Applicable Issuer by one of its Authorized Officers. The signature of such Authorized Officer on the Notes may be manual or facsimile.

 

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

 

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

 

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

 

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

 

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

 

74

 

Authentication upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

(b)  Conversion of Class A Loans.

 

(i)                                                 Notwithstanding anything herein to the contrary and in accordance with the procedures set forth in Section 3.7 of the Credit Agreement, upon written notice from a Converting Lender to the Collateral Trustee, the Loan Agent, the Rating Agency and the Co-Issuers, provided in accordance with the Credit Agreement, such Converting Lender may elect any Payment Date (such Payment Date, the “Conversion Date”) upon which all or a portion of the Aggregate Outstanding Amount of the Class A Loans held by such Converting Lender shall be converted into Class A Notes of an equal Aggregate Outstanding Amount in accordance with the terms hereof and the terms of the Credit Agreement; provided that (x) the Conversion Date shall be no earlier than the fifth Business Day following the date such notice is delivered (or such later date as may be reasonably agreed to by such Converting Lender, the Loan Agent and the Collateral Trustee) and (y) the Conversion Date may only occur on a Payment Date.

 

(ii)                                  On the Conversion Date, (A) the Aggregate Outstanding Amount of the Class A Notes shall be increased by the current Aggregate Outstanding Amount of the Class A Loans so converted and (B) the Class A Loans so converted shall cease to be Outstanding and shall be deemed to have been repaid in full for all purposes hereunder and under the Credit Agreement. Class A Notes may not be converted into Class A Loans.

 

(iii)                               The Co-Issuers, the Collateral Manager and the Converting Lender agree to provide reasonable assistance to the Collateral Trustee and the Loan Agent in connection with such conversion, including, but not limited to, providing applicable instructions to DTC, the Collateral Trustee and the Note or Loan Registrar, as applicable.

 

(iv)                              Each Class A Lender may elect, in its sole discretion, to exercise the Conversion Option concurrently with an assignment of all or a portion of its Class A Loans (an “Assignment/Conversion”) such that the effective date of the assignment occurs on the related Conversion Date and the assignee receives Class A Notes (or interest therein) in lieu of the portion of Class A Loans being assigned. Any assignment made in connection with an Assignment/Conversion shall meet the requirements for an assignment set forth in Section 3.7 of the Credit Agreement. Any Class A Lender electing to make an Assignment/Conversion shall deliver to the Collateral Trustee, the Loan Agent and the Co-Issuers at least five Business Days prior to the Conversion Date, (w) an executed Assignment Agreement (as defined in the Credit Agreement), (x) a completed notice substantially in the form of Exhibit C to the Credit Agreement, (y) the assignment fee required under the Credit Agreement and (z) a written certification from the assignee substantially in the form of Exhibit B-6 or Exhibit B-7, as applicable.

 

Section 2.6                                    Registration, Registration of Transfer and Exchange. (a) The Issuer shall cause the Notes to be Registered and shall cause to be kept a register (the “Register”) at the office of the Collateral Trustee in which, subject to such reasonable regulations as it may 

 

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prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Collateral Trustee is hereby initially appointed registrar (the “Registrar”) for the purpose of registering Notes and transfers of such Notes with respect to the Register maintained in the United States as herein provided. Upon any resignation or removal of the Registrar, the Issuer shall promptly appoint a successor or, in the absence of such appointment, assume the duties of Registrar.

 

If a Person other than the Collateral Trustee is appointed by the Issuer as Registrar, the Issuer will give the Collateral Trustee prompt written notice of the appointment of a Registrar and of the location, and any change in the location, of the Register, and the Collateral Trustee shall have the right to inspect the Register at all reasonable times and to obtain copies thereof and the Collateral Trustee shall have the right to rely upon a certificate executed on behalf of the Registrar by an Officer thereof as to the names and addresses of the Holders of the Secured Debt and the principal or face amounts and numbers of such Notes. Upon written request at any time the Registrar shall provide to the Issuer, the Collateral Manager, the Placement Agent, or the Co-Placement Agent a current list of Holders as reflected in the Register.

 

Subject to this Section 2.6, upon surrender for registration of transfer of any Notes at the office or agency of the Issuer to be maintained as provided in Section 7.2, the Issuer (and solely with respect to the Co-Issued Notes, the Co-Issuer) shall execute, and the Collateral Trustee shall authenticate, or cause the Authenticating Agent to authenticate, and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal or face amount. At any time, upon request of the Issuer, the Collateral Manager, the Placement Agent, or the Co-Placement Agent, the Collateral Trustee shall provide such requesting Person a list of Holders of the Secured Debt.

 

In addition, when permitted under this Indenture, the Issuers, the Collateral Trustee and the Collateral Manager shall be entitled to rely upon any certificate of ownership provided to the Collateral Trustee by a beneficial owner of a Note (including a Beneficial Ownership Certificate or a certificate in the form of Exhibit D) and/or other forms of reasonable evidence of such ownership as to the names and addresses of such beneficial owner and the Classes, principal amounts and CUSIP numbers of Notes beneficially owned thereby. At any time, upon request of the Applicable Issuer, the Collateral Manager, the Placement Agent, or the Co-Placement Agent, the Collateral Trustee shall provide such requesting Person a copy of each Beneficial Ownership Certificate that the Collateral Trustee has received.

 

At the option of the Holder, Notes may be exchanged for Notes of like terms, in any authorized denominations and of like aggregate principal amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Note is surrendered for exchange, the Applicable Issuer shall execute, and the Collateral Trustee shall authenticate, or cause the Authenticating Agent to authenticate, and deliver, the Notes that the Holder making the exchange is entitled to receive.

 

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

 

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Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in a form reasonably satisfactory to the Registrar, duly executed by the Holder thereof or such Holder’s attorney duly authorized in writing.

 

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

 

(b)                                 No Note and no Subordinated Security may be sold or transferred (including, without limitation, by pledge or hypothecation) unless such sale or transfer is exempt from the registration requirements of the Securities Act, is exempt from the registration requirements under applicable state securities laws and will not cause the Applicable Issuer to become subject to the requirement that it register as an investment company under the 1940 Act.

 

(c)                                  Each purchaser, beneficial owner and subsequent transferee of a Note or a Subordinated Security (or interest therein) will be deemed (and may be required) to represent and agree that:

 

(i)                    It agrees to provide upon request certification acceptable to the Issuer to permit the Issuer to (A) make payments to it without, or at a reduced rate of, withholding, (B) qualify for a reduced rate of withholding in any jurisdiction from or through which the Issuer receives payments on its assets and (C) comply with applicable law. It has read and understands the summary of the U.S. federal income tax considerations contained in the Offering Circular as it relates to such Notes or Subordinated Securities, and it represents that it will treat such Notes or Subordinated Securities for U.S. tax purposes in a manner consistent with the treatment of such Notes or Subordinated Securities by the Issuer described therein and will take no action inconsistent with such treatment.

 

(ii)                 In the case of the Subordinated Securities or other interests that might be treated as equity of the Issuer (the Subordinated Securities and such other interests, collectively, “Equity Securities”), it agrees that (A) it will not (1) acquire or directly or indirectly sell, encumber, assign, participate, pledge, hypothecate, rehypothecate, exchange, or otherwise dispose of, suffer the creation of a lien on, or transfer or convey in any manner (each, a “Transfer”) such Equity Securities (or any interest therein that is described in United States Treasury Regulations Section 1.7704 1(a)(2)(i)(B)) on or through (x) a United States national, regional or local securities exchange, (y) a foreign securities exchange or (z) an interdealer quotation system that regularly disseminates firm buy or sell quotations by identified brokers or dealers ((x), (y) and (z), collectively, an “Exchange”) or (2) cause any of such Equity Securities or any interest therein to be marketed on or through an Exchange; (B) it will not enter into any financial instrument payments on which are, or the value of which is, determined in whole or in part by reference to such Equity Securities or the Issuer (including the amount of Issuer distributions on such Equity Securities, the value of the Issuer’s assets, or the result of the Issuer’s operations), or any contract that otherwise is described in United States Treasury

 

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Regulations Section 1.7704 1(a)(2)(i)(B); (C) if it is, for U.S. federal income tax purposes, a partnership, grantor trust or S corporation, then less than 50% of the value of any person’s interest in it will be attributable to such Equity Securities, unless the Issuer has obtained Tax Advice that such Holder will not cause the Issuer to be unable to rely on the “private placement” safe harbor of United States Treasury Regulations Section 1.7704 1(h); (D) it will not Transfer all or any portion of such Equity Securities unless such Transfer does not violate this clause (ii); and (E) any Transfer made in violation of this clause (ii) will be void and of no force or effect, and will not bind or be recognized by the Issuer or any other person, and no person to which such Notes are Transferred shall become a Holder unless such person agrees to be bound by this clause (ii); provided that, notwithstanding the immediately preceding sentence, a Transfer in violation of this clause (ii) shall be permitted if the Issuer or the Trustee receives Tax Advice to the effect that the Transfer should not cause the Issuer to be treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.

 

(iii)              In the case of Subordinated Securities or other Equity Securities, it will not Transfer all or any portion of such Equity Securities if such Transfer would cause the combined number of holders of such Equity Securities and any equity interests of the Issuer to be more than 90 for purposes of Treasury Regulations Section 1.7704-1(h). Any Transfer made in violation of this paragraph (iii) will be void and of no force or effect, and will not bind or be recognized by the Issuer or any other person, and no person to which such Equity Securities are Transferred shall become a holder unless such person agrees to be bound by this paragraph (iii); provided that, notwithstanding the immediately preceding sentence, a Transfer in violation of this paragraph (iii) shall be permitted if the Issuer or the Trustee receives Tax Advice to the effect that the Transfer should not cause the Issuer to be treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes.

 

(iv)             In the case of Subordinated Securities or other Equity Securities, it is a “United States person” as defined in Section 7701(a)(30) of the Code and agrees to provide the Issuer, the Collateral Manager and the Trustee (and any of their agents) with a correct, complete and properly executed IRS Form W-9 (or applicable successor form) with appropriate attachments (if any). Furthermore, it agrees that in connection with the Transfer of any such Equity Security such purchaser or holder shall provide the transferee with the appropriate documentation in compliance with Section 1446(f) of the Code and regulations promulgated thereunder such that no withholding tax is required pursuant to Section 1446(f) of the Code with respect to the Transfer and shall provide any forms, documentation, proof of payment or other certifications as reasonably requested by the Issuer or the Trustee (or their agents or representatives) to evidence that such purchaser or holder provided the transferee with the appropriate documentation in compliance with Section 1446(f) of the Code and regulations promulgated thereunder such that no withholding tax was required pursuant to Section 1446(f) of the Code with respect to the Transfer and (y) a transferring purchaser or holder shall pay and/or reimburse and hold harmless the Issuer for any withholding tax imposed on the Issuer pursuant to Section 1446(f) of the Code, together with any related interest, costs, expenses, and penalties, that would not have been imposed had the transferring purchaser or holder properly complied with the certification procedures under Section 1446(f) of the Code and regulations 

 

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promulgated thereunder. This indemnification will continue even after such purchaser or holder ceases to have an ownership interest in such Equity Securities.

 

(v)                Each Holder of Secured Notes represents, acknowledges and agrees that it is not and will not become a member of an “expanded group” (within the meaning of Treasury Regulations issued under Section 385 of the Code.) that includes a domestic corporation (as determined for U.S. federal income tax purposes) if such domestic corporation directly or  indirectly (through one or more entities that are treated for U.S. federal income tax purposes as partnerships, disregarded entities, or grantor trusts) owns Subordinated Securities.

 

(vi)             Prior to the transfer by the Sole Equity Owner of any Secured Notes, (A) the Sole Equity Owner must receive an opinion of counsel that any Secured Notes that are issued or treated as issued for U.S. federal income tax purposes upon a transfer will be treated as indebtedness for U.S. federal income tax purposes following such transfer, which opinion need not address the effect of any regulations that would treat debt as equity for periods in which it is held by a Holder or beneficial owner that is related to the issuer of such debt, and (B) any Secured Notes that will be issued or treated as issued for U.S. federal income tax purposes as a result of the transfer with more original issue discount than the Secured Notes of the corresponding Class that have already been issued or treated as issued for U.S. federal income tax purposes, taking into account the qualified reopening rules, will be issued with a separate CUSIP from the Secured Notes of the corresponding Class.

 

(vii)          For so long as the Issuer is treated as a disregarded entity for U.S. federal income tax purposes and the Sole Equity Owner owns any Secured Notes, prior to the transfer (as determined by applying U.S. federal income tax principles) by the Sole Equity Owner of any Subordinated Securities or other Equity Securities, (A) the Sole Equity Owner must receive an opinion of counsel that any Secured Notes that will be issued or treated as issued for U.S. federal income tax purposes as a  result of the transfer will be treated as indebtedness for U.S. federal income tax purposes following such transfer, which opinion need not address the effect of any regulations that would treat debt as equity for periods in which it is held by a Holder or beneficial owner that is related to the issuer of such debt, and (B) any Secured Notes that will be issued or treated as issued for U.S. federal income tax purposes as a result of the transfer with more original issue discount than the Secured Notes of the corresponding Class that have already been issued or treated as issued for U.S. federal income tax purposes, taking into account the qualified reopening rules, will be issued with a separate CUSIP from the Secured Notes of the corresponding Class.

 

(viii)       In the case of Subordinated Securities or other Equity Securities, it agrees to (a) provide tax information or certifications (including evidence of filing or payment of tax) as reasonably requested by the Partnership Representative, in connection with an audit adjustment; (b) comply with the Partnership Representative’s reasonable request to file accurate and timely amended returns to reflect an audit adjustment; (c) provide information reasonably requested by the Partnership Representative in connection with the procedures under Section 6225(c)(2)(B) of the Code and its efforts to reduce the Issuer-level liability;

 

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and (d) be liable for and economically bear, all taxes and related interest, additional amounts and penalties and other liabilities including reasonable administrative costs resulting from or otherwise attributable to the partner’s allocable share (determined with respect to the adjustment period) of the tax items affected by the audit adjustment.

 

(ix)             In the case of the Secured Notes, it acknowledges that the failure to provide the Issuer, the Collateral Manager and the Trustee (and any of their agents) with the properly completed and signed tax certifications (generally, in the case of U.S. federal income tax, an IRS Form W-9 (or applicable successor form) with appropriate attachments (if any) in the case of a person that is a “United States person” within the meaning of Section 7701(a)(30)  of the Code or the appropriate IRS Form W-8 (or applicable successor form) with appropriate attachments (if any) in the case of a person that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code) may result in withholding from payments in respect of the Secured Notes, including U.S. federal withholding or back up withholding.

 

(x)                In the case of a holder of Subordinated Securities, it agrees to provide the Issuer and the Trustee (A) any information as is necessary (in the sole determination of the Issuer or the Trustee, as applicable) for the Issuer and the Trustee to comply with U.S. tax information reporting requirements relating to its adjusted basis in such Subordinated Securities and (B) any additional information that the Issuer, the Trustee or their agents request in connection with any 1099 reporting requirements, and to update any such information provided in clause (A) or (B) promptly upon learning that any such information previously provided has become obsolete or incorrect or is otherwise required. It acknowledges that the Issuer or the Trustee may provide such information and any other information concerning its investment in such Subordinated Securities to the U.S. Internal Revenue Service.

 

(xi)             No holder of Subordinated Securities will treat any income with respect to its Subordinated Securities as derived in connection with the Issuer’s active conduct of a banking, financing, insurance, or other similar business for purposes of Section 954(h)(2) of the Code.  If the holder owns more than 50% of the Subordinated Securities by value or if such holder, its beneficial owner, or a direct or indirect owner of the foregoing is otherwise treated as a member of the Issuer’s “expanded affiliated group” (as defined in Treasury regulations section 1.1471-5(i) (or any successor provision)), the holder represents that it will (A) confirm that any member of such expanded affiliated group (assuming that each of the Issuer is a “registered deemed-compliant FFI” within the meaning of Treasury regulations section 1.1471-1(b)(111) (or any successor provision)) that is treated as a “foreign financial institution” within the meaning of Section 1471(d)(4) of the Code and any Treasury regulations promulgated thereunder is either a “participating FFI”, a “registered deemed-compliant FFI” or an “exempt beneficial owner” within the meaning of Treasury regulations section 1.1471-4(e) (or any successor provision), and (B) promptly notify the Issuer in the event that any member of such expanded affiliated group that is treated as a “foreign financial institution” within the meaning of Section 1471(d)(4) of the Code and any Treasury regulations promulgated thereunder is not either a “participating FFI”, a “registered deemed-compliant FFI” or an “exempt beneficial owner” within the meaning of Treasury regulations section 1.1471-4(e) (or any successor

 

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provision), in each case except to the extent that the Issuer or its agents have provided the holder with an express waiver of this requirement.

 

(d)                                 Notwithstanding anything contained herein to the contrary, the Collateral Trustee shall not be responsible for ascertaining whether any transfer complies with, or for otherwise monitoring or determining compliance with, the registration provisions of or any exemptions from the Securities Act, applicable state securities laws or the applicable laws of any other jurisdiction, ERISA, the Code, the 1940 Act, or the terms hereof; provided that if a certificate is specifically required by the terms of this Section 2.6 to be provided to the Collateral Trustee by a prospective transferor or transferee, the Collateral Trustee shall be under a duty to receive and examine the same to determine whether or not the certificate substantially conforms on its face to the applicable  requirements of this Indenture and shall promptly notify the party delivering the same and the Issuer if such certificate does not comply with such terms.

 

(e)                                  Each Holder will provide the Issuer or its agents with such information and documentation that may be required for the Issuer to achieve AML Compliance and shall update or replace such information or documentation, as may be necessary (the “Holder AML Obligations”).

 

(f)                                   Transfers of Global Notes shall only be made in accordance with Section 2.2(b) and this Section 2.6(f).

 

(i)                    Rule 144A Global Note to Regulation S Global Note. If a holder of a beneficial interest in a Rule 144A Global Note deposited with DTC wishes at any time to exchange its interest in such Rule 144A Global Note for an interest in the corresponding Regulation S Global Note, or to transfer its interest in such Rule 144A Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Note, such holder (provided that such holder or, in the case of a transfer, the transferee is not a “U.S. Person” (as defined in Regulation S)) may, subject to the immediately succeeding sentence and the rules and procedures of DTC, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Regulation S Global Note. Upon receipt by the Registrar of (A) instructions given in accordance with DTC’s procedures from an Agent Member directing the Registrar to credit or cause to be credited a beneficial interest in the corresponding Regulation S Global Note, but not less than the Minimum Denomination applicable to such holder’s Notes, in an amount equal to the beneficial interest in the Rule 144A Global Note to be exchanged or transferred, (B) a written order given in accordance with DTC’s procedures containing information regarding the participant account of DTC and the Euroclear or Clearstream account to be credited with such increase, (C) a certificate in the form of Exhibit B-1 attached hereto given by the holder of such beneficial interest stating that the exchange or transfer of such interest has been made in compliance with the transfer restrictions applicable to the Global Notes, including that the holder or the transferee, as applicable, is not a “U.S. Person” (as defined in Regulation S), and (D) a written certification in the form of Exhibit B-7 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is not a “U.S. Person” (as defined in Regulation S), then the Registrar shall approve the instructions at DTC to reduce the principal amount of the Rule 144A Global Note and to 

 

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increase the principal amount of the Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Note to be exchanged or transferred, and to credit or cause to be credited to the securities account of the Agent Member specified in such instructions a beneficial interest in the corresponding Regulation S Global Note equal to the reduction in the principal amount of the Rule 144A Global Note.

 

(ii)                 Regulation S Global Note to Rule 144A Global Note. If a holder of a beneficial interest in a Regulation S Global Note deposited with DTC wishes at any time to exchange its interest in such Regulation S Global Note for an interest in the corresponding Rule 144A Global Note or to transfer its interest in such Regulation S Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding  Rule 144A Global Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Rule 144A Global Note. Upon receipt by the Registrar of (A) instructions from Euroclear, Clearstream and/or DTC, as the case may be, directing the Registrar to cause to be credited a beneficial interest in the corresponding Rule 144A Global Note in an amount equal to the beneficial interest in such Regulation S Global Note, but not less than the Minimum Denomination applicable to such holder’s Notes to be exchanged or transferred, such instructions to contain information regarding the participant account with DTC to be credited with such increase, (B) a certificate in the form of Exhibit B-4 attached hereto given by the holder of such beneficial interest and stating, among other things, that, in the case of a transfer, the Person transferring such interest in such Regulation S Global Note reasonably believes that the Person acquiring such interest in a Rule 144A Global Note is a QIB/QP, is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction and (C) a written certification in the form of Exhibit B-6 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is a QIB/QP, then the Registrar will approve the instructions at DTC to reduce, or cause to be reduced, the Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Regulation S Global Note to be transferred or exchanged and the Registrar shall instruct DTC, concurrently with such reduction, to credit or cause to be credited to the securities account of the Agent Member specified in such instructions a beneficial interest in the corresponding Rule 144A Global Note equal to the reduction in the principal amount of the Regulation S Global Note.

 

(iii)              Global Note to Certificated Note. Subject to Section 2.11(a), if a holder of a beneficial interest in a Global Note deposited with DTC wishes at any time to transfer its interest in such Global Note to a Person who wishes to take delivery thereof in the form of a corresponding Certificated Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, transfer, or cause the transfer of, such interest for a Certificated Note. Upon receipt by the Registrar of (A) a certificate substantially in the form of Exhibit B-2 attached hereto executed by the transferee and (B) appropriate instructions from DTC, if required, the Registrar will approve the instructions at DTC to reduce, or cause to be reduced, the Global 

 

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Note by the aggregate principal amount of the beneficial interest in the Global Note to be transferred and record the transfer in the Register in accordance with Section 2.6(a) and upon execution by the Applicable Issuer, authentication by the Collateral Trustee or the Authenticating Agent and delivery by the Collateral Trustee of one or more corresponding Certificated Notes, registered in the names specified in the instructions described in clause (B) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the interest in such Global Note transferred by the transferor), and in authorized denominations.

 

(g)                                  Transfers of Certificated Notes shall only be made in accordance with Section 2.2(b) and this Section 2.6(g).

 

(i)                    Certificated Notes to Global Notes. If a holder of a Certificated Note wishes at any time to exchange its interest in such Certificated Note for a beneficial interest in a corresponding Global Note or to transfer such Certificated Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a corresponding Global Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such Certificated Note for a beneficial interest in a corresponding Global Note. Upon receipt by the Registrar of (A) a Holder’s Certificated Note properly endorsed for assignment to the transferee, (B) a certificate substantially in the form of Exhibit B-1 or Exhibit B-4 (as applicable) attached hereto executed by the transferor and a certificate substantially in the form of Exhibit B-6 or B-7 (as applicable) attached hereto executed by the transferee, (C) instructions given in accordance with Euroclear, Clearstream or DTC’s procedures, as the case may be, from an Agent Member to instruct DTC to cause to be credited a beneficial interest in the applicable Global Notes in an amount equal to the Certificated Notes to be transferred or exchanged, and (D) a written order given in accordance with DTC’s procedures containing information regarding the Agent Member’s account at DTC and/or Euroclear or Clearstream to be credited with such increase, the Registrar shall cancel such Certificated Note in accordance with Section 2.10, record the transfer in the Register in accordance with Section 2.6(a) and approve the instructions at DTC, concurrently with such cancellation, to credit or cause to be credited to the securities account of the Agent Member specified in such instructions a beneficial interest in the corresponding Global Note equal to the principal amount of the Certificated Note transferred or exchanged.

 

(ii)                 Certificated Notes to Certificated Notes. If a holder of a Certificated Note wishes at any time to exchange such Certificated Note for one or more Certificated Notes or to transfer such Certificated Note to a Person who wishes to take delivery thereof in the form of a Certificated Note, such holder may exchange or transfer, or cause the exchange or transfer of, such Certificated Note. Upon receipt by the Registrar of (A) a Holder’s Certificated Note properly endorsed for assignment to the transferee, and (B) a certificate substantially in the form of Exhibit B-2 attached hereto executed by the transferee, the Registrar shall cancel such Certificated Note in accordance with Section 2.10, record the transfer in the Register in accordance with Section 2.6(a) and upon execution by the  Applicable Issuer, authentication by the Collateral Trustee or the Authenticating Agent and delivery by the Collateral Trustee, deliver one or more Certificated Notes bearing the same 

 

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designation as the Certificated Note endorsed for transfer, registered in the names specified in the assignment described in clause (A) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the Certificated Note surrendered by the transferor), and in authorized denominations.

 

(h)                                 If Notes are issued upon the transfer, exchange or replacement of Notes bearing the applicable legends set forth in the applicable part of Exhibit A hereto, and if a request is made to remove such applicable legend on such Notes, the applicable legend shall not be removed unless  there is delivered to the Collateral Trustee and the Applicable Issuer such satisfactory evidence, which may include an Opinion of Counsel acceptable to them, as may be reasonably required by the Applicable Issuer (and which shall by its terms permit reliance by the Collateral Trustee), to the effect that neither such applicable legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of the Securities Act, the 1940 Act, ERISA or the Code. Upon provision of such satisfactory evidence, the Collateral Trustee or its Authenticating Agent, at the written direction of the Applicable Issuer shall, after due execution by the Applicable Issuer authenticate and deliver Notes that do not bear such applicable legend.

 

(i)                                     Each Person who (x) becomes a holder of an ERISA Restricted Security on the Closing Date or a Certificated Note or ERISA Restricted Security at any time will be required to represent and agree in a representation letter or (y) becomes a beneficial owner of Notes represented by an interest in a Global Note will be deemed to have represented and agreed, as follows:

 

(i)                    In connection with the purchase of such Notes or Subordinated Securities:  (A) none of the Issuer, the Co-Issuer, the Collateral Manager, the Placement Agent, the Co-Placement Agent, the Collateral Trustee, the Collateral Administrator or any of their respective Affiliates is acting as a fiduciary or financial or investment adviser for such holder or beneficial owner; (B) such holder or beneficial owner has read and understands the Offering Circular (including, without limitation, the descriptions therein of the structure of the transaction in which the Notes and Subordinated Securities are being issued and the risks to purchasers of the Notes and Subordinated Securities) and is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Co-Issuer, the Collateral Manager, the Collateral Trustee, the Collateral Administrator, the Placement Agent, the Co-Placement Agent or any of their respective Affiliates other than any statements in the final Offering Circular for such Notes or Subordinated Securities; (C) such holder or beneficial owner has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary and has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to this Indenture) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the Co-Issuer, the Collateral Manager, the Collateral Trustee, the Collateral Administrator, the Placement Agent, the Co-Placement Agent or any of their respective Affiliates; (D) such holder or beneficial owner is either (1) both (a) (in the case of a beneficial owner of an interest in a Rule 144A Global Note) a QIB that is not a broker-dealer which owns and 

 

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invests on a discretionary basis less than U.S.$25,000,000 in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(D) or (a)(1)(E) of Rule 144A under the Securities Act or a trust fund referred to in paragraph (a)(1)(F) of Rule 144A under the Securities Act that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries of the plan and (b) a Qualified Purchaser for purposes of Section 3(c)(7) of the 1940 Act or an entity (other than a trust) owned exclusively by Qualified Purchasers or (2) (in the case of a beneficial owner of an interest in a Regulation S Global Note) a Person that is not a “U.S. person” (as defined in Regulation S) and is acquiring the Notes in reliance on the exemption from registration provided by Regulation S; (E) such holder or beneficial owner is acquiring its interest in such Notes or Subordinated Securities for its own account  and not with a view to the resale, distribution or other disposition thereof in violation of the Securities Act; (F) unless it is a Person that is not a “U.S. person” (as defined in Regulation S) acquiring the Notes or Subordinated Securities in reliance on the exemption from registration provided by Regulation S thereunder, such holder or beneficial owner was not formed for the purpose of investing in such Notes or Subordinated Securities (unless each beneficial owner of the holder or beneficial owner is a Qualified Purchaser); (G) such holder or beneficial owner understands that the Issuer may receive a list of participants holding interests in the Notes or Subordinated Securities from one or more book-entry depositories, (H) such holder or beneficial owner will hold and transfer at least the Minimum Denomination of such Notes or Subordinated Securities; (I) such holder or beneficial owner is a sophisticated investor and is purchasing the Notes or Subordinated Securities with a full understanding of all of the terms, conditions and risks thereof, and is capable of and willing to assume those risks; (J) such holder or beneficial owner will provide notice of the relevant transfer restrictions to subsequent transferees; and (K) if it is not a U.S. person, it is not acquiring any Note or Subordinated Security as part of a plan to reduce, avoid or evade U.S. federal income tax.

 

(ii)                 With respect to the Class A Notes, the Class A-F Notes  and the Class B Notes (A) if such Person is, or is acting on behalf of, a Benefit Plan Investor, its acquisition, holding and disposition of such Notes does not and will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code, and (B) if such Person is a governmental, church, non-U.S. or other plan which is subject to any Other Plan Law, such Person’s acquisition, holding and disposition of such Notes will not constitute or result in a non-exempt violation of any such Other Plan Law.

 

(iii)              With respect to the Subordinated Securities, on each day from the date on which such holder or beneficial owner acquires its interest in such Subordinated Securities through and including the date on which such holder or beneficial owner disposes of its interest in such Subordinated Securities, that (a) it is not, and is not acting on behalf of, a Benefit Plan Investor and (b) if it is a governmental, church, non-U.S. or other plan, (I) it is not, and for so long as it holds such Subordinated Securities or interest therein will not be, subject to any federal, state, local or non-U.S. law or regulation that could cause the underlying assets of the Issuer to be treated as assets of the investor in any Note or Subordinated Security (or any interest therein) by virtue of its interest and thereby subject the Issuer or the Collateral Manager (or other persons responsible for the investment and operation of the Issuer’s assets) to Other Plan Law and (II) its acquisition, holding and 

 

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disposition of such Subordinated Securities or interest therein will not constitute or result in a non-exempt violation of any Other Plan Law.

 

(iv)             Such holder beneficial owner understands that such Notes or Subordinated Securities are being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, such Notes or Subordinated Securities have not been and will not be registered under the Securities Act, and, if in the future such holder or beneficial owner decides to offer, resell, pledge or otherwise transfer such Notes or Subordinated Securities, such Notes or Subordinated Securities may be offered, resold, pledged or otherwise transferred only in accordance with the provisions of this Indenture, the Fiscal Agency Agreement (in the case of the Subordinated Securities) and  the legend on such Notes or Subordinated Securities, as applicable. Such holder or beneficial owner acknowledges that no representation has been made as to the availability of any exemption under the Securities Act or any state securities laws for resale of such Notes or Subordinated Securities. Such holder or beneficial owner understands that none of the Issuer, the Co-Issuer or the pool of Assets has been registered under the 1940 Act, and that they are exempt from registration as such by virtue of Section 3(c)(7) of the 1940 Act.

 

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

 

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

 

(vii)          Such holder or beneficial owner understands that the Issuer has the right to compel any beneficial owner of any Re-Priced Class that does not consent to a Re-Pricing with respect to its Notes pursuant to the applicable terms of this Indenture to sell its interest in the Notes, or may sell such interest in the Notes on behalf of such holder or beneficial owner in accordance with the terms of this Indenture.

 

(viii)       (1)(A) The express terms of this Indenture govern the rights of the Holders to direct the commencement of a Proceeding against any Person, (B) this Indenture contains limitations on the rights of the Holders to direct the commencement of any such Proceeding, and (C) each Holder shall comply with such express terms if it seeks to direct the commencement of any such Proceeding; (2) there are no implied rights under this Indenture to direct the commencement of any such Proceeding; and (3) notwithstanding any provision of this Indenture, the Notes, the Subordinated Securities, the Collateral Management Agreement, the Collateral Administration Agreement, the Fiscal Agency Agreement or any other agreement, the Issuer shall be under no duty or obligation of any kind to the holders of the Notes or Subordinated Securities, or any of them, to institute any legal or other proceedings of any kind, against any person or entity, including, without limitation, the Collateral Trustee, the Collateral Manager, the Collateral Administrator, the Fiscal Agent or the Calculation Agent.

 

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(ix)             Such holder or beneficial owner agrees that the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, may enter into binding commitments to sell and transfer all Notes of a Re-Priced Class held by non-consenting holders pursuant to this Indenture, and if such holder or beneficial owner is a non-consenting holder, it agrees to sell and transfer its Notes in accordance with the provisions of this Indenture and hereby irrevocably appoints the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, as its true and lawful agent and attorney-in-fact (with full power of substitution) in its name, place and stead and at its expense, in connection with such sale and transfer, and agrees to cooperate with the Issuer, the Re-Pricing Intermediary on behalf of the Issuer, or the Collateral Trustee to effect such sale and transfers.

 

(x)                Such holder or beneficial owner is not a member of the public in the Cayman Islands.

 

(xi)             Such holder or beneficial owner agrees to be subject to the Bankruptcy Subordination Agreement.

 

(xii)          Such holder or beneficial owner understands and agrees that such Notes or Subordinated Securities are from time to time and at any time limited recourse obligations of the Issuer (and, in the case of Co-Issued Debt, the Co-Issuer), payable solely from proceeds of the Assets available at such time in accordance with the Priority of Payments, and following realization of the Assets and application of the proceeds thereof in accordance with this Indenture, all obligations of and any claims against the Issuer (and, in the case of Co-Issued Debt, the Co-Issuer) thereunder or in connection therewith after such realization will be extinguished and will not thereafter revive.

 

(j)                                    Each Person who becomes an owner of a Certificated Note will be required to make the representations and agreements set forth in Exhibit B-2.

 

(k)                                 Without limiting the foregoing, each transferee of ERISA Restricted Securities will be required to execute and deliver to the Issuer, the Paying Agent and, if applicable, the Fiscal Agent, a certificate (or, in the case of a purchaser on the Closing Date, a representation letter) substantially in the form of Exhibit B-3 attached hereto in which it will be required to agree that such transferee will not transfer its interest in the Subordinated Securities, as applicable, except in compliance with the transfer restrictions set forth in this Indenture (including the requirement that any subsequent transferee execute and deliver such letter as a condition to any subsequent transfer).

 

(l)                                     [Reserved].

 

(m)                             Any purported transfer of (i) a Note not in accordance with this Section 2.6 or (ii) a Subordinated Security not in accordance with the provisions of this Section 2.6 that are applicable to the Subordinated Securities shall be null and void and shall not be given effect for any purpose whatsoever.

 

(n)                                 To the extent required by the Issuer, as determined by the Issuer or the Collateral Manager on behalf of the Issuer, the Issuer may, upon written notice to the Collateral Trustee, impose additional transfer restrictions on the Notes or Subordinated Securities to comply with 

 

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the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 or the Code and other similar laws or regulations, including, without limitation, requiring each transferee of a Note or a Subordinated Security to make representations to the Issuer in connection with such compliance.

 

(o)                                 The Registrar, the Collateral Trustee and the Issuers shall be entitled to conclusively rely on the information set forth on the face of any purchaser, transferor and transferee certificate delivered pursuant to this Section 2.6 and shall be able to presume conclusively the continuing accuracy thereof, in each case without further inquiry or investigation. Notwithstanding anything in this Indenture to the contrary, the Collateral Trustee shall not be required to obtain any certificate specifically required by the terms of this Section 2.6 if the Collateral Trustee is not notified of or  in a position to know of any transfer requiring such a certificate to be presented by the proposed transferor or transferee.

 

(p)                                 For the avoidance of doubt, notwithstanding anything in this Indenture to the contrary, the Placement Agent may hold a position in a Regulation S Global Note prior to the distribution of the applicable Notes represented by such position.

 

Section 2.7                                    Mutilated, Defaced, Destroyed, Lost or Stolen Note. If (a) any mutilated or defaced Note is surrendered to a Transfer Agent, or if there shall be delivered to the Applicable Issuer, the Collateral Trustee and the relevant Transfer Agent evidence to their reasonable satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the Applicable Issuer, the Collateral Trustee and such Transfer Agent such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Applicable Issuer, the Collateral Trustee or such Transfer Agent that such Note has been acquired by a protected purchaser, the Applicable Issuer shall execute and, upon Issuer Order, the Collateral Trustee shall authenticate, or cause the Authenticating Agent to authenticate, and deliver to the Holder, in lieu of any such mutilated, defaced, destroyed, lost or stolen Note, a new Note, of like tenor (including the same date of issuance) and equal principal or face amount, registered in the same manner, dated the date of its authentication, bearing interest from the date to which interest has been paid on the mutilated, defaced, destroyed, lost or stolen Note and bearing a number not contemporaneously outstanding.

 

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

 

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

 

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Upon the issuance of any new Note under this Section 2.7, the Applicable Issuer may require the payment by the Holder thereof of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Collateral Trustee) connected therewith.

 

Every new Note issued pursuant to this Section 2.7 in lieu of any mutilated, defaced, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Applicable Issuer and such new Note shall be entitled, subject to the second paragraph of this Section 2.7, to all the benefits of this Indenture equally and proportionately with any and all other Notes of the same Class duly issued hereunder.

 

The provisions of this Section 2.7 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, defaced, destroyed, lost or stolen Notes.

 

Section 2.8                                    Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved. (a) The Secured Debt of each Class shall accrue interest during each Interest Accrual Period at the applicable Interest Rate and such interest will be payable in arrears on each Payment Date on the Aggregate Outstanding Amount thereof as of the first day of the related Interest Accrual Period (after giving effect to payments of principal thereof on such date), except as otherwise set forth below; provided that any interest bearing Additional Debt issued after the Closing Date in accordance with the terms of this Indenture will accrue interest during the Interest Accrual Period in which such Additional Debt is issued from and including the applicable date of issuance of such Additional Debt to but excluding the last day of such Interest Accrual Period at the applicable Interest Rate for such Additional Debt; provided further that, with respect to any Interest Accrual Period during which a Re-Pricing has occurred, the applicable Interest Rate of any Re-Priced Class shall reflect the applicable Re-Pricing Rate from, and including, the applicable Re-Pricing Date. Payment of interest and distributions on each Class of Secured Debt and on the Subordinated Securities will be subordinated to the payment of interest on each related Priority Class as provided in Section 11.1. To the extent lawful and enforceable, interest on any interest that is not paid when due on any Class A Notes, Class A-F Notes, Class A Loans or Class B Notes shall accrue at the Interest Rate for such Class until paid as provided herein.

 

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

 

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(c)                                  Principal payments on the Secured Debt will be made in accordance with the Priority of Payments and Article IX.

 

(d)                                 The Paying Agent shall require the previous delivery of properly completed and signed applicable tax certifications (generally, in the case of U.S. federal income tax, an Internal Revenue Service Form W-9 (or applicable successor form) in the case of a United States person within the meaning of Section 7701(a)(30) of the Code or the applicable Internal Revenue Service Form W-8 (or applicable successor form) in the case of a Person that is not a United States person within the meaning of Section 7701(a)(30) of the Code) or other certification acceptable to it to enable the Issuers, the Collateral Trustee and any Paying Agent to determine their duties and liabilities with respect to any taxes or other charges that they may be required to pay, deduct or withhold from payments in respect of such Secured Debt or the Holder or beneficial owner of such Secured Debt under any present or future law or regulation of the United States, any other jurisdiction or any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation and the delivery of any information required under Sections 1471-1474 of the Code to determine if the Issuers are subject to withholding or payments by the Issuers are subject to withholding. The Issuers shall not be  obligated to pay any additional amounts to the Holders or beneficial owners of the Secured Debt as a result of deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges with respect to the Secured Debt. Nothing herein shall be construed to obligate the Paying Agent to determine the duties or liabilities of the Issuers or any other paying agent with respect to any tax certification or withholding requirements, or any tax certification or withholding requirements of any jurisdiction, political subdivision or taxing authority outside the United States.  Should any Holder fail for any reason to obtain and provide the Issuers and the Collateral Trustee with accurate or complete information or documentation described in the paragraph above or to the extent necessary or helpful (in the sole determination of the Issuers or the Collateral Trustee or their agents, as applicable) to achieve Tax Account Reporting Rules Compliance, or to update or correct such information or documentation, the Issuers shall have the right to withhold on passthru payments, principal and any other amounts payable in respect of the Secured Debt.

 

(e)                                  Payments in respect of interest on and principal of any Secured Debt shall be made by the Collateral Trustee in Dollars to DTC or its designee with respect to a Global Note, to the Holder or its nominee with respect to a Certificated Note, by wire transfer, as directed by such Person, in immediately available funds to a Dollar account maintained by DTC or its nominee with respect to a Global Note, to the Holder or its nominee with respect to a Certificated Note; provided that in the case of a Certificated Note (1) the Holder thereof shall have provided written wiring instructions to the Collateral Trustee on or before the related Record Date and (2) if appropriate instructions for any such wire transfer are not received by the related Record Date, then such payment shall be made by check drawn on a U.S. bank mailed to the address of the Holder specified in the Register. Upon final payment due on the Maturity of a Secured Debt, the Holder thereof shall present and surrender such Secured Debt at the Corporate Trust Office of the Collateral Trustee or at the office of any Paying Agent on or prior to such Maturity; provided that if the Collateral Trustee and the Issuers shall have been furnished such security or indemnity as may be required by them to save each of them harmless and an undertaking thereafter to surrender such certificate, then, in the absence of notice to the Issuers or the Collateral Trustee that the applicable Secured Debt has been acquired by a protected purchaser,

 

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such final payment shall be made without presentation or surrender. Neither the Issuers, the Collateral Trustee, the Collateral Manager, nor any Paying Agent will have any responsibility or liability for any aspects of the records (or for maintaining, supervising or reviewing such records) maintained by DTC, Euroclear, Clearstream or any of the Agent Members or any of their nominees relating to or for payments made thereby on account of beneficial interests in a Global Note. In the case where any final payment of principal and interest is to be made on any Secured Debt (other than on the Stated Maturity thereof), the Collateral Trustee, in the name and at the expense of the Issuers shall prior to the date on which such payment is to be made, mail (by first class mail, postage prepaid) to the Persons entitled thereto at their addresses appearing on the Register, a notice which shall specify the date on which such payment will be made, the amount of such payment per U.S.$1,000 original principal amount of Secured Debt and the place where such Secured Debt may be presented and surrendered for such payment.

 

(f)                                   Payments of principal to Holders of the Secured Debt of each Class shall be made in the proportion that the Aggregate Outstanding Amount of the Secured Debt of such Class registered in the name of each such Holder on the applicable Record Date bears to the Aggregate Outstanding Amount of all Secured Debt of such Class on such Record Date.  Payments to Holders  of the Subordinated Securities shall be made to the Fiscal Agent for further distribution to the Holders of the Subordinated Securities in accordance with the Fiscal Agency Agreement.

 

(g)                                  Interest accrued with respect to the Floating Rate Debt shall be calculated on the basis of the actual number of days elapsed in the applicable Interest Accrual Period divided by 360.  Interest on the Fixed Rate Debt will be calculated on the basis of a 360-day year divided into twelve (12) 30-day months.

 

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

 

(i)                                     Notwithstanding any other provision of this Indenture or the Credit Agreement, the obligations of the Issuers under the Co-Issued Debt and the Secured Debt or the Issuer under the Subordinated Securities and this Indenture and the Credit Agreement from time to time and at any time are limited recourse obligations of the Issuers or the Issuer (as applicable) payable solely from the Assets available at such time and following realization of the Assets, and application of the proceeds thereof in accordance with this Indenture, all obligations of and any claims against the Issuers hereunder or in connection herewith after such realization shall be extinguished and shall not thereafter revive. No recourse shall be had against any officer, director, manager, partner, member, employee, shareholder, authorized Person or incorporator of the Issuer, the Co-Issuer, the Collateral Manager or their respective Affiliates, successors or assigns for any amounts payable under the Notes, the Subordinated Securities, this Indenture or the Credit Agreement. It is understood that the foregoing provisions of this paragraph (i) shall not (i) prevent recourse to the Assets for the sums due or to become due under any security, instrument or agreement which is part of the Assets or (ii) constitute a waiver, release or discharge of any indebtedness or obligation evidenced by the Secured Debt or secured by this Indenture or the Credit Agreement until such Assets have been realized. It is further understood 

 

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that the foregoing provisions of this paragraph (i) shall not limit the right of any Person to name the Issuer or the Co-Issuer as a party defendant in any Proceeding or in the exercise of any other remedy under the Notes, the Subordinated Securities, this Indenture or the Credit Agreement, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any such Person or entity.

 

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

 

Section 2.9                                    Persons Deemed Owners. The Applicable Issuer, the Collateral Trustee, the Fiscal Agent and any agent of the Applicable Issuer or the Collateral Trustee shall treat as the owner of each Secured Debt and Subordinated Securities the Person in whose name such Secured Debt or Subordinated Securities are registered on the applicable Register on the applicable Record Date for the purpose of receiving payments of principal of and interest on such Note or the Subordinated Securities and on, other than as otherwise expressly provided in this Indenture, any other date for all other purposes whatsoever (whether or not such Note is overdue), and none of the Applicable Issuer, the Collateral Trustee, the Fiscal Agent or any agent of the Applicable Issuer or the Collateral Trustee shall be affected by notice to the contrary.

 

Section 2.10                             Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption, or deemed lost or stolen, shall be promptly canceled by the Collateral Trustee and may not be reissued or resold. No Note may be surrendered (including any surrender in connection with any abandonment thereof) except for payment as provided herein, or for registration of transfer or exchange in accordance with an Optional Redemption, a Tax Redemption, Clean-Up Call Redemption, Special Redemption or a mandatory redemption pursuant to Section 9.1 (and, in the case of a Special Redemption or a mandatory redemption pursuant to Section 9.1, only to the extent that such Special Redemption or mandatory redemption results in the payment in full of the applicable Class of Notes), or for replacement in connection with any Note deemed lost or stolen. Any Notes surrendered for cancellation as permitted by this Section 2.10 shall, if surrendered to any Person other than the Collateral Trustee, be delivered to the Collateral Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.10, except as expressly permitted by this Indenture. All canceled Notes held by the Collateral Trustee shall be destroyed or held by the Collateral Trustee in accordance with its standard retention policy unless the Issuer shall direct by an Issuer Order received prior to destruction that they be returned to it. The Issuers are not permitted to repurchase any Notes; provided that such prohibition will not be deemed to limit the Issuer’s rights or obligations relating to any redemption of the Notes permitted or required pursuant to this Indenture.

 

Section 2.11                             DTC Ceases to be Depository. (a) A Global Note deposited with DTC pursuant to Section 2.2 shall be transferred in the form of a corresponding Certificated Note to the beneficial owners thereof only if (A) such transfer complies with Section 2.6 of this Indenture and (B) either (x) (i) DTC notifies the Applicable Issuer that it is unwilling or unable to continue as depository for such Global Note, or (ii) DTC ceases to be a Clearing Agency registered under the Exchange Act and, in each case, a successor depository is not appointed by 

 

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the Issuer within 90 days after receiving notice of such event or (y) an Event of Default has occurred and is continuing and such transfer is requested by any beneficial owner of an interest in such Global Note.

 

(b)                                 Any Global Note that is transferable in the form of a corresponding Certificated Note to the beneficial owner thereof pursuant to this Section 2.11 shall be surrendered by DTC to the Collateral Trustee’s Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Applicable Issuer shall execute and the Collateral Trustee shall authenticate, or cause the Authenticating Agent to authenticate, and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of definitive physical certificates (pursuant to the instructions of DTC) in authorized denominations. Any Certificated Note delivered in exchange for an interest in a Global Note shall, except as otherwise provided by Section 2.6, bear the legends set forth in the applicable Exhibit A and shall be subject to the transfer restrictions referred to in such legends.

 

(c)                                  Subject to the provisions of paragraph (b) of this Section 2.11, the Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and  Persons that may hold interests through Agent Members, to take any action which such Holder is entitled to take under this Indenture or the Notes.

 

(d)                                 In the event of the occurrence of any of the events specified in sub-Section (a) of this Section 2.11, the Applicable Issuer will promptly make available to the Collateral Trustee a reasonable supply of Certificated Notes.

 

If Certificated Notes are not so issued by the Applicable Issuer to such beneficial owners of interests in Global Notes as required by sub-Section (a) of this Section 2.11, the Applicable Issuers expressly acknowledge that the beneficial owners shall be entitled to pursue any remedy that the Holders of a Global Note would be entitled to pursue in accordance with Article V of this Indenture (but only to the extent of such beneficial owner’s interest in the Global Note) as if corresponding Certificated Notes had been issued; provided that the Collateral Trustee shall be entitled to rely upon any certificate of ownership provided by such beneficial owners (including a certificate in the form of Exhibit D) and/or other forms of reasonable evidence of such ownership.

 

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

 

Section 2.12                             Non-Permitted Holders. (a) Notwithstanding anything to the contrary elsewhere herein, any transfer of a beneficial interest in any Note to a U.S. person that is not a QIB/QP shall be null and void and any such purported transfer of which the Issuer or the Collateral Trustee shall have notice may be disregarded by the Issuer and the Collateral Trustee for all purposes. In addition, the acquisition of Notes by a Non-Permitted Holder under Section 2.12(b) shall be null and void ab initio.

 

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(b)                                 If any U.S. person that is not a QIB/QP shall become the Holder or beneficial owner of an interest in any Note (other than a Regulation S Global Note) or any U.S. Person shall become the Holder of a Regulation S Global Note (any such Person a “Non-Permitted Holder”), the acquisition of Notes by such Holder shall be void ab initio. The Issuer (or the Collateral Manager on behalf of the Issuer) shall, promptly after discovery that such Person is a Non-Permitted Holder by the Issuer or the Collateral Trustee or upon notice to the Issuer from the Collateral Trustee (if a trust officer of the Collateral Trustee obtains actual knowledge, in which case, the Collateral Trustee agrees to notify the Issuer of such discovery), send notice to such Non-Permitted Holder demanding that such Non-Permitted Holder transfer its interest in the Notes held by such Non-Permitted Holder to a Person that is not a Non-Permitted Holder within 30 days after the date of such notice. If such Non-Permitted Holder fails to so transfer such Notes, the Issuer or the Collateral Manager acting for the Issuer shall have the right, without further notice to the Non-Permitted Holder, to sell such Notes or interest in such Notes to a purchaser selected by the Issuer that is not a Non-Permitted Holder on such terms as the Issuer may choose. The Issuer, or the Collateral Manager acting on behalf of the Issuer, may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to the Notes, and sell such Notes to the highest such bidder; provided that the Collateral Manager, its Affiliates and accounts, funds, clients or portfolios established and controlled by the Collateral Manager shall be entitled to bid in any such sale. However, the Issuer or the Collateral  Manager may select a purchaser by any other means determined by it in its sole discretion. The Holder of each Note, the Non-Permitted Holder and each other Person in the chain of title from the Holder to the Non-Permitted Holder, by its acceptance of an interest in the Notes, agrees to cooperate with the Issuer, the Collateral Manager and the Collateral Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted Holder. The terms and conditions of any such sale shall be determined in the sole discretion of the Issuer, and none of the Issuer, the Collateral Trustee or the Collateral Manager shall be liable to any Person having an interest in the Notes sold as a result of any such sale or the exercise of such discretion.

 

(c)                                  If any Person shall become the beneficial owner of an interest in any Note who has made or is deemed to have made a prohibited transaction, Benefit Plan Investor or Other Plan Law representation required by Section 2.6 that is subsequently shown to be false or misleading (any such Person a “Non-Permitted ERISA Holder”), the Issuer (or the Collateral Manager on behalf of the Issuer) shall, promptly after discovery that such Person is a Non-Permitted ERISA Holder by the Issuer or upon notice to the Issuer from the Collateral Trustee (if a Trust Officer of the Collateral Trustee has actual knowledge and who agrees to notify the Issuer upon obtaining actual knowledge), send notice to such Non-Permitted ERISA Holder demanding that such Non-Permitted ERISA Holder transfer all or any portion of the Notes held by such Person to a Person that is not a Non-Permitted ERISA Holder within 10 days after the date of such notice. If such Non-Permitted ERISA Holder fails to so transfer such Notes, the Issuer shall have the right, without further notice to the Non-Permitted ERISA Holder, to sell such Notes or interest in such Notes to a purchaser selected by the Issuer that is not a Non-Permitted ERISA Holder on such terms as the Issuer may choose. The Issuer may select the purchaser by soliciting one or more bids from one or more brokers or other market professionals that regularly deal in securities similar to the Notes, and selling such Notes to the highest such bidder. The holder of each Note, the Non-Permitted ERISA Holder and each other Person in the 

 

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chain of title from the Holder to the Non-Permitted ERISA Holder, by its acceptance of an interest in the Notes, agrees to cooperate with the Issuer and the Collateral Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted ERISA Holder. The terms and conditions of any sale under this sub-Section shall be determined in the sole discretion of the Issuer, and none of the Issuers the Collateral Trustee or the Collateral Manager shall be liable to any Person having an interest in the Notes sold as a result of any such sale or the exercise of such discretion.

 

(d)                                 Each beneficial owner agrees (A) except as prohibited by applicable law, to obtain and provide the Issuer and the Collateral Trustee (including their agents and representatives), as applicable, with information or documentation, and to update or correct such information or documentation, as may be necessary or helpful (in the sole determination of the Issuer, the Collateral Trustee or their agents or representatives, as applicable) to achieve Tax Account Reporting Rules Compliance (the obligations undertaken pursuant to this clause (A), the “Holder Tax Obligations”), (B) that the Issuer and/or the Collateral Trustee or their agents or representatives may (1) provide such information and documentation and any other information concerning its investment in such Notes to the Cayman Islands Tax Information Authority, the U.S. Internal Revenue Service and any other relevant tax authority and (2) take such other steps as they deem necessary or helpful to achieve Tax Account Reporting Rules Compliance, including withholding on “passthru payments” (as defined in the Code), and (C) that if it fails for any reason to comply with the Holder Tax Obligations, or the Issuer otherwise reasonably determines that such beneficial owner’s direct or indirect acquisition, holding or transfer of an interest in such Notes would cause the Issuers to be unable to achieve Tax Account Reporting Rules Compliance, the Issuers shall have the right, in addition to withholding on passthru payments made to the applicable Holder of Notes or any agent or intermediary through which its Notes are held, to (x) compel it to sell its interest in such Notes, (y) after ten (10) Business Days’ notice from the Issuer (or its agents) sell such interest on its behalf and/or (z) assign to such Notes a separate CUSIP or CUSIPs. Moreover, each such beneficial owner will agree, or be deemed to agree, to indemnify the Issuers, the Collateral Trustee and the other beneficial owners of Notes for all damages, costs and expenses that result from the failure of such Person to comply with its Holder Tax Obligations. This indemnification will continue even after the Person ceases to have an ownership interest in the Notes.

 

(e)                                  If a Holder of a Note fails for any reason to (i) comply with the Holder AML Obligations (ii) such information or documentation is not accurate or complete, or (iii) the Issuer otherwise reasonably determines that such Holder’s acquisition, holding or transfer of an interest in any Note would cause the Issuer to be unable to achieve AML Compliance, the Issuer (or any intermediary on the Issuer’s behalf) shall have the right to (x) compel the relevant Holder to sell its interest in such Note or (y) sell such interest on such Holder’s behalf. The Issuer shall not compel sales for failure to provide such other information or documentation as may be required under the Cayman AML Regulations unless the Issuer reasonably determines the Holder’s acquisition, holding or transfer of an interest in such Note would result in a materially adverse effect on the Issuer.

 

Section 2.13                             Treatment and Tax Certification. (a) The Issuers and the Collateral Trustee agree, and each Holder and each beneficial owner of Secured Debt or Subordinated Securities, 

 

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by acceptance of such Secured Debt or Subordinated Securities or an interest in such Secured Debt or Subordinated Securities shall be deemed to have agreed, to treat, and shall treat, the Secured Debt or Subordinated Securities as described in the “Certain U.S. Federal Income Tax Considerations” section of the Offering Circular for all United States federal, state and local income tax purposes and shall take no action inconsistent with such treatment unless required by law.

 

(b)                                 Each Holder and beneficial owner of Secured Debt or Subordinated Securities, by acceptance of such Secured Debt or Subordinated Securities or an interest in such Secured Debt or Subordinated Securities, shall be deemed to understand and acknowledge that failure to provide the Applicable Issuer, the Collateral Trustee or any Paying Agent with the properly completed and signed applicable tax certifications (generally, in the case of U.S. federal income tax, an Internal Revenue Service Form W-9 (or applicable successor form) in the case of a U.S. Person or the applicable Internal Revenue Service Form W-8 (or applicable successor form) in the case of a Person that is not a U.S. Person) may result in withholding from payments in respect of such Note or Subordinated Security, including U.S. federal withholding or back-up withholding.

 

(c)                                  Each Holder and beneficial owner of Secured Debt or Subordinated Securities, by acceptance of such Secured Debt or Subordinated Securities or an interest in such Secured Debt or Subordinated Securities, shall be deemed to agree to provide the Issuer and the Collateral Trustee any U.S. federal income tax form, certification or other information or documentation that  is required or is otherwise necessary (in the sole determination of the Issuers, the Collateral Trustee, or other agent of the Issuers, as applicable) (a) to enable the Issuers, the Collateral Trustee, or other agent of the Issuers to determine their duties and liabilities with respect to any taxes they may be required to withhold pursuant to the Code in respect of such Secured Debt or Subordinated Securities or the Holder of such Secured Debt or Subordinated Securities or beneficial interest therein, (b) to enable the Issuer to qualify for a reduced rate of withholding in any jurisdiction from or through which either Issuer receives payments on its assets, or (c) to enable the Issuers, the Collateral Trustee, or other agent of the Issuers to satisfy reporting and other obligations under the Code and Treasury regulations, including any cost basis reporting obligations. Each holder and beneficial owner of a Secured Debt or Subordinated Securities, by acceptance of such Secured Debt or Subordinated Securities or an interest in such Secured Debt or Subordinated Securities, shall be deemed to agree that the Issuers may provide such information and any other information concerning its investment in the Secured Debt or Subordinated Securities to the Internal Revenue Service. In addition, it understands and acknowledges that the Issuer has the right under this Indenture to withhold from any beneficial owner of an interest in a Note that fails to establish an exemption from U.S. federal withholding tax under Sections 1471 through 1474 of the Code.

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.1                                    Conditions to Issuance of Notes and Incurrence of Loans on Closing Date. The Notes to be issued and Class A Loans to be incurred on the Closing Date may be executed by the Applicable Issuer and delivered to the Collateral Trustee for authentication and thereupon 

 

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the same shall be authenticated by the Collateral Trustee or the Authenticating Agent and delivered by the Collateral Trustee upon Issuer Order and upon receipt by the Collateral Trustee of the following:

 

(i)                    Officers’ Certificate of the Issuers Regarding Corporate Matters. An Officer’s certificate of the Issuers (A) evidencing the authorization by Resolution of the execution and delivery of the Transaction Documents to which it is a party and related transaction documents and the execution, authentication and delivery of the Notes (or in the case of the Co-Issuer, the Co-Issued Debt), and the incurrence of the Class A Loans, applied for by it, (B) specifying the Stated Maturity, principal amount and Interest Rate of each Class of Secured Debt (or in the case of the Co-Issuer, the Co-Issued Debt) to be authenticated and delivered, and (C) certifying that (1) the attached copy of the Resolution is a true and complete copy thereof, (2) such Resolution has not been rescinded and is in full force and effect on and as of the Closing Date and (3) the Officers authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

 

(ii)                 Governmental Approvals. From the Issuer either (A) a certificate of the Issuer or other official document evidencing the due authorization, approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of such Issuer that no other authorization, approval or consent of any governmental body is required for the valid issuance of the Notes and incurrence of the Class A Loans or (B) an Opinion of Counsel of the Issuer that no such authorization, approval or consent of any governmental body is required for the valid issuance of such Notes and incurrence of such Loans except as has been given.  From the Co-Issuer either (A) a certificate of the Co-Issuer or other official document evidencing the due authorization, approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of such Co-Issuer that no other authorization, approval or consent of any governmental body is required for the valid issuance of the Co-Issued Debt or (B) an Opinion of Counsel of the Co-Issuer that no such authorization, approval or consent of any governmental body is required for the valid issuance of such Co-Issued Debt except as has been given.

 

(iii)              Opinions. Opinions of (A) Mayer Brown LLP, U.S. counsel to the Issuers and the Placement Agent, (B) Maples & Calder, Cayman Islands counsel to the Issuer, (C) Nixon Peabody LLP, counsel to the Collateral Trustee and Collateral Administrator and (D) Cleary Gottlieb Steen & Hamilton LLP, U.S. counsel to the Collateral Manager, each dated the Closing Date.

 

(iv)             Officers’ Certificate of the Issuers Regarding Indenture. An Officer’s certificate of each of the Issuers stating that, to the best of the signing Officer’s knowledge, the Issuer or Co-Issuer (as applicable) is not in default under this Indenture or the Credit Agreement and that the issuance of the Notes and the incurrence of the Class A Loans applied for by it will not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its Organizational Documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by 

 

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which it may be bound or to which it may be subject; that all conditions precedent provided herein relating to the authentication and delivery of the Notes (or in the case of the Co-Issuer, the Co-Issued Debt only) and the Incurrence of the Class A Loans applied for by it have been complied with; and that all expenses due or accrued with respect to the Offering of such Notes (or in the case of the Co-Issuer, the Co-Issued Debt only) or relating to actions taken on or in connection with the Closing Date have been paid or reserves therefor have been made. The Officer’s certificates of each of the Issuers shall also state that, to the best of the signing Officer’s knowledge, all of the Issuer’s or Co-Issuer’s (as applicable) representations and warranties contained herein are true and correct as of the Closing Date.

 

(v)                Certificate of ORCC. An Officer’s certificate of ORCC, dated as of the Closing Date, certifying that ORRC will not take any action that would result in the Issuer being a “publicly traded partnership” taxable as a corporation for U.S. federal income tax purposes.

 

(vi)             Certificate of the Collateral Manager. An Officer’s certificate of the Collateral Manager, dated as of the Closing Date, to the effect that immediately before the Delivery of the Collateral Obligations on the Closing Date:

 

(A)                               the information with respect to each Collateral Obligation in the Schedule of Collateral Obligations is true and correct and such schedule is complete with respect to each such Collateral Obligation;

 

(B)                               each Collateral Obligation in the Schedule of Collateral Obligations satisfies the requirements of the definition of “Collateral Obligation”; and

 

(C)                               the Aggregate Principal Balance of the Collateral Obligations which the Issuer has purchased or entered into binding commitments to purchase on or prior to the Closing Date is at least U.S.$540,000,000.

 

(vii)          Grant of Collateral Obligations. Contemporaneously with the issuance and sale of the Secured Debt and Subordinated Securities on the Closing Date, the Grant pursuant to the Granting Clauses of this Indenture of all of the Issuer’s right, title and interest in and to the Collateral Obligations pledged to the Collateral Trustee for inclusion in the Assets on the Closing Date shall be effective, and Delivery of such Collateral Obligations (including each promissory note and all other Underlying Documents related thereto to the extent received by the Issuer) as contemplated by Section 3.3 shall have been effected.

 

(viii)       Certificate of the Issuer Regarding Assets. An Officer’s certificate of the Issuer, dated as of the Closing Date, to the effect that:

 

(A)                               in the case of each Collateral Obligation pledged to the Collateral Trustee for inclusion in the Assets, on the Closing Date and immediately prior to the Delivery thereof (or immediately after Delivery thereof, in the case of clause (VI)(ii) below) on the Closing Date;

 

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(I)                  the Issuer is the owner of such Collateral Obligation free and clear of any liens, claims or encumbrances of any nature whatsoever except for (i) those which are being released on the Closing Date; (ii) those Granted pursuant to this Indenture and (iii) any other Permitted Liens;

 

(II)             the Issuer has acquired its ownership in such Collateral Obligation in good faith without notice of any adverse claim, except as described in clause (I) above;

 

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

 

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

 

(V)              based on the certificate of the Collateral Manager delivered pursuant to Section 3.1(vi), the information set forth with respect to such Collateral Obligation in the Schedule of Collateral Obligations is true and correct;

 

(VI)         (i) based on the certificate of the Collateral Manager delivered pursuant to Section 3.1(vi), each Collateral Obligation included  in the Assets satisfies the requirements of the definition of “Collateral Obligation” and (ii) the requirements of Section 3.1(vii) have been satisfied;

 

(VII)    upon the Grant by the Issuer, the Collateral Trustee has a first priority perfected security interest in the Collateral Obligations and other Assets, except as permitted by this Indenture; and

 

(B)                               based on the certificate of the Collateral Manager delivered pursuant to Section 3.1(vi), the Aggregate Principal Balance of the Collateral Obligations which the Issuer has purchased or entered into binding commitments to purchase on or prior to the Closing Date is at least U.S.$540,000,000.

 

(ix)             Rating Letters. An Officer’s certificate of the Issuer to the effect that attached thereto is a true and correct copy of letter signed by the Rating Agency, and confirming that each Class of Secured Debt has been assigned the applicable Initial Rating and that such ratings are in effect on the Closing Date.

 

(x)                Accounts. Evidence of the establishment of each of the Accounts.

 

(xi)             Issuer Order for Deposit of Funds into Accounts. The Issuer hereby authorizes (A) the deposit of U.S.$25,000,000 from the proceeds of the issuance of the 

 

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Notes into the Ramp-Up Account for use pursuant to Section 10.3(c), (B) the deposit of U.S.$3,325.000 from the proceeds of the issuance of the Notes into the Expense Reserve Account as Interest Proceeds for use pursuant to Section 10.3(d), (C) the deposit of the Interest Reserve Amount from the proceeds of the issuance of the Notes into the Interest Reserve Account for use pursuant to Section 10.3(e) and (D) the deposit of U.S.$9,500,000 into the Revolver Funding Account for use pursuant to Section 10.4.

 

(xii)          Other Documents. Such other documents as the Collateral Trustee may reasonably require; provided that nothing in this clause (xii) shall imply or impose a duty on the part of the Collateral Trustee to require any other documents.

 

Section 3.2                                    Conditions to Issuance of Additional Debt. (a) Additional Debt to be issued on an Additional Debt Closing Date pursuant to Section 2.4 may be executed by the Applicable Issuer and delivered to the Collateral Trustee for authentication and thereupon the same shall be authenticated and delivered to the Applicable Issuer by the Collateral Trustee upon Issuer Order, upon compliance with clauses (vi) and (vii) of Section 3.1 (with all references therein to the Closing Date being deemed to be the applicable Additional Debt Closing Date and the Aggregate Principal Balance being deemed to be the Aggregate Principal Balance as of the applicable Additional Debt Closing Date) and upon receipt by the Collateral Trustee of the following:

 

(i)                                     Officers’ Certificate of the Issuers Regarding Corporate Matters. An Officer’s certificate of each of the Issuers (1) evidencing the authorization by Resolution of each of the Issuers of the execution and delivery of a supplemental indenture and the execution, authentication and delivery of the Additional Debt applied for by it and specifying the Stated Maturity, the principal amount and Interest Rate of each Class of such Additional Debt to be authenticated and delivered, and (2) certifying that (a) the attached  copy of such action is a true and complete copy thereof, (b) such action has not been rescinded and is in full force and effect on and as of the Additional Debt Closing Date and (c) the Officers authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon.

 

(ii)                                  Governmental Approvals. From the Issuer either (A) a certificate of the Issuer or other official document evidencing the due authorization, approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel to the effect that no other authorization, approval or consent of any governmental body is required for the valid issuance of such Additional Debt, or (B) an Opinion of Counsel to the effect that no such authorization, approval or consent of any governmental body is required for the valid issuance of such Additional Debt except as have been given; provided that the opinions delivered pursuant to Section 3.2(iii) may satisfy the requirement.  From the Co-Issuer either (A) a certificate of the Co-Issuer or other official document evidencing the due authorization, approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel to the effect that no other authorization, approval or consent of any governmental body is required for the valid issuance of such Additional Debt to be issued by the Co-Issuer, or (B) an Opinion of Counsel to the effect that no such authorization, approval or consent of any governmental

 

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body is required for the valid issuance of such Additional Debt to be issued by the Co-Issuer except as have been given (provided that the opinions delivered pursuant to Section 3.2(iii) may satisfy the requirement).

 

(iii)                               Counsel Opinion. Opinion of Mayer Brown LLP, special counsel to the Issuers or other counsel acceptable to the Collateral Trustee, dated the Additional Debt Closing Date, in form and substance satisfactory to the Issuer and the Collateral Trustee.

 

(iv)                              Officers’ Certificate of the Issuers Regarding Indenture. An Officer’s certificate of each of the Issuers stating that the Issuer or Co-Issuer (as applicable) is not in default under this Indenture or the Credit Agreement and that the issuance or incurrence of the Additional Debt applied for by it shall not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its Organizational Documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in this Indenture and the supplemental indenture relating to the authentication and delivery of the Additional Debt applied for have been complied with and that the authentication and delivery of the Additional Debt is authorized or permitted under this Indenture and the supplemental indenture entered into in connection with such Additional Debt; and that all expenses due or accrued with respect to the Offering of the Additional Debt or relating to actions taken on or in connection with the Additional Debt Closing Date have been paid or reserved. The Officer’s certificate of the Issuer shall also state that all of its representations and warranties contained herein are true and correct as of the Additional Debt Closing Date.

 

(v)                                 [Reserved].

 

(vi)                              S&P Rating Condition. Unless only additional Junior Mezzanine Debt is being issued, evidence that the S&P Rating Condition has been satisfied with respect to such issuance or incurrence of Additional Debt.

 

(vii)                           Other Documents. Such other documents as the Collateral Trustee may reasonably require; provided that nothing in this clause (viii) shall imply or impose a duty on the Collateral Trustee to so require any other documents.

 

(b)                                 Prior to any Additional Debt Closing Date, the Collateral Trustee shall provide to the Holders notice of such issuance or incurrence of Additional Debt as soon as reasonably practicable but in no case less than fifteen (15) days prior to the Additional Debt Closing Date; provided that the Collateral Trustee shall receive such notice at least two (2) Business Days prior to the 15th day prior to such Additional Debt Closing Date. On or prior to any Additional Debt Closing Date, the Collateral Trustee shall provide to the Holders copies of any supplemental indentures executed as part of such issuance pursuant to Article VIII.

 

Section 3.3                                    Custodianship; Delivery of Collateral Obligations and Eligible Investments. (a) The Collateral Manager, on behalf of the Issuer, shall deliver or cause to be 

 

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delivered, on or prior to the Closing Date (with respect to the initial Collateral Obligations) and within five (5) Business Days after the related Cut-Off Date (with respect to any additional Collateral Obligations) to a custodian appointed by the Issuer, which shall be a Securities Intermediary (the “Custodian”) or the Collateral Trustee, as applicable, all Assets in accordance with the definition of “Deliver”. The Custodian appointed hereby shall act as agent and bailee for the Collateral Trustee on behalf of the Secured Parties. Initially, the Custodian shall be the Bank and if such institution’s rating falls below “A” and “A-1” by S&P (or below “A+” by S&P if such institution has no short-term rating) the assets held by the Custodian shall be moved within 30 calendar days to another institution that is rated at least “A” and “A-1” by S&P (or at least “A+” by S&P if such institution has no short-term rating) and is subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulation Section 9.10(b). Any successor custodian shall also be a state or national bank or trust company that (i) has capital and surplus of at least U.S.$200,000,000 and (ii) is a Securities Intermediary. Subject to the limited right to relocate Assets as provided in Section 7.5(b), the Collateral Trustee or the Custodian, as applicable, shall hold (i) all Collateral Obligations, Eligible Investments, Cash and other investments purchased in accordance with this Indenture and (ii) any other property of the Issuer otherwise Delivered to the Collateral Trustee or the Custodian, as applicable, by or on behalf of the Issuer, in the relevant Account established and maintained pursuant to Article X as to which in each case the Collateral Trustee shall have entered into the Securities Account Control Agreement with the Custodian providing, inter alia, that the establishment and maintenance of such Account will be governed by a law of a jurisdiction satisfactory to the Issuer and the Collateral Trustee.

 

(b)                                 Each time that the Collateral Manager on behalf of the Issuer directs or causes the acquisition of any Collateral Obligation, Eligible Investment or other investment, the Collateral Manager (on behalf of the Issuer) shall, if the Collateral Obligation, Eligible Investment or other investment is required to be, but has not already been, transferred to the relevant Account, cause the Collateral Obligation, Eligible Investment or other investment to be Delivered to the Custodian to be held in the Custodial Account (or in the case of any such investment that is not a Collateral Obligation, in the Account in which the funds used to purchase the investment are held in  accordance with Article X) for the benefit of the Collateral Trustee in accordance with this Indenture. The security interest of the Collateral Trustee in the funds or other property used in connection with the acquisition shall, immediately and without further action on the part of the Collateral Trustee, be released. The security interest of the Collateral Trustee shall nevertheless come into existence and continue in the Collateral Obligation, Eligible Investment or other investment so acquired, including all interests of the Issuer in any contracts related to and proceeds of such Collateral Obligation, Eligible Investment or other investment.

 

ARTICLE IV

 

SATISFACTION AND DISCHARGE

 

Section 4.1                                    Satisfaction and Discharge of Indenture. This Indenture shall be discharged and shall cease to be of further effect except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, defaced, destroyed, lost or stolen Notes, (iii) rights of Holders to receive payments of principal thereof and interest thereon, (iv) the rights, protections, indemnities and immunities of the Collateral Trustee and the specific obligations of 

 

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the Collateral Trustee and the Loan Agent set forth below hereunder and under the Credit Agreement, (v) the rights, obligations and immunities of the Collateral Manager hereunder and under the Collateral Management Agreement, (vi) the rights, protections, indemnities and immunities of the Collateral Administrator hereunder and under the Collateral Administration Agreement and (vii) the rights of Holders as beneficiaries hereof with respect to the property deposited with the Collateral Trustee and payable to all or any of them (and the Collateral Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture) when:

 

(a)                                 (i) either:

 

(A)                               all Notes theretofore authenticated and delivered to Holders other than (1) Notes which have been mutilated, defaced, destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.7 and (2) Notes for whose payment Money has theretofore irrevocably been deposited in trust and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 7.3 have been delivered to the Collateral Trustee for cancellation and the Class A Loans have been repaid in full; or

 

(B)                               all Notes not theretofore delivered to the Collateral Trustee for cancellation and the Class A Loans (1) have become due and payable, or (2) shall become due and payable at their Stated Maturity within one year, or (3) are to be called for redemption pursuant to Article IX under an arrangement satisfactory to the Collateral Trustee for the giving of notice of redemption by the Issuer pursuant to Section 9.4 and either (x) the Issuer has irrevocably deposited or caused to be deposited with the Collateral Trustee, in trust for such purpose, Cash or non-callable direct obligations of the United States; provided that the obligations are entitled to the full faith and credit of the United States or are debt obligations which are rated “AAA” by S&P, in an amount sufficient, as recalculated by a firm of Independent certified public accountants which are nationally recognized, to pay  and discharge the entire indebtedness on such Secured Debt not theretofore delivered to the Collateral Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Secured Debt which have become due and payable), or to the respective Stated Maturity or the respective Redemption Date, as the case may be, and shall have Granted to the Collateral Trustee a valid perfected security interest in such Eligible Investment that is of first priority or free of any adverse claim, as applicable, and shall have furnished an Opinion of Counsel with respect thereto or (y) in the event all of the Assets are liquidated following the satisfaction of the conditions specified in Section 5.5(a), the Issuer shall have paid or caused to be paid all proceeds of such liquidation of the Assets in accordance with the Priority of Payments;

 

(ii)                 the Issuer has paid or caused to be paid all other sums then due and payable hereunder (including any amounts then due and payable pursuant to the Collateral Administration Agreement, the Collateral Management Agreement and the Fiscal Agency Agreement without regard to the Administrative Expense Cap) by the Issuer and no other amounts are scheduled to be due and payable by the Issuers other than Dissolution 

 

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Expenses (it being understood that the requirements of this clause (ii) may be satisfied as set forth in Section 5.7); and

 

(iii)              the Issuers have delivered to the Collateral Trustee Officer’s certificates and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with; or

 

(b)                                 (i) the Collateral Trustee confirms to the Issuer that:

 

(A)                               the Collateral Trustee is not holding any Assets (other than (x) the Collateral Management Agreement, the Collateral Administration Agreement, the Fiscal Agency Agreement, the Loan Sale Agreements and the Securities Account Control Agreement and (y) Cash in an amount not greater than the Dissolution Expenses); and

 

(B)                               no assets (other than Excluded Property and Cash in an amount not greater than the Dissolution Expenses) are on deposit in or to the credit of any deposit account or securities account (including any Accounts) in the name of the Issuer or the Co-Issuer (or the Collateral Trustee for the benefit of the Issuer, the Co-Issuer or any Secured Party);

 

(ii)                 each of the Issuers have delivered to the Collateral Trustee a certificate stating that (1) there are no Assets (other than (x) the Collateral Management Agreement, the Collateral Administration Agreement, the Fiscal Agency Agreement and the Securities Account Control Agreement and (y) Cash in an amount not greater than the Dissolution Expenses) that remain subject to the lien of this Indenture, and (2) all funds on deposit in the Accounts have been distributed in accordance with the terms of this Indenture or have otherwise been irrevocably deposited with the Collateral Trustee for such purpose; and

 

(iii)              the Issuers have delivered to the Collateral Trustee Officer’s certificates and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.

 

Upon the discharge of this Indenture, the Collateral Trustee shall provide such certifications to the Issuer or the Administrator as may be reasonably required by the Issuer or the Administrator in order for the liquidation of the Issuer to be completed.

 

Notwithstanding the satisfaction and discharge of this Indenture, the rights and obligations of the Issuers, the Collateral Trustee, the Collateral Manager and, if applicable, the Holders, as the case may be, under Sections 2.8, 4.2, 5.4(d), 5.9, 5.18, 6.1, 6.3, 6.6, 6.7, 7.1, 7.3, 13.1, 14.10, 14.11, and 14.12 shall survive.

 

Section 4.2                                    Application of Trust Money. All Monies deposited with the Collateral Trustee pursuant to Section 4.1 shall be held in trust and applied by it in accordance with the provisions of the Secured Debt, the Subordinated Securities and this Indenture, including, without limitation, the Priority of Payments, to the payment of principal, interest and other distributions to the Secured Debt and the Subordinated Securities, either directly or through any 

 

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Paying Agent, as the Collateral Trustee may determine; and such Money shall be held in an Account meeting the requirements of Section 10.1.

 

Section 4.3                                    Repayment of Monies Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to the Secured Debt and the Subordinated Securities, all Monies then held by any Paying Agent other than the Collateral Trustee under the provisions of this Indenture shall, upon demand of the Issuer, be paid to the Collateral Trustee to be held and applied pursuant to Section 7.3 hereof and in accordance with the Priority of Payments and thereupon such Paying Agent shall be released from all further liability with respect to such Monies.

 

Section 4.4                                    Limitation on Obligation to Incur Administrative Expenses. If at any time when this Indenture is eligible to be discharged pursuant to Section 4.1, the sum of (i) Eligible Investments, (ii) Cash and (iii) amounts reasonably expected to be received by the Issuer in Cash during the current Collection Period (as certified by the Collateral Manager in its reasonable judgment) is less than the sum of Dissolution Expenses and any accrued and unpaid Administrative Expenses, then notwithstanding any other provision of this Indenture, the Issuers shall no longer be required to incur Administrative Expenses as otherwise required by this Indenture to any Person other than the Collateral Trustee and their Affiliates, and the Collateral Manager, and failure to pay such amounts or provide or obtain any opinions, reports or services required under this Indenture shall not constitute a Default hereunder, and the Collateral Trustee shall have no liability for any failure to obtain or receive any of the foregoing opinions, reports or services.

 

ARTICLE V

 

REMEDIES

 

Section 5.1                                    Events of Default. “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)                                 a default in the payment, when due and payable, of (i) any interest on any Class A Debt or any Class B Note and the continuation of any such default for five (5) Business Days after a Trust Officer of the Collateral Trustee has actual knowledge or receives notice from any holder of Secured Debt or Subordinated Securities of such payment default, or (ii) any principal of, or interest on, or any Redemption Price in respect of, any Secured Debt at its Stated Maturity or any Redemption Date; provided that the failure to effect any Optional Redemption which is withdrawn by the Issuer in accordance with this Indenture or with respect to which any Refinancing fails to occur shall not constitute an Event of Default and provided further that, solely with respect to clause (i) above, in the case of a failure to disburse funds due to an administrative error or omission by the Collateral Manager, Collateral Trustee, the Loan Agent, Collateral Administrator or any Paying Agent, such failure continues for seven (7) Business Days after a Trust Officer of the Collateral Trustee receives written notice or has actual knowledge of such administrative error or omission;

 

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(b)                                 the failure on any Payment Date to disburse amounts available in the Payment Account in excess of U.S.$25,000 in accordance with the Priority of Payments and continuation of such failure for a period of ten (10) Business Days or, in the case of a failure to disburse due to an administrative error or omission by the Collateral Trustee, the Loan Agent, Collateral Administrator or any Paying Agent, such failure continues for seven (7) Business Days after a Trust Officer of the Collateral Trustee receives written notice or has actual knowledge of such administrative error or omission;

 

(c)                                  any of the Issuer, the Co-Issuer or the Assets becomes an investment company required to be registered under the 1940 Act and that status continues for forty-five (45) consecutive days;

 

(d)                                 except as otherwise provided in this Section 5.1, a default in a material respect in  the performance, or breach in a material respect, of any other material covenant of the Issuer or the Co-Issuer herein (it being understood, without limiting the generality of the foregoing, that (i) any failure to meet any Concentration Limitation, Collateral Quality Test or Coverage Test is not an Event of Default, except to the extent provided in clause (e) below, and (ii) the failure of the Issuer to satisfy the requirements of Section 7.18 will not constitute an Event of Default (unless such failure constitutes an Event of Default under this clause (d) and the Issuer, the Co-Issuer or the Collateral Manager acting on behalf of the Issuer, has acted in bad faith), or the failure of any material representation or warranty of the Issuer or the Co-Issuer made herein, in the Credit Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith to be correct in each case in all material respects when the same shall have been made, which default, breach or failure has a material adverse effect on the Holders of the Secured Debt or Subordinated Securities and continues for a period of forty-five (45) days (or, in the case of a breach of any material representation or warranty, 30 days) after notice to the Issuer and the Collateral Manager by registered or certified mail or overnight delivery service, by the Collateral Trustee or the Loan Agent at the direction of the Holders of at least a Majority of the Controlling Class, specifying such default, breach or failure and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; provided that the delivery of a certificate or other report which corrects any inaccuracy contained in a previous report or certification shall be deemed to cure such inaccuracy as of the date of delivery of such updated report or certificate and any and all inaccuracies arising from continuation of such initial inaccurate report or certificate and the sale or other disposition of any asset that did not at the time of its acquisition satisfy any of the investment criteria set forth in this Indenture shall cure any breach or failure arising therefrom as of the date of such sale or disposition;

 

(e)                                  on any Measurement Date as of which the Class A Debt is Outstanding, failure of the percentage equivalent of a fraction, (i) the numerator of which is equal to (1) the Collateral Principal Amount plus (2) the aggregate Market Value of all Defaulted Obligations on such date and (ii) the denominator of which is equal to the Aggregate Outstanding Amount of the Class A Debt, to equal or exceed 102.5%;

 

(f)                                   the entry of a decree or order by a court having competent jurisdiction adjudging either of the Issuers as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of either of the Issuers under the Bankruptcy Law or any other applicable law, or appointing a receiver, liquidator, assignee, or 

 

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sequestrator (or other similar official) of either of the Issuers or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, respectively, and the continuance of any such decree or order unstayed and in effect for a period of sixty (60) consecutive days; or

 

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

 

(h)                                 The sole Event of Default under the Credit Agreement will be the occurrence of an Event of a Default under this Section 5.1.

 

Upon a Responsible Officer’s obtaining knowledge of the occurrence of an Event of Default, each of (i) the Issuers, (ii) the Collateral Trustee, (iii) the Loan Agent and (iv) the Collateral Manager shall notify each other. Upon the occurrence of an Event of Default known to a Trust Officer of the Collateral Trustee, the Collateral Trustee shall promptly (and in no event later than three (3) Business Days thereafter) notify the Holders (as their names appear on the Register), each Paying Agent and the Rating Agency of such Event of Default in writing (unless such Event of Default has been waived as provided in Section 5.14).

 

Section 5.2                                    Acceleration of Maturity; Rescission and Annulment. (a) If an Event of Default occurs and is continuing (other than an Event of Default specified in Section 5.1(f) or (g)), the Collateral Trustee may, and shall, upon the written direction of a Majority of the Controlling Class, by notice to the Issuer and the Rating Agency, declare the principal of and accrued and unpaid interest on all the Secured Debt to be immediately due and payable, and upon any such declaration such principal, together with all accrued and unpaid interest thereon, and other amounts payable hereunder, shall become immediately due and payable. If an Event of Default specified in Section 5.1(f) or (g) occurs, all unpaid principal, together with all accrued and unpaid interest thereon, of all the Secured Debt, and other amounts payable thereunder and hereunder, shall automatically become due and payable without any declaration or other act on the part of the Collateral Trustee or any Holder.

 

(b)                                 At any time after such a declaration of acceleration of maturity has been made and before a judgment or decree for payment of the Money due has been obtained by the Collateral Trustee as hereinafter provided in this Article V, a Majority of the Controlling Class by written notice to the Issuers and the Collateral Trustee, may rescind and annul such declaration and its consequences if:

 

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(i)                    The Issuer has paid or deposited with the Collateral Trustee a sum sufficient to pay:

 

(A)                               all unpaid installments of interest and principal then due on the Secured Debt (other than any principal amounts due to the occurrence of an acceleration); and

 

(B)                               all unpaid taxes and Administrative Expenses of the Issuers and other sums paid or advanced by the Collateral Trustee hereunder or by the Collateral Administrator under the Collateral Administration Agreement or hereunder, accrued and unpaid Collateral Management Fee then due and owing and any other amounts then payable by the Issuers hereunder prior to such Administrative Expenses and such Collateral Management Fee; or

 

(ii)                 It has been determined that all Events of Default, other than the nonpayment of the interest on or principal of the Secured Debt that has become due solely by such acceleration, have:

 

(A)                               been cured; and

 

(I)                  in the case of an Event of Default specified in Section 5.1(a) due to failure to pay interest on the Class A Debt or the Class B Notes or in Section 5.1(e), a Majority of the Class A Debt, by written notice to the Collateral Trustee, have agreed with such determination (which agreement shall not be unreasonably withheld, delayed or conditioned);

 

(II)             if (and only if) the Class B Notes constitute the Controlling Class, in the case of an Event of Default specified in Section 5.1(a) due to failure to pay interest on the Class B Notes, the Holders of at least a Majority of the Class B Notes, by written notice to the Collateral Trustee, have agreed with such determination (which agreement shall not be unreasonably withheld, delayed or conditioned); or

 

(III)        in the case of any other Event of Default, a Majority of each Class of Secured Debt (voting separately by Class), in each case, by written notice to the Collateral Trustee, have agreed with such determination (which agreement shall not be unreasonably withheld, delayed or conditioned); or

 

(B)                               been waived as provided in Section 5.14.

 

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

 

(c)                                  Notwithstanding anything in this Section 5.2 to the contrary, the Secured Debt will not be subject to acceleration by the Collateral Trustee solely as a result of the failure to pay 

 

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any amount due on the Secured Debt that is not of the Controlling Class other than any failure to pay interest due on the Class B Notes.

 

Section 5.3                                    Collection of Indebtedness and Suits for Enforcement by Trustee. The Issuers covenant that if a default shall occur in respect of the payment of any principal of or interest when due and payable on any Secured Debt, the Issuers will, upon demand of the Collateral Trustee, pay to the Collateral Trustee, for the benefit of the Holder of such Secured Debt, the whole amount, if any, then due and payable on such Secured Debt for principal and interest with interest upon the overdue principal and, to the extent that payments of such interest shall be legally enforceable, upon overdue installments of interest, at the applicable Interest Rate, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Collateral Trustee and its agents and counsel.

 

If the Issuers fail to pay such amounts forthwith upon such demand, the Collateral Trustee, in its own name and as trustee of an express trust, may, and shall, subject to the terms of this Indenture (including Section 6.3(e)) upon direction of a Majority of the Controlling Class, institute a Proceeding for the collection of the sums so due and unpaid, may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or any other obligor upon the Secured Debt and collect the Monies adjudged or decreed to be payable in the manner provided by law out of the Assets.

 

If an Event of Default occurs and is continuing, the Collateral Trustee may in its discretion, and shall, subject to the terms of this Indenture (including Section 6.3(e)) upon written direction of a Majority of the Controlling Class, proceed to protect and enforce its rights and the rights of the Secured Parties by such appropriate Proceedings as the Collateral Trustee shall deem most effectual (if no such direction is received by the Collateral Trustee) or as the Collateral Trustee may be directed by a Majority of the Controlling Class, to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement herein or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Collateral Trustee by this Indenture, the Credit Agreement or by law.

 

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

 

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(a)                                 to file and prove a claim or claims for the whole amount of principal, interest and other distributions owing and unpaid in respect of the Secured Debt or Subordinated Securities upon direction by a Majority of the Controlling Class and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Collateral Trustee (including any claim for reasonable compensation to the Collateral Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all reasonable expenses and liabilities incurred, and all advances made, by the Collateral Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Holders allowed in any Proceedings relative to the Issuer or to the creditors or property of the Issuer;

 

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

 

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

 

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

 

In any Proceedings brought by the Collateral Trustee on behalf of the Holders of the Secured Debt or Subordinated Securities (and any such Proceedings involving the interpretation of any provision of this Indenture or the Credit Agreement to which the Collateral Trustee shall be a party), the Collateral Trustee shall be held to represent all the Holders of the Secured Debt and Subordinated Securities.

 

Notwithstanding anything in this Section 5.3 to the contrary, the Collateral Trustee may not sell or liquidate the Assets or institute Proceedings in furtherance thereof pursuant to this Section 5.3 except according to the provisions specified in Section 5.5(a).

 

Section 5.4                                    Remedies. (a) If an Event of Default has occurred and is continuing, and the Secured Debt has been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Issuers agree that the Collateral Trustee may, and shall, subject to the terms of this Indenture (including Section 6.3(e)), upon written direction of a

 

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Majority of the Controlling Class, to the extent permitted by applicable law, exercise one or more of the following rights, privileges and remedies:

 

(i)       institute Proceedings for the collection of all amounts then payable on the Secured Debt and Subordinated Securities or otherwise payable under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Assets any Monies adjudged due;

 

(ii)      sell or cause the sale of all or a portion of the Assets or rights or interests therein, at one or more public or private sales called and conducted in any manner permitted by law and in accordance with Section 5.17 hereof;

 

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

 

(iv)    exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Collateral Trustee and the Holders of the Secured Debt or Subordinated Securities hereunder (including exercising all rights of the Collateral Trustee under the Securities Account Control Agreement); and

 

(v)     exercise any other rights and remedies that may be available at law or in equity;

 

provided that the Collateral Trustee may not sell or liquidate the Assets or institute Proceedings in furtherance thereof pursuant to this Section 5.4 except according to the provisions of Section 5.5(a).

 

The Collateral Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking firm of national reputation (the reasonable cost of which shall be payable as an Administrative Expense) in structuring and distributing securities similar to the Secured Debt or Subordinated Securities, which may be the Placement Agent, as to the feasibility of any action proposed to be taken in accordance with this Section 5.4 and as to the sufficiency of the proceeds and other amounts receivable with respect to the Assets to make the required payments of principal of and interest on the Secured Debt which opinion shall be conclusive evidence as to such feasibility or sufficiency.

 

(b)           If an Event of Default as described in Section 5.1(d) hereof shall have occurred and be continuing the Collateral Trustee may, and at the direction of the Holders of not less than 25% of the Aggregate Outstanding Amount of the Controlling Class (or, if the Class A Debt is the Controlling Class, and interest on the Class B Notes is due and unpaid, the Class B Notes) shall, subject to the terms of this Indenture (including Section 6.3(e)), institute a Proceeding solely to compel performance of the covenant or agreement or to cure the representation or warranty, the breach of which gave rise to the Event of Default under such Section, and enforce any equitable decree or order arising from such Proceeding.

 

(c)           Upon any sale, whether made under the power of sale hereby given or by virtue of judicial Proceedings, any of the Holders of the Secured Debt or Subordinated Securities, the 

 

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Collateral Trustee, the Collateral Manager, ORCC, the Collateral Administrator or any Affiliate of the Issuers may bid for and purchase the Assets or any part thereof and, upon compliance with the terms of sale and applicable law (including the Advisers Act), may hold, retain, possess or dispose of such property in its or their own absolute right without accountability.

 

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

 

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

 

(d)           If an Event of Default has occurred and is continuing and the Collateral Trustee has directed or been directed to cause a liquidation of the Assets pursuant to this Indenture, ORCC shall have the right to make a contribution in an amount no less than would be sufficient to discharge in full the amounts then due (or, in the case of interest, accrued) and unpaid on the Secured Debt for principal and interest and all other amounts that, pursuant to the Priority of Payments, are required to be paid prior to such payments on such Secured Debt (including any amounts due and owing as Administrative Expenses (without regard to the Administrative Expense Cap) and any due and unpaid Base Management Fee) and upon the making of such contribution, any such direction for liquidation shall be null and void and any liquidation procedures or auction shall be terminated.

 

(e)           Notwithstanding any other provision of this Indenture, none of the Collateral Trustee, the Secured Parties or the Holders may, prior to the date which is one year and one day (or if longer, any applicable preference period plus one day) after the payment in full of all Secured Debt and Subordinated Securities, institute against, or join any other Person in instituting against, the Issuer or the Co-Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceedings, or other similar Proceedings under Cayman Islands, U.S. federal or state bankruptcy or similar laws. Nothing in this Section 5.4 shall preclude, or be deemed to stop,  the Collateral Trustee (i) from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer, the Co-Issuer (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Collateral Trustee, or (ii) from commencing against the Issuer, the Co-Issuer or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium, liquidation or similar Proceeding.

 

(f)            In the event one or more Holders or beneficial owners of Secured Debt or Subordinated Securities cause the filing of a petition in bankruptcy against the Issuer in violation of the prohibition described in Section 5.4(d) above, such Holder(s) or beneficial owner(s) will be deemed to acknowledge and agree that any claim that such Holder(s) or beneficial owner(s) 

 

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have against the Issuer, the Co-Issuer or with respect to any Assets (including any proceeds thereof) shall, notwithstanding anything to the contrary in the Priority of Payments, be fully subordinate in right of payment to the claims of each Holder and beneficial owner of any Secured Debt that does not seek to cause any such filing, with such subordination being effective until each Secured Debt held by each Holder or beneficial owner of any Secured Debt that does not seek to cause any such filing is paid in full in accordance with the Priority of Payments (after giving effect to such subordination). The terms described in the immediately preceding sentence are referred to herein as the “Bankruptcy Subordination Agreement”. The Bankruptcy Subordination Agreement will constitute a “subordination agreement” within the meaning of Section 510(a) of the Bankruptcy Code. The Collateral Trustee shall be entitled to rely upon an issuer order from the Issuer with respect to the payment of amounts payable to Holders, which amounts are subordinated pursuant to this Section 5.4(f).

 

Section 5.5            Optional Preservation of Assets. (a) Notwithstanding anything to the contrary herein (but subject to the right of the Collateral Manager to direct the Collateral Trustee to sell Collateral Obligations or Equity Securities in strict compliance with Section 12.1), if an Event of Default shall have occurred and be continuing, the Collateral Trustee shall retain the Assets securing the Secured Debt intact, collect and cause the collection of the proceeds thereof and make and apply all payments at the date or dates fixed by the Collateral Trustee and deposit and maintain all accounts in respect of the Assets, the Secured Debt and the Subordinated Securities in accordance with the Priority of Payments and the provisions of Article X, Article XII and Article XIII unless:

 

(i)       the Collateral Trustee, pursuant to Section 5.5(c), determines that the anticipated proceeds of a sale or liquidation of the Assets (after deducting the reasonable expenses of such sale or liquidation) would be sufficient to discharge in full the amounts then due (or, in the case of interest, accrued) and unpaid on the Secured Debt for principal and interest, and all other amounts that, pursuant to the Priority of Payments, are required to be paid prior to such payments on such Secured Debt (including amounts due and owing as Administrative Expenses (without regard to the Administrative Expense Cap) and due and unpaid Base Management Fees) and a Majority of the Controlling Class agrees with such determination and directs the sale and liquidation of the Assets;

 

(ii)      in the case of an Event of Default specified in (A) Section 5.1(a) due to failure to pay interest on the Class A Debt or the Class B Notes in accordance with Section 11.1(a)(i) or Section 11.1(a)(ii), (B) Section 5.1(a) due to failure to pay interest on the Class A Debt in  accordance with Section 11.1(a)(iii), or (C) Section 5.1(e), the Holders of at least a Majority of the Class A Debt direct the sale and liquidation of the Assets (in each case without regard to whether another Event of Default has occurred prior, contemporaneously or subsequent to such Event of Default); or

 

(iii)     if the Class A Debt is no longer Outstanding, or in the case of any other Event of Default not specified in clause (ii), the Holders of at least a Majority of each Class of Secured Debt (voting separately by Class) direct the sale and liquidation of the Assets.

 

So long as such Event of Default is continuing, any such retention pursuant to this Section 5.5(a) may be rescinded at any time when the conditions specified in clause (i), (ii) or (iii) exist.

 

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(b)           Nothing contained in Section 5.5(a) shall be construed to require the Collateral Trustee to sell the Assets securing the Secured Debt if the conditions set forth in clause (i), (ii) or (iii) of Section 5.5(a) are not satisfied. Nothing contained in Section 5.5(a) shall be construed to require the Collateral Trustee to preserve the Assets securing the Secured Debt if prohibited by applicable law.

 

(c)           In determining whether the condition specified in Section 5.5(a)(i) exists, the Collateral Trustee shall use reasonable efforts to obtain, with the cooperation of the Collateral Manager, bid prices with respect to each Asset from two nationally recognized dealers (as specified by the Collateral Manager in writing) at the time making a market in such Assets and shall compute the anticipated proceeds of sale or liquidation on the basis of the lower of such bid prices for each such Asset. In the event that the Collateral Trustee, with the cooperation of the Collateral Manager, is only able to obtain bid prices with respect to each Asset from one nationally recognized dealer at the time making a market in such Assets, the Collateral Trustee shall compute the anticipated proceeds of the sale or liquidation on the basis of such one bid price for each such Asset. In addition, for the purposes of determining issues relating to the execution of a sale or liquidation of the Assets and the execution of a sale or other liquidation thereof in connection with a determination whether the condition specified in Section 5.5(a)(i) exists, the Collateral Trustee may retain and rely on an opinion of an Independent investment banking firm of national reputation (the cost of which shall be payable as an Administrative Expense).

 

The Collateral Trustee shall deliver to the Holders and the Collateral Manager a report stating the results of any determination required pursuant to Section 5.5(a)(i) no later than 10 days after such determination is made. The Collateral Trustee shall make the determinations required by Section 5.5(a)(i) within 30 days after an Event of Default and at the request of a Majority of the Controlling Class at any time during which the Collateral Trustee retains the Assets pursuant to Section 5.5(a)(i).

 

The Collateral Trustee shall deliver written notice to the Issuers, the Collateral Manager, the Loan Agent and the Rating Agency upon receipt of direction pursuant to Section 5.5(a)(i), (ii) or (iii) to liquidate and sell the Assets.

 

Section 5.6            Collateral Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or under any of the Secured Debt may be prosecuted and enforced by the Collateral Trustee without the possession of any of the Secured Debt or the production thereof in any trial or other Proceeding relating thereto, and any such action or Proceeding instituted by the Collateral Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be applied as set forth in Section 5.7 hereof.

 

Section 5.7            Application of Money Collected. Any Money collected by the Collateral Trustee with respect to the Secured Debt pursuant to this Article V and any Money that may then be held or thereafter received by the Collateral Trustee with respect to the Secured Debt hereunder shall be applied, subject to Section 13.1 and in accordance with the provisions of Section 11.1(a)(iii), at the date or dates fixed by the Collateral Trustee. Upon the final distribution of all proceeds of any liquidation effected hereunder, the provisions of Section 4.1(a) 

 

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and Section 4.1(b) shall be deemed satisfied for the purposes of discharging this Indenture pursuant to Article IV.

 

Section 5.8            Limitation on Suits. No Holder of any Secured Debt or Subordinated Securities shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, the Credit Agreement, the Fiscal Agency Agreement, or any Note or Subordinated Security, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

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

 

(b)           the Holders of not less than 25% of the then Aggregate Outstanding Amount of the Secured Debt of the Controlling Class (or, if the Class A Debt is the Controlling Class and interest on the Class B Notes is due and unpaid, the Class B Notes) shall have made written request to the Collateral Trustee to institute Proceedings in respect of such Event of Default in its own name as Collateral Trustee hereunder and such Holder or Holders have provided the Collateral Trustee indemnity reasonably satisfactory to the Collateral Trustee against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities which might reasonably be incurred by it in compliance with such request;

 

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

 

(d)           no direction inconsistent with such written request has been given to the Collateral Trustee during such 30-day period by a Majority of the Controlling Class; it being understood and intended that no one or more Holders of Secured Debt or Subordinated Securities shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Secured Debt or Subordinated Securities of the same Class or to obtain or to seek to obtain priority or preference over any other Holders of the Secured Debt or Subordinated Securities of the same Class or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Secured Debt or Subordinated Securities of the same Class subject to and in accordance with Section 13.1 and the Priority of Payments.

 

In the event the Collateral Trustee shall receive conflicting or inconsistent requests and indemnity pursuant to this Section 5.8 from two or more groups of Holders of the Controlling Class (or from the Holders of the Class B Notes where permitted herein), each representing less than a Majority of the Controlling Class, the Collateral Trustee shall act in accordance with the request specified by the group of Holders with the greatest percentage of the Aggregate Outstanding Amount of the Controlling Class, notwithstanding any other provisions of this Indenture. If all such groups represent the same percentage, the Collateral Trustee, in its sole discretion, may determine what action, if any, shall be taken.

 

Section 5.9            Unconditional Rights of Holders to Receive Principal, Interest and other Distributions. Subject to Section 2.8(i), but notwithstanding any other provision of this Indenture, the Holder of any Secured Debt shall have the right, which is absolute and 

 

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unconditional, to receive payment of the principal of and interest on such Secured Debt or distributions on the Subordinated Securities, as such principal, interest and other amounts become due and payable in accordance with the Priority of Payments and Section 13.1, as the case may be, and, subject to the provisions of Section 5.8, to institute proceedings for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. Holders of Secured Debt or Subordinated Securities ranking junior to Secured Debt still Outstanding (except for the Holders of the Class B Notes as set forth in Section 5.8(b)) shall have no right to institute Proceedings to request the Collateral Trustee to institute proceedings for the enforcement of any such payment until such time as no Secured Debt ranking senior to such Secured Debt or Subordinated Securities remains Outstanding, which right shall be subject to the provisions of Section 5.8, and shall not be impaired without the consent of any such Holder.

 

Section 5.10          Restoration of Rights and Remedies. If the Collateral Trustee or any Holder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Collateral Trustee or to such Holder, then and in every such case the Issuers, the Collateral Trustee and the Holder shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Issuers, Collateral Trustee and the Holder shall continue as though no such Proceeding had been instituted.

 

Section 5.11          Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Collateral Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.12          Delay or Omission Not Waiver. No delay or omission of the Collateral Trustee or any Holder of Secured Debt or Subordinated Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein or of a subsequent Event of Default. Every right and remedy given by this Article V or by law to the Collateral Trustee or to the Holders of the Secured Debt or Subordinated Securities may be exercised from time to time, and as often as may be deemed expedient, by the Collateral Trustee or by the Holders of the Secured Debt or Subordinated Securities, as applicable.

 

Section 5.13          Control by Majority of Controlling Class. A Majority of the Controlling Class shall have the right following the occurrence, and during the continuance of, an Event of Default to cause the institution of and direct the time, method and place of conducting any Proceeding for any remedy available to the Collateral Trustee or exercising any trust or power conferred upon the Collateral Trustee under this Indenture; provided that:

 

(a)           such direction shall not conflict with any rule of law or with any express provision of this Indenture;

 

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(b)           the Collateral Trustee may take any other action deemed proper by the Collateral Trustee that is not inconsistent with such direction; provided that subject to Section 6.1, the Collateral Trustee need not take any action that it determines might involve it in liability or expense (unless the Collateral Trustee has received the indemnity as set forth in (c) below);

 

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

 

(d)           notwithstanding the foregoing, any direction to the Collateral Trustee to undertake a Sale of the Assets shall be by the Holders of Secured Debt or Subordinated Securities representing the requisite percentage of the Aggregate Outstanding Amount of Secured Debt or Subordinated Securities specified in Section 5.4 and/or Section 5.5.

 

Section 5.14          Waiver of Past Defaults. Prior to the time a judgment or decree for payment of the Money due has been obtained by the Collateral Trustee, as provided in this Article V, a Majority of the Controlling Class may on behalf of the Holders of all the Secured Debt and Subordinated Securities waive any past Default or Event of Default and its consequences, except a Default:

 

(a)           in the payment of the principal of any Secured Debt or Subordinated Securities (which may be waived only with the consent of the Holder of such Secured Debt or Subordinated Securities);

 

(b)           in the payment of interest on any Secured Debt (which may be waived only with the consent of the Holder of such Secured Debt);

 

(c)           in respect of a covenant or provision hereof that under Section 8.2 cannot be modified or amended without the waiver or consent of the Holder of each Outstanding Secured Debt or Subordinated Securities materially and adversely affected thereby (which may be waived only with the consent of each such Holder); or

 

(d)           in respect of a representation contained in Section 7.19 (which may be waived only by a Majority of the Controlling Class if the S&P Rating Condition is satisfied).

 

In the case of any such waiver, the Issuers, the Collateral Trustee and the Holders of the Secured Debt or Subordinated Securities shall be restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. The Collateral Trustee shall promptly give written notice of any such waiver to the Rating Agency, the Collateral Manager and each Holder. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture.

 

Section 5.15          Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Secured Debt or Subordinated Securities by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Collateral Trustee for any action taken, or omitted by it as Collateral Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its 

 

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discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by the Collateral Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Aggregate Outstanding Amount of the Controlling Class, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Secured Debt on or after the applicable Stated Maturity (or, in the case of redemption which has resulted in an Event of Default, on or after the applicable Redemption Date).

 

Section 5.16          Waiver of Stay or Extension Laws. The Issuers covenant (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any valuation, appraisement, redemption or marshalling law or rights, in each case wherever enacted, now or at any time hereafter in force, which may affect the covenants set forth in, the performance of, or any remedies under this Indenture; and the Issuers (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law or rights, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Collateral Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted or rights created.

 

Section 5.17          Sale of Assets. (a) The power to effect any sale (a “Sale”) of any portion of the Assets pursuant to Sections 5.4 and 5.5 shall not be exhausted by any one or more Sales as to any portion of such Assets remaining unsold, but shall continue unimpaired until the entire Assets shall have been sold or all amounts secured by the Assets shall have been paid. The Collateral Trustee may upon notice to the Holders, and shall, upon direction of a Majority of the Controlling Class, from time to time postpone any Sale by public announcement made at the time and place of such Sale. The Collateral Trustee hereby expressly waives its rights to any amount fixed by law as compensation for any Sale; provided that the Collateral Trustee shall be authorized to deduct the reasonable costs, charges and expenses incurred by it in connection with such Sale from the proceeds thereof notwithstanding the provisions of Section 6.7 or other applicable terms hereof.

 

(b)           The Collateral Trustee may bid for and acquire any portion of the Assets on behalf of the Holders in connection with a public Sale thereof, and may pay all or part of the purchase price by crediting against amounts owing on the Secured Debt in the case of the Assets or other amounts secured by the Assets, all or part of the net proceeds of such Sale after deducting the reasonable costs, charges and expenses incurred by the Collateral Trustee in connection with such Sale notwithstanding the provisions of Section 6.7 hereof or other applicable terms hereof. The Secured Debt need not be produced in order to complete any such Sale, or in order for the net proceeds of such Sale to be credited against amounts owing on the Secured Debt. The Collateral  Trustee may hold, lease, operate, manage or otherwise deal with any property so acquired in any manner permitted by law in accordance with this Indenture.

 

(c)           If any portion of the Assets consists of securities issued without registration under the Securities Act (“Unregistered Securities”), the Collateral Trustee may seek an Opinion of Counsel, or, if no such Opinion of Counsel can be obtained and with the consent of a Majority of 

 

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the Controlling Class, seek a no action position from the Securities and Exchange Commission or any other relevant federal or State regulatory authorities, regarding the legality of a public or private Sale of such Unregistered Securities.

 

(d)           The Collateral Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Assets in connection with a Sale thereof, without recourse, representation or warranty. In addition, the Collateral Trustee is hereby irrevocably appointed the agent and attorney in fact of the Issuer to transfer and convey its interest in any portion of the Assets in connection with a Sale thereof, and to take all action necessary to effect such Sale. No purchaser or transferee at such a sale shall be bound to ascertain the Collateral Trustee’s authority, to inquire into the satisfaction of any conditions precedent or see to the application of any Monies.

 

Section 5.18          Action on the Notes. The Collateral Trustee’s right to seek and recover judgment on the Secured Debt or under this Indenture shall not be affected by the seeking or obtaining of or application for any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Collateral Trustee or the Holders shall be impaired by the recovery of any judgment by the Collateral Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Assets or upon any of the assets of the Issuer.

 

ARTICLE VI

 

THE TRUSTEE

 

Section 6.1            Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default known to the Collateral Trustee:

 

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

 

(ii)      in the absence of bad faith on its part, the Collateral Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Collateral Trustee and conforming to the requirements of this Indenture or the Credit Agreement; provided that in the case of any such certificates or opinions which by any provision hereof or of the Credit Agreement are specifically required to be furnished to the Collateral Trustee, the Collateral Trustee shall be under a duty to examine the same to determine whether or not they substantially conform to the requirements of this Indenture or the Credit Agreement and shall promptly, but in any event within three (3) Business Days in the case of an Officer’s certificate furnished by the  Collateral Manager, notify the party delivering the same if such certificate or opinion does not conform. If a corrected form shall not have been delivered to the Collateral Trustee within 15 days after such notice from the Collateral Trustee, the Collateral Trustee shall so notify the Holders.

 

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

 

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

 

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

 

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

 

(iii)     the Collateral Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Issuers or the Collateral Manager in accordance with this Indenture and/or a Majority (or such other percentage as may be required by the terms hereof) of the Controlling Class (or other Class if required or permitted by the terms hereof), relating to the time, method and place of conducting any Proceeding for any remedy available to the Collateral Trustee, or exercising any trust or power conferred upon the Collateral Trustee, under this Indenture;

 

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

 

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

 

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

 

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or Default of which the Collateral Trustee is deemed to have notice as described in this Section 6.1.

 

(e)           Upon the Collateral Trustee receiving written notice from the Collateral Manager that an event constituting “Cause” has occurred, the Collateral Trustee shall, not later than two (2) Business Days thereafter, forward such notice to the Holders (as their names appear in the Register) and the Rating Agency.

 

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

 

(g)           The Collateral Trustee is hereby authorized and directed to enter into the Credit Agreement. In connection with its execution and delivery of the Credit Agreement, and the performance of its duties thereunder, the Collateral Trustee shall be entitled to all rights, benefits, protections, immunities and indemnities provided to it under this Indenture, mutatis mutandis.

 

Section 6.2            Notice of Event of Default. Promptly (and in no event later than three (3) Business Days) after the occurrence of any Event of Default actually known to a Trust Officer of the Collateral Trustee or after any declaration of acceleration has been made or delivered to the Collateral Trustee pursuant to Section 5.2, the Collateral Trustee shall transmit by mail to the Issuer, the Co-Issuer, the Collateral Manager, the Rating Agency, all Holders (as their names and addresses appear on the Register), notice of all Event of Defaults hereunder known to the Collateral Trustee, unless such Event of Default shall have been cured or waived.

 

Section 6.3            Certain Rights of Trustee. Except as otherwise provided in Section 6.1:

 

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

 

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

 

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

 

(d)           as a condition to the taking or omitting of any action by it hereunder, the Collateral Trustee may consult with counsel and the advice of such counsel or any Opinion of 

 

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Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in reliance thereon;

 

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

 

(f)            the Collateral Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note or other paper or document, but the Collateral Trustee, in its discretion, may, and upon the written direction of a Majority of the Controlling Class or of the Rating Agency shall (subject to the right hereunder to be reasonably satisfactorily indemnified for associated expense and liability), make such further inquiry or investigation into such facts or matters as it may see fit or as it shall be directed, and the Collateral Trustee shall be entitled, on reasonable prior notice to the Issuers and the Collateral Manager, to examine the books and records relating to the Secured Debt, the Subordinated Securities and the Assets, personally or by agent or attorney, during the Issuers’ or the Collateral Manager’s normal business hours; provided that the Collateral Trustee shall, and shall cause its agents to, hold in confidence all such information, except (i) to the extent disclosure may be required by law by any regulatory, administrative or governmental authority and (ii) to the extent that the Collateral Trustee, in its sole discretion, may determine that such disclosure is consistent with its obligations hereunder; provided further that the Collateral Trustee may disclose on a confidential basis any such information to its agents, attorneys and auditors in connection with the performance of its responsibilities hereunder;

 

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

 

(h)           the Collateral Trustee shall not be liable for any action it takes or omits to take in good faith that it reasonably believes to be authorized or within its rights or powers hereunder, including actions or omissions to act at the direction of the Collateral Manager;

 

(i)            nothing herein shall be construed to impose an obligation on the part of the Collateral Trustee to monitor, recalculate, evaluate or verify or independently determine the accuracy of any report, certificate or information received from the Issuer, the Co-Issuer or Collateral Manager (unless and except to the extent otherwise expressly set forth herein or in the Collateral Administration Agreement);

 

(j)            to the extent any defined term hereunder, or any calculation required to be made or determined by the Collateral Trustee hereunder, is dependent upon or defined by reference to generally accepted accounting principles (as in effect in the United States) (“GAAP”), the

 

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Collateral Trustee shall be entitled to request and receive (and rely upon) instruction from the Issuer or the accountants identified in the Accountants’ Report (and in the absence of its receipt of timely instruction therefrom, shall be entitled to obtain from an Independent accountant at the expense of the Issuer) as to the application of GAAP in such connection, in any instance;

 

(k)           the Collateral Trustee shall not be liable for the actions or omissions of, or any inaccuracies in the records of, the Collateral Manager, the Issuer, the Co-Issuer, any Paying Agent (other than the Collateral Trustee), DTC, Euroclear, Clearstream, or any other clearing agency or depository and without limiting the foregoing, the Collateral Trustee shall not be under any obligation to monitor, evaluate or verify compliance by the Collateral Manager with the terms hereof or of the Collateral Management Agreement, or to verify or independently determine the accuracy of information received by the Collateral Trustee from the Collateral Manager (or from any selling institution, agent bank, trustee or similar source) with respect to the Assets;

 

(l)            notwithstanding any term hereof (or any term of the UCC that might otherwise be construed to be applicable to a “securities intermediary” as defined in the UCC) to the contrary, none of the Collateral Trustee, the Custodian or the Securities Intermediary shall be under a duty or obligation in connection with the acquisition or Grant by the Issuer to the Collateral Trustee of any item constituting the Assets, or to evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Issuers in connection with its Grant or otherwise, or in that regard to examine any Underlying Document, in each case, in order to determine compliance with applicable requirements of and restrictions on transfer in respect of such Assets;

 

(m)          in the event the Bank is also acting in the capacity of Paying Agent, Registrar, Transfer Agent, Loan Agent, Custodian, Calculation Agent, Collateral Administrator or Securities Intermediary, the rights, protections, benefits, immunities and indemnities afforded to the Collateral Trustee pursuant to this Article VI or the Credit Agreement shall also be afforded to the Bank acting in such capacities; provided that such rights, protections, benefits, immunities and indemnities shall be in addition to any rights, immunities and indemnities provided in the Securities Account Control Agreement, the Collateral Administration Agreement or any other documents to which the Bank in such capacity is a party;

 

(n)           any permissive right of the Collateral Trustee to take or refrain from taking actions enumerated herein or in the Credit Agreement shall not be construed as a duty;

 

(o)           to the extent permitted by applicable law, the Collateral Trustee shall not be required to give any bond or surety in respect of the execution of this Indenture or otherwise;

 

(p)           except as otherwise provided herein, the Collateral Trustee shall not be deemed to have notice or knowledge of any matter unless a Trust Officer has actual knowledge thereof or unless written notice thereof is received by the Collateral Trustee at the Corporate Trust Office and such notice references the Secured Debt and the Subordinated Securities generally, the Issuer or this Indenture. Whenever reference is made herein to a Default or an Event of Default such reference shall, insofar as determining any liability on the part of the Collateral Trustee is concerned, be construed to refer only to a Default or an Event of Default of which the Collateral Trustee is deemed to have knowledge in accordance with this paragraph;

 

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(q)           the Collateral Trustee shall not be responsible for delays or failures in performance resulting from circumstances beyond its control (such circumstances include but are not limited to acts of God, strikes, lockouts, riots, acts of war, loss or malfunctions of utilities, computer (hardware or software) or communications services);

 

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

 

(s)            in making or disposing of any investment permitted by this Indenture, the Collateral Trustee is authorized to deal with itself (in its individual capacity) or with any one or more of its Affiliates, in each case on an arm’s-length basis, whether it or such Affiliate is acting as a subagent of the Collateral Trustee or for any third party or dealing as principal for its own account. If otherwise qualified, obligations of the Bank or any of its Affiliates shall qualify as Eligible Investments hereunder;

 

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

 

(u)           notwithstanding anything to the contrary in this Indenture, the Collateral Trustee shall have no duty (i) to see to any recording, filing, or depositing of this Indenture or any supplemental indenture or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording, filing or depositing or to any rerecording, refiling or redepositing of any thereof or (ii) to maintain any insurance.

 

Section 6.4            Not Responsible for Recitals or Issuance of Notes. The recitals contained herein and in the Notes, other than the Certificate of Authentication thereon, shall be taken as the statements of the Issuer; and the Collateral Trustee assumes no responsibility for their correctness. The Collateral Trustee makes no representation as to the validity or sufficiency of this Indenture (except as may be made with respect to the validity of the Collateral Trustee’s obligations hereunder), the Assets or the Secured Debt. The Collateral Trustee shall not be accountable for the use or application by the Issuer of the Secured Debt or the proceeds thereof or any Money paid to the Issuer pursuant to the provisions hereof.

 

Section 6.5            May Hold Secured Debt or Subordinated Securities. The Collateral Trustee, any Paying Agent, Registrar or any other agent of the Issuers, in its individual or any other capacity, may become the owner or pledgee of Secured Debt or Subordinated Securities 

 

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and may otherwise deal with the Issuers or any of their Affiliates with the same rights it would have if it were not Trustee, Paying Agent, Registrar or such other agent.

 

Section 6.6            Money Held in Trust. Money held by the Collateral Trustee hereunder shall be held in trust to the extent required herein. The Collateral Trustee shall be under no liability for interest on any Money received by it hereunder except to the extent of income or other gain on investments which are deposits in or certificates of deposit of the Bank in its commercial capacity and income or other gain actually received by the Collateral Trustee on Eligible Investments.

 

Section 6.7            Compensation and Reimbursement. (a) The Issuer agrees:

 

(i)       to pay the Collateral Trustee on each Payment Date reasonable compensation, as set forth in a separate fee schedule delivered to the Issuer in connection with this Indenture, for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(ii)      except as otherwise expressly provided herein, to reimburse the Collateral Trustee in a timely manner upon its request for all reasonable expenses, disbursements and advances incurred or made by the Collateral Trustee in accordance with any provision of this Indenture or other Transaction Document (including, without limitation, securities transaction charges and the reasonable compensation and expenses and disbursements of its agents and legal counsel and of any accounting firm or investment banking firm employed by the Collateral Trustee pursuant to Section 5.4, 5.5, 6.3(c) or 10.7, except any such expense, disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith) but with respect to securities transaction charges, only to the extent any such charges have not been waived during a Collection Period due to the Collateral Trustee’s receipt of a payment from a financial institution with respect to certain Eligible Investments, as specified by the Collateral Manager;

 

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

 

(iv)    to pay the Collateral Trustee reasonable additional compensation together with its expenses (including reasonable counsel fees) for any collection or enforcement action taken pursuant to Section 6.13 or Article V, respectively.

 

(b)           The Collateral Trustee shall receive amounts pursuant to this Section 6.7 and any other amounts payable to it under this Indenture or in any of the Transaction Documents to 

 

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which the Collateral Trustee is a party only as provided in Sections 11.1(a)(i), (ii) and (iii) but only to the extent that funds are available for the payment thereof. Subject to Section 6.9, the Collateral Trustee shall continue to serve as Collateral Trustee under this Indenture notwithstanding the fact  that the Collateral Trustee shall not have received amounts due it hereunder; provided that nothing herein shall impair or affect the Collateral Trustee’s rights under Section 6.9. No direction by the Holders shall affect the right of the Collateral Trustee to collect amounts owed to it under this Indenture. If, on any date when a fee or an expense shall be payable to the Collateral Trustee pursuant to this Indenture, insufficient funds are available for the payment thereof, any portion of a fee or an expense not so paid shall be deferred and payable on such later date on which a fee or an expense shall be payable and sufficient funds are available therefor.

 

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

 

(d)           The Issuer’s payment obligations to the Collateral Trustee under this Section 6.7 shall be secured by the lien of this Indenture payable in accordance with the Priority of Payments, and shall survive the discharge of this Indenture and the resignation or removal of the Collateral Trustee.

 

(e)           Without limiting Section 5.4, the Collateral Trustee hereby agrees not to cause the filing of a petition in bankruptcy against the Issuer or the Co-Issuer on its own behalf or on behalf of the Secured Parties until at least one year (or, if longer, the applicable preference period) plus one day after the payment in full of all of the Secured Debt.

 

Section 6.8            Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be an Independent organization or entity organized and doing business under the laws of the United States or of any state thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least U.S.$200,000,000, subject to supervision or examination by federal or state authority, having a long-term debt rating of at least “BBB+” by S&P and having an office within the United States, and who makes the representations contained in Section 6.17. If such organization or entity publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 6.8, the combined capital and surplus of such organization or entity shall be deemed to be its combined capital and surplus as set forth in its most recent published report of condition. If at any time the Collateral Trustee shall cease to be eligible in accordance with the provisions of this Section 6.8, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI.

 

Section 6.9            Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Collateral Trustee and no appointment of a successor Collateral Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Collateral Trustee under Section 6.10.

 

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(b)           Subject to Section 6.9(a), the Collateral Trustee may resign at any time by giving not less than 30 days’ written notice thereof to the Issuers, the Collateral Manager, the Holders of the Secured Debt and Subordinated Securities and the Rating Agency. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees satisfying the requirements of Section 6.8 by written instrument, in duplicate, executed by a Responsible Officer  of the Issuer, one copy of which shall be delivered to the Collateral Trustee so resigning and one copy to the successor Collateral Trustee or Trustees, together with a copy to each Holder and the Collateral Manager; provided that such successor Collateral Trustee shall be appointed only upon the Act of a Majority of the Secured Debt of each Class and a Majority of the Subordinated Security or, at any time when an Event of Default shall have occurred and be continuing, by an Act of a Majority of the Controlling Class. If no successor Collateral Trustee shall have been appointed and an instrument of acceptance by a successor Collateral Trustee shall not have been delivered to the Collateral Trustee within 30 days after the giving of such notice of resignation, the resigning Collateral Trustee or any Holder, on behalf of itself and all others similarly situated, may petition any court of competent jurisdiction for the appointment of a successor Collateral Trustee satisfying the requirements of Section 6.8.

 

(c)           The Collateral Trustee may be removed at any time upon 30 days written notice by an act of a Majority of the Controlling Class and a Majority of the Subordinated Securities or, at any time when an Event of Default shall have occurred and be continuing by an Act of a Majority of the Controlling Class, delivered to the Collateral Trustee and to the Issuer.

 

(d)           If at any time:

 

(i)         the Collateral Trustee shall cease to be eligible under Section 6.8 and shall fail to resign after written request therefor by the Issuer or by any Holder; or

 

(ii)        the Collateral Trustee shall become incapable of acting or shall be adjudged as bankrupt or insolvent or a receiver or liquidator of the Collateral Trustee or of its property shall be appointed or any public officer shall take charge or control of the Collateral Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

 

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

 

(e)           If the Collateral Trustee shall be removed or become incapable of acting, or if a vacancy shall occur in the office of the Collateral Trustee for any reason (other than resignation), the Issuer, by Issuer Order, shall promptly appoint a successor Collateral Trustee. If the Issuer shall fail to appoint a successor Collateral Trustee within 30 days after such removal or incapability or the occurrence of such vacancy, a successor Collateral Trustee may be appointed by a Majority of the Controlling Class by written instrument delivered to the Issuer and the retiring Collateral Trustee. The successor Collateral Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Collateral Trustee and supersede any successor Collateral Trustee proposed by the Issuer. If no successor Collateral Trustee shall have 

 

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been so appointed by the Issuer or a Majority of the Controlling Class and shall have accepted appointment in the manner hereinafter provided, subject to Section 5.15, the Collateral Trustee or any Holder may, on behalf of itself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Collateral Trustee.

 

(f)            The Issuer shall give prompt notice of each resignation and each removal of the Collateral Trustee and each appointment of a successor Collateral Trustee by mailing written notice of such event by first class mail, postage prepaid, to the Collateral Manager, to the Rating Agency and to the Holders of the Secured Debt or Subordinated Securities as their names and addresses appear in the Register. Each notice shall include the name of the successor Collateral Trustee and the address of its Corporate Trust Office. If the Issuer fails to mail such notice within ten days after acceptance of appointment by the successor Collateral Trustee, the successor Collateral Trustee shall cause such notice to be given at the expense of the Issuer.

 

Section 6.10          Acceptance of Appointment by Successor. Every successor Collateral Trustee appointed hereunder shall meet the requirements of Section 6.8, shall make the representations and warranties contained in Section 6.17, and shall execute, acknowledge and deliver to the Issuer and the retiring Collateral Trustee an instrument accepting such appointment. In addition, so long as the retiring Collateral Trustee is the same institution as the Collateral Administrator, unless otherwise agreed to in writing by the Issuer, the successor and the retiring institutions, such successor Collateral Trustee shall automatically become, and hereby so agrees to be, the Collateral Administrator pursuant to Section 9(f) of the Collateral Administration Agreement and shall assume the duties of the Collateral Administrator under the terms and conditions of the Collateral Administration Agreement in its acceptance of appointment as successor Collateral Trustee until such time, if any, as it is replaced as Collateral Administrator by the Issuer pursuant to the Collateral Administration Agreement. Upon delivery of the required instruments, the resignation or removal of the retiring Collateral Trustee shall become effective and such successor Collateral Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of the retiring Collateral Trustee; but, on request of the Issuer or a Majority of any Class of Secured Debt or a Majority of the Subordinated Securities or the successor Collateral Trustee or successor Collateral Administrator, as applicable, such retiring Collateral Trustee shall, upon payment of its charges then unpaid, execute and deliver an instrument transferring to such successor Collateral Trustee all the rights, powers and trusts of the retiring Collateral Trustee, and shall duly assign, transfer and deliver to such successor Collateral Trustee all property and Money held by such retiring Collateral Trustee hereunder. Upon request of any such successor Collateral Trustee, the Issuers shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Collateral Trustee all such rights, powers and trusts.

 

Section 6.11          Merger, Conversion, Consolidation or Succession to Business of Trustee. Any organization or entity into which the Collateral Trustee may be merged or converted or with which it may be consolidated, or any organization or entity resulting from any merger, conversion or consolidation to which the Collateral Trustee shall be a party, or any organization or entity succeeding to all or substantially all of the corporate trust business of the Collateral Trustee, shall be the successor of the Collateral Trustee hereunder; provided that such organization or entity shall be otherwise qualified and eligible under this Article VI, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case 

 

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any of the Notes has been authenticated, but not delivered, by the Collateral Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Collateral Trustee had itself authenticated such Notes.

 

Section 6.12          Co-Trustees. At any time or times, the Issuer and the Collateral Trustee shall have power to appoint one or more Persons to act as co-trustee (subject to the satisfaction of the S&P Rating Condition), jointly with the Collateral Trustee, of all or any part of the Assets, with the power to file such proofs of claim and take such other actions pursuant to Section 5.6 herein and to make such claims and enforce such rights of action on behalf of the Holders, as such Holders themselves may have the right to do, subject to the other provisions of this Section 6.12.

 

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

 

Should any written instrument from the Issuer be required by any co-trustee so appointed, more fully confirming to such co-trustee such property, title, right or power, any and all such instruments shall, on request, be executed, acknowledged and delivered by the Issuer. The Issuer agrees to pay, to the extent funds are available therefor under Section 11.1(a)(i)(A), for any reasonable fees and expenses in connection with such appointment.

 

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

 

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

 

(b)           the rights, powers, duties and obligations hereby conferred or imposed upon the Collateral Trustee in respect of any property covered by the appointment of a co-trustee shall be conferred or imposed upon and exercised or performed by the Collateral Trustee or by the Collateral Trustee and such co-trustee jointly as shall be provided in the instrument appointing such co-trustee;

 

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

 

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

 

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

 

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

 

The Issuer shall notify the Rating Agency of the appointment of a co-trustee hereunder.

 

Section 6.13          Certain Duties of Trustee Related to Delayed Payment of Proceeds and the Assets. If the Collateral Trustee shall not have received a payment with respect to any Asset on its Due Date, (a) the Collateral Trustee shall promptly notify the Issuer and the Collateral Manager in writing and (b) unless within three (3) Business Days (or the end of the applicable grace period for such payment, if any) after such notice (x) such payment shall have been received by the Collateral Trustee or (y) the Issuer, in its absolute discretion (but only to the extent permitted by Section 10.2(a)), shall have made provision for such payment satisfactory to the Collateral Trustee in accordance with Section 10.2(a), the Collateral Trustee shall, not later than the Business Day immediately following the last day of such period and in any case upon request by the Collateral Manager, request the issuer of such Asset, the trustee under the related Underlying Document or a paying agent designated by either of them, as the case may be, to make such payment not later than three (3) Business Days after the date of such request. If such payment is not made within such time period, the Collateral Trustee, subject to the provisions of clause (iv) of Section 6.1(c), shall take such action as the Collateral Manager shall direct. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture. If the Issuer or the Collateral Manager requests a release of an Asset and/or delivers an additional Collateral Obligation in connection with any such action under the Collateral Management Agreement or under this Indenture, such release shall be subject to Section 10.8 and Article XII of this Indenture, as the case may be. Notwithstanding any other provision hereof, the Collateral Trustee shall deliver to the Issuer or its designee any payment with respect to any Asset or any additional Collateral Obligation received after the Due Date thereof to the extent the Issuer previously made provisions for such payment satisfactory to the Collateral Trustee in accordance with this Section 6.13 and such payment shall not be deemed part of the Assets.

 

Reasonably promptly after receipt thereof, the Collateral Trustee will notify and provide to the Collateral Manager on behalf of the Issuer a copy of any documents, financial reports, legal opinions or any other information including, without limitation, any notices, reports, requests for waiver, consent requests or any other requests or communications relating to the Assets or any Obligor or to actions affecting the Assets or any Obligor. Upon reasonable request by the Collateral Administrator or the Collateral Manager, the Collateral Trustee further agrees to provide to the requesting Person from time to time, on a timely basis, any information in its possession relating to the Collateral Obligations, the Equity Securities and the Eligible Investments as requested so as to enable the requesting Person to perform its duties hereunder, under the Collateral Administration Agreement or under the Collateral Management Agreement, as applicable.

 

Section 6.14          Authenticating Agents. Upon the request of the Applicable Issuer, the Collateral Trustee shall, and if the Collateral Trustee so chooses the Collateral Trustee may,

 

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appoint one or more Authenticating Agents with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, incurrence, transfers and exchanges under Sections 2.4, 2.5, 2.6, 2.7 and 8.5, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes. For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the authentication of Notes by the Collateral Trustee.

 

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

 

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

 

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

 

Section 6.15                             Withholding. If any withholding tax is imposed on the Issuer’s payment (or allocations of income) under the Secured Debt, such tax shall reduce the amount otherwise distributable to the relevant Holder. The Collateral Trustee is hereby authorized and directed to retain from amounts otherwise distributable to any Holder sufficient funds for the payment of any tax that is legally owed or required to be withheld by the Issuer (but such authorization shall not prevent the Collateral Trustee from contesting any such tax in appropriate proceedings and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings) or may be withheld because of a failure by a Holder to provide any information required under Sections 1441, 1445 and 1471-1474 of the Code or any other provisions of any applicable law and to timely remit such amounts to the appropriate taxing authority; provided, for the avoidance of doubt, that whether the Trustee may make a payment in respect of an obligation imposed by Section 6225 of the Code, and the consequences of such a payment, are governed by Section 7.17(l). The amount of any withholding tax imposed with respect to any Secured Debt shall be treated as Cash distributed to the relevant Holder at the time it is withheld by the Collateral Trustee. If there is a possibility that withholding tax is payable with respect to a distribution, the Paying Agent or the Collateral Trustee may, in its sole discretion, withhold such amounts in accordance with this Section 6.15. If any Holder or beneficial owner wishes to apply for a refund of any such withholding tax, the Collateral Trustee shall reasonably cooperate with such Person 

 

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in providing readily available information so long as such Person agrees to reimburse the Collateral Trustee for any out-of-pocket expenses incurred. Nothing herein shall impose an obligation on the part of the Collateral Trustee to determine the amount of any tax or withholding obligation on the part of the Issuer or in respect of the any Class of Secured Debt.  This Section 6.15 shall be interpreted and applied in a manner consistent with Section 7.17(l).

 

Section 6.16                             Fiduciary for Holders Only; Agent for each other Secured Party. With respect to the security interest created hereunder, the delivery of any item of Asset to the Collateral Trustee is to the Collateral Trustee as representative of the Holders and agent for each other Secured Party. In furtherance of the foregoing, the possession by the Collateral Trustee of any Asset, and the endorsement to or registration in the name of the Collateral Trustee of any Asset (including without limitation as entitlement holder of the Custodial Account) are all undertaken by the Collateral Trustee in its capacity as representative of the Holders, and agent for each other Secured Party.

 

Section 6.17                             Representations and Warranties of the Bank. The Bank hereby represents and warrants as follows, in its individual capacity and in its capacities as described below (and any Person that becomes a successor Collateral Trustee pursuant to Sections 6.9, 6.10, or 6.11 or a co-trustee pursuant to Section 6.12 represents and warrants as follows in its individual capacity and in its capacity as Collateral Trustee where applicable):

 

(a)                                 Organization. The Bank has been duly organized and is validly existing as a trust company with trust powers under the laws of the Commonwealth of Massachusetts and has the power to conduct its business and affairs as a trustee, paying agent, loan agent, registrar, transfer agent, custodian, calculation agent and securities intermediary.

 

(b)                                 Authorization; Binding Obligations. The Bank has the corporate power and authority to perform the duties and obligations of Trustee, Paying Agent, Loan Agent, Registrar, Transfer Agent, Custodian, Calculation Agent and Securities Intermediary under this Indenture. The Bank has taken all necessary corporate action to authorize the execution, delivery and performance of this Indenture, and all of the documents required to be executed by the Bank pursuant hereto. This Indenture has been duly authorized, executed and delivered by the Bank and constitutes the legal, valid and binding obligation of the Bank enforceable in accordance with its terms subject, as to enforcement, (i) to the effect of bankruptcy, insolvency or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency or similar event applicable to the Bank and (ii) to general equitable principles (whether enforcement is considered in a proceeding at law or in equity).

 

(c)                                  Eligibility. The Bank is eligible under Section 6.8 to serve as Collateral Trustee hereunder.

 

(d)                                 No Conflict. Neither the execution, delivery and performance of this Indenture, nor the consummation of the transactions contemplated by this Indenture, (i) is prohibited by, or requires the Bank to obtain any consent, authorization, approval or registration under, any law, statute, rule, regulation, judgment, order, writ, injunction or decree that is binding upon the Bank or any of its properties or assets, or (ii) will violate any provision of, result in any default or 

 

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acceleration of any obligations under, result in the creation or imposition of any lien pursuant to, or require any consent under, any material agreement to which the Bank is a party or by which it or any of its property is bound.

 

(e)                                  Ownership of Secured Debt or Subordinated Securities. On the date of its appointment as Collateral Trustee, the Collateral Trustee does not own any Secured Debt or Subordinated Securities and has no present intention of acquiring any Secured Debt or Subordinated Securities although it is not restricted from doing so in the future as provided in Section 6.5.

 

ARTICLE VII

 

COVENANTS

 

Section 7.1                                    Payment of Principal and Interest. The Issuer will duly and punctually pay the principal of and interest on the Secured Debt, in accordance with the terms of such Secured Debt and this Indenture pursuant to the Priority of Payments. The Issuer will, to the extent funds are available pursuant to the Priority of Payments, duly and punctually pay all required distributions on the Subordinated Securities, in accordance with this Indenture.

 

Amounts properly withheld under the Code or other applicable law by any Person from a payment under Secured Debt or Subordinated Securities shall be considered as having been paid by the Issuer to the relevant Holder for all purposes of this Indenture.

 

The Issuer hereby provides notice to each Holder that the failure of such Holder to provide appropriate tax certifications and information or documentation necessary to achieve Tax Account Reporting Rules Compliance may result in amounts being withheld from payments to such Holder under this Indenture; provided that amounts withheld pursuant to applicable tax laws shall be considered as having been paid by the Applicable Issuer as provided in the preceding sentence.

 

Section 7.2                                    Maintenance of Office or Agency. The Issuers hereby appoint the Collateral Trustee as a Paying Agent for payments or distributions on the Secured Debt, and appoint the Collateral Trustee as Transfer Agent at its applicable Corporate Trust Office as the Issuer’s agent where Secured Debt may be surrendered for registration of transfer or exchange.

 

The Issuer may at any time and from time to time vary or terminate the appointment of any such agent or appoint any additional agents for any or all of such purposes and no paying agent shall be appointed in a jurisdiction which subjects payments or distributions on the Secured Debt to withholding tax solely as a result of such Paying Agent’s activities. The Issuers shall at all times maintain a duplicate copy of the Register at the Corporate Trust Office. The Issuers shall give prompt written notice to the Collateral Trustee, the Loan Agent, the Rating Agency and the Holders of the appointment or termination of any such agent and of the location and any change in the location of any such office or agency.

 

If at any time the Issuers shall fail to maintain any such required office or agency, or shall fail to furnish the Collateral Trustee with the address thereof, presentations and surrenders may be made (subject to the limitations described in the preceding paragraph), notices and demands 

 

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may be served on the Issuers, and Secured Debt may be presented and surrendered for payment to the Collateral Trustee at its main office, and the Issuers hereby appoint the same as its agent to receive such respective presentations, surrenders, notices and demands.

 

The Issuers shall maintain and implement administrative and operating procedures reasonably necessary in the performance of their obligations hereunder, and the Issuer shall keep and maintain or cause the Administrator to keep or maintain at all times, or cause to be kept and maintained at all times in the Cayman Islands, all documents, books, records, accounts and other information as are required under the laws of the Cayman Islands.

 

The Issuers shall maintain an Issuers’ Notice Agent at all times.  If at any time the Issuers fail to maintain any such required office or agency in the United States, or fail to furnish the Collateral Trustee with the address thereof, notices and demands may be served directly on the Issuers.  For the avoidance of doubt, notices to the Issuers under the Transaction Documents shall be delivered in accordance with Section 14.3.

 

Section 7.3                                    Money for Note Payments to be Held in Trust. All payments of amounts due and payable with respect to any Secured Debt and Subordinated Securities that are to be made from amounts withdrawn from the Payment Account shall be made on behalf of the Issuer (and, in the case of the Co-Issued Debt, the Issuers) by the Collateral Trustee or a Paying Agent with respect to payments or distributions on the Secured Debt and Subordinated Securities.

 

When the Issuers shall have a Paying Agent that is not also the Registrar, the Issuers shall furnish, or cause the Registrar to furnish, no later than the fifth calendar day after each Record Date a list, if necessary, in such form as such Paying Agent may reasonably request, of the names and addresses of the Holders and of the certificate numbers of individual Notes held by each such Holder.

 

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

 

The initial Paying Agent shall be as set forth in Section 7.2. Any additional or successor Paying Agents shall be appointed by Issuer Order with written notice thereof to the Collateral Trustee; provided that, with respect to any additional or successor Paying Agent, (x) so long as the Notes of any Class are rated by S&P either (i) such Paying Agent has a long-term debt rating of “A+” or higher by S&P or a short-term debt rating of “A-1” by S&P or (ii) the S&P Rating Condition is satisfied. If such successor Paying Agent ceases to have any such minimum rating 

 

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specified in clause (i) of the immediately preceding sentence, the Issuer shall promptly remove such Paying Agent and appoint a successor Paying Agent. The Issuers shall not appoint any Paying Agent that is not, at the time of such appointment, a depository institution or trust company subject to supervision and examination by federal and/or state and/or national banking authorities. The Issuers shall cause each Paying Agent other than the Collateral Trustee to execute and deliver to the Collateral Trustee an instrument in which such Paying Agent shall agree with the Collateral Trustee and if the Collateral Trustee acts as Paying Agent, it hereby so agrees, subject to the provisions of this Section 7.3, that such Paying Agent will:

 

(a)                                 allocate all sums received for payment to the Holders of Secured Debt or Subordinated Securities for which it acts as Paying Agent on each Payment Date and any Redemption Date among such Persons in the proportion specified in the applicable Distribution Report to the extent permitted by applicable law;

 

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

 

(c)                                  if such Paying Agent is not the Collateral Trustee, immediately resign as a Paying Agent and forthwith pay to the Collateral Trustee all sums held by it in trust for the payment of the Secured Debt or Subordinated Securities if at any time it ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment;

 

(d)                                 if such Paying Agent is not the Collateral Trustee, immediately give the Collateral Trustee notice of any default by the Issuer in the making of any payment required to be made; and

 

(e)                                  if such Paying Agent is not the Collateral Trustee, during the continuance of any such default, upon the written request of the Collateral Trustee, forthwith pay to the Collateral Trustee all sums so held in trust by such Paying Agent.

 

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

 

Except as otherwise required by applicable law, any Money deposited with the Collateral Trustee or any Paying Agent in trust for any payment on any Secured Debt or Subordinated Securities and remaining unclaimed for two years after such amount has become due and payable shall be paid to the Issuer on Issuer Order; and the Holder of such Secured Debt or Subordinated Securities shall thereafter, as an unsecured general creditor, look only to the Issuer for payment of such amounts (but only to the extent of the amounts so paid to the Issuer) and all liability of the Collateral Trustee or such Paying Agent with respect to such trust Money shall thereupon 

 

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cease. The Collateral Trustee or such Paying Agent, before being required to make any such release of payment, may, but shall not be required to, adopt and employ, at the expense of the Issuers any reasonable means of notification of such release of payment, including, but not limited to, mailing notice of such release to Holders whose Secured Debt or Subordinated Securities been called but have not been surrendered for redemption or whose right to or interest in Monies due and payable but not claimed is determinable from the records of any Paying Agent, at the last address of record of each such Holder.

 

Section 7.4                                    Existence of the Issuers. (a) Each of the Issuer and Co-Issuer shall take all reasonable steps to maintain its identity as a separate legal entity from that of its shareholders or members, as applicable.  Each of the Issuer and the Co-Issuer shall keep its registered office or principal place of business (as the case may be) in the same city, state and country indicated in the address specified in Section 14.3.  Each of the Issuer and the Co-Issuer shall keep separate books and records and shall not commingle its respective funds with those of any other Person.  The Issuer and the Co-Issuer shall keep in full force and effect their rights and franchises as a company incorporated under the laws of the Cayman Islands and as a limited liability company organized under the laws of the State of Delaware, respectively, shall comply with the provisions of their respective Organizational Documents and shall obtain and preserve their qualification to do business as foreign corporations in each jurisdiction in which such qualifications are or shall be necessary to protect the validity and enforceability of this Indenture, the Secured Debt or Subordinated Securities or any of the Assets; provided, however, that, subject to Cayman Islands law, the Issuer shall be entitled to change its jurisdiction of incorporation from the Cayman Islands to any other jurisdiction reasonably selected by the Issuer and approved by a Majority of the Subordinated Securities, so long as (i) the Issuer has received an Opinion of Counsel (upon which the Collateral Trustee may conclusively rely) to the effect that such change is not disadvantageous in any material respect to the Holders, (ii) written notice of such change shall have been given to the Collateral Trustee by the Issuer, which notice shall be promptly forwarded by the Collateral Trustee to the Holders, the Collateral Manager and the Rating Agency, (iii) the S&P Rating Condition is satisfied and (iv) on or prior to the 15th Business Day following receipt of such notice the Collateral Trustee shall not have received written notice from a Majority of the Controlling Class objecting to such change.

 

(b)                                 Each of the Issuer and the Co-Issuer shall (i) ensure that all corporate (or, in the case of the Co-Issuer, limited liability company) or other formalities regarding its existence (including, to the extent required by applicable law, holding regular board of directors’, partners’, member’s, manager and shareholders’ or other similar meetings) are followed, (ii) conduct business in its own name, (iii) correct any known misunderstanding as to its separate existence, (iv) maintain separate financial statements (if any), (v) maintain an arm’s-length relationship with any Affiliates, (vi) maintain adequate capital in light of its contemplated business operations and (vii) not commingle its funds with those of any other entity. Neither the Issuer nor the Co-Issuer shall take any action, or conduct its affairs in a manner, that is likely to result in its separate existence being ignored or in its assets and liabilities being substantively consolidated with any other Person in a bankruptcy, reorganization or other insolvency proceeding.  Without limiting the foregoing, (i) the Issuer shall not have any subsidiaries (other than the Co-Issuer and any subsidiaries necessitated by a change of jurisdiction pursuant to clause (a), subject to satisfaction of the S&P Rating Condition in the case of such clause (a)), (ii) the Co-Issuer shall not have any subsidiaries and (iii) the Issuer and the Co-Issuer shall not 

 

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(A) have any employees (other than their respective directors, manager and officers), (B) engage in any transaction with any shareholder, member or partner that would constitute a conflict of interest (provided that each Transaction Document shall not be deemed to be such a transaction that would constitute a conflict of interest) or (C) pay dividends or make distributions to its owners other than in accordance with the provisions of this Indenture.

 

(c)                                  The Co-Issuer will at all times have at least one Independent manager under the Limited Liability Company Agreement.

 

Section 7.5                                    Protection of Assets. (a) The Collateral Manager on behalf of the Issuer will cause the taking of such action within the Collateral Manager’s control as is reasonably necessary in order to maintain the perfection and priority of the security interest of the Collateral Trustee in the Assets; provided that the Collateral Manager shall be entitled to rely on any Opinion of Counsel delivered pursuant to Section 7.6 and any Opinion of Counsel with respect to the same subject matter delivered pursuant to Section 3.1(iii) to determine what actions are reasonably necessary, and shall be fully protected in so relying on such an Opinion of Counsel, unless the Collateral Manager has actual knowledge that the procedures described in any such Opinion of Counsel are no longer adequate to maintain such perfection and priority. The Issuer shall from time to time execute and deliver all such supplements and amendments hereto and file or authorize the filing of all such Financing Statements, continuation statements, instruments of further assurance and other instruments, and shall take such other action as may be necessary or advisable or desirable to secure the rights and remedies of the Holders of the Secured Debt or Subordinated Securities hereunder and to:

 

(i)                    grant more effectively all or any portion of the Assets;

 

(ii)                 maintain, preserve and perfect any Grant made or to be made by this Indenture including, without limitation, the first priority nature of the lien or carry out more effectively the purposes hereof;

 

(iii)              perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture (including, without limitation, any and all actions necessary or desirable as a result of changes in law or regulations);

 

(iv)             enforce any of the Assets or other instruments or property included in the Assets;

 

(v)                preserve and defend title to the Assets and the rights therein of the Collateral Trustee, for the benefit of the Secured Parties, in the Assets against the claims of all Persons and parties; or

 

(vi)             pay or cause to be paid any and all taxes levied or assessed upon all or any part of the Assets; or

 

(vii)          for so long as all the Subordinated Securities and other interests treated as equity in the Issuer are held by a Sole Equity Owner, cause such Sole Equity Owner to deliver or cause to be delivered an applicable U.S. Internal Revenue Service Form W-9 or successor applicable form and if reasonably able to do so, other properly completed and 

 

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executed documentation, agreements, and certifications to each issuer, counterparty, paying agent, and/or to any applicable governmental authority, and enter into any agreements with a governmental authority, as necessary to permit the Issuer to receive payments without withholding or deduction or at a reduced rate of withholding or deduction.

 

The Issuer hereby designates the Collateral Trustee as its agent and attorney in fact to prepare and file and hereby authorizes the filing of any Financing Statement, continuation statement and all other instruments, and take all other actions, required pursuant to this Section 7.5. Such designation shall not impose upon the Collateral Trustee, or release or diminish, the Issuer’s and the Collateral Manager’s obligations under this Section 7.5. The Issuer further authorizes and shall cause the Issuer’s counsel to file without the Issuer’s signature an initial Financing Statement on the Closing Date that names the Issuer as debtor and the Collateral Trustee, on behalf of the Secured Parties, as secured party and that describes “all personal property of the Debtor now owned or hereafter acquired” as the Assets in which the Collateral Trustee has a Grant.

 

(b)                                 The Collateral Trustee shall not, except in accordance with Section 5.5 or Section 10.8(a), (b) and (c), as applicable, permit the removal of any portion of the Assets or transfer any such Assets from the Account to which it is credited, or cause or permit any change in the Delivery made pursuant to Section 3.3 with respect to any Assets, if, after giving effect thereto, the jurisdiction governing the perfection of the Collateral Trustee’s security interest in such Assets is different from the jurisdiction governing the perfection at the time of delivery of the most recent Opinion of Counsel pursuant to Section 7.6 (or, if no Opinion of Counsel has yet been delivered pursuant to Section 7.6, the Opinion of Counsel delivered at the Closing Date pursuant to Section 3.1(iii)) unless the Collateral Trustee shall have received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property and the priority thereof will continue to be maintained after giving effect to such action or actions.

 

Section 7.6                                    Opinions as to Assets. On or before December 31st in each calendar year, commencing in 2020, the Issuer shall furnish to the Collateral Trustee and the Rating Agency an Opinion of Counsel relating to the continued perfection of the security interest granted by the Issuer to the Collateral Trustee, stating that, as of the date of such opinion, the lien and security interest created by this Indenture with respect to the Assets remain perfected and that no further action (other than as specified in such opinion) needs to be taken to ensure the continued perfection of such lien over the next year.

 

Section 7.7                                    Performance of Obligations. (a) The Issuers shall not take any action, and will use its best efforts not to permit any action to be taken by others, that would release any Person from any of such Person’s covenants or obligations under any instrument included in the Assets, except in the case of enforcement action taken with respect to any Defaulted Obligation in accordance with the provisions hereof and actions by the Collateral Manager under the Collateral Management Agreement and in conformity therewith or with this Indenture, as applicable, or as otherwise required hereby or deemed necessary or advisable by the Collateral Manager in accordance with the Collateral Management Agreement.

 

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(b)                                 The Issuer shall notify the Rating Agency within ten (10) Business Days after it has received notice from any Holder or the Collateral Trustee of any material breach of any Transaction Document, following any applicable cure period for such breach.

 

Section 7.8                                    Negative Covenants. (a) The Issuer will not from and after the Closing Date:

 

(i)                    sell, transfer, exchange or otherwise dispose of, or pledge, mortgage, hypothecate or otherwise encumber (or permit such to occur or suffer such to exist), any part of the Assets, except as expressly permitted by this Indenture and the Collateral Management Agreement;

 

(ii)                 claim any credit on, make any deduction from, or dispute the enforceability of payment of the principal or interest payable (or any other amount) in respect of the  Secured Debt or Subordinated Securities (other than amounts withheld or deducted in accordance with the Code or any applicable laws of the Cayman Islands);

 

(iii)              (A) incur or assume or guarantee any indebtedness, other than the Secured Debt, this Indenture, the Credit Agreement and the transactions contemplated hereby or (B) issue any additional notes, securities or ownership interests after the Closing Date (other than Additional Debt, additional Subordinated Securities or notes issued in connection with a Refinancing);

 

(iv)             (A) permit the validity or effectiveness of this Indenture or any Grant hereunder to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to this Indenture, the Secured Debt or the Subordinated Securities except as may be permitted hereby or by the Collateral Management Agreement, (B) except as permitted by this Indenture, permit any lien, charge, adverse claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden any part of the Assets, any interest therein or the proceeds thereof, or (C) except as permitted by this Indenture, take any action that would permit the lien of this Indenture not to constitute a valid first priority security interest in the Assets;

 

(v)                amend the Collateral Management Agreement except pursuant to the terms thereof and Article XV of this Indenture;

 

(vi)             dissolve or liquidate in whole or in part, except as permitted hereunder or required by applicable law;

 

(vii)          pay any Cash distributions other than in accordance with the Priority of Payments;

 

(viii)       conduct business under any name other than its own;

 

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

 

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(x)                become liable in any way, whether directly or by assignment or as a guarantor or other surety, for the obligations of the lessee under any lease, hire any employees or make any distributions to the Issuer;

 

(xi)             enter into any transaction with any Affiliate or any Holder of Secured Debt or Subordinated Securities other than (A) the transactions contemplated by the Transaction Documents, (B) the transactions relating to the offering and sale of the Secured Debt or Subordinated Securities or (C) the purchase of any Collateral Obligation in accordance with the terms of this Indenture;

 

(xii)          maintain any bank accounts, other than the Accounts and the Issuer’s bank account in the Cayman Islands (if any);

 

(xiii)       change its name without first delivering to the Collateral Trustee and the Rating Agency notice thereof and an Opinion of Counsel that after giving effect to the name change the security interest under this Indenture is perfected to the same extent as it was prior to such name change;

 

(xiv)      have any subsidiaries other than the Co-Issuer and any subsidiaries necessitated by a change of jurisdiction pursuant to Section 7.4 (subject to satisfaction of the S&P Rating Condition);

 

(xv)         transfer its equity interest in the Co-Issuer so long as any Co-Issued Debt is Outstanding;

 

(xvi)      permit the Issuer to be a U.S. Person or a U.S. resident (as determined for purposes of the Investment Company Act);

 

(xvii)   elect to be taxable for U.S. federal income tax purposes as other than a disregarded entity or partnership;

 

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

 

(xix)      amend or waive any “non-petition” and “limited recourse” provisions in any agreements that require such provisions pursuant to Section 7.8(c), unless the S&P Rating Condition is satisfied.

 

(b)                                 The Co-Issuer shall not, except as expressly permitted under this Indenture:

 

(i)                   claim any credit on, or make any deduction from, the principal or interest payable in respect of the Co-Issued Debt (other than amounts withheld in accordance with the Code or any applicable laws of the Cayman Islands) or assert any claim against any present or future Holder by reason of the payment of any taxes levied or assessed upon any part of the Assets;

 

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(ii)                (A) incur, assume or guarantee, or become directly or indirectly liable with respect to, any indebtedness or any contingent obligations, other than pursuant to the Co-Issued Debt, this Indenture and the other agreements and transactions expressly contemplated hereby and thereby or (B) issue any additional notes, securities or ownership interests after the Closing Date (other than Additional Debt, additional Subordinated Securities  or Notes issued in a Refinancing);

 

(iii)             (A) permit the validity or effectiveness of this Indenture or any Grant hereunder to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to this Indenture or the Co-Issued Debt, (B) permit any lien, charge, adverse claim, security interest, mortgage or other encumbrance (including any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever or otherwise, other than the lien of this Indenture) to be created on or  extend to or otherwise arise upon or burden the Collateral or any part thereof; any interest therein or the Proceeds thereof or (C) take any action that would cause the lien of this Indenture not to constitute a valid first priority perfected security interest in the Collateral;

 

(iv)            make or incur any capital expenditures;

 

(v)               become liable in any way, whether directly or by assignment or as a guarantor or other surety, for the obligations of the lessee under any lease, hire any employees or make any distributions to its members;

 

(vi)            enter into any transaction with any Affiliate or any Holder of Secured Debt or Subordinated Securities, other than the transactions relating to the offering and sale of the Secured Debt or Subordinated Securities;

 

(vii)         maintain any bank accounts;

 

(viii)      change its name without first delivering to the Collateral Trustee notice thereof;

 

(ix)            have any subsidiaries;

 

(x)               dissolve or liquidate in whole or in part, except as required by applicable law;

 

(xi)            pay any distributions other than in accordance with the Priority of Payments;

 

(xii)         conduct business under any name other than its own; or

 

(xiii)      permit the transfer of any of its membership interests so long as any Co-Issued Debt is Outstanding.

 

(c)                                  The Issuers shall not be party to any agreements without including customary “non-petition” and “limited recourse” provisions therein (and shall not amend or eliminate such 

 

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provisions in any agreement to which it is party), except for any agreements to achieve Tax Account Reporting Rules Compliance or any agreements related to the purchase and sale of any Assets which contain customary (as determined by the Collateral Manager in its sole discretion) purchase or sale terms or which are documented using customary (as determined by the Collateral Manager in its sole discretion) loan trading documentation.

 

(d)                                 Notwithstanding anything contained herein to the contrary, the Issuers may not acquire any of the Secured Debt or Subordinated Securities; provided that this Section 7.8(d) shall not be deemed to limit any redemption pursuant to the terms of this Indenture.

 

(e)                                  The Issuer shall not acquire or hold any Collateral Obligation or Eligible Investment that is a debt obligation in bearer form unless the obligor of such Collateral Obligation or Eligible Investment that is a debt obligation is a non-U.S. Person and the Collateral Obligation or Eligible Investment that is a debt obligation is not a “registration-required obligation” within the meaning of Section 163(f)(2)(A) of the Code or the Collateral Obligation or Eligible  Investment that is a debt obligation is held in a manner that satisfies the requirements of Treasury regulations Section 1.165-12(c).

 

Section 7.9                                    Statement as to Compliance. On or before December 31st in each calendar year commencing in 2020, or promptly after a Responsible Officer of the Issuer becomes aware thereof if there has been a Default under this Indenture and prior to the issuance or incurrence of any Additional Debt or additional Subordinated Securities pursuant to Section 2.4, the Issuer shall deliver to the Collateral Trustee (to be forwarded by the Collateral Trustee to the Collateral Manager, each Holder making a written request therefor and the Rating Agency) an Officer’s certificate of the Issuer that, having made reasonable inquiries of the Collateral Manager, and to the best of the knowledge, information and belief of the Issuer, there did not exist, as at a date not more than five days prior to the date of the certificate, nor had there existed at any time prior thereto since the date of the last certificate (if any), any Default hereunder or, if such Default did then exist or had existed, specifying the same and the nature and status thereof, including actions undertaken to remedy the same, and that the Issuer has complied with all of its obligations under this Indenture or, if such is not the case, specifying those obligations with which it has not complied.

 

Section 7.10                             The Issuer May Consolidate, etc.

 

(a)                                 The Issuer shall not consolidate or merge with or into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person, unless permitted by Cayman Islands law and unless:

 

(i)                    the Issuer shall be the surviving entity, or the Person (if other than the Issuer) formed by such consolidation or into which the Issuer is merged or to which the properties and assets of the Issuer are transferred (A) shall be a company or a limited partnership organized and existing under the laws of the Cayman Islands or such other jurisdiction approved by a Majority of the Controlling Class; provided that no such approval shall be required in connection with any such transaction undertaken solely to effect a change in the jurisdiction of incorporation pursuant to Section 7.4, and (B) shall expressly assume, by an indenture supplemental hereto and an omnibus assumption 

 

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agreement, executed and delivered to the Collateral Trustee, each Holder, the Collateral Manager and the Collateral Administrator, the due and punctual payment of the principal of and interest on all Secured Debt, the payments on the Subordinated Securities and the performance of every covenant of this Indenture, the Credit Agreement and of each other Transaction Document on the part of the Issuer to be performed or observed, all as provided herein or therein, as applicable;

 

(ii)                 the Rating Agency shall have been notified in writing of such consolidation or merger and the S&P Rating Condition shall have been satisfied;

 

(iii)              if the Issuer is not the surviving entity, the Person formed by such consolidation or into which the Issuer is merged or to which the properties and assets of the Issuer are transferred substantially as an entirety shall have agreed with the Collateral Trustee (A) if the formed or surviving Person is a company, to observe the same legal requirements for the recognition of such company as a legal entity separate and apart from any of its Affiliates as are applicable to the Issuer with respect to its Affiliates and (B) not to  consolidate or merge with or into any other Person or convey or transfer the Assets or its assets substantially as an entirety to any other Person except in accordance with the provisions of this Section 7.10;

 

(iv)             if the Issuer is not the surviving entity, the Person formed by such consolidation or into which the Issuer is merged or to which the properties and assets of the Issuer are transferred substantially as an entirety shall have delivered to the Collateral Trustee and the Rating Agency an Officer’s Certificate and an Opinion of Counsel, each stating that such Person shall be duly organized, validly existing and in good standing in the jurisdiction in which it is organized; that it has sufficient power and authority to assume the obligations set forth in paragraph (i) above and to execute and deliver an indenture supplemental hereto and an omnibus assumption agreement for the purpose of assuming such obligations; that such Person has duly authorized the execution, delivery and performance of an indenture supplemental hereto and an omnibus assumption agreement for the purpose of assuming such obligations and that such supplemental indenture is a valid, legal and binding obligation of such Person, enforceable in accordance with its terms, subject only to bankruptcy, reorganization, insolvency, moratorium and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and such other matters as the Collateral Trustee may reasonably require; provided that nothing in this clause shall imply or impose a duty on the Collateral Trustee to require any other matters to be covered; provided that, immediately following the event which causes such Person to become the successor to the Issuer, (A) such Person has good and marketable title, free and clear of any lien, security interest or charge, other than the lien and security interest of this Indenture, to the Collateral and (B) the Collateral Trustee continues to have a valid perfected security interest in the Collateral that is of first priority, free of any adverse claim or the legal equivalent thereof, as applicable; and (C) such Person will not be subject to U.S. net income tax;

 

(v)                immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

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(vi)             the Issuer shall have notified the Rating Agency of such consolidation, merger, conveyance or transfer and shall have delivered to the Collateral Trustee for transmission to each Holder an Officer’s Certificate (based upon the advice of counsel), stating that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with this Section 7.10, that all conditions in this Section 7.10 have been satisfied and that no adverse U.S. federal or Cayman Islands tax consequences (relative to the tax consequences of not effecting the transaction) shall result therefrom to the Issuer or the Holders of the Secured Debt or Subordinated Securities;

 

(vii)          after giving effect to such transaction, neither of the Issuers nor the pool of Assets will be required to register as an investment company under the Investment Company Act; and

 

(viii)       after giving effect to such transaction, the outstanding interests in the Co-Issuer will not be beneficially owned within the meaning of the Investment Company Act by any U.S. Person and the Issuer will not be a U.S. Person.

 

(b)                                 The Co-Issuer shall not consolidate or merge with or into any other Person or convey or transfer its properties and assets substantially as an entirety to any Person unless:

 

(i)                    the Co-Issuer shall be the surviving entity, or the Person (if other than the Co-Issuer) formed by such consolidation or into which the Co-Issuer is merged or to which the properties and assets of the Co-Issuer are transferred shall be a limited purpose organization organized and existing under the laws of the State of Delaware or such other jurisdiction approved by a Majority of the Controlling Class and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Collateral Trustee, the due and punctual payment of the principal of and interest on all Co-Issued Debt and the performance of every covenant of this Indenture on the part of the Co-Issuer to be performed or observed, all as provided herein;

 

(ii)                 the Rating Agency shall have been notified in writing of such consolidation or merger and the S&P Rating Condition shall have been satisfied;

 

(iii)              if the Co-Issuer is not the surviving entity, the Person formed by such consolidation or into which the Co-Issuer is merged or to which the properties and assets of the Co-Issuer are transferred substantially as an entirety shall have agreed with the Collateral Trustee (A) to observe the same legal requirements for the recognition of such formed or surviving corporation as a legal entity separate and apart from any of its Affiliates as are applicable to the Co-Issuer with respect to its Affiliates and (B) not to consolidate or merge with or into any other Person or convey or transfer its assets substantially as an entirety to any other Person except in accordance with the provisions of this Section 7.10;

 

(iv)             if the Co-Issuer is not the surviving entity, the Person formed by such consolidation or into which the Co-Issuer is merged or to which the properties and assets of the Co-Issuer are transferred substantially as an entirety shall have delivered to the Collateral Trustee and the Rating Agency an Officer’s Certificate and an Opinion of 

 

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Counsel, each stating that such Person shall be duly organized, validly existing and in good standing in the jurisdiction in which such Person is organized; that such Person has sufficient power and authority to assume the obligations set forth in paragraph (i) above and to execute and deliver an indenture supplemental hereto and an omnibus assumption agreement for the purpose of assuming such obligations; that such Person has duly authorized the execution, delivery and performance of an indenture supplemental hereto and an omnibus assumption agreement for the purpose of assuming such obligations and that such supplemental indenture is a valid, legal and binding obligation of such Person, enforceable in accordance with its terms, subject only to bankruptcy, reorganization, insolvency, moratorium and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and such other matters as the Collateral Trustee may reasonably require; provided that nothing in this clause shall imply or impose a duty on the Collateral Trustee to require any such other matters to be covered;

 

(v)                immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(vi)             the Co-Issuer shall have notified the Rating Agency of such consolidation, merger, conveyance or transfer and shall have delivered to the Collateral Trustee and each Holder of a Co-Issued Debt an Officer’s Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with this Section 7.10, that all conditions in this Section 7.10 have been satisfied and that no adverse U.S. federal or Cayman Islands tax consequences will result therefrom to the Co-Issuer or the Holders of the Co-Issued Debt;

 

(vii)          after giving effect to such transaction, neither of the Issuers nor the pool of Assets will be required to register as an investment company under the Investment Company Act;

 

(viii)       after giving effect to such transaction, the outstanding ownership interests in the Co-Issuer will not be beneficially owned within the meaning of the Investment Company Act by any U.S. Person; and

 

(ix)             the conditions specified in Section 7.17(a) are satisfied.

 

Section 7.11                             Successor Substituted. Upon any consolidation or merger, or transfer or conveyance of all or substantially all of the properties and assets of the Issuer or the Co-Issuer substantially as an entity in accordance with Section 7.10, the Person formed by or surviving such consolidation or merger (if other than the Issuer or the Co-Issuer), or the Person to which such consolidation, merger, conveyance or transfer is made, shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer or the Co-Issuer, as the case may be, under this Indenture with the same effect as if such Person had been named as the Issuer or the Co-Issuer, as the case may be, herein. In the event of any such consolidation, merger, transfer or conveyance, the Person named as the “Issuer” or the “Co-Issuer” herein or any successor which shall theretofore have become such in the manner prescribed in this Article VII may be dissolved, wound up and liquidated at any time thereafter, and such Person thereafter shall be 

 

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released, without further action by any Person, from its liabilities as obligor and maker on all the Secured Debt and Subordinated Securities (or with respect to the Co-Issuer, the Co-Issued Debt) and from its obligations under this Indenture and the other Transaction Documents to which it is a party.

 

Section 7.12                             No Other Business. The Issuers shall not have any employees (other than its officers, directors and managers to the extent such officers, directors and managers might be considered employees) and shall not engage in any business or activity other than issuing, incurring, selling, paying, redeeming, prepaying and refinancing the Secured Debt pursuant to this Indenture and the Subordinated Securities pursuant to the Memorandum and Articles, acquiring, holding, selling, exchanging, redeeming and pledging, solely for its own account, the Assets and other incidental activities thereto, including entering into the Transaction Documents to which it is a party and such other activities which are necessary, required or advisable to accomplish the foregoing; provided, however, that the Issuer shall be permitted to enter into any additional agreements not expressly prohibited by Section 7.8 and to enter into any amendment, modification, or waiver of existing agreements or such additional agreements as otherwise provided in this Indenture, including in accordance with Article VIII.  The Co-Issuer shall not engage in any business or activity other than issuing and selling the Co-Issued Debt pursuant to this Indenture and such other activities which are necessary, required or advisable to accomplish the foregoing.

 

Each of the Issuer and Co-Issuer will provide prior written notice to S&P of any proposed amendment to its Organizational Documents.  Neither the Issuer nor the Co-Issuer shall permit the amendment of its Organizational Documents, if such amendment would result in the rating of any Class of Secured Debt being reduced or withdrawn without the consent of a Majority of the Holders of each Class of Secured Debt so affected, and shall not otherwise amend its Organizational Documents, without the consent a Majority of any one or more Classes of Secured Debt or Subordinated Securities unless (i) the Issuer determines that such amendment would not, upon or after becoming effective, materially adversely affect the rights or interests of such Class or Classes, (ii) the Issuer gives ten days’ prior written notice to the Holders of such amendment, (iii) with respect to any such Class, a Majority of such Class do not provide written notice to the Issuer that, notwithstanding the determination of the Issuer, the Persons providing notice have reasonably determined that such amendment would, upon or after becoming effective, materially adversely affect such Class (the failure of any such Majority to provide such notice to the Issuer within ten days of receipt of notice of such amendment from the Issuer being conclusively deemed to constitute hereunder consent to and approval of such amendment) and (iv) the S&P Rating Condition is satisfied.

 

Section 7.13                             [Reserved].

 

Section 7.14                             Annual Rating Review. (a) So long as any of the Secured Debt of any Class remains Outstanding, on or before May 28th in each year commencing in 2020, the Issuer shall obtain and pay for an annual review of the rating of each such Class of Secured Debt from the Rating Agency, as applicable. The Issuer shall promptly notify the Collateral Trustee and the Collateral Manager in writing (and the Collateral Trustee shall promptly provide the Holders with a copy of such notice) if at any time the Issuer is notified or has actual knowledge that the 

 

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then-current rating of any such Class of Secured Debt has been, or is known will be, changed or withdrawn.

 

(b)                                 The Issuer shall obtain and pay for an annual review by S&P of any Collateral Obligation which has an S&P Rating determined pursuant to clause (iii)(b) of the definition of “S&P Rating”.

 

Section 7.15                             Reporting. At any time when the Issuers are not subject to Section 13 or 15(d) of the Exchange Act and are not exempt from reporting pursuant to Rule 12g3 - 2(b) under the Exchange Act, upon the request of a Holder or beneficial owner of a Note, the Issuers shall promptly furnish or cause to be furnished Rule 144A Information to such Holder or beneficial owner, to a prospective purchaser of such Note designated by such Holder or beneficial owner, or to the Collateral Trustee for delivery upon an Issuer Order to such Holder or beneficial owner or a prospective purchaser designated by such Holder or beneficial owner, as the case may be, in order to permit compliance by such Holder or beneficial owner with Rule 144A under the Securities Act in connection with the resale of such Note. “Rule 144A Information” shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).

 

Section 7.16                             Calculation Agent.  (a) The Issuers hereby agree that for so long as any Floating Rate Debt remains Outstanding there will at all times be an agent appointed (which does not control or is not controlled or under common control with the Issuers or their Affiliates or the Collateral Manager or its Affiliates) to calculate LIBOR in respect of each Interest Accrual Period in accordance with the definition of LIBOR (the “Calculation Agent”). The Issuers hereby appoint the Collateral Administrator as Calculation Agent. The Calculation Agent may be removed by the Issuers or the Collateral Manager, on behalf of the Issuers, at any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Issuers or the Collateral Manager, on behalf of the Issuers, the Issuers or the Collateral Manager, on behalf of the Issuers, will promptly appoint a replacement Calculation Agent which does not control or is not controlled by or under common control with the Issuer or its Affiliates or the Collateral Manager or its Affiliates and provide notice thereof to the Collateral Trustee and the Collateral Administrator. The Calculation Agent may not resign its duties or be removed without a successor having been duly appointed.

 

(b)                                 The Calculation Agent shall be required to agree (and the Collateral Administrator as Calculation Agent agrees under the Collateral Administration Agreement) that, as soon as possible after 11:00 a.m. London time on each Interest Determination Date, but in no event later than 11:00 a.m. New York time on the London Banking Day immediately following each Interest Determination Date, the Calculation Agent will calculate the Interest Rate applicable to each Class of Floating Rate Debt during the related Interest Accrual Period and the Debt Interest Amount (in each case, rounded to the nearest cent, with half a cent being rounded upward) payable on the related Payment Date in respect of such Class of Floating Rate Debt in respect of the related Interest Accrual Period. At such time, the Calculation Agent will communicate such rates and amounts to the Issuers, the Collateral Trustee, the Loan Agent, each Paying Agent, the Collateral Manager, DTC, Euroclear and Clearstream. The Calculation Agent will also specify to the Issuers the quotations upon which the foregoing rates and amounts are based, and in any event the Calculation Agent shall notify the Issuers before 5:00 p.m. (New 

 

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York time) on every Interest Determination Date if it has not determined and is not in the process of determining any such Interest Rate or Debt Interest Amount together with its reasons therefor. The Calculation Agent’s determination of the foregoing rates and amounts for any Interest Accrual Period will (in the absence of manifest error) be final and binding upon all parties.

 

Section 7.17                             Certain Tax Matters. The Co-Issuer shall not elect to be treated as other than a disregarded entity for U.S. federal income tax purposes, in each case without the unanimous consent of all Holders.

 

(a)                                 The Issuer intends to be treated as a pass through entity for U.S. federal income tax purposes.  For so long as all of the Subordinated Securities and any other interests that are treated as equity of the Issuer for U.S. federal income tax purposes are held by the Sole Equity Owner, the Issuer will be disregarded as separate from such Sole Equity Owner for U.S. federal income tax purposes.  If and when the Subordinated Securities and any other interests that are treated as equity of the Issuer for U.S. federal income tax purposes are transferred such that those interest are considered held by two or more tax owners for U.S. federal income tax purposes, the Issuer intends to treat itself as a partnership for U.S. tax purposes.  Each Holder or beneficial owner of a Note or interest therein, by investing in a Note, is deemed to agree to such treatment.

 

(b)                                 The Issuer has in effect an election to be treated as a disregarded entity for U.S. federal income tax purposes, and has not and will not elect to be treated other than as a partnership or disregarded entity for U.S. federal, state or local income or franchise tax purposes and shall make any election or take any action necessary to avoid classification as a corporation for U.S. federal, state or local tax purposes.

 

(c)                                  The Issuers and the Trustee shall treat the Secured Notes and the Subordinated Securities in a manner consistent with the description in the “Certain U.S. Federal Income Tax Considerations” section of the Offering Circular, unless otherwise required by applicable law.

 

(d)                                 The Issuer shall file, or cause to be filed, any tax returns, including information tax returns, required by any governmental authority; provided, however, that the Issuer shall not file, or cause to be filed, any income or franchise tax return in the United States or in any state of the United States that in each case is based on the Issuer being engaged in trade or business in such jurisdiction unless it shall have obtained Tax Advice prior to such filing that, under the laws of such jurisdiction, the Issuer is required to file such income or franchise tax return.

 

(e)                                  If the Issuer has purchased an interest and the Issuer is aware that such interest is a “reportable transaction” within the meaning of Section 6011 of the Code, and a Holder of any Note that is required to be treated as equity for U.S. federal income tax purposes requests in writing information about any such transactions in which the Issuer is an investor, the Issuer shall provide, or cause its Independent accountants to provide, such information it has reasonably available that is required to be obtained by such Holder under the Code as soon as practicable after such request.

 

(f)                                   Notwithstanding anything herein to the contrary, the Collateral Manager, the Issuers, the Collateral Trustee, the Collateral Administrator, the Placement Agent, the Co-Placement Agent, the Holders and beneficial owners of the Secured Debt or Subordinated 

 

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Securities and each employee, representative or other agent of those Persons, may disclose to any and all Persons, without limitation of any kind, the U.S. tax treatment and tax structure of the transactions contemplated by this Indenture and all materials of any kind, including opinions or other tax analyses, that are provided to those Persons. This authorization to disclose the U.S. tax treatment and tax structure does not permit disclosure of information identifying the Collateral Manager, the Issuer, the Collateral Trustee, the Loan Agent, the Collateral Administrator, the Placement Agent, the Co-Placement Agent or any other party to the transactions contemplated by this Indenture, the Offering or the pricing (except to the extent such information is relevant to U.S. tax structure or tax treatment of such transactions).

 

(g)                                  Upon the Issuer’s receipt of a request of a Holder of a Secured Debt or Subordinated Securities that has been issued with more than de minimis “original issue discount” (as defined in Section 1273 of the Code) or written request of a Person certifying that it is an owner of a beneficial interest in a Secured Debt or Subordinated Securities that has been issued with more than de minimis “original issue discount” for the information described in United States Treasury regulations Section 1.1275-3(b)(1)(i) that is applicable to such Secured Debt or Subordinated Securities, the Issuer will cause its Independent certified public accountants to provide promptly to the Collateral Trustee and such requesting Holder or owner of a beneficial interest in such a Secured Debt or Subordinated Securities all of such information. Any additional issuance or incurrence of the Additional Debt, additional Subordinated Securities or Re-Pricing shall be  accomplished in a manner that shall allow the Independent accountants of the Issuer to accurately calculate original issue discount income to Holders of the Additional Debt or additional Subordinated Securities, as applicable.

 

(h)                                 The Issuer (or the Collateral Manager acting on behalf of the Issuer) will take such reasonable actions, consistent with law and its obligations under this Indenture, as are necessary to achieve Tax Account Reporting Rules Compliance, including appointing any agent or representative to perform due diligence, withholding or reporting obligations of the Issuer (or the Sole Equity Owner) pursuant to FATCA, and any other action that the Issuer would be permitted to take under this Indenture in furtherance of Tax Account Reporting Rules Compliance.  The Issuer shall provide any certification or documentation (including the IRS Form W-9 or the applicable IRS Form W-8 or any successor form) to any payor from time to time as provided by law to minimize U.S. withholding tax or backup withholding tax.

 

(i)                                     For the avoidance of doubt, notwithstanding anything in this Section 7.17 or any other Section of this Indenture to the contrary, neither the Accountants’ Effective Date Recalculation Report or any other Accountants’ Report pursuant to Section 10.9(b) shall be provided to the Holders of the Notes or to the Rating Agency.

 

(j)                                    The Issuer will provide, upon request of a Holder or beneficial owner of Subordinated Securities, any information that such Holder or beneficial owner reasonably requests to assist such Holder with regard to any filing requirements the Holder may have as a result of the controlled foreign corporation rules under the Code.

 

(k)                                 Upon written request, the Trustee and the Notes Registrar shall provide to the Issuer, the Placement Agent, the Co-Placement Agent or any agent thereof any information specified by such parties regarding the Holders of the Notes and payments on the Notes that is 

 

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reasonably available to the Trustee or the Notes Registrar, as the case may be, and may be necessary for achieving Tax Account Reporting Rules Compliance, subject in all cases to confidentiality provisions.

 

(l)                                     If and when the Subordinated Securities and any other interests that are treated as equity of the Issuer for U.S. federal income tax purposes are transferred such that those interests are considered held by two or more tax owners for U.S. federal income tax purposes, the following provisions shall apply (but, for the avoidance of doubt, the following provisions shall have no force or effect while the Subordinated Securities and the other interests that are treated as equity of the Issuer for U.S. federal income tax purposes are held by a Sole Equity Owner):

 

(i)                    Each Holder or beneficial owner of a Subordinated Security or other interest that is treated as equity of the Issuer for U.S. federal income tax purposes (each such interest, a “Partnership Interest” and each such Holder, a “Partner”) agrees to treat the Issuer as a partnership and this Indenture as part of the Issuer’s partnership agreement for purposes of Subchapter K and any related provisions of the Code and any Treasury Regulations promulgated thereunder.

 

(ii)                 The Collateral Manager is hereby designated as the Issuer’s “Partnership Representative” within the meaning of Section 6223 of the Code. Vincent Cataldo shall be  designated as the sole individual through whom the Partnership Representative will act for all purposes under the Sections 6221 through 6241 of the Code.  If the then serving designated individual ceases to be the Head of Tax or ceases to meet the legal requirements to so serve, the Collateral Manager shall appoint a new designated individual.  The Partnership Representative shall have authority to take any action that may be taken by a “partnership representative” under Code Sections 6221 through 6241.  The Partnership Representative shall be entitled to reimbursement from the Issuer for reasonable costs it incurs in performing its duties as the Partnership Representative.  The Issuer shall, to the fullest extent permitted by applicable law, indemnify, defend and hold harmless the Partnership Representative from, against and with respect to any liabilities arising out of or in connection with the duties of the Partnership Representative, except to the extent that it is finally judicially determined that such liabilities arose out of or were related to actions or omissions undertaken in bad faith or constituting recklessness, fraud or intentional wrongdoing.

 

(iii)              To the extent that, as a result of a determination by a taxing authority or adjudicative body, there is any adjustment or proposed adjustment (an “Audit Adjustment”) for the purposes of any tax law to any items of income gain, loss, deduction or credit of the Issuer for any taxable period (the “Adjustment Period”):

 

(A)                               The Partnership Representative agrees to take reasonable steps (taking into account the ability to effectively contest any Audit Adjustment and the overall taxes imposed on the Issuer and the Partners (disregarding for this purpose the specific tax characteristics of any Partner)), which may include following procedures under Code Section 6225 to reduce any imputed underpayment or making an election under Code Section  6226 and enforcing rights against Partners, to reduce liabilities of the Issuer for taxes, interest,

 

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additional amounts or penalties, or related amounts including any imputed underpayment, arising from the Audit Adjustment (except to the extent such amounts are in fact reimbursed by the Partners) and instead to cause each Partner to be liable for and economically bear its allocable share (determined with respect to the Adjustment Period) of the tax items affected by the Audit Adjustment (including interest, additional amounts and penalties or related amounts, including any imputed underpayment); and

 

(B)                               each Partner agrees to (a) provide tax information or certifications (including evidence of filing or payment of tax) as reasonably requested by the Partnership Representative in connection with an Audit Adjustment; (b) comply with the Partnership Representative’s reasonable request to file accurate and timely amended returns to reflect an Audit Adjustment; and (c) be liable for and economically bear (and indemnify and hold the Issuer and each other Partner harmless from), all taxes and related interest, additional amounts and penalties and other liabilities including reasonable administrative costs resulting from or otherwise attributable to the Partner’s allocable share (determined with respect to the Adjustment Period by the Partnership Representative, in consultation with the Investment Manager) of the tax items affected by the Audit Adjustment.

 

This clause (iii) and clause (vi), below, shall survive the transfer or termination of a Partnership Interest in the Issuer, as well as the termination, dissolution, liquidation and winding up of the Issuer.

 

(iv)             The Partnership Representative shall make or cause to be made any and all elections on behalf of the Issuer under any applicable tax law as the Partnership Representative shall deem, in its discretion, to be in the best interests of the Issuer, including an election under section 754 of the Code.

 

(v)                Capital Accounts.

 

(A)                               The Partnership Representative shall establish and maintain or cause to be established and maintained on the books and records of the Issuer an individual capital account for each Partner in accordance with Section 704(b) of the Code and Treasury Regulations section 1.704-1(b)(2)(iv).

 

(B)                               For capital account purposes, all items of income, gain, loss and deduction shall be allocated among the Partners in a manner such that, if the Issuer were dissolved, its affairs wound up, its assets sold for their respective “book values” (within the meaning of Treasury regulations section 1.704-1(b)(2)(iv)) and its liabilities satisfied in full (except that nonrecourse liabilities with respect to an asset shall be satisfied only to the extent that such nonrecourse liabilities do not exceed the book value of such asset) and its assets distributed to the Partners in accordance with their respective capital account balances immediately after making such allocation, such distributions would, as nearly as possible, be equal to the distributions that would be made pursuant to the

 

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provisions of this Indenture. Any special allocations provided for in Section 7.17(n)(v)(E)-(G) shall be taken into account for capital account purposes.

 

(C)                               For U.S. federal, state and local income tax purposes, items of income, gain, loss, deduction and credit shall be allocated to the Partners in accordance with the allocations of the corresponding items for capital account purposes under this Section 7.17(l)(v), except that items with respect to which there is a difference between tax and book basis will be allocated in accordance with Section 704(c) of the Code, the Treasury Regulations thereunder, and Treasury Regulation section 1.704- 1(b)(4)(i).

 

(D)                               The provisions of this Section 7.17(l)(v) relating to the maintenance of capital accounts are intended to comply with Treasury Regulation section 1.704-1(b) and shall be interpreted and applied in a manner consistent with such regulations.  The Partnership Representative shall be authorized to make appropriate amendments to the allocations of items pursuant to this Section 7.17(n)(v) if necessary in order to comply with Section 704 of the Code or applicable Treasury Regulations thereunder.

 

(E)                                Notwithstanding any other provision set forth in this Section 7.17(l)(v), no item of deduction or loss shall be allocated to a Partner to the extent  the allocation would cause a negative balance in the Partner’s capital account (after taking into account the adjustments, allocations and distributions described in Treasury Regulations sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) that exceeds the amount that such Partner would be required to reimburse the Issuer pursuant to this Indenture or under applicable law.  In the event some but not all of the Partners would have such excess capital account deficits as a consequence of such an allocation of loss or deduction, the limitation set forth in this Section 7.17(l)(v)(E) shall be applied on a Partner by Partner basis so as to allocate the maximum permissible deduction or loss to each such Partner under Treasury Regulation section 1.704-1(b)(2)(ii)(d).  In the event any loss or deduction is specially allocated to a Partner pursuant to either of the two preceding sentences, an equal amount of income of the Issuer shall be specially allocated to such Partner prior to any allocation pursuant to Section 7.17(l)(v)(B).

 

(F)                                 In the event any Partner unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6), items of Issuer income and gain shall be specially allocated to such Partner in an amount and manner sufficient to eliminate as quickly as possible any deficit balance in its capital account in excess of that permitted under Section 7.17(l)(v)(E) created by such adjustments, allocations or distributions.  Any special allocations of items of income or gain pursuant to this Section 7.17(l)(v)(F) shall be taken into account in computing subsequent allocations pursuant to this Section 7.17(l)(v)(F) so that the net amount of any items so allocated and all other items allocated to each Partner pursuant to this Section 7.17(l)(v)(F) shall, to the extent possible, be equal to the net amount that would have been allocated to each such Partner pursuant to the provisions of this

 

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Section 7.17(l)(v)(F) if such unexpected adjustments, allocations or distributions had not occurred.

 

(G)                               In the event the Issuer incurs any nonrecourse liabilities, income and gain shall be allocated in accordance with the “minimum gain chargeback” provisions of Treasury Regulations sections 1.704-1(b)(4)(iv) and 1.704-2.

 

(H)                              The capital accounts of the Partners shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect the fair market value of Issuer property whenever a Partnership Interest is relinquished to the Issuer, whenever an additional Person becomes a Partner as permitted under this Indenture, upon any termination of the Issuer within the meaning of Section 708 of the Code, and when the Issuer is liquidated as permitted under this Indenture, and shall be adjusted in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e) in the case of a distribution of any property (other than cash).

 

(I)                                   To the extent the Issuer is required by law to withhold or to make tax payments on behalf of or with respect to any Partner (e.g., backup withholding) (“Tax Advances”), the Issuer may cause such amounts to be withheld and such tax payments to be made as so required. All Tax Advances made on behalf of a Partner shall, at the option of the Issuer, (i) be promptly paid to the Issuer by the Partner on  whose behalf such Tax Advances were made (such payment not to constitute a capital contribution), or (ii) be repaid by reducing the amount of the current or next succeeding distribution or distributions which would otherwise have been made to such Partner or, if such distributions are not sufficient for that purpose, by so reducing the proceeds of liquidation otherwise payable to such Partner. Whenever the Issuer selects option (ii) pursuant to the preceding sentence for repayment of a Tax Advance by a Partner, for all other purposes of this Indenture such Partner shall be treated as having received all distributions (whether before or upon liquidation) unreduced by the amount of such Tax Advance and interest thereon.  Each Partner hereby agrees, to the extent permitted by applicable state and federal law, to reimburse the Issuer for any liability with respect to Tax Advances required on behalf of or with respect to such Partner.

 

(J)                                   No more than 50% of the debt obligations (as determined for U.S. federal income tax purposes) held by the Issuer may at any time consist of real estate mortgages as determined for purposes of Section 7701(i) of the Code unless, based on Tax Advice, the ownership of such debt obligations will not cause the Issuer to be treated as a taxable mortgage pool for U.S. federal income tax purposes.

 

By its purchase of a Partnership Interest, each Partner acknowledges that it has read this Section 7.17(l) and agrees to the covenants set forth herein.

 

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Section 7.18                             Effective Date; Purchase of Additional Collateral Obligations.

 

(a)                                 The Issuer will use commercially reasonable efforts to purchase, on or before August 20, 2019, Collateral Obligations (i) such that the Target Initial Par Condition is satisfied and (ii) that satisfy, as of the Effective Date, the Concentration Limitations, the Collateral Quality Test and the Coverage Tests.

 

(b)                                 During the period from the Closing Date to and including the Effective Date, the Issuer will use funds to purchase additional Collateral Obligations as follows:  (i) to pay for the principal portion of any Collateral Obligation from any amounts on deposit in the Ramp-Up Account or any Principal Proceeds on deposit in the Collection Account at the discretion of the Collateral Manager  and (ii) to pay for accrued interest on any such Collateral Obligation from any amounts on deposit in the Ramp-Up Account or any Principal Proceeds on deposit in the Collection Account at the discretion of the Collateral Manager.

 

(c)                                  Within thirty (30) days after the Effective Date, (i) the Issuer shall provide to the Collateral Manager and the Collateral Trustee, an Accountants’ Report: (x) confirming the identity of the issuer (it being understood that the same issuer may be referred to differently due to the use of abbreviations or shorthand references by different record keepers), principal balance, coupon/spread, stated maturity, S&P Rating and country of Domicile with respect to each Collateral Obligation as of the Effective Date and the information provided by the Issuer with respect to every other asset included in the Assets, by reference to such sources as shall be specified therein (such report, the “Accountants’ Effective Date Comparison AUP Report”) and (y) recalculating and comparing as of the Effective Date the level of compliance with, or satisfaction or non-satisfaction of the Effective Date Tested Items and specifying the procedures undertaken  by them to review data and computations relating to such report (the “Accountants’ Effective Date Recalculation AUP Report”), and (ii) the Issuer shall cause the Collateral Administrator to compile and deliver to the Rating Agency (in the case of delivery to S&P, via email to CDOEffectiveDatePortfolios@spglobal.com a report (the “Effective Date Report”), determined as of the Effective Date, containing (A) the information required in a Monthly Report, (B) a calculation of the Aggregate Principal Balance that indicates whether the Aggregate Principal Balance equals or exceeds the Target Initial Par Amount in satisfaction of the Target Initial Par Condition and (C) a list of any Closing Date Participation Interests held by the Issuer as of the Effective Date. For the avoidance of doubt, the Effective Date Report shall not include or refer to the Accountants’ Report and no Accountants’ Report shall be provided to or otherwise shared with the Rating Agency.

 

(d)                                 In accordance with SEC Release No. 34-72936, Form 15-E, only in its complete and unedited form which includes the Accountants’ Effective Date Comparison AUP Report as an attachment and, if Additional Debt or additional Subordinated Securities are issued, any Accountants’ Report delivered pursuant to Section 2.4(e) as an attachment, will be provided by the Independent accountants to the Issuer who will post such Form 15-E, except for the redaction of any sensitive information, on the 17g-5 Website. Copies of the Accountants’ Effective Date Recalculation AUP Report or any other accountants’ report provided by the Independent accountants to the Issuer, Trustee, Collateral Manager or Collateral Administrator will not be provided to any other party including the Rating Agency (other than as provided in an access letter between the accountants and such party).

 

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(e)                                  If (1) the Effective Date S&P Conditions have not been satisfied prior to the date that is thirty (30) days after the Effective Date or (2) S&P has not provided written confirmation (which may take the form of a press release or other written communication) of its Initial Rating of the Secured Debt rated by S&P by the date thirty (30) Business Days following the Effective Date, then the Issuer (or the Collateral Manager on the Issuer’s behalf) shall request S&P to provide written confirmation of its Initial Rating of the Secured Debt rated by S&P (which may take the form of a press release or other written communication). In such case, if S&P does not provide written confirmation of its Initial Rating of the Secured Debt on or prior to the Determination Date immediately preceding the first Payment Date, then the Issuer (or the Collateral Manager on the Issuer’s behalf) will instruct the Collateral Trustee to transfer amounts from the Interest Collection Subaccount to the Principal Collection Subaccount and may, prior to the first Payment Date, use such funds on behalf of the Issuer for the purchase of additional Collateral Obligations until such time as S&P has provided written confirmation of its Initial Rating of the Secured Debt (provided that the amount of such transfer would not result in a default in the payment of interest with respect to the Class A Debt or the Class B Notes); provided that in lieu of complying with this clause (e), the Issuer (or the Collateral Manager on the Issuer’s behalf) may take such action, including but not limited to, a Special Redemption and/or transferring amounts from the Interest Collection Subaccount to the Principal Collection Subaccount as Principal Proceeds (for use in a Special Redemption), sufficient to enable the Issuer (or the Collateral Manager on the Issuer’s behalf) to obtain written confirmation of its Initial Rating of the Secured Debt from S&P.

 

(f)                                   U.S.$25,000,000 of the net proceeds of the issuance of the Notes and incurrence of the Class A Loans will be deposited in the Ramp-Up Account on the Closing Date. At the direction  of the Issuer (or the Collateral Manager on behalf of the Issuer), the Collateral Trustee shall apply amounts held in the Ramp-Up Account to purchase additional Collateral Obligations and Principal Financed Accrued Interest from the Closing Date to and including the Effective Date as described in clause (b) above. If on the Effective Date, any amounts on deposit in the Ramp-Up Account have not been applied to purchase Collateral Obligations, such amounts shall be applied as described in Section 10.3(c).

 

(g)                                  [Reserved].

 

(h)                                 Weighted Average S&P Recovery Rate; S&P CDO Monitor. On or prior to the later of (x) the S&P CDO Monitor Election Date and (y) the Effective Date, the Collateral Manager will elect the Weighted Average S&P Recovery Rate that will apply on and after such date to the Collateral Obligations for purposes of determining compliance with the S&P Minimum Weighted Average Recovery Rate Test, and the Collateral Manager will so notify the Collateral Trustee and the Collateral Administrator. Thereafter, at any time on written notice to the Collateral Trustee, the Collateral Administrator and S&P, the Collateral Manager may elect a different Weighted Average S&P Recovery Rate to apply to the Collateral Obligations; provided that if (i) the Collateral Obligations are currently in compliance with the Weighted Average S&P Recovery Rate case then applicable to the Collateral Obligations but the Collateral Obligations would not be in compliance with the Weighted Average S&P Recovery Rate case to which the Collateral Manager desires to change, then such changed case shall not apply or (ii) the Collateral Obligations are not currently in compliance with the Weighted Average S&P Recovery Rate case then applicable to the Collateral Obligations and would not be in compliance 

 

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with any other Weighted Average S&P Recovery Rate case, the Weighted Average S&P Recovery Rate to apply to the Collateral Obligations shall be the lowest Weighted Average S&P Recovery Rate in Schedule 5. If the Collateral Manager does not notify the Collateral Trustee and the Collateral Administrator that it will alter the Weighted Average S&P Recovery Rate in the manner set forth in this Indenture, the Weighted Average S&P Recovery Rate chosen as of the S&P CDO Monitor Election Date or the Effective Date, as applicable, shall continue to apply.

 

(i)                                     Compliance with the S&P CDO Monitor Test will be measured by the Collateral Manager on each Measurement Date on or after the Effective Date and on or prior to the last day of the Reinvestment Period; provided, however, that on each Measurement Date occurring on and after the S&P CDO Monitor Election Date, after receipt by the Issuer of the S&P CDO Monitor, the Collateral Manager will be required to provide to the Collateral Administrator a report on the portfolio of Collateral Obligations containing such information as shall be reasonably necessary to permit the Collateral Administrator to calculate the Class Default Differential with respect to the Highest Ranking Class on such Measurement Date. In the event that the Collateral Manager’s measurement of compliance and the Collateral Administrator’s measurement of compliance show different results, the Collateral Manager and the Collateral Administrator shall be required to cooperate promptly in order to reconcile such discrepancy.

 

(j)                                    The failure of the Issuer to satisfy the requirements of this Section 7.18 will not constitute an Event of Default unless such failure constitutes an Event of Default under Section 5.1(d) hereof and the Issuer, or the Collateral Manager acting on behalf of the Issuer, has acted in bad faith.

 

Section 7.19                             Representations Relating to Security Interests in the Assets. (a) The Issuer hereby represents and warrants that, as of the Closing Date (which representations and warranties shall survive the execution of this Indenture and be deemed to be repeated on each date on which an Asset is Granted to the Collateral Trustee hereunder):

 

(i)                    The Issuer owns each Asset free and clear of any lien, claim or encumbrance of any Person, other than such as are being released on the Closing Date contemporaneously with the sale of the Secured Debt and Subordinated Securities on the Closing Date or on the related Cut-Off Date contemporaneously with the purchase of such Asset on the Cut-Off Date, created under, or permitted by, this Indenture and any other Permitted Liens.

 

(ii)                 Other than the security interest Granted to the Collateral Trustee for the benefit of the Secured Parties pursuant to this Indenture, except as permitted by this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Assets. The Issuer has not authorized the filing of and is not aware of any Financing Statements against the Issuer that include a description of collateral covering the Assets other than any Financing Statement relating to the security interest granted to the Collateral Trustee hereunder or that has been terminated; the Issuer is not aware of any judgment, PBGC liens or tax lien filings against the Issuer.

 

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(iii)              All Assets constitute Cash, accounts (as defined in Section 9-102(a)(2) of the UCC), Instruments, general intangibles (as defined in Section 9-102(a)(42) of the UCC), uncertificated securities (as defined in Section 8-102(a)(18) of the UCC), Certificated Securities or security entitlements to financial assets resulting from the crediting of financial assets to a “securities account” (as defined in Section 8-501(a) of the UCC).

 

(iv)             All Accounts constitute “securities accounts” under Section 8-501(a) of the UCC, or “deposit accounts” (as defined in Section 9-102(a) of the UCC).

 

(v)                This Indenture creates a valid and continuing security interest (as defined in Section 1 - 201(37) of the UCC) in such Assets in favor of the Collateral Trustee, for the benefit and security of the Secured Parties, which security interest is prior to all other liens, claims and encumbrances (except as permitted otherwise herein), and is enforceable as such against creditors of and purchasers from the Issuer.

 

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

 

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

 

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

 

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

 

(i)                    All of such Assets have been and will have been credited to one of the Accounts which are securities accounts within the meaning of Section 8-501(a) of the UCC, or “deposit accounts” (as defined in Section 9-102(a) of the UCC). The Securities Intermediary for each Account has agreed to treat all assets (other than cash or general 

 

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intangibles) credited to such Accounts that are securities accounts as “financial assets” within the meaning of Section 8-102(a)(9) the UCC.

 

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

 

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

 

(iv)             The Accounts are not in the name of any Person other than the Issuer or the Collateral Trustee. The Issuer has not consented to the Custodian to comply with the Entitlement Order of any Person other than the Collateral Trustee (and the Issuer prior to a notice of exclusive control being provided by the Collateral Trustee).

 

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

 

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

 

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

 

(e)                                  The Issuer agrees to notify the Collateral Manager and the Rating Agency promptly if it becomes aware of the breach of any of the representations and warranties contained in this Section 7.19 and shall not, without satisfaction of the S&P Rating Condition, waive any of the representations and warranties in this Section 7.19 or any breach thereof.

 

Section 7.20                             Limitation on Long Dated Obligations.   Neither the Issuer nor the Collateral Manager on behalf of the Issuer shall agree to any amendment or modification to extend the stated maturity of a Collateral Obligation unless the amended stated maturity of such Collateral Obligation would be not later than two years beyond the earliest Stated Maturity of any Secured Debt Outstanding; provided that unless, after giving effect to such amendment or 

 

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modification, (a) the Weighted Average Life Test would be satisfied, or if not satisfied, maintained or improved and (b) not more than 10% of the Collateral Principal Amount consists of Collateral Obligations that are Long Dated Obligations, such Collateral Obligation will be considered a Defaulted Collateral Obligation for all purposes under this Indenture until such time, if any, that the conditions in clauses (a) and (b) are satisfied; provided, however, that clauses (a) and (b) above shall not apply if (i) the Issuer (or the Collateral Manager on behalf of the Issuer) did not affirmatively consent to such amendment or modification or (ii) such amendment or modification is being executed in connection with the restructuring of such Collateral Obligation as a result of an actual default, bankruptcy or insolvency of the related Obligor; provided further, however, that notwithstanding the prohibition set forth above, the Issuer or the Collateral Manager on behalf of the Issuer may agree to an amendment or modification to extend the stated maturity of a Collateral Obligation beyond two years following the earliest Stated Maturity of any Secured Debt Outstanding and in such instances, for all purposes under this Indenture, such Collateral Obligation will be treated as an Equity Security.  For the avoidance of doubt, after giving effect to such amendment or modification, the Collateral Obligation that is the subject of such amendment or modification must satisfy the definition of Collateral Obligation (other than clause (xvii) thereof).

 

Subject to the foregoing, the Collateral Manager may, on behalf of the Issuer, agree to any amendment, waiver or modification with respect to any Collateral Obligation in accordance with the Collateral Management Agreement.

 

Section 7.21                             Proceedings.    Notwithstanding any other provision of this Indenture, the Credit Agreement, the Notes, the Collateral Administration Agreement, the Collateral Management Agreement or of any other agreement, the Issuer shall be under no duty or obligation of any kind to the Holders, or any of them, to institute any legal or other proceedings of any kind, against any person or entity, including, without limitation, the Collateral Trustee, the Collateral  Administrator or the Calculation Agent. Nothing in this Section 7.21 shall imply or impose any additional duties on the part of the Collateral Trustee.

 

Section 7.22                             Involuntary Bankruptcy Proceedings.   The Issuers shall take all actions necessary to defend and dismiss any petition, filing or institution of any involuntary bankruptcy or insolvency proceedings against the Issuer or Co-Issuer, or the filing with respect to the Issuer or the Co-Issuer of a petition or answer or consent seeking an involuntary reorganization, arrangement, moratorium or liquidation proceedings or other involuntary proceedings under any Bankruptcy Law or any similar laws; provided that the obligations of the Issuers in this Section 7.22 shall be subject to the availability of funds therefor under the Priority of Payments. The reasonable fees, costs, charges and expenses incurred by the Issuer or the Co-Issuer (including, without limitation, attorney’s fees and expenses) in connection with taking any such actions constitute Administrative Expenses payable in accordance with the Priority of Payments.

 

ARTICLE VIII

 

SUPPLEMENTAL INDENTURES

 

Section 8.1                                    Supplemental Indentures Without Consent of Holders. (a) Without the consent of the Holders of any Secured Debt or Subordinated Securities (except 

 

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any consent explicitly required below) (but with the written consent of the Collateral Manager) and at any time and from time to time, subject to Section 8.3, and without regard to whether any Class would be materially and adversely affected thereby, the Issuers and the Collateral Trustee may enter into one or more indentures supplemental hereto, in form satisfactory to the Collateral Trustee, for any of the following purposes:

 

(i)                    to evidence the succession of another Person to the Issuer or the Co-Issuer and the assumption by any such successor Person of the covenants of the Issuer or the Co-Issuer herein, in the Credit Agreement and in the Secured Debt and Subordinated Securities;

 

(ii)                 to add to the covenants of the Issuers or the Collateral Trustee for the benefit of the Secured Parties;

 

(iii)              to convey, transfer, assign, mortgage or pledge any property to or with the Collateral Trustee or add to the conditions, limitations or restrictions on the authorized amount, terms and purposes of the issue, authentication and delivery of the Secured Debt and Subordinated Securities;

 

(iv)             to evidence and provide for the acceptance of appointment hereunder by a successor Collateral Trustee and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Sections 6.9, 6.10 and 6.12 hereof;

 

(v)                to correct or amplify the description of any property at any time subject to the lien of this Indenture, or to better assure, convey and confirm unto the Collateral Trustee any property subject or required to be subjected to the lien of this Indenture (including, without limitation, any and all actions necessary or desirable as a result of changes in law or  regulations, whether pursuant to Section 7.5 or otherwise) or to subject to the lien of this Indenture any additional property;

 

(vi)             to modify the restrictions on and procedures for resales and other transfers of Secured Debt or Subordinated Securities to reflect any changes in ERISA or other applicable law or regulation (or the interpretation thereof) or to enable the Issuers to rely upon any exemption from registration under the Securities Act or the 1940 Act or otherwise comply with any applicable securities law;

 

(vii)          to remove restrictions on resale and transfer of Secured Debt and Subordinated Securities to the extent not required under clause (vi) above;

 

(viii)       to facilitate (A) the listing of any of the Notes on any non-U.S. exchange, (B) compliance with the guidelines of such exchange, or (C) if so listed, the de-listing of any of the Notes from such exchange if the Collateral Manager determines that the costs and burdens of maintaining such listing are excessive;

 

(ix)             to correct any inconsistent or defective provisions herein or to cure any ambiguity, omission or errors herein;

 

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(x)         to conform the provisions of this Indenture to the Offering Circular;

 

(xi)        to take any action necessary or advisable to prevent the Issuer or the Co-Issuer from becoming subject to (or to otherwise minimize) withholding or other taxes, fees or assessments, including by achieving Tax Account Reporting Rules Compliance, or to reduce the risk that the Issuer may be treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes or otherwise subject to U.S. federal, state or local tax on a net income basis;

 

(xii)       (A) with the consent of the Collateral Manager, the Retention Holder and a Majority of the Subordinated Securities (and, solely with respect to an issuance or incurrence of additional Secured Debt, the consent of a Majority of the Controlling Class (such consent not to be unreasonably withheld or delayed)), to make such changes as shall be necessary to permit the Issuer or the Issuers, as applicable, to issue additional notes of any one or more existing Classes or Junior Mezzanine Debt or Subordinated Securities in accordance with this Indenture or (B) at the direction of a Majority of the Subordinated Securities, to permit the Issuer or the Issuers, as applicable, to issue replacement securities in connection with a Refinancing or to reduce the Interest Rate of a Class of Re-Pricing Eligible Debt in connection with a Re-Pricing, in each case in accordance with this Indenture; provided that, for the avoidance of doubt, the supplemental indenture executed in connection therewith shall only effect such additional issuance, Re-Pricing or Refinancing, as applicable, and shall not modify any other provisions of this Indenture;

 

(xiii)      to modify the procedures herein relating to compliance with Rule 17g-5;

 

(xiv)      to conform to ratings criteria and other guidelines (including, without limitation, any alternative methodology published by the Rating Agency or any use of the Rating Agency’s credit models or guidelines for ratings determination) relating to collateral  debt obligations in general published or otherwise communicated by the Rating Agency; provided that, consent to such supplemental indenture has been obtained from a Majority of the Controlling Class (such consent not to be unreasonably withheld, delayed or conditioned);

 

(xv)       following receipt by the Issuer of written advice of counsel with a national reputation and experienced in such matters (which may be via e-mail), to amend, modify or otherwise accommodate changes to this Indenture to comply with any statute, rule or regulation enacted by regulatory agencies of the United States federal government, or by any Member State of the European Economic Area or otherwise under European law, after the Closing Date that are applicable to the Issuers, the Secured Debt or Subordinated Securities or the transactions contemplated by this Indenture or the Offering Circular, including, without limitation, the EU Risk Retention Requirements, U.S. Risk Retention Rules, securities laws or the Dodd-Frank Act and all rules, regulations, and technical or interpretive guidance thereunder, or any amendment in relation to the Volcker Rule; provided that any amendment in relation to the Volcker Rule shall require the consent of each holder of Secured Debt or Subordinated Securities that notifies the Issuer that it is adversely affected thereby;

 

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(xvi)      to amend the name of the Issuer or the Co-Issuer;

 

(xvii)     (A) to modify or amend any component of the Collateral Quality Test and the definitions related thereto which affect the calculation thereof or (B) to modify the definition of “Credit Improved Obligation”, “Credit Risk Obligation”, “Defaulted Obligation” or “Equity Security,” the restrictions on the sales of Collateral Obligations set forth herein or the Investment Criteria set forth herein (other than the calculation of the Concentration Limitations and the Collateral Quality Test), in each case under the foregoing clauses (A) and (B), that consent to such supplemental indenture has been obtained from a Majority of the Controlling Class;

 

(xviii)    to facilitate the issuance of participation notes, combination notes, composite securities, and other similar securities by the Issuer or the Issuers, as applicable, provided that any such issuance will not cause the Issuer to be treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes;

 

(xix)      to modify any provision to facilitate an exchange of one Note for another Note that has substantially identical terms except transfer restrictions (other than transfer restrictions relating to the treatment of the Issuer as a publicly traded partnership for U.S. federal income tax purposes), including to effect any serial designation relating to the exchange;

 

(xx)       to evidence any waiver or modification by the Rating Agency as to any material requirement or condition, as applicable, of the Rating Agency set forth herein; provided, that consent to such supplemental indenture has been obtained from a Majority of the Controlling Class (such consent not to be unreasonably withheld, delayed or conditioned);

 

(xxi)      to accommodate the settlement of the Notes in book-entry form through the facilities of DTC or otherwise;

 

(xxii)     to change the date within the month on which reports are required to be delivered hereunder; or

 

(xxiii)    to enter into any additional agreements not expressly prohibited by this Indenture if the Issuer determines that such agreement would not, upon or after becoming effective, materially and adversely affect the rights and interests of the Holders of any Class of Secured Debt or Subordinated Securities; provided that (x) any such additional agreements include customary limited recourse and non-petition provisions and (y) consent to such supplemental indenture has been obtained from a Majority of the Controlling Class and a Majority of the Subordinated Securities (such consents not to be unreasonably withheld, delayed or conditioned);

 

(xxiv)   in each case, as determined by the Collateral Manager in its reasonable discretion, following (i) a material disruption to LIBOR, a change in the methodology of calculating LIBOR or LIBOR ceasing to exist or be reported or actively updated on the Reuters Screen or any equivalent reporting service (or the reasonable expectation of the Collateral Manager that any of the events specified in this clause (i) will occur within the 

 

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current or next succeeding Interest Accrual Period), or (ii) any date on which at least 50% (by principal amount) of the Collateral Obligations are Floating Rate Obligations that are monthly and/or quarterly pay and rely on reference or base rates other than LIBOR (in the case of this clause (ii), as determined as of the Determination Date immediately prior to the date on which a Base Rate Amendment is proposed under this Indenture) (each a “LIBOR Event”), the Collateral Manager shall (unless LIBOR is otherwise amended pursuant the definition of “LIBOR”), upon written notice to the Issuer and the Collateral Trustee, propose an alternative quarterly base rate, which shall include a Base Rate Modifier, to replace LIBOR as the base rate used to calculate the Interest Rate on the Floating Rate Debt (such alternative base rate, including the Base Rate Modifier, the “Alternative Base Rate”) and promptly upon receipt of such notice, the Issuer (or the Collateral Manager on its behalf) shall prepare a supplemental indenture which by its terms (x) changes the base rate used to calculate the Interest Rate on the Floating Rate Debt from LIBOR to the Alternative Base Rate, (y) expressly provides that at no time will the Alternative Base Rate be less than 0.0% per annum and (z) makes such other amendments as are necessary or advisable in the reasonable judgment of the Collateral Manager to facilitate the change to the Alternative Base Rate (a “Base Rate Amendment”); provided that (subject to the notice provisions of Section 8.3) such Base Rate Amendment may be executed (x) without the consent of the Holders of any of the Secured Debt or Subordinated Securities if such Alternative Base Rate is the Designated Base Rate or a Market Replacement Rate or (y) with the consent of a Majority of the Controlling Class (but without the consent of any other Holders of the Secured Debt or Subordinated Securities) if such Alternative Base Rate is any other alternative base rate; provided, further, that any Alternative Base Rate may be further amended in accordance with the foregoing procedures to a Designated Base Rate, Market Replacement Rate or other alternative base rate if in the reasonable judgment of the Collateral Manager such additional amendment is necessary or advisable; or

 

(xxv)    to amend, modify or otherwise change the provisions of this Indenture so that (1) the Issuer is not a “covered fund” under the Volcker Rule, (2) the Secured Debt is not considered to constitute “ownership interests” under the Volcker Rule or (3) ownership of the Secured Debt will otherwise be exempt from the Volcker Rule.

 

Section 8.2            Supplemental Indentures With Consent of Holders. (a) With the written consent of (i) the Collateral Manager and (ii) a Majority of each Class of Secured Debt and Subordinated Securities (voting separately by Class) materially and adversely affected thereby, if any the Collateral Trustee and the Issuers may, subject to Section 8.3 execute one or more supplemental indentures to add provisions to, or change in any manner or eliminate any of the provisions of, this Indenture or modify in any manner the rights of the Holders of the Secured Debt or Subordinated Securities of any Class under this Indenture; provided that, notwithstanding anything herein to the contrary, no such supplemental indenture shall, without the consent of the Holder of each Outstanding Secured Debt or Subordinated Securities of each Class materially and adversely affected thereby:

 

(i)       change the Stated Maturity of the principal of or the due date of any installment of interest on any Secured Debt, reduce the principal amount thereof or the rate of interest thereon (except in connection with a Re-Pricing) or, except as otherwise expressly permitted by this Indenture, the Redemption Price with respect to any Secured 

 

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Debt or Subordinated Securities, or change the earliest date on which Secured Debt or Subordinated Securities of any Class may be redeemed or re-priced, change the provisions of this Indenture relating to the application of proceeds of any Assets to the payment of principal of or interest on the Secured Debt, or distributions on the Subordinated Securities or change any place where, or the coin or currency in which, Secured Debt or Subordinated Securities or the principal thereof or interest or any distribution thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the applicable Redemption Date); provided that this Indenture may be amended without the consent of the Holders (except as expressly provided in Section 8.1(xxiv)) to facilitate a change from LIBOR to an Alternative Base Rate pursuant to a Base Rate Amendment;

 

(ii)      reduce the percentage of the Aggregate Outstanding Amount of Holders of each Class whose consent is required for the authorization of any such supplemental indenture or for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder or their consequences provided for herein;

 

(iii)     materially impair or materially adversely affect the Assets except as otherwise permitted herein;

 

(iv)    except as otherwise permitted by this Indenture, permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Assets or terminate such lien on any property at any time subject hereto or deprive the Holder of any Secured Debt of the security afforded by the lien of this Indenture;

 

(v)     reduce the percentage of the Aggregate Outstanding Amount of Holders of any Class of Secured Debt whose consent is required to request the Collateral Trustee to  preserve the Assets or rescind the Collateral Trustee’s election to preserve the Assets pursuant to Section 5.5 or to sell or liquidate the Assets pursuant to Section 5.4 or 5.5;

 

(vi)    modify any of the provisions of (x) this Section 8.2, except to increase the percentage of Outstanding Class A Debt, Class B Notes or Subordinated Securities, the consent of the holders of which is required for any such action or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Class A Note Outstanding, Class A-F Note Outstanding, Class A Loan Outstanding, Class B Note Outstanding, or Subordinated Security Outstanding and affected thereby or (y) Section 8.1 or Section 8.3;

 

(vii)   modify the definitions of any of the terms “Outstanding,” “Class,” “Controlling Class,” “Majority” and “Supermajority” or the Priority of Payments set forth in Section 11.1(a); or

 

(viii)  modify any of the provisions of this Indenture in such a manner as to affect the calculation of the amount of any payment of interest or principal on any Secured Debt or any amount available for distribution to the Subordinated Securities, or to affect the rights of the Holders of any Secured Debt or Subordinated Securities to the benefit of any 

 

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provisions for the redemption of such Secured Debt or Subordinated Securities contained herein.

 

The Collateral Trustee may conclusively rely on an Opinion of Counsel (which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering the opinion) or a Responsible Officer’s certificate of the Collateral Manager as to whether the interests of any Holder of Secured Debt or Subordinated Securities would be materially and adversely affected by the modifications set forth in any supplemental indenture entered in pursuant to this Section 8.2, it being expressly understood and agreed that the Collateral Trustee shall have no obligation to make any determination as to the satisfaction of the requirements related to any supplemental indenture which may form the basis of such Opinion of Counsel or such Responsible Officer’s certificate. Such determination shall be conclusive and binding on all present and future Holders. The Collateral Trustee shall not be liable for any such determination made in good faith and in reliance upon an Opinion of Counsel or such a Responsible Officer’s certificate delivered to the Collateral Trustee as described herein.  Notwithstanding the foregoing, if a Majority of any Class has provided written notice to the Collateral Trustee at least three Business Days prior to the execution of such supplemental indenture that such Class would be materially and adversely affected thereby (and setting forth in reasonable detail how such Class would be materially and adversely affected) and such Class is not being redeemed or prepaid in connection with the execution of such supplemental indenture, the Collateral Trustee shall not enter into such supplemental indenture without the consent of a Majority (or such greater portion as may be required above) of such Class.

 

Section 8.3            Execution of Supplemental Indentures. (a) The Collateral Manager shall not be bound to follow any amendment or supplement to this Indenture unless it has consented thereto in accordance with this Article VIII. No amendment to this Indenture will be effective against the Collateral Administrator if such amendment would adversely affect the Collateral Administrator, including, without limitation, any amendment or supplement that would increase the duties or liabilities of, or adversely change the economic consequences to, the Collateral Administrator, unless the Collateral Administrator otherwise consents in writing.

 

(b)           Notwithstanding any other provision relating to supplemental indentures herein, at any time after the expiration of the Non-Call Period, if any Class of Secured Debt or Subordinated Securities has been or contemporaneously with the effectiveness of any supplemental indenture will be paid in full in accordance with this Indenture as so supplemented or amended, the written consent of any Holder of any Secured Debt or Subordinated Securities of such Class will not be required with respect to such supplemental indenture.

 

(c)           The Collateral Trustee shall join in the execution of any such supplemental indenture and shall make any further appropriate agreements and stipulations which may be therein contained, but the Collateral Trustee shall not be obligated to enter into any such supplemental indenture which adversely affects the Collateral Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise, except to the extent required by law.

 

(d)           In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article VIII or the modifications thereby of the trusts created by this 

 

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Indenture, the Collateral Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and that all conditions precedent thereto have been satisfied. The Collateral Trustee shall not be liable for any reliance made in good faith upon such an Opinion of Counsel.

 

(e)           At the cost of the Issuers, for so long as any Secured Debt or Subordinated Securities shall remain Outstanding, not later than twenty (20) Business Days (or, in the case of a proposed supplemental indenture that effects a Refinancing, a Re-Pricing or an issuance or incurrence of Additional Debt or additional Subordinated Securities, five (5) Business Days) prior to the execution of any proposed supplemental indenture, the Collateral Trustee shall deliver to the Collateral Manager, the Loan Agent, the Collateral Administrator, the Holders and the Issuers, a copy of such supplemental indenture. At the cost of the Issuers, for so long as any Class of Secured Debt shall remain Outstanding and such Class is rated by the Rating Agency, the Collateral Trustee shall provide to the Rating Agency a copy of any proposed supplemental indenture at least ten (10) Business Days (or, in the case of a proposed supplemental indenture that effects a Refinancing, a Re-Pricing or an issuance or incurrence of Additional Debt or additional Subordinated Securities, five (5) Business Days) prior to the execution thereof by the Collateral Trustee (unless such period is waived by the Rating Agency) and, for so long as such Class of Secured Debt is Outstanding and so rated, as soon as practicable after the execution of any such supplemental indenture, provide to the Rating Agency a copy of the executed supplemental indenture. The Collateral Trustee shall, at the expense of the Issuer, notify the Holders if the Rating Agency determines that such supplemental indenture will affect its rating of any Class rated by the Rating Agency. At the cost of the Issuer, the Collateral Trustee shall provide to the Holders (in the manner described in Section 14.4) a copy of the executed supplemental indenture after its execution. Any failure of the Collateral Trustee to publish or deliver such notice, or any defect therein, shall not in any way impair or affect the validity of any such supplemental indenture.

 

(f)            It shall not be necessary for any Act of Holders to approve the particular form of any proposed supplemental indenture, but it shall be sufficient, if the consent of any Holders to such proposed supplemental indenture is required, that such Act shall approve the substance thereof.

 

(g)           Notwithstanding any other provision in this Article VIII or any other requirements set forth in this Indenture, in connection with a Refinancing of all Classes of Secured Debt, the Issuers and the Collateral Trustee may enter into a supplemental indenture to add any provisions to, or change in any manner or eliminate any of the provisions of, this Indenture if (i) such supplemental indenture is effective on or after the date of such Refinancing, (ii) the Collateral Manager and a Majority of the Subordinated Securities have consented to the execution of such supplemental indenture and (iii) such supplemental indenture does not, by its terms, modify the rights or terms applicable to any portion of the Subordinated Securities in a manner intended to result in such rights or terms being materially different from any other portion of the Subordinated Securities; provided, further that with respect to any such supplemental indenture, a description of all material terms of such supplemental indenture was disclosed to the purchasers of the loans or replacement notes prior to the date of such Refinancing.

 

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(h)           Notwithstanding any other provision in this Article VIII, a supplemental indenture for which the Holders of each Outstanding Secured Debt or Subordinated Securities of each Class have consented shall not require satisfaction of any timing requirements for prior notice of such supplemental indenture to any party. Notwithstanding the foregoing, the Collateral Trustee shall subsequently provide to the Rating Agency then rating an outstanding Class of Secured Debt a copy of any supplemental indenture described in the immediately preceding sentence.

 

(i)            Notwithstanding anything to the contrary contained herein, no supplemental indenture, or other modification or amendment of this Indenture, may become effective unless such supplemental indenture or other modification or amendment would not, in the reasonable judgment of the Issuer in consultation with legal counsel experienced in such matters, as certified by the Issuer to the Collateral Trustee (upon which certification the Collateral Trustee may conclusively rely), (i) result in the Issuer being treated as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes or otherwise being subject to U.S. federal income tax on a net income basis or (ii) have a material adverse effect on the tax treatment of the Issuer or the tax consequences to the holders of any Class Outstanding at the time of the execution of the supplemental indenture or amendment or other modification or amendment of this Indenture; provided that in determining whether a material adverse effect exists with respect to the Issuer or such holders, either any related recognition of cancellation of indebtedness income or gain or loss with respect to such Secured Debt or Subordinated Securities under Section 1001 of the Code will be disregarded.

 

(j)            Holders of Class A Debt will vote together as a single Class in connection with any supplemental indenture, except that the holders of each of the Class A Notes, Class A-F Notes and the Class A Loans will vote separately by Class with respect to any amendment or modification of this Indenture solely to the extent that such amendment or modification would by its terms directly affect the holders of any such Class exclusively and differently from any holders of the other Class of Class A Debt (including, without limitation, any amendment that would reduce the amount of interest or principal payable on the applicable Class).

 

Section 8.4            Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article VIII, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes theretofore and thereafter authenticated and delivered hereunder shall be bound thereby.

 

Section 8.5            Reference in Notes to Supplemental Indentures. Notes authenticated and delivered as part of a transfer, exchange or replacement pursuant to Article II or Notes originally issued hereunder after the execution of any supplemental indenture pursuant to this Article VIII may, and if required by the Issuer shall, bear a notice in form approved by the Collateral Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Notes, so modified as to conform in the opinion of the Issuer to any such supplemental indenture, may be prepared and executed by the Issuers and authenticated and delivered by the Collateral Trustee in exchange for Outstanding Notes.

 

Section 8.6            Hedge Agreements. Notwithstanding anything herein to the contrary, no supplemental indenture, or other modification or amendment of this Indenture, may be entered 

 

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into that permits the Issuer to enter into any hedge agreement unless (i) the written terms of the hedge agreement directly relate to the Collateral Obligations and the Secured Debt and Subordinated Securities and such hedge agreement reduces the interest rate and/or foreign exchange risks related to the Collateral Obligations and the Secured Debt and Subordinated Securities and (ii) the S&P Rating Condition is satisfied. For the avoidance of doubt, the Issuer cannot enter into hedge agreements without such a modification.

 

ARTICLE IX

 

REDEMPTION OF NOTES

 

Section 9.1            Mandatory Redemption. If a Coverage Test is not met on any Determination Date on which such Coverage Test is applicable, the Issuer shall apply available amounts in the Payment Account to make payments on the Secured Debt and Subordinated Securities on the applicable Payment Date pursuant to the Priority of Payments.

 

Section 9.2            Optional Redemption. (a) The Secured Debt shall be redeemable (or in the case of the Class A Loans, prepayable) by the Applicable Issuer at the written direction of a Majority of the Subordinated Securities (with the consent of the Collateral Manager) as follows: (i) in whole (with respect to all Classes of Secured Debt) but not in part on any Business Day after the end of the Non-Call Period from Sale Proceeds and/or Refinancing Proceeds or (ii) in part by Class (with respect to one or more entire Classes of Secured Debt designated by a Majority of the Subordinated Securities) on any Business Day after the end of the Non-Call Period from Refinancing Proceeds and/or Partial Refinancing Interest Proceeds; provided that any redemption in part by Class will be in respect of the entire Class or Classes of Secured Debt. In connection with any such redemption, the Secured Debt shall be redeemed (or in the case of the Class A Loans, prepaid) at the applicable Redemption Prices and a Majority of the Subordinated Securities, must provide the above described written direction to the Issuer, the Collateral Trustee and the Loan Agent not later than thirty (30) days (or such shorter period of time (not to be less than fifteen (15) Business Days) as the Collateral Trustee, the Loan Agent and the Collateral Manager find reasonably acceptable) prior to the Business Day on which such redemption is to be made; provided that all Secured Debt to be redeemed must be redeemed simultaneously.

 

(b)           Upon receipt of a notice of any redemption of Secured Debt in whole (from the Collateral Trustee via overnight delivery service) pursuant to Section 9.2(a)(i), the Collateral Manager in its sole discretion shall direct the sale (and the manner thereof) of all or part of the Redemption Assets in an amount such that the proceeds from such sale and all other funds available for such purpose in the Collection Account and the Payment Account will be at least sufficient to pay the Redemption Prices of the Secured Debt to be redeemed (or in the case of the Class A Loans, prepaid) and to pay all Administrative Expenses (without regard to the Administrative Expense Cap) and Collateral Management Fee due and payable under the Priority of Payments. If such proceeds of such sale and all other funds available for such purpose in the Collection Account and the Payment Account would not be sufficient to redeem all Secured Debt and to pay such fees and expenses, the Secured Debt may not be redeemed. The Collateral Manager, in its sole discretion, may effect the sale of all or any part of the Collateral Obligations 

 

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or other Assets through the direct sale of such Collateral Obligations or other Assets or by participation or other arrangement.

 

(c)           [Reserved].

 

(d)           In addition to (or in lieu of) a sale of Collateral Obligations and/or Eligible Investments in the manner provided above, upon any redemption in whole, the Applicable Issuer may redeem the Secured Debt in whole from Refinancing Proceeds and Sale Proceeds, if any, and, upon a redemption in part by Class the Applicable Issuer may redeem the applicable Class or Classes of Secured Debt from Refinancing Proceeds and/or Partial Refinancing Interest Proceeds, in each case, by obtaining a loan or an issuance of replacement securities, whose terms in each case may be negotiated by the Collateral Manager on behalf of the Applicable Issuer, from one or more financial institutions or purchasers; provided that the terms of such Refinancing and any financial institutions acting as lenders thereunder or purchasers thereof must be acceptable to the Collateral Manager and a Majority of the Subordinated Securities and such Refinancing must otherwise satisfy the conditions set forth below. Prior to or concurrent with effecting any Refinancing in part, but not in whole, the Applicable Issuer shall satisfy the S&P Rating Condition in relation to such Refinancing.  Any loans or replacement securities issued in connection with a Refinancing will be offered first to the Collateral Manager and the Retention Holder, in such amount that the Collateral Manager has determined, in its sole discretion, is required for the U.S. Risk Retention Rules to be satisfied.

 

(e)           In the case of a Refinancing upon a redemption of the Secured Debt in whole but not in part pursuant to Section 9.2(a)(i), such Refinancing will be effective only if (i) the Refinancing Proceeds, all Sale Proceeds from the sale of Collateral Obligations and Eligible Investments, if any, in accordance with the procedures set forth herein, and all other available funds will be at least sufficient to redeem (or in the case of the Class A Loans, prepay) simultaneously the Secured Debt then required to be redeemed at the respective Redemption Prices thereof, in whole but not in part, and to pay all accrued and unpaid Administrative Expenses (without regard to the Administrative Expense Cap), including, without limitation, the reasonable fees, costs, charges and expenses incurred by the Collateral Trustee, the Loan Agent, the Collateral Administrator and the Collateral Manager (including reasonable attorneys’ fees and expenses) in  connection with such Refinancing, (ii) any Sale Proceeds, Refinancing Proceeds and other available funds are used (to the extent necessary) to make such redemption, and (iii) the agreements relating to the Refinancing contain limited recourse and non-petition provisions equivalent (mutatis mutandis) to those contained in Section 13.1(b) and Section 2.8(i).

 

(f)            In the case of a Refinancing upon a redemption of the Secured Debt in part by Class pursuant to Section 9.2(a)(ii), such Refinancing will be effective only if (i) the S&P Rating Condition has been satisfied with respect to any remaining Secured Debt that was not the subject of the Refinancing, (ii) the Refinancing Proceeds and the Partial Refinancing Interest Proceeds will be at least sufficient to pay in full the aggregate Redemption Prices of the entire Class or Classes of Secured Debt subject to Refinancing, (iii) the Refinancing Proceeds and the Partial Refinancing Interest Proceeds are used (to the extent necessary) to make such redemption, (iv) the agreements relating to the Refinancing contain limited recourse and non-petition provisions equivalent (mutatis mutandis) to those contained in Section 13.1(b) and Section 2.8(i), (v) the aggregate principal amount of any obligations providing the Refinancing is no greater 

 

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than the Aggregate Outstanding Amount of the Secured Debt being redeemed with the proceeds of such obligations plus an amount equal to the reasonable fees, costs, charges and expenses incurred in connection with such Refinancing, (vi) the stated maturity of each class of obligations providing the Refinancing is no earlier than the corresponding Stated Maturity of each Class of Secured Debt being refinanced, (vii) the reasonable fees, costs, charges and expenses incurred in connection with such Refinancing have been paid or will be adequately provided for from the Refinancing Proceeds (except for expenses owed to Persons that the Collateral Manager informs the Collateral Trustee will be paid solely as Administrative Expenses payable in accordance with the Priority of Payments; provided that any such fees due to the Collateral Trustee and determined by the Collateral Manager to be paid in accordance with the Priority of Payments shall not be subject to the Administrative Expense Cap), (viii) the weighted average interest rate (based on the aggregate principal amount of each Class of Secured Debt subject to a Refinancing and LIBOR as in effect in the Interest Accrual Period in which the notice of redemption is delivered) with respect to such loan or issuance must not exceed the weighted average interest rate (based on the aggregate principal amount of each Class of Secured Debt subject to a Refinancing and LIBOR as in effect in the Interest Accrual Period in which the notice of redemption is delivered) of the Class or Classes of Secured Debt that are being redeemed pursuant to such Refinancing; provided further that, for the avoidance of doubt, Secured Debt may be refinanced with Secured Debt bearing a fixed rate of interest, (ix) the obligations providing the Refinancing are subject to the Priority of Payments and do not rank higher in priority pursuant to the Priority of Payments than the corresponding Class of Secured Debt being refinanced, (x) the voting rights, consent rights, redemption rights and all other rights of the obligations providing the Refinancing are the same as the rights of the corresponding Class of Secured Debt being refinanced, (xi) a Majority of the Subordinated Securities directs the Issuer to effect such Refinancing, (xii) Tax Advice is delivered to the Collateral Trustee and the Loan Agent, in form and substance satisfactory to the Collateral Manager, the Collateral Trustee and the Loan Agent, to the effect that such Refinancing will not cause the Issuer to have any U.S. federal income or withholding tax liability or otherwise have a material adverse effect on the tax treatment of the Issuer and (xiii) none of the Issuer, the Collateral Manager, the Retention Holder or any “sponsor” of the Issuer under the U.S. Risk Retention Rules shall fail to be in compliance with the U.S. Risk Retention Rules and the EU Risk Retention Requirements as a result of such Refinancing unless such Person has consented to such Refinancing.

 

(g)           The holders of the Subordinated Securities will not have any cause of action against the Issuers, the Collateral Manager, the Collateral Administrator or the Collateral Trustee for any failure to obtain a Refinancing. Unless it otherwise consents, neither the Collateral Manager nor any Affiliate of the Collateral Manager shall be required to acquire any obligations or securities of the Issuers in connection with such Refinancing. If a Refinancing is obtained meeting the requirements specified above as certified by the Collateral Manager, the Issuers and the Collateral Trustee shall amend this Indenture to the extent necessary to reflect the terms of the Refinancing and, notwithstanding anything to the contrary set forth in Article VIII hereof, no further consent for such amendments shall be required from the Holders of Secured Debt or Subordinated Securities other than the consent of a Majority of the Subordinated Securities directing the redemption (including with respect to any related amendment providing that replacement debt issued in connection therewith will not be subject to any subsequent Refinancing). The Collateral Trustee shall not be obligated to enter into any amendment that, in its view, adversely affects its duties, obligations, liabilities or protections hereunder, and the

 

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Collateral Trustee shall be entitled to conclusively rely upon an Opinion of Counsel as to matters of law (which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering such Opinion of Counsel) provided by the Issuer to the effect that such amendment meets the requirements specified above and is permitted under this Indenture (except that such officer or counsel shall have no obligation to certify or opine as to the sufficiency of the Refinancing Proceeds, or the sufficiency of the Accountants’ Report required hereunder).

 

(h)           In the event of any redemption pursuant to this Section 9.2, the Issuer shall, at least fifteen (15) Business Days prior to the Redemption Date, notify the Collateral Trustee and the Loan Agent in writing of such Redemption Date, the applicable Record Date, the principal amount of Secured Debt to be redeemed on such Redemption Date and the applicable Redemption Prices.  The failure to effect any Optional Redemption shall not constitute an Event of Default.

 

(i)            In connection with any Optional Redemption of the Secured Debt in whole or of any Class of the Secured Debt in connection with a Refinancing of such Class, Holders of 100% of the Aggregate Outstanding Amount of any such Class of Secured Debt may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Debt.

 

(j)            If a Class or Classes of Secured Debt is redeemed in connection with a Refinancing in part by Class, Refinancing Proceeds, together with Partial Refinancing Interest Proceeds, shall be used to pay the Redemption Price(s) of such Class or Classes of Secured Debt without regard to the Priority of Payments.

 

(k)           The Subordinated Securities may be redeemed by the Issuer at their Redemption Price (any such redemption, an “Optional Subordinated Security Redemption”), in whole but not in part, on any Business Day upon five (5) Business Days’ notice (or such shorter agreed period) to the Collateral Trustee on or after the redemption or repayment in full of the Secured Debt, at the direction of a Majority of the Subordinated Securities (with the consent of the Collateral Manager) or at the direction of the Collateral Manager.

 

Section 9.3            Tax Redemption. (a) The Secured Debt shall be redeemed (or in the case of the Class A Loans, prepaid) in whole but not in part (any such redemption, a “Tax Redemption”) at their applicable Redemption Prices at the written direction (delivered to the Collateral Trustee and the Loan Agent) of (x) a Majority of any Affected Class or (y) a Majority of the Subordinated Securities, in either case following the occurrence and continuation of a Tax Event.

 

(b)           In connection with any Tax Redemption, Holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Debt may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Debt.

 

(c)           Upon its receipt of such written direction directing a Tax Redemption, the Collateral Trustee shall promptly notify the Collateral Manager, the Holders and the Rating Agency thereof.

 

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(d)           If an Officer of the Collateral Manager obtains actual knowledge of the occurrence of a Tax Event, the Collateral Manager shall promptly notify the Issuer, the Collateral Administrator and the Collateral Trustee thereof, and upon receipt of such notice the Collateral Trustee shall promptly notify the Holders of the Secured Debt and Subordinated Securities and the Rating Agency thereof.

 

Section 9.4            Redemption Procedures. (a) In the event of any redemption pursuant to Section 9.2, the written direction of a Majority of the Subordinated Securities and the consent of the Collateral Manager shall be provided to the Applicable Issuer, the Collateral Trustee and the Collateral Manager not later than sixty (60) days (or such shorter period of time, not to be less than fifteen (15) Business Days, as the Collateral Trustee and the Collateral Manager find reasonably acceptable) prior to the Business Day on which such redemption is to be made (which date shall be designated in such notice). In the event of any redemption pursuant to Section 9.2 or 9.3, a notice of redemption shall be given by the Collateral Trustee by overnight delivery service, postage prepaid, mailed not later than fifteen (15) Business Days prior to the applicable Redemption Date, to each Holder of Secured Debt or Subordinated Securities, at such Holder’s address in the Register (and, in the case of Global Notes, delivered by electronic transmission to DTC) and the Rating Agency.

 

(b)           All notices of redemption delivered pursuant to Section 9.4(a) shall state:

 

(i)       the applicable Redemption Date;

 

(ii)      the Redemption Prices of the Secured Debt and Subordinated Securities to be redeemed (as applicable);

 

(iii)     all of the Secured Debt and Subordinated Securities that are to be redeemed are to be redeemed (or in the case of the Class A Loans, prepaid) in full and that interest on such Secured Debt shall cease to accrue on the Payment Date specified in the notice; and

 

(iv)    the place or places specified by the Collateral Trustee where Secured Debt or Subordinated Securities are to be surrendered for payment of the Redemption Prices, which in the case of the Secured Debt shall be the Corporate Trust Office of the Collateral Trustee and in the case of the Subordinated Securities shall be as provided in the Fiscal Agency Agreement.

 

(c)           The Issuer may withdraw any such notice of redemption delivered pursuant to Section 9.2 on any day up to and including the later of (x) the day on which the Collateral Manager is required to deliver to the Collateral Trustee the sale agreement or agreements or certifications as described in Section 9.4(e), by written notice to the Collateral Trustee that the Collateral Manager will be unable to after using commercially reasonable efforts or elects in good faith based on an assessment of current market conditions not to deliver the sale agreement or agreements or certifications described in Section 9.4(e) and Sections 12.1(b) and (g) and (y) the day on which the Holders of Secured Debt and Subordinated Securities are notified of such redemption in accordance with Section 9.4(a), at the written direction of a Majority of the Subordinated Securities to the Collateral Trustee, the Loan Agent and the Collateral Manager. The Issuer shall provide notice to the Rating Agency of any such withdrawal. The reasonable 

 

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fees, costs, charges and expenses incurred in connection with the failure of any such redemption will be paid by the Issuer as Administrative Expenses payable in accordance with the Priority of Payments.

 

(d)           Notice of redemption (and any withdrawal thereof) pursuant to Section 9.2 or 9.3 shall be given to the Holders of Secured Debt and Subordinated Securities and the Rating Agency by the Issuer or, upon an Issuer Order, by the Collateral Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Holder of any Secured Debt or Subordinated Securities selected for redemption shall not impair or affect the validity of the redemption of any other Secured Debt or Subordinated Securities.

 

(e)           Unless Refinancing Proceeds are being used to redeem the Secured Debt in whole or in part, in the event of any redemption pursuant to Section 9.2 or 9.3, no Secured Debt may be optionally redeemed unless (i) at least five (5) Business Days before the scheduled Redemption Date the Collateral Manager shall have furnished to the Collateral Trustee and the Loan Agent evidence in a form reasonably satisfactory to the Collateral Trustee and the Loan Agent, that the Collateral Manager on behalf of the Issuer has entered into a binding agreement or agreements with a financial or other institution or institutions whose short-term unsecured debt obligations (other than such obligations whose rating is based on the credit of a Person other than such institution) are rated, or guaranteed by a Person whose short-term unsecured debt obligations are rated, at least “A-1” by S&P to purchase (directly or by participation or other arrangement), not later than the Business Day immediately preceding the scheduled Redemption Date in immediately available funds, all or part of the Assets at a purchase price at least sufficient, together with the Eligible Investments maturing, redeemable or putable to the issuer thereof at par on or prior to the scheduled Redemption Date, to pay all Administrative Expenses (without regard to the Administrative Expense Cap) and Collateral Management Fee payable in connection with such Optional Redemption or Tax Redemption, in each case, as applicable and in accordance with the Priority of Payments, and redeem the applicable Class of Secured Debt on the scheduled Redemption Date at the applicable Redemption Prices (including, without limitation, any such amount that the Holders of such Class have elected to receive, where Holders of such Class have elected to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class), or (ii) prior to selling any Collateral Obligations and/or Eligible Investments, the Collateral Manager shall certify to the Collateral Trustee and the Loan Agent that, in its judgment (which may be based on the Issuer having entered into an agreement to sell such  Assets to another special purpose entity (or any Affiliate which has sufficient cash or financing resources available) that has committed financing or that has priced but has not yet closed its securities offering if such securities offering is expected to close on or prior to the scheduled Redemption Date), the aggregate sum of (A) expected proceeds from the sale of Eligible Investments and all amounts that ORCC has committed to contribute to the Issuer, and (B) for each Collateral Obligation, its Market Value, shall exceed the sum of (x) the aggregate Redemption Prices of the applicable Class of Secured Debt (including, without limitation, any such amount that the Holders of such Class have elected to receive, where Holders of such Class have elected to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class) and (y) all Administrative Expenses (without regard to the Administrative Expense Cap) and Collateral Management Fee payable in connection with such Optional Redemption or Tax Redemption, in each case, as applicable and in accordance with the Priority of Payments. Any certification delivered by the 

 

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Collateral Manager pursuant to this Section 9.4(e) shall include (1) the prices of, and expected proceeds from, the sale (directly or by participation or other arrangement) of any Collateral Obligations and/or Eligible Investments and (2) all calculations required by this Section 9.4(e). Any holder of Secured Debt or Subordinated Securities, ORCC, the Collateral Manager or any of their respective Affiliates or accounts managed thereby or by any of their respective Affiliates may, subject to the same terms and conditions afforded to other bidders and compliance with applicable law (including the Advisers Act), bid on Assets to be sold as part of an Optional Redemption or Tax Redemption.

 

Section 9.5            Secured Debt or Subordinated Securities Payable on Redemption Date. (a) Notice of redemption pursuant to Section 9.4 having been given as aforesaid, the Secured Debt or Subordinated Securities to be redeemed (or in the case of the Class A Loans, prepaid) shall, on the Redemption Date, subject to Section 9.4(e) and the Issuer’s right to withdraw any notice of redemption pursuant to Section 9.4(c), become due and payable at the Redemption Prices therein specified, and from and after the Redemption Date (unless the Issuer shall default in the payment of the Redemption Prices and accrued interest) all such Secured Debt shall cease to bear interest on the Redemption Date. Upon final payment on a Secured Debt or Subordinated Securities to be so redeemed, the Holder shall present and surrender such Secured Debt or Subordinated Securities at the place specified in the notice of redemption on or prior to such Redemption Date; provided that if there is delivered to the Issuer and the Collateral Trustee (or the Fiscal Agent in the case of the Subordinated Securities) such security or indemnity as may be required by them to save such party harmless and an undertaking thereafter to surrender such Secured Debt or Subordinated Securities, then, in the absence of notice to the Issuer or the Collateral Trustee (or the Fiscal Agent in the case of the Subordinated Securities) that the applicable Secured Debt or Subordinated Securities has been acquired by a protected purchaser, such final payment shall be made without presentation or surrender. Payments of interest on Secured Debt to be so redeemed which are payable on or prior to the Redemption Date shall be payable to the Holders of such Secured Debt, or one or more predecessor Secured Debts, registered as such at the close of business on the relevant Record Date according to the terms and provisions of Section 2.8(e).

 

(b)           If any Secured Debt called for redemption shall not be paid upon surrender thereof for redemption, the principal thereof shall, until paid, bear interest from the Redemption Date at the applicable Interest Rate for each successive Interest Accrual Period such Secured Debt remains Outstanding; provided that the reason for such non-payment is not the fault of such Holder.

 

Section 9.6            Special Redemption. Principal payments on the Secured Debt shall be made in part in accordance with the Priority of Payments on any Payment Date (i) during the Reinvestment Period, if the Collateral Manager in its sole discretion notifies the Collateral Trustee and the Loan Agent at least five (5) Business Days prior to the applicable Special Redemption Date that it has been unable, for a period of at least twenty (20) consecutive Business Days, to identify additional Collateral Obligations that are deemed appropriate by the Collateral Manager in its sole discretion and which would satisfy the Investment Criteria in sufficient amounts to permit the investment or reinvestment of all or a portion of the funds then in the Collection Account that are to be invested in additional Collateral Obligations or (ii) after the Effective Date, if the Collateral Manager notifies the Collateral Trustee and the Loan Agent that a redemption is required pursuant to Section 7.18 in order to obtain from S&P its written 

 

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confirmation of its Initial Ratings of the Secured Debt (each of (i) and (ii), a “Special Redemption”). On the first Payment Date following the Collection Period in which such notice is given (a “Special Redemption Date”), the amount in the Collection Account representing, as applicable, either (i) Principal Proceeds which the Collateral Manager has determined cannot be reinvested in additional Collateral Obligations will be applied as described in clause (E) of Section 11.1(a)(ii), or (ii) Interest Proceeds and Principal Proceeds available therefor will be applied to pay principal of the Secured Debt in accordance with the Debt Payment Sequence as described in clause (F) of Section 11.1(a)(i) and clause (C) of Section 11.1(a)(ii) (but in the case of this clause (ii), only to the extent that the Collateral Manager does not direct that the Interest Proceeds and Principal Proceeds be allocated to the purchase of additional Collateral Obligations) until the Issuer obtains written confirmation from S&P of the Initial Ratings of the Secured Debt or the Effective Date S&P Conditions have been satisfied (such amount, a “Special Redemption Amount”) will be applied in accordance with the Priority of Payments. Notice of payments pursuant to this Section 9.6 shall be given by the Collateral Trustee and the Loan Agent not less than three (3) Business Days prior to the applicable Special Redemption Date (x) by email transmission, if available, and otherwise by facsimile, if available, or (y) by first class mail, postage prepaid, to each Holder of Secured Debt affected thereby at such Holder’s facsimile number, email address or mailing address in the Register (and in the case of Global Notes, delivered by electronic transmission to DTC) and to the Rating Agency.

 

Section 9.7            Optional Re-Pricing.

 

(a)           On any Business Day after the Non-Call Period, at the written direction of a Majority of the Subordinated Securities (with the consent of the Collateral Manager), the Applicable Issuer shall reduce the spread over LIBOR (or, in the case of any Fixed Rate Debt, the stated rate of interest) with respect to any Class of Re-Pricing Eligible Debt (such reduction, a “Re-Pricing” and any Class of Re-Pricing Eligible Debt to be subject to a Re-Pricing, a “Re-Priced Class”); provided that the Applicable Issuer shall not effect any Re-Pricing unless each condition specified in this Section 9.7 is satisfied with respect thereto. For the avoidance of doubt, no terms of any Secured Debt other than the Interest Rate applicable to the related Re-Priced Class may be modified or supplemented in connection with a Re-Pricing. In connection with any Re-Pricing, the Issuer may engage a broker-dealer (the “Re-Pricing Intermediary”) upon the recommendation and subject to the approval of (i) a Majority of the Subordinated Securities and (ii) the Collateral Manager and such Re-Pricing Intermediary shall assist the Issuer in effecting the Re-Pricing.

 

(b)           At least 30 days prior to the Business Day fixed by a Majority of the Subordinated Securities for any proposed Re-Pricing (the “Re-Pricing Date”), the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall deliver a notice in writing to the Collateral Trustee and the Loan Agent (who shall promptly deliver a copy of such notice to each Holder of the proposed Re-Priced Class(es), the Loan Agent, the Collateral Manager and the Rating Agency), which notice shall:

 

(i)       specify the proposed Re-Pricing Date and the revised Interest Rate to be applied with respect to such Class (the “Re-Pricing Rate”);

 

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(ii)      request each Holder of the Re-Priced Class to approve the proposed Re-Pricing; and

 

(iii)     specify the price at which Secured Debt of any Holder of the Re-Priced Class which does not approve the Re-Pricing may be sold and transferred pursuant to Section 9.7(c), which, for purposes of such Re-Pricing, shall be the applicable Redemption Price after giving effect on a pro forma basis to all payments to be made pursuant to the Priority of Payments on the Re-Pricing Date if such date is a Payment Date.

 

(c)           In the event any Holders of the Re-Priced Class do not deliver written consent to the proposed Re-Pricing on or before the date that is ten (10) Business Days prior to the proposed Re-Pricing Date, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall deliver written notice thereof to the Collateral Trustee (who shall promptly deliver a copy of such notice to the consenting Holders of the Re-Priced Class), specifying the Aggregate Outstanding Amount of the Secured Debt of the Re-Priced Class held by such non-consenting Holders, and shall request that each such consenting Holder provide written notice to the Issuer, the Collateral Trustee, the Loan Agent, the Collateral Manager and the Re-Pricing Intermediary if such Holder would like to purchase all or any portion of the Secured Debt of the Re-Priced Class held by the non-consenting Holders (each such notice, an “Exercise Notice”) within five (5) Business Days after receipt of such notice. In the event the Issuer shall receive Exercise Notices with respect to more than the Aggregate Outstanding Amount of the Secured Debt of the Re-Priced Class held by non-consenting Holders, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall cause the sale and transfer of such Secured Debt, without further notice to the non-consenting Holders thereof (for settlement on the Re-Pricing Date) to the Holders delivering Exercise Notices with respect thereto, pro rata based on the Aggregate Outstanding Amount of the Secured Debt such Holders indicated an interest in purchasing pursuant to their Exercise Notices. In the event the Issuer shall receive Exercise Notices with respect to less than the Aggregate Outstanding Amount of the Secured Debt of the Re-Priced Class held by non-consenting Holders, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall cause the sale and transfer of such Secured Debt, without further notice to the non-consenting Holders thereof (for settlement on the Re-Pricing Date) to the Holders delivering Exercise Notices with respect thereto, and any excess Secured Debt of the Re-Priced Class held by non-consenting Holders shall be sold (for settlement on the Re-Pricing Date) to one or more transferees designated by the Re-Pricing Intermediary and consented to by the Collateral Manager on behalf of the Issuer. All sales of Re-Pricing Eligible Debt to be effected pursuant to this clause (c) shall be made at the applicable Redemption Price after giving effect on a pro forma basis to all payments to be made pursuant to the Priority of Payments on the Re-Pricing Date if such date is a Payment Date, and shall be effected only if the  related Re-Pricing is effected in accordance with the provisions hereof. The Holder of each Re-Pricing Eligible Debt, by its acceptance of an interest in the Re-Pricing Eligible Debt, agrees that the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, may enter into binding commitments to sell and transfer all Re-Pricing Eligible Debt of a Re-Priced Class held by non-consenting Holders in accordance with this Section 9.7 and, if it is a non-consenting Holder, hereby irrevocably appoints the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, as its true and lawful agent and attorney-in-fact (with full power of substitution) in its name, place and stead and at its expense, in connection with such sale and transfer, and agrees to sell and transfer its Secured Debt in accordance with 

 

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this Section 9.7 and to cooperate with the Issuer, the Re-Pricing Intermediary and the Collateral Trustee to effectuate such sale and transfers. The Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall deliver written notice to the Collateral Trustee and the Collateral Manager not later than five (5) Business Days prior to the proposed Re-Pricing Date confirming that the Issuer has received written commitments to purchase all Secured Debt of the Re-Priced Class held by non-consenting Holders. For the avoidance of doubt, such Re-Pricing will apply to all the Secured Debt of the Re-Priced Class, including the Secured Debt of the Re-Priced Class held by non-consenting Holders.

 

(d)           The Issuer shall not effect any proposed Re-Pricing unless:  (i) with the consent of a Majority of the Subordinated Securities and the Collateral Manager, the Issuers and the Collateral Trustee shall have entered into a supplemental indenture and the Issuers, the Collateral Trustee and the Loan Agent shall have entered into an amendment to the Credit Agreement, as applicable, dated as of the Re-Pricing Date solely to decrease the spread over LIBOR (or, in the case of any Fixed Rate Debt, the stated rate of interest) applicable to the Re-Priced Class; (ii) the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, has received written commitments to purchase all Secured Debt of the Re-Priced Class held by non-consenting Holders; (iii) the Rating Agency shall have been notified of such Re-Pricing; (iv) the Issuer has Tax Advice to the effect that (1) such Re-Pricing will not cause the Issuer to have any U.S. federal income or withholding tax liability or otherwise have a material adverse effect on the tax treatment of the Issuer and (2) any Class A Debt or Class B Notes subject to Re-Pricing will be treated as debt for U.S. federal income tax purposes; (v) all expenses of the Issuer and the Collateral Trustee (including the fees of the Re-Pricing Intermediary and fees of counsel) incurred in connection with the Re-Pricing shall not exceed the amount of Interest Proceeds expected to be available after taking into account all amounts required to be paid pursuant to the Priority of Payments on the subsequent Payment Date prior to distributions to the Holders of the Subordinated Securities, unless such expenses shall have been paid (including from proceeds of any additional issuance of Subordinated Securities) or shall be adequately provided for by an entity other than the Issuer; and (vi) the Issuer, the Collateral Manager, the Retention Holder and any “sponsor” of the Issuer under the U.S. Risk Retention Rules and the EU Risk Retention Requirements is in compliance with the U.S. Risk Retention Rules and the EU Risk Retention Requirements as a result of such Re-Pricing unless such Person has consented to such Re-Pricing. Unless it otherwise consents, none of the Collateral Manager, the Retention Holder nor any of their Affiliates shall be required to acquire any obligations or securities of the Issuer in connection with such Re-Pricing.

 

(e)           If notice has been timely received by the Collateral Trustee and the Loan Agent from the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, confirming that the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, has received written commitments to purchase all Secured Debt of the Re-Priced Class held by non-consenting Holders, notice of a  Re-Pricing shall be given by the Collateral Trustee and the Loan Agent by email transmission, if available, and by first class mail, postage prepaid, mailed not less than three (3) Business Days prior to the proposed Re-Pricing Date, to each Holder of Secured Debt of the Re-Priced Class at the address in the Register (and, in the case of Global Notes, delivered by electronic transmission to DTC) (with a copy to the Collateral Manager), specifying the applicable Re-Pricing Date and Re-Pricing Rate. Notice of Re-Pricing shall be given by the Collateral Trustee at the expense of the Issuer. Failure to give a notice of Re-Pricing, or any defect therein, to any Holder of any Re-Priced Class shall not impair or affect the validity of the Re-Pricing or give rise to any claim 

 

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based upon such failure or defect. Any notice of a Re-Pricing may be withdrawn by a Majority of the Subordinated Securities on or prior to the fourth Business Day prior to the scheduled Re-Pricing Date by written notice to the Issuer, the Collateral Trustee, the Loan Agent and the Collateral Manager for any reason. Upon receipt of such notice of withdrawal, the Collateral Trustee and the Loan Agent shall send such notice to the Holders of Secured Debt and the Subordinated Securities and the Rating Agency.

 

(f)            The Issuer shall direct the Collateral Trustee to segregate payments and take other reasonable steps to effect the Re-Pricing and the Collateral Trustee shall have the authority to take such actions as may be directed by the Issuer or the Collateral Manager as the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, or Collateral Manager shall deem necessary or desirable to effect a Re-Pricing. In order to give effect to the Re-Pricing, the Issuer may, to the extent necessary or desirable, obtain and assign a separate CUSIP or CUSIPs to the Notes of each Class held by such consenting or non-consenting Holder(s). The Collateral Trustee shall be entitled to receive, and shall be fully protected in relying upon an Opinion of Counsel stating that the Re-Pricing is authorized or permitted by this Indenture and that all conditions precedent thereto have been complied with. The Collateral Trustee may request and rely on an Issuer Order providing direction and any additional information requested by the Collateral Trustee in order to effect a Re-Pricing.

 

Section 9.8            Clean-Up Call Redemption.

 

(a)           At the written direction of the Collateral Manager to the Issuer, the Collateral Trustee and the Loan Agent, with a copy to the Rating Agency, at least twenty (20) Business Days prior to the proposed Redemption Date, the Secured Debt shall be subject to redemption by the Applicable Issuer, in whole but not in part, at the applicable Redemption Price, on any Business Day after the Non-Call Period on which the Collateral Principal Amount is less than 10% of the Target Initial Par Amount.

 

(b)           Notwithstanding anything to the contrary set forth herein, the Secured Debt shall not be redeemed pursuant to a Clean-Up Call Redemption unless (i) at least five (5) Business Days before the scheduled Redemption Date the Collateral Manager shall have furnished to the Collateral Trustee evidence, in form satisfactory to the Collateral Trustee, that the Collateral Manager on behalf of the Issuer has entered into a binding agreement or agreements to sell to a financial or other institution or institutions not later than the Business Day immediately preceding the scheduled Redemption Date, all or part of the Collateral Obligations at a purchase price at least equal to an amount sufficient, together with the Eligible Investments maturing, redeemable (or putable to the issuer thereof at par) on or prior to the scheduled Redemption Date, to pay all Administrative Expenses and other fees and expenses payable in accordance with the Priority of  Payments (without regard to the Administrative Expense Cap) prior to the payment of the principal of the Secured Debt to be redeemed and redeem all of the Secured Debt on the scheduled Redemption Date at the applicable Redemption Price, or (ii) prior to selling any Collateral Obligations and/or Eligible Investments, the Collateral Manager shall certify to the Collateral Trustee in a certificate of a Responsible Officer upon which the Collateral Trustee can conclusively rely that, in its judgment (which may be based on the Issuer having entered into an agreement to sell such Assets to another special purpose entity that has committed financing or that has priced but has not yet closed its securities offering if such securities offering is expected 

 

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to close on or prior to the scheduled Redemption Date), the aggregate sum of (A) any expected proceeds from the sale of Eligible Investments and (B) for each Collateral Obligation, the Market Value thereof, shall equal or exceed the Redemption Price of the Secured Debt. Any certification delivered by the Collateral Manager pursuant to this Section 9.8(b) shall include (1) the prices of, and expected proceeds from, the sale (directly or by participation or other arrangement) of any Collateral Obligations and/or Eligible Investments and (2) all calculations required by this Section 9.8(b).

 

(c)           Upon receipt from the Collateral Manager of a direction in writing to effect a Clean-Up Call Redemption, the Issuer will set the related Redemption Date and the Record Date and give written notice thereof to the Collateral Trustee, the Collateral Administrator, the Collateral Manager and the Rating Agency not later than fifteen (15) Business Days prior to the proposed Redemption Date. A notice of redemption will be given by email, if available, and by first-class mail, postage prepaid, mailed not later than ten (10) Business Days prior to the applicable Redemption Date, to each Holder of Secured Debt, at such Holder’s address in the register maintained by the registrar under this Indenture (and, in the case of Global Notes, delivered by electronic transmission to DTC), the Fiscal Agent (who will notify the Holders of the Subordinated Securities in accordance with the Fiscal Agency Agreement) and the Rating Agency.

 

(d)           Any notice of a Clean-Up Call Redemption may be withdrawn by the Issuer (or by the Collateral Manager on behalf of the Issuer) up to (and including) the fourth Business Day prior to the related Redemption Date by written notice to the Collateral Trustee, the Loan Agent and the Rating Agency (if the Secured Debt remains Outstanding) only if the Collateral Manager has not delivered the sale agreement or agreements or certifications as described in Section 9.8(b) in form satisfactory to the Collateral Trustee.

 

(e)           The Collateral Trustee and the Loan Agent, as applicable, will give notice of any such withdrawal of a Clean-Up Call Redemption, at the expense of the Issuer, to each Holder of Secured Debt that were to be redeemed at such holder’s address in the Register and the Fiscal Agent (who will notify the Holders of the Subordinated Securities in accordance with the Fiscal Agency Agreement), by overnight courier guaranteeing next day delivery not later than the third Business Day prior to the related scheduled Redemption Date.

 

(f)            On the Redemption Date related to any Clean-Up Call Redemption, the Redemption Price for the Secured Debt will be distributed pursuant to the Priority of Payments.

 

ARTICLE X

 

ACCOUNTS, ACCOUNTINGS AND RELEASES

 

Section 10.1          Collection of Money. Except as otherwise expressly provided herein, the Collateral Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all Money and other property payable to or receivable by the Collateral Trustee pursuant to this Indenture, including all payments due on the Assets, in accordance with the terms and conditions of such Assets. The Collateral Trustee shall segregate and hold all such Money and property received by 

 

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it in trust for the Holders of the Secured Debt and Subordinated Securities and shall apply it as provided herein. Each Account shall be established and maintained (a) with a federal or state-chartered depository institution that has a short-term debt rating of at least “A-1” and a long-term debt rating of at least “A” (or, in the absence of a short-term debt rating, a long-term debt rating of at least “A+”) by S&P or (b) in segregated trust accounts with the corporate trust department of a federal or state-chartered deposit institution that has a short-term debt rating of at least “A-1” and a long-term debt rating of at least “A” (or, in the absence of a short-term debt rating, a long-term debt rating of at least “A+”) by S&P and is subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulation Section 9.10(b) (an “Eligible Institution”) and, in each case, if such institution’s rating falls below any such rating threshold, the assets held in such Account shall be moved within 30 calendar days to another institution that satisfies those ratings. Such institution shall have a combined capital and surplus of at least U.S.$200,000,000. All Cash deposited in the Accounts shall be invested only in Eligible Investments or Collateral Obligations in accordance with the terms of this Indenture. To avoid the consolidation of the Assets of the Issuer with the general assets of the Bank under any circumstances, the Collateral Trustee shall comply, and shall cause the Custodian to comply, with all law applicable to it as a Massachusetts trust company holding segregated trust assets in a fiduciary capacity.  Notwithstanding anything herein to the contrary, the Collateral Trustee shall not credit or otherwise deposit Excluded Property into any Account.  The Co-Issuer shall have no legal, equitable or beneficial interest in an Account.

 

Section 10.2          Collection Account. (a) In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Collateral Trustee to establish at the Custodian two segregated trust accounts, one of which will be designated the “Interest Collection Subaccount” and one of which will be designated the “Principal Collection Subaccount” (and which together will comprise the Collection Account), each held in the name of the Issuer subject to the Lien of this Indenture and each of which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. The Collateral Trustee shall from time to time deposit into the Interest Collection Subaccount, in addition to the deposits required pursuant to Section 10.6(a), immediately upon receipt thereof or upon transfer from the Payment Account, all Interest Proceeds (unless simultaneously reinvested in additional Collateral Obligations in accordance with Article XII). The Collateral Trustee shall deposit immediately upon receipt thereof or upon transfer from the Expense Reserve Account, the Ramp-Up Account or Revolver Funding Account all other amounts remitted to the Collection Account into the Principal Collection Subaccount, including in addition to the deposits required pursuant to Section 10.6(a), (i) any funds designated as Principal Proceeds by the Collateral Manager in accordance with this Indenture and (ii) all other Principal Proceeds (unless simultaneously reinvested in additional Collateral Obligations in accordance with Article XII or in Eligible Investments). The Issuer may, but under no circumstances shall be required to, deposit from time to time into the Collection Account, in addition to any amount required hereunder to be deposited therein, such Monies received from external sources for the benefit of the Secured Parties or the Issuer (other than payments on or in respect of the Collateral Obligations, Eligible Investments or other existing Assets) as the Issuer deems, in its sole discretion, to be advisable and to designate them as Interest Proceeds or Principal Proceeds. All Monies deposited from time to time in the Collection Account pursuant to this Indenture shall be held by the Collateral Trustee as part of the Assets and shall be applied to the purposes herein

 

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provided. Subject to Section 10.2(d), amounts in the Collection Account shall be reinvested pursuant to Section 10.6(a).

 

(b)                                 The Collateral Trustee, within one Business Day after receipt of any distribution or other proceeds in respect of the Assets which are not Cash, shall so notify the Issuer and the Issuer (or the Collateral Manager on behalf of the Issuer) shall use its commercially reasonable efforts to, within five (5) Business Days after receipt of such notice from the Collateral Trustee (or as soon as practicable thereafter), sell such distribution or other proceeds for Cash in an arm’s length transaction and deposit the proceeds thereof in the Collection Account; provided that the Issuer (i) need not sell such distributions or other proceeds if it delivers an Issuer Order or an Officer’s certificate to the Collateral Trustee certifying that such distributions or other proceeds constitute Collateral Obligations, Equity Securities or Eligible Investments or (ii) may otherwise retain such distribution or other proceeds for up to two years from the date of receipt thereof if it delivers an Officer’s certificate to the Collateral Trustee certifying that (x) it will sell such distribution within such two-year period and (y) retaining such distribution is not otherwise prohibited by this Indenture.

 

(c)                                  At any time when reinvestment is permitted pursuant to Article XII, the Collateral Manager on behalf of the Issuer may by Issuer Order direct the Collateral Trustee to, and upon receipt of such Issuer Order the Collateral Trustee shall, withdraw funds on deposit in the Principal Collection Subaccount representing Principal Proceeds (together with any Principal Financed Accrued Interest) and reinvest (or invest, in the case of funds referred to in Section 7.18) such funds in additional Collateral Obligations, in each case in accordance with the requirements of Article XII and such Issuer Order. At any time, the Collateral Manager on behalf of the Issuer may by Issuer Order direct the Collateral Trustee to, and upon receipt of such Issuer Order the Collateral Trustee shall, withdraw funds on deposit in the Principal Collection Subaccount representing Principal Proceeds and deposit such funds in the Revolver Funding Account to meet funding requirements on Delayed Drawdown Collateral Obligations or Revolving Collateral Obligations.

 

(d)                                 The Collateral Manager on behalf of the Issuer may by Issuer Order direct the Collateral Trustee to, and upon receipt of such Issuer Order the Collateral Trustee shall, pay from amounts on deposit in the Collection Account on any Business Day during any Interest Accrual Period (i) any amount required to purchase additional Collateral Obligations or to exercise a warrant or right to acquire securities held in the Assets in accordance with the requirements of Article XII and such Issuer Order; provided that if such payment to exercise a warrant or right to acquire securities held in the Assets is made from Principal Proceeds, the Adjusted Collateral Principal Amount is greater than or equal to the Reinvestment Target Par Balance after giving effect to such payment and receipt of any related assets or other proceeds, and (ii) from Interest Proceeds only, any Administrative Expenses (such payments to be counted against the  Administrative Expense Cap for the applicable period and to be subject to the order of priority as stated in the definition of Administrative Expenses); provided that the aggregate Administrative Expenses paid pursuant to this Section 10.2(d) during any Collection Period shall not exceed the Administrative Expense Cap for the related Payment Date; provided further that the Collateral Trustee shall be entitled (but not required) without liability on its part, to refrain from making any such payment of an Administrative Expense pursuant to this Section 10.2 on any day other than a Payment Date if, in its reasonable determination, the payment of such amount is likely to

 

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leave insufficient funds available to pay in full each of the items described in Section 11.1(a)(i)(A) as reasonably anticipated to be or become due and payable on the next Payment Date, taking into account the Administrative Expense Cap.

 

(e)                                  The Collateral Trustee shall transfer to the Payment Account, from the Collection Account for application pursuant to Section 11.1(a), on the Business Day immediately preceding each Payment Date, the amount set forth to be so transferred in the Distribution Report for such Payment Date.

 

(f)                                   In connection with a Refinancing in part by Class of one or more Classes of Secured Debt, the Collateral Manager on behalf of the Issuer may direct the Collateral Trustee to apply Partial Refinancing Interest Proceeds from the Interest Collection Subaccount on the date of a Refinancing of one or more Classes of Secured Debt to the payment of the Redemption Price(s) of the Class or Classes of Secured Debt subject to Refinancing without regard to the Priority of Payments.

 

Section 10.3                             Transaction Accounts.

 

(a)                                 Payment Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Collateral Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of State Street Bank and Trust Company, as Collateral Trustee, for the benefit of the Secured Parties, which shall be designated as the Payment Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. Except as provided in Section 11.1(a), the only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Payment Account shall be to pay amounts due and payable on the Secured Debt and Subordinated Securities in accordance with their terms and the provisions of this Indenture and, upon Issuer Order, to pay Administrative Expenses, fees and other amounts due and owing to the Collateral Manager under the Collateral Management Agreement and other amounts specified herein, each in accordance with the Priority of Payments. The Issuer shall not have any legal, equitable or beneficial interest in the Payment Account other than in accordance with this Indenture (including the Priority of Payments) and the Securities Account Control Agreement. Amounts in the Payment Account shall remain uninvested.

 

(b)                                 Custodial Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Collateral Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer, subject to the Lien of this Indenture, which shall be designated as the Custodial Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. All Collateral Obligations shall be credited to the Custodial Account. The  only permitted withdrawals from the Custodial Account shall be in accordance with the provisions of this Indenture. The Collateral Trustee agrees to give the Issuer immediate notice if (to the actual knowledge of a Trust Officer of the Collateral Trustee) the Custodial Account or any assets or securities on deposit therein, or otherwise to the credit of the Custodial Account, shall become subject to any writ, order, judgment, warrant of attachment, execution or similar process. The Issuer shall not have any legal, equitable or beneficial interest in the Custodial Account other than in accordance with this Indenture and the Priority of Payments.

 

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(c)                                  Ramp-Up Account. In accordance with this Indenture and the Securities Account Control Agreement, the Collateral Trustee shall, if directed to do so by the Issuer, prior to the Closing Date, establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer, subject to the Lien of this Indenture, which shall be designated as the Ramp-Up Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. The Issuer shall direct the Collateral Trustee to deposit the amount specified in Section 3.1(xi)(A) to the Ramp-Up Account on the Closing Date. In connection with any purchase of an additional Collateral Obligation, the Collateral Trustee will apply amounts held in the Ramp-Up Account as provided by Section 7.18(b) and Section 7.18(f). Any income earned on amounts deposited in the Ramp-Up Account will be deposited in the Interest Collection Subaccount. All other amounts on deposit in the Ramp-Up Account will be deemed to represent Principal Proceeds. Upon the occurrence of an Enforcement Event (and excluding any amounts that will be used to settle binding commitments entered into prior to such date), the Collateral Trustee will deposit any remaining amounts in the Ramp-Up Account into the Principal Collection Subaccount as Principal Proceeds. On the Effective Date (and excluding any amounts that will be used to settle binding commitments entered into prior to such date), the Collateral Manager, in its sole discretion, shall direct the Collateral Trustee to deposit from amounts remaining in the Ramp-Up Account (x) an amount designated by the Collateral Manager not greater than 0.5% of the Target Initial Par Amount into the Interest Collection Subaccount as Interest Proceeds, provided that the Target Initial Par Condition is satisfied before and after giving effect to such deposit, and (y) any remaining amounts (after any deposit pursuant to clause (x) above) into the Principal Collection Subaccount as Principal Proceeds.

 

(d)                                 Expense Reserve Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Closing Date, cause the Collateral Trustee to establish at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer, subject to the Lien of this Indenture, which shall be designated as the Expense Reserve Account, which shall be maintained with the Custodian in accordance with the Securities Account Control Agreement. The Issuer shall direct the Collateral Trustee to deposit the amount specified in Section 3.1(xi)(B) to the Expense Reserve Account. On any Business Day from the Closing Date up to the date that is two (2) Business Days prior to the first Payment Date following the Closing Date, the Collateral Trustee shall apply funds from the Expense Reserve Account, as directed by the Collateral Manager, (i) to pay expenses of the Issuers incurred in connection with the establishment of the Issuers, the structuring and consummation of the Offering and the issuance or incurrence of the Secured Debt and Subordinated Securities or (ii) to the Collection Account as Principal Proceeds (or, prior to the Effective Date, the Ramp-Up Account) or (solely in respect of the first Payment Date) as Interest Proceeds. By the date that is two (2) Business Days prior to the first Payment Date following the Closing Date, all funds in the Expense Reserve Account (after deducting any expenses paid on such Payment Date) will be deposited in  the Collection Account as Principal Proceeds and/or Interest Proceeds and the Expense Reserve Account will be closed. Thereafter, amounts may be deposited into the Expense Reserve Account in connection with the issuance or incurrence of Additional Debt and the Collateral Trustee shall apply such funds from the Expense Reserve Account, as directed by the Collateral Manager on behalf of the Issuer, as needed to pay expenses of the Issuer incurred in connection with such additional issuance or as a deposit into the Collection Account as Principal Proceeds or Interest Proceeds (solely with respect to the first Payment Date following such additional issuance). Any income earned on amounts deposited in the Expense Reserve

 

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Account will be deposited in the Interest Collection Subaccount as Interest Proceeds as it is received.

 

(e)                                  Interest Reserve Account. In accordance with this Indenture and the Securities Account Control Agreement, the Collateral Trustee shall, if directed to do so by the Issuer, prior to the Closing Date, establish a single, segregated non-interest bearing trust account held in the name of the Issuer, subject to the Lien of this Indenture, designated as the “Interest Reserve Account”. The Issuer shall direct the Collateral Trustee to make the deposit specified in Section 3.1(xi)(C) to the Interest Reserve Account. Such Interest Reserve Amount shall be transferred to the Collection Account as Interest Proceeds on the Determination Date relating to the first Payment Date unless the Collateral Manager, in its discretion, provides written notice to the Collateral Trustee that such Interest Reserve Amount shall not be so transferred and should instead be held in the Interest Reserve Account for application in accordance with this Section 10.3(e). The only permitted withdrawals from or application of funds or property on deposit in the Interest Reserve Account shall be in accordance with the provisions of this Indenture, including:  (i) prior to the second Payment Date, at the discretion of the Collateral Manager, to the Collection Account as Interest Proceeds or to the Collection Account (or, prior to the Effective Date, the Ramp-Up Account) as Principal Proceeds (as designated by the Collateral Manager), and (ii) amounts remaining in the Interest Reserve Account after the second Payment Date shall be transferred to the Collection Account as Interest Proceeds or Principal Proceeds (as designated by the Collateral Manager).

 

Section 10.4                             The Revolver Funding Account. Upon the purchase or acquisition of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation identified by written notice to the Collateral Trustee, funds in an amount equal to the undrawn portion of such obligation shall be withdrawn from the Ramp-Up Account and/or from the Principal Collection Subaccount (at the direction of the Collateral Manager) and deposited by the Collateral Trustee in a single, segregated trust account established (in accordance with this Indenture and the Securities Account Control Agreement) at the Custodian and held in the name of the Issuer subject to the Lien of this Indenture (the “Revolver Funding Account”). Upon initial purchase or acquisition of any such obligations, funds deposited in the Revolver Funding Account in respect of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation will be treated as part of the purchase price therefor. Amounts on deposit in the Revolver Funding Account will be invested in overnight funds that are Eligible Investments selected by the Collateral Manager pursuant to Section 10.6 and earnings from all such investments will be deposited in the Interest Collection Subaccount as Interest Proceeds. All other amounts held in the Revolver Funding Account will be deemed to represent Principal Proceeds.

 

The Issuer shall, at all times maintain sufficient funds on deposit in the Revolver Funding Account such that the sum of the amount of funds on deposit in the Revolver Funding Account shall be equal to or greater than the sum of the unfunded funding obligations under all such Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations then included in the Assets. Funds shall be deposited in the Revolver Funding Account upon the purchase of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation and upon the receipt by the Issuer of any Principal Proceeds with respect to a Revolving Collateral Obligation as directed by the Collateral Manager on behalf of the Issuer. In the event of any shortfall in the Revolver Funding Account, the Collateral Manager (on behalf of the Issuer) may direct the

 

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Collateral Trustee to, and the Collateral Trustee thereafter shall, transfer funds in an amount equal to such shortfall from the Principal Collection Subaccount to the Revolver Funding Account.

 

Any funds in the Revolver Funding Account (other than earnings from Eligible Investments therein) will be treated as Principal Proceeds and will be available solely to cover any drawdowns on the Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations; provided that any excess of (A) the amounts on deposit in the Revolver Funding Account over (B) the sum of the unfunded funding obligations under all Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations that are included in the Assets (which excess may occur for any reason, including upon (i) the sale or maturity of a Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation, (ii) the occurrence of an event of default with respect to any such Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation or (iii) any other event or circumstance which results in the irrevocable reduction of the undrawn commitments under such Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation) may be transferred by the Collateral Trustee (at the written direction of the Collateral Manager on behalf of the Issuer) from time to time as Principal Proceeds to the Principal Collection Subaccount.

 

Section 10.5                             Contributions. At any time, the holders of the Subordinated Securities may, but shall not be required to, make contributions of cash, Eligible Investments, or Collateral Obligations to the Issuer for any purpose; provided that (i) following the first Payment Date, each such contribution shall be in an amount equal to or greater than U.S.$500,000 and (ii) without the prior written consent of a Majority of the Controlling Class, no more than 5 such contributions may be made after the first Payment Date.  Cash contributions may be treated as Interest Proceeds if so directed by the holders of a Majority of the Subordinated Securities where necessary to cure or prevent any default or to permit any Interest Coverage Test to be satisfied, or if not satisfied, maintained or improved and otherwise will be treated as Principal Proceeds; provided that any such designation shall be irrevocable.  The Collateral Trustee will post the details of any contributions on a dedicated page in the Monthly Report.

 

Section 10.6                             Reinvestment of Funds in Accounts; Reports by Trustee. (a) By Issuer Order (which may be in the form of standing instructions), the Issuer (or the Collateral Manager on behalf of the Issuer) shall at all times direct the Collateral Trustee to, and, upon receipt of such Issuer Order, the Collateral Trustee shall, invest all funds on deposit in the Collection Account, the Ramp-Up Account, the Revolver Funding Account, the Interest Reserve Account and the Expense Reserve Account, as so directed in Eligible Investments having stated maturities no later than the Business Day preceding the next Payment Date (or such shorter maturities expressly provided herein). If prior to the occurrence of an Event of Default, the Issuer shall not have given any such investment directions, the Collateral Trustee shall seek instructions from the Collateral Manager within three (3) Business Days after transfer of any funds to such accounts. If the Collateral Trustee does not thereafter receive written instructions from the Collateral Manager within five (5) Business Days after transfer of such funds to such accounts, it shall invest and reinvest the funds held in such accounts, as fully as practicable, in the Standby Directed Investment. If after the occurrence of an Event of Default, the Issuer shall not have given such investment directions to the Collateral Trustee for three consecutive days, the Collateral Trustee shall invest and reinvest such Monies as fully as practicable in the Standby

 

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Directed Investment unless and until contrary investment instructions as provided in the preceding sentence are received or the Collateral Trustee receives a written instruction from the Issuer, or the Collateral Manager on behalf of the Issuer, changing the Standby Directed Investment. Except to the extent expressly provided otherwise herein, all interest and other income from such investments shall be deposited in the Interest Collection Subaccount, any gain realized from such investments shall be credited to the Principal Collection Subaccount upon receipt, and any loss resulting from such investments shall be charged to the Principal Collection Subaccount. The Collateral Trustee shall not in any way be held liable by reason of any insufficiency of such accounts which results from any loss relating to any such investment; provided that nothing herein shall relieve the Bank of (i) its obligations or liabilities under any security or obligation issued by the Bank or any Affiliate thereof or (ii) liability for any loss resulting from gross negligence, willful misconduct or fraud on the part of the Bank or any Affiliate thereof.

 

For all U.S. federal tax reporting purposes, all income earned on the funds invested and allocable to the Accounts is legally owned by the Issuer (and beneficially owned by the Issuer or the equity owners of the Issuer). The Issuer is required to provide to the Bank, in its capacity as Collateral Trustee, (i) an applicable IRS Form W-9 or W-8 no later than the date hereof, and (ii) any additional IRS forms (or updated versions of any previously submitted IRS forms) or other documentation at such time or times required by applicable law or upon the reasonable request of the Collateral Trustee as may be necessary (a) to reduce or eliminate the imposition of U.S. withholding taxes and (b) to permit the Collateral Trustee to fulfill its tax reporting obligations under applicable law with respect to the Accounts or any amounts paid to the Issuer. The Issuer is further required to report to the Collateral Trustee comparable information upon any change in the legal or beneficial ownership of the income allocable to the Accounts. The Bank, both in its individual capacity and in its capacity as Collateral Trustee, shall have no liability to the Issuer or any other person in connection with any tax withholding amounts paid, or retained for payment, to a governmental authority from the Accounts arising from the Issuer’s failure to timely provide an accurate, correct and complete applicable IRS Form W-9 or W-8 or such other documentation contemplated under this paragraph. For the avoidance of doubt, no funds shall be invested with respect to such Accounts absent the Collateral Trustee having first received (x) instructions with respect to the investment of such funds, and (y) the forms and other documentation required by this paragraph.

 

(b)                                 The Collateral Trustee agrees to give the Issuer immediate notice if any Account or any funds on deposit in any Account, or otherwise to the credit of an Account, shall become subject to any writ, order, judgment, warrant of attachment, execution or similar process.

 

(c)                                  The Collateral Trustee shall supply, in a timely fashion, to the Issuers, the Rating Agency, the Collateral Administrator and the Collateral Manager any information regularly maintained by the Collateral Trustee that the Issuers, the Rating Agency, the Collateral Administrator or the Collateral Manager may from time to time reasonably request with respect to  the Assets, the Accounts and the other Assets and provide any other requested information reasonably available to the Collateral Trustee by reason of its acting as Collateral Trustee hereunder and required to be provided by Section 10.7 or to permit the Collateral Manager to perform its obligations under the Collateral Management Agreement or the Issuer’s obligations hereunder that have been delegated to the Collateral Manager. The Collateral Trustee shall

 

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promptly forward to the Collateral Manager copies of notices and other writings received by it from the obligor or issuer of any Asset or from any Clearing Agency with respect to any Asset which notices or writings advise the holders of such Asset of any rights that the holders might have with respect thereto (including, without limitation, requests to vote with respect to amendments or waivers and notices of prepayments and redemptions) as well as all periodic financial reports received from such obligor or issuer and Clearing Agencies with respect to such issuer.

 

Section 10.7                             Accountings.

 

(a)                                 Monthly. Not later than the 8th Business Day of each calendar month (other than the calendar months in which a Payment Date occurs) and commencing in July 2019, the Issuer shall compile and make available (or cause to be compiled and made available) to the Rating Agency, the Collateral Trustee, the Collateral Manager, the Placement Agent, the Co-Placement Agent and each other Holder shown on the applicable Register and any beneficial owner of a Secured Debt or Subordinated Securities who has delivered a Beneficial Ownership Certificate to the Collateral Trustee a monthly report on a settlement date basis (except as otherwise expressly provided in this Indenture) (each such report a “Monthly Report”). As used herein, the “Monthly Report Determination Date” with respect to any calendar month will be the last day of the calendar month preceding the month in which the Monthly Report is made available. The Monthly Report for a calendar month shall contain the following information with respect to the Collateral Obligations and Eligible Investments included in the Assets, and shall be determined as of the close of business on the Monthly Report Determination Date for such calendar month:

 

(i)                    Aggregate Principal Balance of Collateral Obligations, the aggregate unfunded commitments of the Collateral Obligations, any capitalized interest on the Collateral Obligations and Eligible Investments representing Principal Proceeds.

 

(ii)                 Adjusted Collateral Principal Amount of Collateral Obligations.

 

(iii)              Collateral Principal Amount of Collateral Obligations.

 

(iv)             A list of Collateral Obligations, including, with respect to each such Collateral Obligation, the following information:

 

(A)                               The obligor thereon (including the issuer ticker, if any);

 

(B)                               The LoanX ID (to the extent available) and any other security identifier thereof;

 

(C)                               The Principal Balance thereof (other than any accrued interest that was purchased with Principal Proceeds) and any unfunded commitment pertaining thereto;

 

(D)                               The percentage of the aggregate Collateral Principal Amount represented by such Collateral Obligation;

 

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(E)                                (x) The related interest rate or spread (in the case of a LIBOR Floor Obligation, calculated both with and without regard to the applicable specified “floor” rate per annum), (y) if such Collateral Obligation is a LIBOR Floor Obligation, the related LIBOR floor and (z) the identity of any Collateral Obligation that is not a LIBOR Floor Obligation and for which interest is calculated with respect to any index other than LIBOR;

 

(F)                                 The stated maturity thereof;

 

(G)                               The related S&P Industry Classification;

 

(H)                              For each Collateral Obligation with an S&P Rating derived from a Moody’s Rating, the Moody’s Rating, unless such rating is based on a credit estimate unpublished by Moody’s (and, in the event of a downgrade or withdrawal of the applicable Moody’s Rating, the prior rating and the date such Moody’s Rating was changed);

 

(I)                                   The S&P Rating, unless such rating is based on a credit estimate or is a private or confidential rating from S&P;

 

(J)                                   The country of Domicile;

 

(K)                               An indication as to whether each such Collateral Obligation is (1) a Senior Secured Loan, (2) a Defaulted Obligation, (3) a Delayed Drawdown Collateral Obligation, (4) a Revolving Collateral Obligation, (5)  except for the Closing Date Participation Interests, a Participation Interest (indicating the related Selling Institution, if applicable, and its ratings by the Rating Agency), (6) a Permitted Deferrable Obligation, (7) a Fixed Rate Obligation, (8) a Current Pay Obligation, (9) a Discount Obligation, (10) a Discount Obligation purchased in the manner described in clause (y) of the proviso to the definition “Discount Obligation”, (11) a Cov-Lite Loan, (12) a First-Lien Last-Out Loan or (13) a DIP Collateral Obligation.

 

(L)                                With respect to each Collateral Obligation that is a Discount Obligation purchased in the manner described in clause (y) of the proviso to the definition “Discount Obligation”,

 

(I)                  the identity of the Collateral Obligation (including whether such Collateral Obligation was classified as a Discount Obligation at the time of its original purchase) the proceeds of whose sale are used to purchase the purchased Collateral Obligation;

 

(II)             the purchase price (as a percentage of par) of the purchased Collateral Obligation and the sale price (as a percentage of par) of the  Collateral Obligation the proceeds of whose sale are used to purchase the purchased Collateral Obligation;

 

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(III)        the Aggregate Principal Balance of Collateral Obligations that have been excluded from the definition of “Discount Obligation” and relevant calculations indicating whether such amount is in compliance with the limitations described in clauses (z)(A) and (z)(B) of the proviso to the definition of “Discount Obligation.”

 

(M)                            The Principal Balance of each Cov-Lite Loan and the Aggregate Principal Balance of all Cov-Lite Loans;

 

(N)                               The S&P Recovery Rate; and

 

(O)                               The date of the credit estimate of such Collateral Obligation, if applicable.

 

(v)                If the Monthly Report Determination Date occurs on or after the Effective Date, for each of the limitations and tests specified in the definitions of Concentration Limitations and Collateral Quality Test, (1) the result, (2) if such Monthly Report Determination Date occurs on or prior to the last day of the Reinvestment Period, the related minimum or maximum test level and (3) if such Monthly Report Determination Date occurs on or prior to the last day of the Reinvestment Period, a determination as to whether such result satisfies the related test.

 

(vi)             The calculation of each of the following:

 

(A)                               Each Interest Coverage Ratio (and setting forth the percentage required to satisfy each Interest Coverage Test); and

 

(B)                               Each Overcollateralization Ratio (and setting forth the percentage required to satisfy each Overcollateralization Ratio Test).

 

(vii)          The calculation specified in Section 5.1(e).

 

(viii)       For each Account, a schedule showing the beginning balance, each credit or debit specifying the nature, source and amount, and the ending balance.

 

(ix)             A schedule showing for each of the following the beginning balance, the amount of Interest Proceeds received from the date of determination of the immediately preceding Monthly Report, and the ending balance for the current Measurement Date:

 

(A)                               Interest Proceeds from Collateral Obligations; and

 

(B)                               Interest Proceeds from Eligible Investments.

 

(x)                Purchases and sales:

 

(A)                               The identity, Principal Balance (other than any accrued interest that was purchased with Principal Proceeds), unfunded commitment (if any), capitalized interest (if any), Principal Proceeds and Interest Proceeds received, 

 

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and date for each Collateral Obligation that was released for sale or disposition pursuant to Section 12.1 since the last Monthly Report Determination Date and whether such Collateral Obligation was a Credit Risk Obligation or a Credit Improved Obligation, whether the sale of such Collateral Obligation was a discretionary sale; provided that Principal Proceeds shall not be required to be reported in connection with an Optional Redemption in full;

 

(B)                               The identity, Principal Balance (other than any accrued interest that was purchased with Principal Proceeds), unfunded commitment (if any), capitalized interest (if any) and cash expended to acquire each Collateral Obligation acquired pursuant to Section 12.2 since the last Monthly Report Determination Date;

 

(C)                               The identity, Principal Balance (other than any accrued interest that was purchased with Principal Proceeds), unfunded commitment (if any), Principal Proceeds and Interest Proceeds received, and date for each Collateral Obligation that was substituted pursuant to Section 12.3(a) or purchased pursuant to Section 12.3(b) since the last Monthly Report Determination Date, all as reported to the Collateral Trustee by the Collateral Manager at the time of such purchase or substitution; and

 

(D)                               On a dedicated page of the Monthly Report, the completion of any Trading Plan and the details of any Trading Plan (including, the proposed acquisitions and dispositions identified by the Collateral Manager as part of such Trading Plan).

 

(xi)             The identity of each Defaulted Obligation, the S&P Collateral Value and Market Value of each such Defaulted Obligation and date of default thereof.

 

(xii)          The identity of each Collateral Obligation with an S&P Rating of “CCC+” or below, and, if the CCC Excess is greater than zero, the Market Value of each such Collateral Obligation.

 

(xiii)       The identity of each Deferring Obligation and Market Value of each Deferring Obligation, and the date on which interest was last paid in full in Cash thereon.

 

(xiv)      The identity of each Current Pay Obligation, the Market Value of each such Current Pay Obligation, and the percentage of the Collateral Principal Amount comprised of Current Pay Obligations.

 

(xv)         The identity, rating and maturity of each Eligible Investment.

 

(xvi)      The Diversity Score, the S&P Equivalent Diversity Score, the Weighted Average Floating Spread, the Weighted Average Life, the Weighted Average S&P Recovery Rate and the S&P Equivalent Weighted Average Rating Factor.

 

(xvii)   The results of the S&P CDO Monitor Test (with a statement as to whether it is passing or failing), including the Class Default Differentials, the Class Break-even

 

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Default Rates and the Class Scenario Default Rate for the Highest Ranking Class of Secured Debt, and, after the S&P CDO Monitor Election Date, the Weighted Average Floating Spread that is calculated for purposes of the S&P CDO Monitor Test, the characteristics of the Current Portfolio and the benchmark rating levels used in connection with the related S&P CDO Monitor.

 

(xviii)        The number, identity, Bloomberg Loan ID, FIGI, ISIN, Loan/X or CUSIP number, if applicable, of any Collateral Obligations.

 

(xix)          The short-term debt rating and long-term debt rating by S&P of the Eligible Institution.

 

(xx)           Confirmation that each Account is held at an Eligible Institution (and which Eligible Institution).

 

(xxi)          On a dedicated page of the Monthly Report, any amounts in the Ramp-Up Account which the Collateral Manager designated as Interest Proceeds on the Effective Date pursuant to Section 10.3(c).

 

(xxii)         On a dedicated page of the Monthly Report, the amount of any contributions received by the Issuer pursuant to Section 10.5 since the previous Monthly Report Determination Date.

 

(xxiii)        The identity of each Closing Date Participation Interest;.

 

(xxiv)        Such other information as the Rating Agency or the Collateral Manager may reasonably request.

 

Upon receipt of each Monthly Report, the Collateral Trustee shall (a) if the relevant Monthly Report Determination Date occurred on or prior to the last day of the Reinvestment Period, notify the Issuer (who shall notify S&P) if such Monthly Report indicates that the S&P CDO Monitor Test has not been satisfied as of the relevant Measurement Date and (b) compare the information contained in such Monthly Report to the information contained in its records with respect to the Assets and shall, within three (3) Business Days after receipt of such Monthly Report, notify the Issuer, the Collateral Administrator, the Rating Agency and the Collateral Manager if the information contained in the Monthly Report does not conform to the information maintained by the Collateral Trustee with respect to the Assets. If any discrepancy exists, the Collateral Administrator and the Issuer, or the Collateral Manager on behalf of the Issuer, shall attempt to resolve the discrepancy. If such discrepancy cannot be promptly resolved, the Collateral Trustee shall within ten (10) Business Days notify the Collateral Manager who shall, on behalf of the Issuer, request that the Independent accountants appointed by the Issuer pursuant to Section 10.9 review such Monthly Report and the Collateral Trustee’s records to determine the cause of such discrepancy. If such review reveals an error in the Monthly Report or the Collateral Trustee’s records, the Monthly Report or the Collateral Trustee’s records shall be revised accordingly and, as so revised, shall be utilized in making all calculations pursuant to this Indenture and notice of any error in the Monthly Report shall be sent as soon as practicable by the Issuer to all recipients of such report which may be accomplished by making a notation of such error in the subsequent Monthly Report.

 

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(b)           Payment Date Accounting. The Issuer shall render an accounting (each a “Distribution Report”), determined as of the close of business on each Determination Date preceding a Payment Date, and shall make available such Distribution Report to the Collateral Trustee, the Collateral Manager, the Loan Agent, the Placement Agent, the Co-Placement Agent, the Rating Agency and any Holder shown on the applicable Register of a Secured Debt or Subordinated Securities and any beneficial owner of a Secured Debt or Subordinated Securities who has delivered a Beneficial Ownership Certificate to the Collateral Trustee not later than the Business Day preceding the related Payment Date. The Distribution Report shall contain the following information:

 

(i)       the information required to be in the Monthly Report pursuant to Section 10.7(a);

 

(ii)      (a) the Aggregate Outstanding Amount of the Secured Debt and Subordinated Securities of each Class at the beginning of the Interest Accrual Period and such amount as a percentage of the original Aggregate Outstanding Amount of the Secured Debt and Subordinated Securities of such Class, (b) the amount of principal payments to be made on the Secured Debt of each Class on the next Payment Date and the Aggregate Outstanding Amount of the Secured Debt of each Class after giving effect to the principal payments, if any, on the next Payment Date and such amount as a percentage of the original Aggregate Outstanding Amount of the Secured Debt of such Class and (c) the amount of distributions, if any, to be made on the Subordinated Securities on the next Payment Date;

 

(iii)     the Interest Rate and accrued interest for each applicable Class of Secured Debt for such Payment Date;

 

(iv)    the amounts payable pursuant to each clause of Section 11.1(a)(i) and each clause of Section 11.1(a)(ii) or each clause of Section 11.1(a)(iii), as applicable, on the related Payment Date;

 

(v)     for the Collection Account:

 

(A)          the Balance on deposit in the Collection Account at the end of the related Collection Period;

 

(B)          the amounts payable from the Collection Account to the Payment Account, in order to make payments pursuant to Section 11.1(a)(i) and Section 11.1(a)(ii) on the next Payment Date (net of amounts which the Collateral Manager intends to re-invest in additional Collateral Obligations pursuant to Article XII); and

 

(C)          the Balance remaining in the Collection Account immediately after all payments and deposits to be made on such Payment Date; and

 

(vi)    such other information as the Collateral Manager may reasonably request.

 

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Each Distribution Report shall constitute instructions to the Collateral Trustee to withdraw funds from the Payment Account and pay or transfer such amounts set forth in such Distribution Report in the manner specified and in accordance with the priorities established in Section 11.1 and Article XIII.

 

(c)           Interest Rate Notice. The Collateral Trustee shall include in the Monthly Report a notice setting forth the Interest Rate for each Class of Secured Debt for the Interest Accrual Period preceding the next Payment Date.

 

(d)           Failure to Provide Accounting. If the Collateral Trustee shall not have received any accounting provided for in this Section 10.7 on the first Business Day after the date on which such accounting is due to the Collateral Trustee, the Collateral Trustee shall notify the Collateral Manager who shall use all reasonable efforts to obtain such accounting by the applicable Payment Date. To the extent the Collateral Manager is required to provide any information or reports pursuant to this Section 10.7 as a result of the failure of the Issuer to provide such information or reports, the Collateral Manager shall be entitled to retain an Independent certified public accountant in connection therewith and the reasonable costs incurred by the Collateral Manager for such Independent certified public accountant shall be paid by the Issuer.

 

(e)           Required Content of Certain Reports. Each Monthly Report and each Distribution Report sent to any Holder or beneficial owner of an interest in a Secured Debt or Subordinated Securities shall contain, or be accompanied by, the following notices:

 

The Notes may be beneficially owned only by Persons that are (a) not “U.S. Persons” (as defined in Regulation S) outside of the United States in reliance on Regulation S or (b) both (i) Qualified Institutional Buyers and (ii) Qualified Purchasers (or corporations, partnerships, limited liability companies or other entities (other than trusts) each shareholder, partner, member or other equity owner of which is a Qualified Purchaser). The Applicable Issuer has the right to compel any beneficial owner of an interest in Rule 144A Global Notes that does not meet the qualifications set forth in the preceding sentence to sell its interest in such Notes, or may sell such interest on behalf of such owner, pursuant to Section 2.12 of this Indenture.

 

Each holder receiving this report agrees to keep all non-public information herein confidential and not to use such information for any purpose other than its evaluation of its investment in the Notes; provided that any holder may provide such information on a confidential basis to any prospective purchaser of such holder’s Notes that is permitted by the terms of this Indenture to acquire such holder’s Notes and that agrees to keep such information confidential in accordance with the terms of this Indenture.

 

(f)            Placement Agent Information. The Issuer and the Placement Agent or any successor to the Placement Agent, may post the information contained in a Monthly Report or  Distribution Report to a password-protected internet site accessible only to the Holders of the Secured Debt or Subordinated Securities and to the Collateral Manager.

 

(g)           Distribution of Reports. The Collateral Trustee will make the Monthly Report and the Distribution Report available via its website. The Collateral Trustee’s website shall initially 

 

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be located at mystatestreet.com. The Collateral Trustee may change the way such statements are distributed. Access to the Collateral Trustee’s website shall be provided to Holders upon request. As a condition to access to the Collateral Trustee’s website, the Collateral Trustee may require registration and the acceptance of a disclaimer. The Collateral Trustee shall be entitled to rely on but shall not be responsible for the content or accuracy of any information provided in the Monthly Report and the Distribution Report which the Collateral Trustee disseminates in accordance with this Indenture and may affix thereto any disclaimer it deems appropriate in its reasonable discretion.

 

(h)           As promptly as possible following the delivery of each Monthly Report and Distribution Report to the Collateral Trustee pursuant to Section 10.7(a) or (b), as applicable, the Collateral Manager on behalf of the Issuer shall cause a copy of such report (or portions thereof) to be delivered to Intex Solutions, Inc. and Bloomberg Financial Markets, or any other valuation provider deemed necessary by the Collateral Manager, which may be delivered via the Collateral Trustee’s website.

 

(i)            In the event the Collateral Trustee receives instructions from the Issuer to effect a securities transaction as contemplated in 12 CFR 12.1, the Issuer acknowledges that upon its written request and at no additional cost, it has the right to receive the notification from the Collateral Trustee after the completion of such transaction as contemplated in 12 CFR 12.4(a) or (b). The Issuer agrees that, absent specific request, such notifications shall not be provided by the Collateral Trustee hereunder, and in lieu of such notifications, the Collateral Trustee shall make available the Monthly Report in the manner required by this Indenture.

 

Section 10.8          Release of Assets. (a) Subject to Article XII, the Issuer may, by Issuer Order executed by an Officer of the Collateral Manager, delivered to the Collateral Trustee at least one Business Day prior to the settlement date for any sale of an Asset certifying that the sale, purchase or substitution of such Asset is being made in accordance with Section 12.1 or 12.3 hereof or Section 7.2 of the Loan Sale Agreement, as applicable, and such sale, purchase or substitution complies with all applicable requirements of Section 12.1 or 12.3 hereof or Section 7.2 of the Loan Sale Agreement, as applicable (provided that if an Event of Default has occurred and is continuing, neither the Issuer nor the Collateral Manager (on behalf of the Issuer) may direct the Collateral Trustee to release or cause to be released such Asset from the lien of this Indenture pursuant to a sale under Section 12.1(e), Section 12.1(f) or Section 12.1(g) unless the sale of such Asset is permitted pursuant to Section 12.4(c)), direct the Collateral Trustee to release or cause to be released such Asset from the lien of this Indenture and, upon receipt of such Issuer Order, the Collateral Trustee shall deliver any such Asset, if in physical form, duly endorsed to the broker or purchaser designated in such Issuer Order or, if such Asset is a Clearing Corporation Security, cause an appropriate transfer thereof to be made, in each case against receipt of the sales price therefor as specified by the Collateral Manager in such Issuer Order; provided that the Collateral Trustee may deliver any such Asset in physical form for examination in accordance with industry custom.

 

(b)           Subject to the terms of this Indenture, the Collateral Trustee shall upon an Issuer Order (i) deliver any Asset, and release or cause to be released such Asset from the lien of this Indenture, which is set for any mandatory call or redemption or payment in full to the appropriate payor or paying agent, as applicable, on or before the date set for such call, 

 

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redemption or payment, in each case against receipt of the call or redemption price or payment in full thereof and (ii) provide notice thereof to the Collateral Manager.

 

(c)           Upon receiving actual notice of any Offer or any request for a waiver, direction, consent, amendment or other modification or action with respect to any Asset, the Collateral Trustee on behalf of the Issuer shall notify the Collateral Manager of any Asset that is subject to a tender offer, voluntary redemption, exchange offer, conversion or other similar action (an “Offer”) or such request. Unless the Secured Debt has been accelerated following an Event of Default, the Collateral Manager may, by Issuer Order, direct (x) the Collateral Trustee to accept or participate in or decline or refuse to participate in such Offer and, in the case of acceptance or participation, to release from the lien of this Indenture such Asset in accordance with the terms of the Offer against receipt of payment therefor, or (y) the Issuer or the Collateral Trustee to agree to or otherwise act with respect to such consent, direction, waiver, amendment, modification or action; provided that in the absence of any such direction, the Collateral Trustee shall not respond or react to such Offer or request.

 

(d)           As provided in Section 10.2(a), the Collateral Trustee shall deposit any proceeds received by it from the disposition or replacement of an Asset in the applicable subaccount of the Collection Account, unless simultaneously applied to the purchase of additional Collateral Obligations or Eligible Investments as permitted under and in accordance with the requirements of this Article X and Article XII.

 

(e)           The Collateral Trustee shall, upon receipt of an Issuer Order at such time as there is no Secured Debt or Subordinated Securities Outstanding and all obligations of the Issuer hereunder have been satisfied, release any remaining Assets from the lien of this Indenture.

 

(f)            Any security, Collateral Obligation or amounts that are released pursuant to Section 10.8(a), (b) or (c) shall be released from the lien of this Indenture.

 

(g)           Any amounts paid from the Payment Account to the holders of the Subordinated Securities in accordance with the Priority of Payments shall be released from the lien of this Indenture.

 

(h)           The Collateral Trustee shall, upon receipt of an Issuer Order, release from the lien of this Indenture any Tax Asset or Collateral Obligation being transferred.  Such Issuer Order shall be executed by an Authorized Officer of the Collateral Manager, request release of such Collateral Obligation, certify that such release is permitted under this Indenture and request that the Collateral Trustee execute the agreements, releases or other documents releasing such Collateral Obligation as presented to it by the Collateral Manager.

 

Section 10.9          Reports by Independent Accountants. (a) At the Closing Date, the Issuer shall appoint one or more firms of Independent certified public accountants of recognized international reputation for purposes of reviewing and delivering the reports or certificates of such accountants required by this Indenture, which may be the firm of Independent certified public accountants that performs accounting services for the Issuer or the Collateral Manager. The Issuer may remove any firm of Independent certified public accountants at any time without the consent of any Holder of Secured Debt or Subordinated Securities. Upon any resignation by 

 

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such firm or removal of such firm by the Issuer, the Issuer (or the Collateral Manager on behalf of the Issuer) shall promptly appoint by Issuer Order delivered to the Collateral Trustee and the Rating Agency a successor thereto that shall also be a firm of Independent certified public accountants of recognized international reputation, which may be a firm of Independent certified public accountants that performs accounting services for the Issuer or the Collateral Manager. If the Issuer shall fail to appoint a successor to a firm of Independent certified public accountants which has resigned within 30 days after such resignation, the Issuer shall promptly notify the Collateral Trustee of such failure in writing. If the Issuer shall not have appointed a successor within ten days thereafter, the Collateral Trustee shall promptly notify the Collateral Manager, who shall appoint a successor firm of Independent certified public accountants of recognized international reputation. The fees of such Independent certified public accountants and its successor shall be payable by the Issuer as Administrative Expenses. In the event such firm requires the Bank, in any of its capacities including but not limited to Trustee or Collateral Administrator, to agree to the procedures performed by such firm, which acknowledgment or agreement may include confidentiality provisions and/or releases of claims or other liabilities by the Bank, the Issuer hereby directs the Bank to so agree; it being understood that the Bank shall deliver such letter of agreement in conclusive reliance on the foregoing direction and the Bank shall make no inquiry or investigation as to, and shall have no obligation in respect of, the sufficiency, validity, or correctness of such procedures. The Bank, in each of its capacities, shall not disclose any information or documents provided to it by such firm of Independent accountants.

 

(b)           On or before the date which is 30 days after the Payment Date occurring in February of each year commencing in 2020, the Issuer shall cause to be delivered to the Collateral Trustee and the Collateral Manager a statement from a firm of Independent certified public accountants for each Distribution Report delivered in the previous year (i) indicating that such firm has performed agreed upon procedures to recalculate certain calculations within such Distribution Report (excluding the S&P CDO Monitor Test) and (ii) listing the Aggregate Principal Balance of the Assets and the Aggregate Principal Balance of the Collateral Obligations securing the Secured Debt as of the relevant Determination Dates; provided that in the event of a conflict between such firm of Independent certified public accountants and the Issuer with respect to any matter in this Section 10.9, the determination by such firm of Independent public accountants shall be conclusive.

 

(c)           Upon the written request of the Collateral Trustee or any holder of a Subordinated Security, the Issuer will cause the firm of Independent certified public accountants appointed pursuant to Section 10.9(a) to provide any holder of the Subordinated Securities with all of the information required to be provided by the Issuer or pursuant to Section 7.17 or assist the Issuer in the preparation thereof.

 

Section 10.10       Reports to Rating Agency and Additional Recipients. In addition to the information and reports specifically required to be provided to the Rating Agency pursuant to the terms of this Indenture, the Issuer shall provide the Rating Agency with all information or reports delivered to the Collateral Trustee hereunder, and such additional information as the Rating Agency may from time to time reasonably request (including notification (i) to the Rating Agency of any Specified Amendment, which notice shall include (x) a copy of such Specified Amendment, (y) a brief summary of its purpose and (z) which criteria under the definition of 

 

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“Collateral Obligation” are no longer satisfied with respect to such Collateral Obligation after giving effect to the Specified Amendment, if any, and (ii) to the Rating Agency of the occurrence of an event with respect to a Collateral Obligation that has a credit estimate or credit opinion from the Rating Agency and which in the reasonable business judgment of the Collateral Manager would require such notification to the Rating Agency under its credit estimate or credit opinion guidelines); provided that any reports, statements or certificates of the Issuer’s Independent certified public accountants shall not be provided to the Rating Agency. Within ten (10) Business Days after the Effective Date, together with each Monthly Report and on each Payment Date, the Issuer shall provide to S&P at cdo_surveillance@spglobal.com or via the Collateral Trustee’s website, a Microsoft Excel file of the Excel Default Model Input File and, with respect to each Collateral Obligation, the name of each obligor or issuer thereof, the CUSIP number thereof (if applicable) and the Priority Category thereof.

 

Section 10.11       Procedures Relating to the Establishment of Accounts Controlled by the Collateral Trustee. Notwithstanding anything else contained herein, the Collateral Trustee agrees that with respect to each of the Accounts, it will cause each Securities Intermediary establishing such accounts to enter into a securities account control agreement and, if the Securities Intermediary is the Bank, shall cause the Bank to comply with the provisions of such securities account control agreement. The Collateral Trustee shall have the right to open such subaccounts of any such account as it deems necessary or appropriate for convenience of administration.

 

Section 10.12       Section 3(c)(7) Procedures. For so long as any Secured Debt or Subordinated Securities is Outstanding, the Issuer shall do the following:

 

(a)           Notification. Each Monthly Report sent or caused to be sent by the Issuer to the Holders will include a notice to the following effect:

 

“The United States Investment Company Act of 1940, as amended (the “1940 Act”), requires that all holders of the outstanding securities of the Issuer that are U.S. persons (as defined in Regulation S) be “Qualified Purchasers” (“Qualified Purchasers”) as defined in Section 2(a)(51)(A) of the 1940 Act and related rules. Under the rules, the Issuer must have a “reasonable belief” that all holders of its outstanding securities that are “U.S. persons” (as defined in Regulation S), including transferees, are Qualified Purchasers. Consequently, all sales and resales of the Notes in the United States or to “U.S. persons” (as defined in Regulation S) must be made solely to purchasers that are Qualified Purchasers. Each purchaser of a Note in the United States who is a “U.S. person” (as defined in Regulation S) (such Note a “Restricted Note”) will be deemed (or required, as the case may be) to represent at the time of purchase that:  (i) the purchaser is a Qualified Purchaser who is a qualified institutional buyer as defined in Rule 144A under the Securities Act (“QIB”); (ii) the purchaser is acting for its own account or the account of another Qualified Purchaser and QIB; (iii) the purchaser is not formed for the purpose of investing in the Issuer (unless each beneficial owner of the purchaser is a Qualified Purchaser); (iv) the purchaser, and each account for which it is purchasing, will hold and transfer at least the minimum denominations of the Notes specified herein; (v) the purchaser understands that the Issuer may receive a list of participants holding positions in securities from one or more book-entry depositories; and (vi) the purchaser will provide written notice of the foregoing, and of any applicable restrictions on transfer, 

 

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to any subsequent transferees. The Restricted Notes may only be transferred to another Qualified Purchaser and QIB and all subsequent transferees are deemed to have made representations (i) through (vi) above.”

 

“The Issuer directs that the recipient of this notice, and any recipient of a copy of this notice, provide a copy to any Person having an interest in this Note as indicated on the books of DTC or on the books of a participant in DTC or on the books of an indirect participant for which such participant in DTC acts as agent.”

 

“The Indenture provides that if, notwithstanding the restrictions on transfer contained therein, the Issuer determines that any holder of, or beneficial owner of an interest in a Restricted Note is a “U.S. person” (as defined in Regulation S) who is determined not to have been a Qualified Purchaser at the time of acquisition of such Restricted Note, or beneficial interest therein, the Issuer may require, by notice to such Holder or beneficial owner, that such Holder or beneficial owner sell all of its right, title and interest to such Restricted Note (or any interest therein) to a Person that is either (x) a Person that is not a “U.S. person” (as defined in Regulation S) acquiring the Notes in an offshore transaction (as defined in Regulation S) in reliance on the exemption from registration provided by Regulation S, or (y) a Qualified Purchaser who is a QIB, with such sale to be effected within 30 days after notice of such sale requirement is given. If such holder or beneficial owner fails to effect the transfer required within such 30-day period, (i) the Issuer or the Collateral Manager acting for the Issuer, without further notice to such holder, shall and is hereby irrevocably authorized by such holder or beneficial owner, to cause its Restricted Note, or beneficial interest therein to be transferred in a commercially reasonable sale (conducted by the Collateral Manager in accordance with Article 9 of the UCC as in effect in the State of New York as applied to securities that are sold on a recognized market or that may decline speedily in value) to a Person that certifies to the Collateral Trustee, the Issuer and the Collateral Manager, in connection with such transfer, that such Person meets the qualifications set forth in clauses (x) and (y) above and (ii) pending such transfer, no further payments will be made in respect of such Restricted Note, or beneficial interest therein held by such holder or beneficial owner.”

 

(b)           DTC Actions. The Issuer will direct DTC to take the following steps in connection with the Global Notes:

 

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

 

(ii)      The Issuer will direct DTC to cause each physical deliver order ticket that is delivered by DTC to purchasers to contain the 20-character security descriptor. The Issuer will direct DTC to cause each deliver order ticket that is delivered by DTC to purchasers in electronic form to contain a “3c7” indicator and a related user manual for participants. Such user manual will contain a description of the relevant restrictions imposed by Section 3(c)(7).

 

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(iii)     On or prior to the Closing Date, the Issuer will instruct DTC to send a Section 3(c)(7) Notice to all DTC participants in connection with the offering of the Global Notes.

 

(iv)    In addition to the obligations of the Registrar set forth in Section 2.6, the Issuer will from time to time (upon the request of the Collateral Trustee) make a request to DTC to deliver to the Issuer a list of all DTC participants holding an interest in the Global Notes.

 

(v)     The Issuer will cause each CUSIP number obtained for a Global Note to have a fixed field containing “3c7” and “144A” indicators, as applicable, attached to such CUSIP number.

 

(c)           Bloomberg Screens, Etc. The Issuer will from time to time request all third-party vendors to include on screens maintained by such vendors appropriate legends regarding Rule 144A and Section 3(c)(7) under the 1940 Act restrictions on the Global Notes. Without limiting the foregoing, the Placement Agent will request that each third-party vendor include the following legends on each screen containing information about the Notes:

 

(i)       Bloomberg

 

(A)          “Iss’d Under 144A/3c7”, to be stated in the “Note Box” on the bottom of the “Security Display” page describing the Global Notes;

 

(B)          a flashing red indicator stating “See Other Available Information” located on the “Security Display” page;

 

(C)          a link to an “Additional Security Information” page on such indicator stating that the Global Notes are being offered in reliance on the exception from registration under Rule 144A of the Securities Act of 1933 to Persons that are both (i) “qualified institutional buyers” as defined in Rule 144A under the Securities Act and (ii) “qualified purchasers” as defined under Section 2(a)(51) of the 1940 Act, as amended; and

 

(D)          a statement on the “Disclaimer” page for the Global Notes that the Notes will not be and have not been registered under the Securities Act of 1933, as amended, that the Issuer has not been registered under the 1940 Act, as amended, and that the Global Notes may only be offered or sold in accordance with Section 3(c)(7) of the 1940 Act, as amended.

 

(ii)      Reuters.

 

(A)          a “144A — 3c7” notation included in the security name field at the top of the Reuters Instrument Code screen;

 

(B)          a “144A3c7Disclaimer” indicator appearing on the right side of the Reuters Instrument Code screen; and

 

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(C)          a link from such “144A3c7Disclaimer” indicator to a disclaimer screen containing the following language:  “These Notes may be sold or transferred only to Persons who are both (i) Qualified Institutional Buyers, as defined in Rule 144A under the Securities Act, and (ii) Qualified Purchasers, as defined under Section 3(c)(7) under the U.S. Investment Company Act of 1940.”

 

ARTICLE XI

 

APPLICATION OF MONIES

 

Section 11.1          Disbursements of Monies from Payment Account. (a) Notwithstanding any other provision herein, but subject to the other sub-Sections of this Section 11.1 and to Section 13.1, on each Payment Date, the Collateral Trustee shall disburse amounts transferred from the Collection Account to the Payment Account pursuant to Section 10.2 in accordance with the following priorities (the “Priority of Payments”); provided that, unless an Enforcement Event has occurred and is continuing, (x) amounts transferred from the Interest Collection Subaccount shall be applied solely in accordance with Section 11.1(a)(i); and (y) amounts transferred from the Principal Collection Subaccount shall be applied solely in accordance with Section 11.1(a)(ii).

 

(i)       On each Payment Date, unless an Enforcement Event has occurred and is continuing, Interest Proceeds on deposit in the Collection Account, to the extent received on or before the related Determination Date (or if such Determination Date is not a Business Day, the next succeeding Business Day) and that are transferred into the Payment Account, shall be applied in the following order of priority:

 

(A)          to the payment of (1) first, taxes and governmental fees owing by the Issuers, if any and (2) second, the accrued and unpaid Administrative Expenses, in the priority stated in the definition thereof, up to the Administrative Expense Cap (except as otherwise expressly provided in connection with any Optional Redemption or Tax Redemption);

 

(B)          to the payment to the Collateral Manager of the accrued and unpaid Base Management Fee that has not been waived by the Collateral Manager;

 

(C)          pro rata based on the amounts due, to the payment of accrued and unpaid interest on the Class A Notes, the Class A-F Notes and the Class A Loans (in each case, including any defaulted interest);

 

(D)          to the payment of accrued and unpaid interest on the Class B Notes (including any defaulted interest);

 

(E)           if either of the Class A/B Coverage Tests is not satisfied on the related Determination Date (except, in the case of the Class A/B Interest Coverage Test, if such Determination Date is prior to the Interest Coverage Test Effective Date), to make payments in accordance with the Debt Payment

 

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Sequence to the extent necessary to cause all Class A/B Coverage Tests that are applicable on such Payment Date to be satisfied on a pro forma basis after giving effect to all payments pursuant to this clause (E);

 

(F)           if, with respect to any Payment Date following the Effective Date, S&P has not yet confirmed satisfaction of the S&P Rating Condition pursuant to Section 7.18(e), and the Effective Date S&P Conditions are not satisfied, to one or both of the following alternatives, as directed by the Collateral Manager:  (i) for application in accordance with the Debt Payment Sequence on such Payment Date or (ii) as Principal Proceeds and transferred to the Collection Account to invest in Eligible Investments (pending the purchase of additional Collateral Obligations) and/or to the purchase of additional Collateral Obligations, in an amount sufficient to satisfy the S&P Rating Condition;

 

(G)          to the payment of (1) first, (in the same manner and order of priority stated therein) any Administrative Expenses not paid pursuant to clause (A)(2) above due to the limitation contained therein and (2) second, any expenses related to a Re-Pricing to the extent not paid on the effective date of such Re-Pricing;

 

(H)          to the payment to the Collateral Manager of any accrued and unpaid Subordinated Management Fee that has not been waived by the Collateral Manager, except to the extent that the Collateral Manager elects to treat such current Subordinated Management Fee as Deferred Subordinated Management Fees, plus any unpaid Deferred Subordinated Management Fee (including any accrued and unpaid interest thereon) that has been deferred with respect to prior Payment Dates which the Collateral Manager has not waived and elects to have paid on such Payment Date; and

 

(I)            any remaining Interest Proceeds (i) first to be deposited in the Collection Account to the extent the Collateral Manager elects, in its sole discretion, to designate such amounts as Interest Proceeds or Principal Proceeds and (ii) second, to be paid to the Fiscal Agent for payment to the holders of the Subordinated Securities in accordance with the Fiscal Agency Agreement.

 

(ii)      On each Payment Date, unless an Enforcement Event has occurred and is continuing, Principal Proceeds on deposit in the Collection Account that are received on or before the related Determination Date (or if such Determination Date is not a Business Day, the next succeeding Business Day) and that are transferred to the Payment Account (which will not include (i) amounts required to meet funding requirements with respect to Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations that are deposited in the Revolver Funding Account or (ii) Principal Proceeds which the Issuer has entered into any commitment to reinvest in Collateral Obligations) shall be applied in the following order of priority:

 

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(A)          to pay the amounts referred to in clauses (A) through (D) of Section 11.1(a)(i)  (and in the same manner and order of priority stated therein), but only to the extent not paid in full thereunder;

 

(B)          to pay the amounts referred to in clause (E) of Section 11.1(a)(i), but only to the extent not paid in full thereunder and to the extent necessary to cause the Class A/B Coverage Tests that are applicable on such Payment Date to be met as of the related Determination Date on a pro forma basis after giving effect to any payments made through this clause (B);

 

(C)          with respect to any Payment Date following the Effective Date, if after the application of Interest Proceeds as provided in clause (F) under Section 11.1(a)(i) S&P has not yet confirmed satisfaction of the S&P Rating Condition pursuant to Section 7.18(e) , and the Effective Date S&P Conditions are not satisfied, to one or both of the following alternatives, as directed by the Collateral Manager:  (i) for application in accordance with the Debt Payment Sequence on such Payment Date or (ii) as Principal Proceeds and transferred to the Collection Account to invest in Eligible Investments (pending the purchase of additional Collateral Obligations) and/or to the purchase of additional Collateral Obligations, in an amount sufficient to satisfy the S&P Rating Condition;

 

(D)          if such Payment Date is a Redemption Date, to make payments in accordance with the Debt Payment Sequence;

 

(E)           if such Payment Date is a Special Redemption Date occurring in connection with a Special Redemption described in clause (G) of Section 11.1(a)(i) to make payments in the amount of the Special Redemption Amount at the election of the Collateral Manager, in accordance with the Debt Payment Sequence;

 

(F)           during the Reinvestment Period, to the Collection Account as Principal Proceeds to invest in Eligible Investments (pending the purchase of additional Collateral Obligations) and/or to the purchase of additional Collateral Obligations;

 

(G)          after the Reinvestment Period, to make payments in accordance with the Debt Payment Sequence;

 

(H)          after the Reinvestment Period, to pay the amounts referred to in clause (G) of Section 11.1(a)(i) only to the extent not already paid (in the same manner and order of priority stated therein);

 

(I)            after the Reinvestment Period, to pay the amounts referred to in clause (H) of Section 11.1(a)(i) only to the extent not already paid (in the same manner and order of priority stated therein); and

 

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(J)            any remaining Principal Proceeds to be paid to the Fiscal Agent for payment to the holders of the Subordinated Securities in accordance with the Fiscal Agency Agreement.

 

(iii)     On the Stated Maturity of the Secured Debt, the Collateral Trustee shall pay the net proceeds from the liquidation of the Assets and all available Cash, but only after the payment of (or establishment of a reserve for) all Administrative Expenses (in the same  manner and order of priority stated in the definition thereof), Collateral Management Fee, and interest and principal on the Secured Debt, to the Holders of the Subordinated Securities in final payment of such Subordinated Securities (such payments to be made in accordance with the priority set forth in Section 11.1(a)(iii)).

 

(iv)    Notwithstanding the provisions of the foregoing Sections 11.1(a)(i) and 11.1(a)(ii) (other than the last paragraph thereof), on the Stated Maturity of the Secured Debt, or if the maturity of the Secured Debt has been accelerated following an Event of Default and has not been rescinded in accordance with the terms herein (an “Enforcement Event”), pursuant to Section 5.7, distributions and proceeds in respect of the Assets will be applied at the date or dates fixed by the Collateral Trustee in the following order of priority:

 

(A)          to the payment of (1) first, taxes and governmental fees owing by the Issuers, if any, and (2) second, the accrued and unpaid Administrative Expenses, in the priority stated in the definition thereof, up to the Administrative Expense Cap;

 

(B)          to the payment to the Collateral Manager of the accrued and unpaid Base Management Fee that has not been waived by the Collateral Manager;

 

(C)          pro rata based on the amounts due, to the payment of accrued and unpaid interest on the Class A Notes, the Class A-F Notes and the Class A Loans (in each case, including any defaulted interest);

 

(D)          pro rata based on the amounts due, to the payment of principal of the Class A Notes, until the Class A Notes have been paid in full, the Class A-F Notes, until the Class A-F Notes have been paid in full, and the Class A Loans, until the Class A Loans have been paid in full;

 

(E)           to the payment of accrued and unpaid interest on the Class B Notes (including any defaulted interest);

 

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

 

(G)          to the payment of (in the same manner and order of priority stated therein) any Administrative Expenses not paid pursuant to clause (A)(2) above due to the limitation contained therein;

 

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(H)          to the payment to the Collateral Manager of any accrued and unpaid Subordinated Management Fee that has not been waived by the Collateral Manager, except to the extent that the Collateral Manager elects to treat such current Subordinated Management Fee as Deferred Subordinated Management Fees, plus any unpaid Deferred Subordinated Management Fee (including any accrued interest thereon) that has been deferred with respect to prior Payment Dates which the Collateral Manager elects to have paid on such Payment Date;

 

(I)            to the payment of any obligations of the Issuers   or to establish any reserves determined by the Issuer or the Collateral Manager to be necessary or desirable; and

 

(J)            to pay the balance to the Fiscal Agent for payment to the holders of the Subordinated Securities in accordance with the Fiscal Agency Agreement.

 

If any declaration of acceleration has been rescinded in accordance with the provisions herein, proceeds in respect of the Assets will be applied in accordance with Section 11.1(a)(i) or (ii), as applicable.

 

(b)           If on any Payment Date the amount available in the Payment Account is insufficient to make the full amount of the disbursements required by the Distribution Report, the Collateral Trustee shall make the disbursements called for in the order and according to the priority set forth under Section 11.1(a) above, subject to Section 13.1, to the extent funds are available therefor.

 

(c)           In connection with the application of funds to pay Administrative Expenses of the Issuer in accordance with Section 11.1(a)(i), Section 11.1(a)(ii) and Section 11.1(a)(iii), the Collateral Trustee shall remit such funds, to the extent available (and subject to the order of priority set forth in the definition of “Administrative Expenses”), as directed and designated in an Issuer Order (which may be in the form of standing instructions, including standing instructions to pay Administrative Expenses in such amounts and to such entities as indicated in the Distribution Report in respect of such Payment Date) delivered to the Collateral Trustee no later than the Business Day prior to each Payment Date.

 

(d)           The Collateral Manager may, in its sole discretion, elect to waive payment of any or all of any Collateral Management Fee otherwise due on any Payment Date by notice to the Issuer, the Loan Agent, the Collateral Administrator and the Collateral Trustee no later than the Business Day immediately prior to such Payment Date in accordance with the terms of Section 8(a) of the Collateral Management Agreement. Any such Collateral Management Fee, once waived, shall not thereafter become due and payable and any claim of the Collateral Manager therein shall be extinguished.

 

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ARTICLE XII

 

SALE OF COLLATERAL OBLIGATIONS; 
 PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS

 

Section 12.1          Sales of Collateral Obligations. Subject to the satisfaction of the conditions specified in Section 12.4, the Collateral Manager on behalf of the Issuer may (except as otherwise specified in this Section 12.1) direct the Collateral Trustee to sell and the Collateral Trustee shall sell on behalf of the Issuer in the manner directed by the Collateral Manager any Collateral Obligation or Equity Security if, as certified by the Collateral Manager, such sale meets the requirements of any one of paragraphs (a) through (j) of this Section 12.1 (subject in each case to any applicable requirement of disposition under Section 12.1(h) and provided that (x) if an Event of Default has occurred and is continuing, the Collateral Manager may not direct the Collateral Trustee to sell any Collateral Obligation or Equity Security pursuant to Section 12.1(e), Section 12.1(f) or Section 12.1(g) and (y) the Collateral Manager may not direct the Collateral Trustee to sell any Collateral Obligation pursuant to this Section 12.1 to ORCC unless such sale satisfies the Purchase and Substitution Limit). For purposes of this Section 12.1, the Sale Proceeds of a Collateral Obligation sold by the Issuer shall include any Principal Financed Accrued Interest received in respect of such sale.

 

(a)           Credit Risk Obligations. The Collateral Manager may direct the Collateral Trustee to sell any Credit Risk Obligation at any time.

 

(b)           Credit Improved Obligations. The Collateral Manager may direct the Collateral Trustee to sell any Credit Improved Obligation at any time during the Reinvestment Period, if the Collateral Manager reasonably believes prior to any such sale that either:

 

(i)  after giving effect to such sale and subsequent reinvestment, the Adjusted Collateral Principal Amount (excluding the Collateral Obligation being sold but including, without duplication, the Collateral Obligation being purchased and the anticipated cash proceeds, if any, of such sale that are not applied to the purchase of such additional Collateral Obligation) will be at least equal to the Reinvestment Target Par Balance; or

 

(ii)  it will be able to enter into binding commitments to reinvest all or a portion of the proceeds of such sale, in compliance with the Investment Criteria, in one or more additional Collateral Obligations with an aggregate outstanding principal balance at least equal to the outstanding principal balance (or, in the case of any Discount Obligation, the purchase price, excluding accrued interest expressed as a percentage of par and multiplied by the outstanding principal balance thereof) of such Credit Improved Obligation within 20 Business Days of such sale;

 

(c)           Defaulted Obligations. The Collateral Manager may direct the Collateral Trustee to sell any Defaulted Obligation at any time. With respect to each Defaulted Obligation that remained a Defaulted Obligation for a continuous period of three years after becoming a Defaulted Obligation and has not been sold or terminated during such three-year period, the Market Value and Principal Balance of such Defaulted Obligation shall be deemed to be zero.

 

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(d)           Equity Securities. The Collateral Manager may direct the Collateral Trustee to sell any Equity Security at any time and shall use its commercially reasonable efforts to effect the sale of any Equity Security, regardless of price (provided that any sale to ORCC or its Affiliates must be on arm’s length terms), subject to any applicable transfer restrictions:

 

(i)       within three years after receipt, if such Equity Security is (A) received upon the conversion of a Defaulted Obligation, or (B) received in an exchange initiated by the Obligor to avoid bankruptcy; and

 

(ii)      within 45 days after receipt, if such Equity Security constitutes Margin Stock, unless such sale is prohibited by applicable law or contractual restriction, in which case such Equity Security shall be sold as soon as such sale is permitted by applicable law or such contract.

 

(e)           Optional Redemption, Optional Subordinated Security Redemption or Clean-Up Call Redemption. In connection with an Optional Redemption of the Secured Debt, an Optional Subordinated Security Redemption or a Clean-Up Call Redemption, if all requirements for such redemption set forth in this Indenture are met (or expected to be met), if necessary to effect such redemption, the Collateral Manager shall direct the Collateral Trustee to sell (which sale may be through participation or other arrangement) all or a portion of the Collateral Obligations (provided that all of the Collateral Obligations shall be sold in connection with an Optional Subordinated Security Redemption) if the requirements of Article IX (including the certification requirements of Section 9.4(e)(ii), if applicable) are satisfied. If any such sale is made through participations, the Issuer shall use reasonable efforts to cause such participations to be converted to assignments within six months after the sale.

 

(f)            Tax Redemption. After a Majority of an Affected Class or a Majority of the Subordinated Securities has directed (by a written direction delivered to the Collateral Trustee) a Tax Redemption, the Collateral Manager shall, if necessary to effect such Tax Redemption, direct the Collateral Trustee to sell (which sale may be through participation or other arrangement) all or a portion of the Collateral Obligations if the requirements of Article IX (including the certification requirements of Section 9.4(e)(ii), if applicable) are satisfied (or expected to be satisfied). If any such sale is made through participations, the Issuer shall use reasonable efforts to cause such participations to be converted to assignments within six months after the sale.

 

(g)           Discretionary Sales. The Collateral Manager may direct the Collateral Trustee to sell (in addition to any sales pursuant to clauses (a) through (e) above) any Collateral Obligation to any party other than ORCC at any time other than during a Restricted Trading Period if after giving effect to such sale, the Aggregate Principal Balance of all Collateral Obligations sold as described in this Section 12.1(g) during the preceding period of 12 calendar months (or, for the first 12 calendar months after the Closing Date, during the period commencing on the Closing Date) is not greater than 25% of the Collateral Principal Amount as of the first day of such 12 calendar month period (or as of the Closing Date, as the case may be).

 

(h)           Mandatory Sales. The Collateral Manager on behalf of the Issuer shall use its commercially reasonable efforts to effect the sale (regardless of price, but after a reasonable 

 

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period of market inquiry, except that sales to ORCC or its Affiliates must be on arm’s length terms) subject to any applicable transfer restrictions of any Collateral Obligation that (i) no longer meets the criteria described in clause (vii) of the definition of “Collateral Obligation”, within 18 months after the failure of such Collateral Obligation to meet such criteria or (ii) no longer meets the criteria described in clause (vi) of the definition of “Collateral Obligation” within 45 days after the failure of such Collateral Obligation to meet either such criteria.

 

(i)            Sales in Connection with an Optional Substitution or Optional Repurchase. The Collateral Manager may direct the Collateral Trustee to sell any Collateral Obligation to ORCC at any time in connection with an optional purchase or substitution of such Collateral Obligation pursuant to Section 12.3, it being understood that such sales will be subject to the Purchase and Substitution Limit.

 

(j)            Sales at Stated Maturity. The Collateral Manager may direct the Collateral Trustee to sell any Collateral Obligation in order to repay the Secured Debt at the earliest Stated Maturity of any Secured Debt Outstanding.

 

Section 12.2          Purchase of Additional Collateral Obligations. On any date during the Reinvestment Period, the Collateral Manager on behalf of the Issuer may, subject to the other requirements in this Indenture, direct the Collateral Trustee to invest Principal Proceeds, amounts on deposit in the Ramp-Up Account and Principal Financed Accrued Interest, and the Collateral Trustee shall invest such Principal Proceeds and other amounts in accordance with such direction. After the Reinvestment Period, the Collateral Manager shall not direct the Collateral Trustee to invest any amounts on behalf of the Issuer; provided that in accordance with Section 12.2(e), Cash on deposit in any Account (other than the Payment Account) may be invested in Eligible Investments following the Reinvestment Period.

 

(a)           Investment Criteria. No obligation may be purchased by the Issuer unless each of the following conditions is satisfied as of the date the Collateral Manager commits on behalf of the Issuer to make such purchase, in each case as determined by the Collateral Manager after giving effect to such purchase and all other sales or purchases previously or simultaneously committed to; provided that the conditions set forth in clauses (ii), (iii) and (iv) below need only be satisfied with respect to purchases of Collateral Obligations occurring on or after the Effective Date (the “Investment Criteria”):

 

(i)       such obligation is a Collateral Obligation;

 

(ii)      each Coverage Test will be satisfied, or if any such test is not satisfied, the level of compliance with such test is maintained or improved;

 

(iii)     (A) in the case of an additional Collateral Obligation purchased with the proceeds from the sale of a Credit Risk Obligation or a Defaulted Obligation, either (1) the Aggregate Principal Balance of all additional Collateral Obligations purchased with the proceeds from such sale will at least equal the Sale Proceeds from such sale, (2) the Aggregate Principal Balance of the Collateral Obligations will be maintained or increased (when compared to the Aggregate Principal Balance of the Collateral Obligations immediately prior to such sale) or (3) the Adjusted Collateral Principal Amount (excluding 

 

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the Collateral Obligation being sold but including, without duplication, the Collateral Obligation being purchased and the anticipated cash proceeds, if any, of such sale that are not applied to the purchase of such additional Collateral Obligation) will be greater than the Reinvestment Target Par Balance and (B) in the case of any other purchase of additional Collateral Obligations purchased with the proceeds from the sale of a Collateral Obligation, either (1) the Aggregate Principal Balance of the Collateral Obligations will be maintained or increased (when compared to the Aggregate Principal Balance of the Collateral Obligations immediately prior to such sale) or (2) the Adjusted Collateral Principal Amount (excluding the Collateral Obligation being sold but including, without duplication, the Collateral Obligation being purchased and the anticipated cash proceeds, if any, of such sale that are not applied to the purchase of such additional Collateral Obligation) will be greater than the Reinvestment Target Par Balance;

 

(iv)    either (A) each requirement or test, as the case may be, of the Concentration Limitations and the Collateral Quality Test (except, in the case of an additional Collateral Obligation purchased with the proceeds from the sale of a Credit Risk Obligation or a Defaulted Obligation, the S&P CDO Monitor Test) will be satisfied or (B) if any such requirement or test was not satisfied immediately prior to such investment, such requirement or test will be maintained or improved, in each case after giving effect to the investment;

 

(v)     the date on which the Issuer (or the Collateral Manager on its behalf) commits to purchase such Collateral Obligation occurs during the Reinvestment Period; and

 

(vi)    if the Weighted Average Life Test is not satisfied immediately prior to the purchase of such additional Collateral Obligation, the Average Life of such additional Collateral Obligation shall be no greater than the level of the Weighted Average Life Test in effect as of the date of such purchase.

 

(b)           Post-Reinvestment Period Settlement Obligations. If the Issuer has entered into a written trade ticket or other written binding commitment to purchase a Collateral Obligation during the Reinvestment Period which purchase does not settle or is not scheduled to settle prior to the end of the Reinvestment Period (such Collateral Obligation, a “Post-Reinvestment Period Settlement Obligation”), such Post-Reinvestment Period Settlement Obligation shall be treated as having been purchased by the Issuer prior to the end of the Reinvestment Period for purposes of the Investment Criteria, and Principal Proceeds received after the end of the Reinvestment Period may be applied to the payment of the purchase price of such Post-Reinvestment Period Settlement Obligation, provided that the Collateral Manager believes, in its commercially reasonable business judgment, that the settlement date with respect to such purchase will occur within forty-five (45) Business Days of the date of the trade ticket or other commitment to purchase such Collateral Obligations. Not later than the Business Day immediately preceding the end of the Reinvestment Period, the Collateral Manager shall deliver to the Collateral Trustee a schedule of Collateral Obligations purchased by the Issuer with respect to which purchases the trade date has occurred but the settlement date has not yet occurred and shall certify to the Collateral Trustee that sufficient Principal Proceeds are available (including for this purpose, cash on deposit in the Principal Collection Subaccount as well as any Principal Proceeds 

 

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received by the Issuer from the sale of Collateral Obligations for which the trade date has already occurred but the settlement date has not yet occurred) to effect the settlement of such Collateral Obligation.

 

(c)           Trading Plan Period. For purposes of calculating compliance with the Investment Criteria, at the election of the Collateral Manager in its sole discretion, any proposed investment (whether a single Collateral Obligation or a group of Collateral Obligations) identified by the Collateral Manager as such at the time when compliance with the Investment Criteria is required to be calculated (a “Trading Plan”) may be evaluated after giving effect to all sales and reinvestments proposed to be entered into within the three (3) Business Days following the date of determination of such compliance (such period, the “Trading Plan Period”); provided that (i) no Trading Plan may result in the purchase of Collateral Obligations having an Aggregate Principal Balance that exceeds 7.5% of the Collateral Principal Amount as of the first day of the Trading Plan Period, (ii) no Trading Plan Period may include a Determination Date, (iii) no more than one Trading Plan may be in effect at any time during a Trading Plan Period, (iv) if the Investment Criteria are satisfied prospectively after giving effect to a Trading Plan but are not satisfied upon  the expiry of the related Trading Plan Period, solely as a result of the purchases and sales included in the Trading Plan, the Investment Criteria shall not at any time thereafter be evaluated by giving effect to a Trading Plan, (v) no Trading Plan may result in the purchase of Collateral Obligations with the difference between the maturity of the Collateral Obligation with the shortest maturity in such group and the maturity of the Collateral Obligation with the longest maturity in such group being greater than 36 months and (vi) no Trading Plan may result in the purchase of a Collateral Obligation with a maturity of less than six months.  The Collateral Manager shall provide prior written notice to the Rating Agency of (i) any Trading Plan, which notice shall specify the proposed investments identified by the Collateral Manager for acquisition as part of such Trading Plan and (ii) the occurrence of the event described in clause (z) above.  The Collateral Manager shall notify the Collateral Trustee of the completion of any Trading Plan and upon receipt of such notice, the Collateral Trustee will post a notice on the Collateral Trustee’s website.

 

(d)           Certification by Collateral Manager. Not later than the Cut-Off Date for any Collateral Obligation purchased in accordance with this Section 12.2, the Collateral Manager shall deliver by e-mail or other electronic transmission to the Collateral Trustee and the Collateral Administrator an Officer’s certificate of the Collateral Manager certifying that such purchase complies with this Section 12.2 and Section 12.4.

 

(e)           Investment in Eligible Investments. Cash on deposit in any Account (other than the Payment Account) may be invested at any time in Eligible Investments in accordance with Article X.

 

Section 12.3          Optional Purchase or Substitution of Collateral Obligations.

 

(a)           Optional Substitutions.

 

(i)       With respect to any Collateral Obligation as to which a Substitution Event has occurred, subject to the limitations set forth in this Section 12.3 (including the Purchase and Substitution Limit), ORCC may (but shall not be obligated to) either (x) convey to the 

 

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Issuer one or more Collateral Obligations in exchange for such Collateral Obligation or (y) deposit into the Principal Collection Subaccount an amount equal to the Fair Market Value (or, with respect to any Collateral Obligation that, at the time of its acquisition, an application to S&P for a credit estimate was pending and that, upon the provision of such credit estimate, such Collateral Obligation became a S&P CCC Collateral Obligation, the purchase price that the Issuer paid to acquire such Collateral Obligation) for such Collateral Obligation and then, prior to the expiration of the Substitution Period, convey to the Issuer one or more Collateral Obligations in exchange for the funds so deposited or a portion thereof.

 

(ii)      Any substitution pursuant to this Section 12.3(a) shall be initiated by delivery of written notice in the form of Exhibit F hereto (a “Notice of Substitution”) by ORCC to the Collateral Trustee, the Issuer and the Collateral Manager that ORCC intends to substitute a Collateral Obligation pursuant to this Section 12.3(a) and shall be completed prior to the earliest of:  (x) the expiration of 90 days after delivery of such notice (or, with respect to any Collateral Obligation that is substituted or repurchased solely on the basis of becoming a Post-Transition S&P CCC Collateral Obligation, 15 Business Days from the date on which it became a Post-Transition S&P CCC Collateral Obligation); (y) delivery of written notice  to the Collateral Trustee from ORCC stating that ORCC does not intend to convey any additional Substitute Collateral Obligations to the Issuer in exchange for any remaining amounts deposited in the Principal Collection Subaccount under clause (a)(i)(y); or (z) in the case of a Collateral Obligation which has become subject to a Specified Amendment, the effective date set forth in such Specified Amendment (such period described in clause (ii)(x), (y) or (z), as applicable, being the “Substitution Period”).

 

(iii)     Each Notice of Substitution shall specify the Collateral Obligation to be substituted, the reasons for such substitution and the Fair Market Value (or, with respect to any Collateral Obligation that is substituted or repurchased solely on the basis of becoming a Post-Transition S&P CCC Collateral Obligation, the purchase price that the Issuer paid to acquire such Collateral Obligation)  with respect to the Collateral Obligation. On the last day of any Substitution Period, any amounts previously deposited in accordance with clause (a)(i)(y) above which relate to such Substitution Period that have not been applied to purchase one or more Substitute Collateral Obligations or to fund the Revolver Funding Account if necessary with respect thereto shall be deemed to constitute Principal Proceeds; provided that prior to the expiration of the related Substitution Period any such amounts shall not be deemed to be Principal Proceeds and shall remain in the Principal Collection Subaccount until applied to acquire Substitute Collateral Obligations or to fund the Revolver Funding Account if necessary with respect thereto.

 

(iv)    The substitution of any Substitute Collateral Obligation will be subject to the satisfaction of the Substitute Collateral Obligations Qualification Conditions as of the related Cut-Off Date for each such Collateral Obligation (after giving effect to such substitution).

 

(b)           Optional Purchases. In addition to the right to substitute for any Collateral Obligations that become subject to a Substitution Event, ORCC shall have the right, but not the obligation, to purchase from the Issuer any Collateral Obligation subject to the Purchase and

 

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Substitution Limit, at a cash purchase price at least equal to the Fair Market Value of such Collateral Obligation (or applicable portion thereof) as of the date of such purchase, which the Collateral Trustee shall deposit into the Collection Account upon receipt.

 

(c)                                  Purchase and Substitution Limit. At all times, (i) the Aggregate Principal Balance of all Collateral Obligations that are Substitute Collateral Obligations, plus (ii) the Aggregate Principal Balance of all Collateral Obligations that have been purchased by ORCC pursuant to Section 12.3(a) and that the purchase price therefor was not subsequently applied to purchase a Substitute Collateral Obligation, plus (iii) the Aggregate Principal Balance of all Collateral Obligations that have been purchased by ORCC pursuant to Section 12.3(b) above, plus (iv) the Aggregate Principal Balance of all Collateral Obligations that have been purchased by ORCC pursuant to Section 12.1 may not exceed an amount equal to 30% of the Target Initial Par Amount; provided that (I) clauses (i) - (iv) above shall not include (A) the Principal Balance related to any Collateral Obligation that is purchased by ORCC in connection with a proposed Specified Amendment to such Collateral Obligation so long as (x) ORCC certifies in writing to the Collateral Manager and the Collateral Trustee that such purchase is, in the commercially reasonable business judgment of ORCC, necessary or advisable in connection with the restructuring of such Collateral Obligation and such restructuring is expected to result in a Specified Amendment to such Collateral Obligation, and (y) the Collateral Manager certifies in writing to the Collateral Trustee  that the Collateral Manager either would not be permitted to or would not elect to enter into such Specified Amendment pursuant to the Collateral Manager Standard or any provision of this Indenture or the Collateral Management Agreement, (B) the purchase price of any Equity Securities sold to ORCC pursuant to Section 12.1(d), (C) the Principal Balance of up to 10 Post-Transition S&P CCC Collateral Obligations that are substituted or repurchased solely on the basis of becoming a Post-Transition S&P CCC Collateral Obligation; provided that (x) each such Collateral Obligation must be substituted or repurchased by ORCC within 15 Business Days from the date it becomes a Post-Transition S&P CCC Collateral Obligation and (y) the purchase price, or substitution value, as applicable, for such Post-Transition S&P CCC Collateral Obligation must be the greater of its Fair Market Value and the purchase price that the Issuer paid to acquire such Collateral Obligation (less any principal payments received by the Issuer) or (D) any purchase by ORCC in connection with an Optional Redemption, Tax Redemption or Clean-Up Call Redemption and (II) ORCC may not substitute or repurchase a Collateral Obligation that is a Post-Transition S&P CCC Collateral Obligation that was not substituted or repurchased in accordance with clause (I)(C) above or was an S&P CCC Collateral Obligation at the time the Issuer acquired such Collateral Obligation, in each case, other than (A) if a Substitution Event has occurred with respect to such Collateral Obligation (other than a Substitution Event under clause (e) of the definition thereof), in which case, such substitution or repurchase will be counted towards the Purchase and Substitution Limit or (B) in connection with an Optional Redemption, Tax Redemption or Clean-Up Call Redemption. The foregoing provisions in this paragraph constitute the “Purchase and Substitution Limit.”

 

(d)                                 Third Party Beneficiaries. The Issuer and the Collateral Trustee agree that ORCC shall be a third party beneficiary of this Indenture solely for purposes of this Section 12.3, and shall be entitled to rely upon and enforce such provisions of this Section 12.3 to the same extent as if it were a party hereto.

 

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(e)                                  [Reserved].

 

Section 12.4                             Conditions Applicable to All Sale and Purchase Transactions. (a) Any transaction effected under this Article XII or in connection with the acquisition, disposition or substitution of any Asset shall be conducted on an arm’s length basis and, if effected with a Person Affiliated with the Collateral Manager (or with an account or portfolio for which the Collateral Manager or any of its Affiliates serves as investment adviser), shall be effected in accordance with the requirements of Section 5 of the Collateral Management Agreement on terms no less favorable to the Issuer than would be the case if such Person were not so Affiliated, provided that the Collateral Trustee shall have no responsibility to oversee compliance with this clause (a) by the other parties. Any sale of a Collateral Obligation or an Equity Security (other than a Substitute Collateral Obligation) to the Collateral Manager, an Affiliate of the Collateral Manager or an Affiliate of the Issuer shall be at a purchase price equal to the current Fair Market Value of such Collateral Obligation or Equity Security certified by the Collateral Manager to the Collateral Trustee.

 

(b)                                 Upon any acquisition of a Collateral Obligation pursuant to this Article XII, all of the Issuer’s right, title and interest to the Asset or Assets shall be Granted to the Collateral Trustee pursuant to this Indenture, such Asset or Assets shall be Delivered to the Custodian, and, if applicable, the Custodian shall receive such Asset or Assets. The Collateral Trustee shall also  receive, not later than the Cut-Off Date, an Officer’s certificate of the Issuer containing the statements set forth in Section 3.1(viii); provided that such requirement shall be satisfied, and such statements shall be deemed to have been made by the Issuer, in respect of such acquisition by the delivery to the Collateral Trustee of a trade ticket in respect thereof that is signed by a Responsible Officer of the Collateral Manager.

 

(c)                                  Notwithstanding anything contained in this Article XII or Article V to the contrary, in addition to the rights described herein, the Issuer shall have the right to effect any sale of any Asset or purchase of any Collateral Obligation and ORCC shall have the right to exercise any optional purchase or substitution rights with the consent of Holders evidencing at least 75% of the Aggregate Outstanding Amount of each Class of Secured Debt (and notice to the Collateral Trustee and the Rating Agency).

 

(d)                                 Notwithstanding anything contained in this Article XII or Article V to the contrary, upon the occurrence and during the continuance of an Enforcement Event, the Issuer shall not have the right to effect any sale of any Asset or purchase of any Collateral Obligation and ORCC shall not exercise any optional purchase or substitution rights, in each case without the consent of a Majority of the Controlling Class.

 

ARTICLE XIII

 

HOLDERS’ RELATIONS

 

Section 13.1                             Subordination. (a) Anything in this Indenture, the Credit Agreement, the Fiscal Agency Agreement, the Secured Debt or the Subordinated Securities to the contrary notwithstanding, the Holders of the Subordinated Securities and the Holder of each Class of Secured Debt that constitute a Junior Class agree for the benefit of the Holders of the Secured

 

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Debt of each Priority Class with respect to the Subordinated Securities and such Junior Class that the Subordinated Securities and such Junior Class shall be subordinate and junior to the Secured Debt of each such Priority Class to the extent and in the manner expressly set forth in the Priority of Payments.

 

(b)                                 The Holders of the Subordinated Securities and each Class of Secured Debt and beneficial owners of the Subordinated Securities and each Class of Secured Debt agree, for the benefit of all Holders of the Subordinated Securities and each Class of Secured Debt and beneficial owners of the Subordinated Securities and each Class of Secured Debt, not to cause the filing of a petition in bankruptcy, insolvency or a similar proceeding in the United States, the Cayman Islands or any other jurisdiction against the Issuer or the Co-Issuer until the payment in full of all Secured Debt and Subordinated Securities and the expiration of a period equal to one year and one day or, if longer, the applicable preference period then in effect plus one day, following such payment in full.

 

Section 13.2                             Standard of Conduct. In exercising any of its or their voting rights, rights to direct and consent or any other rights as a Holder under this Indenture, a Holder or Holders shall not have any obligation or duty to any Person or to consider or take into account the interests of any Person and shall not be liable to any Person for any action taken by it or them or at its or their direction or any failure by it or them to act or to direct that an action be taken, without regard to whether such action or inaction benefits or adversely affects any Holder, the Issuers, or any other Person, except for any liability to which such Holder may be subject to the extent the same results from such Holder’s taking or directing an action, or failing to take or direct an action, in bad faith or in violation of the express terms of this Indenture.

 

ARTICLE XIV

 

MISCELLANEOUS

 

Section 14.1                             Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Officer of the Issuer, the Co-Issuer or the Collateral Manager may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel (provided that such counsel is a nationally or internationally recognized and reputable law firm, one or more of the partners of which are admitted to practice before the highest court of any State of the United States or the District of Columbia which law firm may, except as otherwise expressly provided herein, be counsel for the Issuer), unless such Officer knows, or should know, that the certificate or opinion or representations with respect to the matters upon which such certificate or opinion is based are erroneous. Any such certificate of an Officer of the Issuer, the Co-Issuer or the Collateral Manager or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations

 

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by, the Issuer, the Co-Issuer, the Collateral Manager or any other Person (on which the Collateral Trustee shall be entitled to rely), stating that the information with respect to such factual matters is in the possession of the Issuer, the Co-Issuer, the Collateral Manager or such other Person, unless such Officer of the Issuer, the Co-Issuer or the Collateral Manager or such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous. Any Opinion of Counsel may also be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an Officer of the Collateral Manager or of the Issuer or the Co-Issuer, stating that the information with respect to such matters is in the possession of the Collateral Manager or of the Issuer, unless such counsel knows that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Collateral Trustee at the request or direction of the Issuer or the Co-Issuer, then notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s or the Co-Issuer’s right to make such request or direction, the Collateral Trustee shall be protected in  acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.1(d).

 

The Bank (in any capacity under the Transaction Documents) agrees to accept and act upon instructions or directions pursuant to the Transaction Documents sent by unsecured email, facsimile transmission or other similar unsecured electronic methods. If such person elects to give the Bank email or facsimile instructions (or instructions by a similar electronic method) and the Bank in its discretion elects to act upon such instructions, the Bank’s reasonable understanding of such instructions shall be deemed controlling. The Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Bank’s reliance upon and compliance with such instructions notwithstanding such instructions conflicting with or being inconsistent with a subsequent written instruction. Any person providing such instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Bank, including without limitation the risk of the Bank acting on unauthorized instructions, and the risk of interception and misuse by third parties and acknowledges and agrees that there may be more secure methods of transmitting such instructions than the method(s) selected by it and agrees that the security procedures (if any) to be followed in connection with its transmission of such instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances.

 

Section 14.2                             Acts of Holders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Collateral Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action or actions embodied therein and

 

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evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Collateral Trustee and the Issuers, if made in the manner provided in this Section 14.2.

 

(b)                                 The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Collateral Trustee reasonably deems sufficient.

 

(c)                                  The principal amount or face amount, as the case may be, and registered numbers of Notes held by any Person, and the date of such Person’s holding the same, shall be proved by the Register or shall be provided by certification by such Holder.

 

(d)                                 Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Secured Debt or Subordinated Securities shall bind the Holder (and any transferee thereof) of such and of every Secured Debt or Subordinated Securities issued or incurred upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Collateral Trustee or the Issuers in reliance thereon, whether or not notation of such action is made upon such Secured Debt or Subordinated Securities.

 

(e)                                  Notwithstanding anything herein to the contrary, a holder of a beneficial interest in a Global Note will have the right to receive access to reports on the Collateral Trustee’s website and will be entitled to exercise rights to vote, give consents and directions which holders of the related Class of Secured Debt is entitled to give under this Indenture upon delivery of a beneficial ownership certificate (a “Beneficial Ownership Certificate”) to the Collateral Trustee which certifies (i) that such Person is a beneficial owner of an interest in a Global Note, (ii) the amount and Class of Secured Debt so owned, and (iii) that such Person will notify the Collateral Trustee when it sells all or a portion of its beneficial interest in such Class of Secured Debt. A separate Beneficial Ownership Certificate must be delivered each time any such vote, consent or direction is given; provided that nothing shall prevent the Collateral Trustee from requesting additional information and documentation with respect to any such beneficial owner.

 

Section 14.3                             Notices, etc.to Trustee, the Issuer, the Loan Agent, the Collateral Manager, Placement Agent, the Collateral Administrator, the Rating Agency and the Co-Issuer.

 

(a)                                 Any request, demand, authorization, direction, instruction, order, notice, consent, waiver or Act of Holders or other documents or communication provided or permitted by this Indenture to be made upon, given, e-mailed or furnished to, or filed with:

 

(i)                    the Collateral Trustee shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to and mailed, by certified mail, return receipt requested, hand delivered, sent by overnight courier service guaranteeing next day delivery, by electronic mail, or by facsimile to State Street Bank and Trust Company, 1 Iron Street Boston, Massachusetts 02210, Attention:  Structured Trust and Analytics; Ref: Owl Rock CLO I, in legible form, to the Collateral Trustee addressed to it at its applicable Corporate Trust Office, or at any other address previously furnished in writing to the other parties hereto by the Collateral Trustee, and executed by a Responsible Officer of the entity

 

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sending such request, demand, authorization, direction, instruction, order, notice, consent, waiver or other document; provided that any demand, authorization, direction, instruction, order, notice, consent, waiver or other document sent to State Street Bank and Trust Company (in any capacity hereunder) will be deemed effective only upon receipt thereof by State Street Bank and Trust Company;

 

(ii)                 the Issuer shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, by electronic mail, or by facsimile in legible form, to the Issuer addressed to it at c/o MaplesFS Limited, P.O. Box 1093, Boundary Hall,
 Cricket Square, Grand Cayman, KY1-1102, Cayman Islands, with a copy to the Collateral Manager, or at any other address previously furnished in writing to the other parties hereto by the Issuer, with a copy to the Collateral Manager at its address below;

 

(iii)              the Collateral Manager shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, by electronic mail or by facsimile in legible form, to the Collateral Manager addressed to it at 399 Park Avenue, 38th Floor, New York, NY 10022, or at any other address previously furnished in writing to the parties hereto;

 

(iv)             Natixis shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, by electronic mail, or by facsimile in legible form, addressed to Natixis Securities Americas LLC, 1251 Avenue of the Americas, 4th Floor, New York, New York, 10020, Attention: Structured Credit and Solutions Group, facsimile No. (212) 891-5790 or at any other address previously furnished in writing to the Issuer and the Collateral Trustee by Natixis;

 

(v)                the Loan Agent shall be sufficient for every purpose hereunder (except as otherwise provided in Section 14.16 with respect to 17g-5 Information) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, by electronic mail, or by facsimile in legible form, to the Loan Agent at State Street Bank and Trust Company, 1 Iron Street Boston, Massachusetts 02210, Attention:  Structured Trust and Analytics; Ref: Owl Rock CLO I, or at any other address previously furnished in writing to the parties hereto; and

 

(vi)             the Collateral Administrator shall be sufficient for every purpose hereunder (except as otherwise provided in Section 14.16 with respect to 17g-5 Information) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, by electronic mail, or by facsimile in legible form, to the Collateral Administrator at State Street Bank and Trust Company, 1 Iron Street Boston, Massachusetts 02210, Attention:  Structured Trust and Analytics; Ref: Owl Rock CLO I, or at any other address previously furnished in writing to the parties hereto; and

 

(vii)          the Rating Agency shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if delivered by electronic copy to CDO_Surveillance@spglobal.com; provided that (x) in respect of any application for a ratings estimate by S&P in respect of a Collateral Obligation, Information must be

 

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submitted to creditestimates@spglobal.com, (y) in respect of any request for satisfaction of the S&P Rating Condition in connection with the Effective Date, Information must be submitted to CDOEffectiveDatePortfolios@spglobal.com and (x) in respect of emails related to the S&P CDO Monitor, Information must be submitted to cdomonitor@spglobal.com.

 

(viii)       the Co-Issuer shall be sufficient for every purpose hereunder (unless otherwise expressly provided) if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, by electronic mail, or by facsimile in legible form, to c/o Puglisi & Associates, 850 Library Avenue, Suite 204 or at any other address previously furnished in writing to the other parties hereto by the Co-Issuer with a copy to the Collateral Manager.

 

(b)                                 If any provision herein calls for any notice or document to be delivered simultaneously to the Collateral Trustee and any other Person, the Collateral Trustee’s receipt of such notice or document shall entitle the Collateral Trustee to assume that such notice or document was delivered to such other Person or entity unless otherwise expressly specified herein.

 

(c)                                  Notwithstanding any provision to the contrary contained herein or in any agreement or document related thereto, any report, statement or other information required to be provided by  the Issuer or the Collateral Trustee may be provided by providing access to a website containing such information.

 

(d)                                 Unless the parties hereto otherwise agree, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that if any such notice or other communication is not sent or posted during normal business hours, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day; provided further that if in any instance the intended recipient declines or opts out of the receipt acknowledgment, then such notice or communication shall be deemed to have been received on the Business Day sent or posted, if sent or posted during normal business hours on such Business Day, or if otherwise, at the opening of business on the next Business Day.

 

Section 14.4                             Notices to Holders; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event:

 

(a)                                 such notice shall be sufficiently given to Holders if in writing and sent by email transmission, if available, and mailed, first class postage prepaid, or by overnight delivery service (or, in the case of Holders of Global Notes, e-mailed to DTC), to each Holder affected by such event, at the address of such Holder as it appears in the Register not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice; and

 

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(b)                                 such notice shall be in the English language.

 

Where this Indenture provides for notice to holders of Subordinated Securities, such notice shall be sufficiently given if in writing and mailed, first class postage prepaid, or by overnight delivery service to Issuer, or by electronic mail transmission, at the Issuer’s address pursuant to Section 14.3 hereof. The Issuer shall forward all notices received pursuant to the preceding sentence to the holders of Subordinated Securities. The Issuer shall provide notice and a consent solicitation package to each holder of a Subordinated Security to the extent that such holder’s consent or approval is required hereunder. The Issuer shall provide written notice to the Collateral Trustee confirming any such approval or consent obtained from the requisite holders of the Subordinated Securities.

 

Notwithstanding clause (a) above, a Holder may give the Collateral Trustee a written notice that it is requesting that notices to it be given by electronic mail or by facsimile transmissions and stating the electronic mail address or facsimile number for such transmission. Thereafter, the Collateral Trustee shall give notices to such Holder by electronic mail or facsimile transmission, as so requested; provided that if such notice also requests that notices be given by mail, then such notice shall also be given by mail in accordance with clause (a) above. Notices for Holders may also be posted to the Collateral Trustee’s website.

 

Subject to the requirements of Section 14.15, the Collateral Trustee will deliver to the Holders any information or notice relating to this Indenture requested to be so delivered by at least 25% of the Holders of any Class of Secured Debt or Subordinated Securities (by Aggregate Outstanding Amount), at the expense of the Issuer; provided that the Collateral Trustee may decline to send any such notice that it reasonably determines to be contrary to (i) any of the terms of this Indenture, (ii) any duty or obligation that the Collateral Trustee may have hereunder or (iii) applicable law. The Collateral Trustee may require the requesting Holders to comply with its standard verification policies in order to confirm Holder status.

 

Neither the failure to mail any notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. In case by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity or by reason of any other cause it shall be impracticable to give such notice by mail of any event to Holders when such notice is required to be given pursuant to any provision of this Indenture, then such notification to Holders as shall be made with the approval of the Collateral Trustee shall constitute a sufficient notification to such Holders for every purpose hereunder.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Collateral Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

Section 14.5                             Effect of Headings and Table of Contents. The Article and Section headings herein (including those used in cross-references herein) and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

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Section 14.6                             Successors and Assigns. All covenants and agreements herein by the Issuers shall bind their successors and assigns, whether so expressed or not.

 

Section 14.7                             Severability. If any term, provision, covenant or condition of this Indenture, the Credit Agreement or the Notes, or the application thereof to any party hereto or any circumstance, is held to be unenforceable, invalid or illegal (in whole or in part) for any reason (in any relevant jurisdiction), the remaining terms, provisions, covenants and conditions of this Indenture, the Credit Agreement or the Notes, modified by the deletion of the unenforceable, invalid or illegal portion (in any relevant jurisdiction), will continue in full force and effect, and such unenforceability, invalidity, or illegality will not otherwise affect the enforceability, validity or legality of the remaining terms, provisions, covenants and conditions of this Indenture, the Credit Agreement or the Notes, as the case may be, so long as this Indenture, the Credit Agreement or the Notes, as the case may be, as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the deletion of such portion of this Indenture, the Credit Agreement or the Notes, as the case may be, will not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties.

 

Section 14.8                             Benefits of Indenture. Except as otherwise expressly set forth in this Indenture, nothing herein or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, the Collateral Manager, the Collateral Administrator, the Holders of the Secured Debt or Subordinated Securities and (to the extent provided herein) and the other Secured Parties any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 14.9                             Liability of Issuers. Notwithstanding any other terms of this Indenture, the Notes, or any other agreement entered into by either of the Issuers or otherwise, neither of the Issuers shall have any liability whatsoever to the other of the Issuers under this Indenture, the Notes, any other agreement, or otherwise.  Without prejudice to the generality of the foregoing, neither of the Issuers may take any action to enforce, or bring any action or proceeding, in respect of this Indenture, the Notes, any other agreement, or otherwise against the other of the Issuers.  In particular, the Issuers may not petition or take any other steps for the winding up or bankruptcy of the other of the Issuers or of any and neither of the Issuers shall have any claim with respect to any assets of the other of the Issuers.

 

Section 14.10                      Governing Law. This Indenture shall be construed in accordance with, and this Indenture and any matters arising out of or relating in any way whatsoever to this Indenture (whether in contract, tort or otherwise), shall be governed by, the law of the State of New York.

 

Section 14.11                      Submission to Jurisdiction. With respect to any suit, action or proceedings relating to this Indenture or any matter between the parties arising under or in connection with this Indenture (“Proceedings”), each party irrevocably:  (i) submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York sitting in the Borough of Manhattan and the United States District Court for the Southern District of New York, and any appellate court from any thereof; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings

 

219

 

have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing herein precludes any of the parties from bringing Proceedings in any other jurisdiction, nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

 

Section 14.12                      WAIVER OF JURY TRIAL. EACH OF THE ISSUERS, THE HOLDERS AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY. Each party hereby (i) certifies that no representative, agent or attorney of the other has represented, expressly or otherwise, that the other would not, in the event of a Proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it has been induced to enter into this Indenture by, among other things, the mutual waivers and certifications in this paragraph. THE ISSUERS IRREVOCABLY CONSENT TO THE SERVICE OF ANY AND ALL PROCESS IN ANY ACTION OR PROCEEDING BY THE MAILING OR DELIVERY OF COPIES OF SUCH PROCESS TO IT AT THE OFFICE OF THE ISSUERS’ NOTICE AGENT SET FORTH IN SECTION 7.2. THE ISSUERS AND THE TRUSTEE AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.

 

Section 14.13                      Counterparts. This Indenture (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by e-mail (.pdf) or facsimile transmission), each of which will be deemed an original, and all of which together constitute one and the same instrument. Delivery of an executed counterpart signature page of this Indenture by e-mail (.pdf) or facsimile shall be effective as delivery of a manually executed counterpart of this Indenture.

 

Section 14.14                      Acts of Issuer. Any report, information, communication, request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or performed by the Issuer shall be effective if given or performed by the Issuer or by the Collateral Manager on the Issuer’s behalf.

 

The Issuer agrees to coordinate with the Collateral Manager with respect to any communication to the Rating Agency and to comply with the provisions of this Section and Section 14.16, unless otherwise agreed to in writing by the Collateral Manager.

 

Section 14.15                      Confidential Information. (a) The Collateral Trustee, the Collateral Administrator and each Holder or beneficial owner of Secured Debt or Subordinated Securities will maintain the confidentiality of all Confidential Information in accordance with procedures adopted by such Person in good faith to protect Confidential Information of third parties delivered to such Person; provided that such Person may deliver or disclose Confidential Information to:  (i) such Person’s directors, trustees, officers, employees, agents, attorneys and affiliates who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 14.15 and to the extent such disclosure is reasonably required for

 

220

 

the administration of this Indenture, the matters contemplated hereby or the investment represented by the Secured Debt or Subordinated Securities; (ii) such Person’s legal advisors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this Section 14.15 and to the extent such disclosure is reasonably required for the administration of this Indenture, the matters contemplated hereby or the investment represented by the Secured Debt or Subordinated Securities; (iii) any other Holder, or any of the other parties to this Indenture, the Collateral Management Agreement or the Collateral Administration Agreement; (iv) except for Specified Obligor Information, any Person of the type that would be, to such Person’s knowledge, permitted to acquire Secured Debt or Subordinated Securities or any other security of the Issuers in accordance with the requirements of Section 2.6 hereof to which such Person sells or offers to sell any such Secured Debt or Subordinated Securities or security or any part thereof or is proposing in good faith a transaction relating thereto; (v) any federal or state or other regulatory, governmental or judicial authority having jurisdiction over such Person; (vi) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about the investment portfolio of such Person, reinsurers and liquidity and credit providers that agree to hold confidential the Confidential Information substantially in accordance with this Section 14.15; (vii) the Rating Agency (subject to Section 14.16); (viii) any other Person with the consent of the Issuer and the Collateral Manager; or (ix) any other Person to which such delivery or disclosure may be necessary or appropriate (A) to effect compliance with any law, rule, regulation or order applicable to such Person, (B) in response to any subpoena or other legal process (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law), (C) in connection with any litigation to which such Person is a party (unless prohibited by applicable law, rule, order or decree or other requirement having the force of law), (D) if an Event of Default has occurred and is continuing, to the extent such Person may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under this Indenture, the Credit Agreement or the Notes or (E) in the Collateral Trustee’s or Collateral Administrator’s performance of its obligations under this Indenture, the Collateral Administration Agreement or other transaction document related thereto; and provided that delivery to the Holders by the Collateral Trustee or the Collateral Administrator of any report of information required by the terms of this Indenture to be provided to Holders shall not be a violation of this Section 14.15. Each Holder or beneficial owner of Secured Debt or Subordinated Securities will, by its acceptance of its Secured Debt or Subordinated Securities, be deemed to have agreed, except as set forth in clauses (v), (vi) and (ix) above, that it shall use the Confidential Information for the sole purpose of making an investment in the Secured Debt or Subordinated Securities or administering its investment in the Secured Debt or Subordinated Securities; and that the Collateral Trustee and the Collateral Administrator shall neither be required nor authorized to disclose to Holders any Confidential Information in violation of this Section 14.15. In the event of any required disclosure of the Confidential Information by such Holder or beneficial owner such Holder or beneficial owner will, by its acceptance of its Secured Debt or Subordinated Securities, be deemed to have agreed to use reasonable efforts to protect the confidentiality of the Confidential Information. Each Holder or beneficial owner of a Secured Debt or Subordinated Securities, by its acceptance of a Secured Debt or Subordinated Securities, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 14.15 (subject to Section 7.17(e)).

 

221

 

(b)                                 For the purposes of this Section 14.15, (A) “Confidential Information” means information delivered to the Collateral Trustee, the Loan Agent, the Collateral Administrator or any Holder of Secured Debt or Subordinated Securities by or on behalf of the Issuer in connection with and relating to the transactions contemplated by or otherwise pursuant to this Indenture (including, without limitation, information relating to Obligors); provided that such term does not include information that:  (i) was publicly known or otherwise known to the Collateral Trustee, the Collateral Administrator or such Holder prior to the time of such disclosure; (ii) subsequently becomes publicly known through no act or omission by the Collateral Trustee, the Collateral Administrator, any Holder or any Person acting on behalf of the Collateral Trustee, the Collateral Administrator or any Holder; (iii) otherwise is known or becomes known to the Collateral Trustee, the Collateral Administrator or any Holder other than (x) through disclosure by the Issuer or (y) to the knowledge of the Collateral Trustee, the Collateral Administrator or a Holder, as the case may be, in each case after reasonable inquiry, as a result of the breach of a fiduciary duty to the Issuer or a contractual duty to the Issuer; or (iv) is allowed to be treated as non-confidential by consent of the Issuer; and (B) “Specified Obligor Information” means Confidential Information relating to Obligors that is not otherwise included in the Monthly Reports or Distribution Reports or the disclosure of which would be prohibited by applicable law or the Underlying Documents relating to such Obligor’s Collateral Obligation.

 

(c)                                  Notwithstanding the foregoing, the Collateral Trustee and the Collateral Administrator may disclose Confidential Information to the extent disclosure thereof may be required by law or by any regulatory or governmental authority and the Collateral Trustee and the Collateral Administrator may disclose on a confidential basis any Confidential Information to its agents, attorneys and auditors in connection with the performance of its responsibilities hereunder.

 

Section 14.16                                  17g-5 Information.    (a)    The Issuer shall comply with their obligations under Rule 17g-5 promulgated under the Exchange Act (“Rule 17g-5”), by its or its agent’s posting on the 17g-5 Website, no later than the time such information is provided to the Rating Agency, all information that the Issuer or other parties on its behalf, including the Collateral Trustee and the Collateral Manager, provide to the Rating Agency for the purposes of determining the initial credit rating of the Secured Debt or undertaking credit rating surveillance of the Secured Debt (the “17g-5 Information”); provided that no party other than the Issuer (or the Information Agent on its behalf), the Collateral Trustee or the Collateral Manager may provide information to the Rating Agency on the Issuer’s behalf without the prior written consent of the Collateral Manager. At all times while any Secured Debt is rated by the Rating Agency or any other NRSRO, the Issuer shall engage a third-party to post 17g-5 Information to the 17g-5 Website. On the Closing Date, the Issuer shall engage the Collateral Administrator (in such capacity, the “Information Agent”), to post 17g-5 Information it receives from the Issuer, the Collateral Trustee or the Collateral Manager to the 17g-5 Website in accordance with Section 2A of the Collateral Administration Agreement.

 

(b)                                 To the extent that any of the Issuer, the Collateral Manager, the Collateral Administrator or the Collateral Trustee is required to provide any information to, or communicate with, the Rating Agency in writing in accordance with its obligations under this Indenture or the Collateral Management Agreement or the Collateral Administration Agreement

 

222

 

(as applicable), the Issuer, the Collateral Manager, the Collateral Administrator or the Collateral Trustee, as applicable (or their respective representatives or advisors), shall provide such information or communication to the Information Agent by e-mail at statestreet_cdo_services@statestreet.com with the subject line specifically referencing “17g-5 Information” and “OWL ROCK CLO I”, which information the Information Agent shall promptly post to the 17g-5 Website in accordance with Section 2A of the Collateral Administration Agreement.

 

(c)                                  To the extent any of the Issuer, the Collateral Trustee or the Collateral Manager are engaged in oral communications with the Rating Agency, for the purposes of determining the initial credit rating of the Secured Debt or undertaking credit rating surveillance of the Secured Debt, the party communicating with the Rating Agency shall cause such oral communication to either be (x) recorded and an audio file containing the recording to be promptly delivered to the Information Agent for posting to the 17g-5 Website or (y) summarized in writing and the summary to be promptly delivered to the Information Agent by e-mail at statestreet_cdo_services@statestreet.com with the subject line specifically referencing “17g-5 Information” and “ OWL ROCK CLO I”, which information the Information Agent shall promptly post to the 17g-5 Website in accordance with Section 2A of the Collateral Administration Agreement.

 

(d)                                 All information to be made available to the Rating Agency pursuant to Section 14.3(a) shall be made available on the 17g-5 Website. In the event that any information is delivered or posted in error, the Issuer may remove it from the 17g-5 Website, and shall so remove promptly when instructed to do so by the Person that delivered such information. None of the Collateral Trustee, the Collateral Manager, the Collateral Administrator and the Information Agent shall have obtained or shall be deemed to have obtained actual knowledge of any information solely due to receipt and posting to the 17g-5 Website. Access will be provided to the Issuer, the Collateral  Manager, the Rating Agency, and to any NRSRO upon receipt by the Issuer of an NRSRO Certification from such NRSRO (which may be submitted electronically via the 17g-5 Website).

 

(e)                                  Notwithstanding the requirements herein, the Collateral Trustee shall have no obligation to engage in or respond to any oral communications, for the purposes of determining the initial credit rating of the Secured Debt or undertaking credit rating surveillance of the Secured Debt, with the Rating Agency or any of its respective officers, directors or employees.

 

(f)                                   The Collateral Trustee shall not be responsible for maintaining the 17g-5 Website, posting any 17g-5 Information to the 17g-5 Website or assuring that the 17g-5 Website complies with the requirements of this Indenture, Rule 17g-5, or any other law or regulation. In no event shall the Collateral Trustee be deemed to make any representation in respect of the content of the 17g-5 Website or compliance of the 17g-5 Website with this Indenture, Rule 17g-5, or any other law or regulation.

 

(g)                                  The Collateral Trustee shall not be responsible or liable for the dissemination of any identification numbers or passwords for the 17g-5 Website, including by the Issuer, the Rating Agency, the NRSROs, any of their agents or any other party. The Collateral Trustee shall not be liable for the use of any information posted on the 17g-5 Website,

 

223

 

whether by the Issuer, the Rating Agency, the NRSROs or any other third party that may gain access to the 17g-5 Website or the information posted thereon.

 

(h)                                 Notwithstanding anything herein to the contrary, the maintenance by the Information Agent of the website described in Section 10.7(g) shall not be deemed as compliance by or on behalf of the Issuer with Rule 17g-5 or any other law or regulation related thereto.

 

(i)                                     For the avoidance of doubt, no reports of Independent accountants shall be provided to the Rating Agency hereunder and shall not be posted to the 17g-5 Website.

 

Notwithstanding anything to the contrary in this Indenture, a breach of this Section 14.16 shall not constitute a Default or Event of Default.

 

ARTICLE XV

 

ASSIGNMENT OF CERTAIN AGREEMENTS

 

Section 15.1                             Assignment of Collateral Management Agreement. (a) The Issuer hereby acknowledges that its Grant pursuant to the first Granting Clause hereof includes all of the Issuer’s estate, right, title and interest in, to and under the Collateral Management Agreement, including (i) the right to give all notices, consents and releases thereunder, (ii) the right to give all notices of termination and to take any legal action upon the breach of an obligation of the Collateral Manager thereunder, including the commencement, conduct and consummation of proceedings at law or in equity, (iii) the right to receive all notices, accountings, consents, releases and statements thereunder and (iv) the right to do any and all other things whatsoever that the Issuer is or may be entitled to do thereunder; provided that, notwithstanding anything herein to the contrary, the Collateral Trustee shall not have the authority to exercise any of the rights set forth in (i) through (iv) above or that may otherwise arise as a result of the Grant until the occurrence of an Event of Default hereunder and such authority shall terminate at such time, if any, as such Event of Default is cured or waived and, for the avoidance of doubt, the Issuer may exercise any of its rights under the Collateral Management Agreement without notice to or the consent of the Collateral Trustee (except as otherwise expressly required by this Indenture), so long as an Event of Default has not occurred and is not continuing. From and after the occurrence and continuance of an Event of Default, the Collateral Manager shall continue to perform and be bound by the provisions of the Collateral Management Agreement and this Indenture applicable thereto.

 

(b)                                 The assignment made hereby is executed as collateral security, and the execution and delivery hereby shall not in any way impair or diminish the obligations of the Issuer under the provisions of the Collateral Management Agreement, nor shall any of the obligations contained in the Collateral Management Agreement be imposed on the Collateral Trustee.

 

(c)                                  Upon the retirement of the Secured Debt and Subordinated Securities, the payment of all amounts required to be paid pursuant to the Priority of Payments and the release of the Assets from the lien of this Indenture, this assignment and all rights herein assigned  to the

 

224

 

Collateral Trustee for the benefit of the Holders shall cease and terminate and all the estate, right, title and interest of the Collateral Trustee in, to and under the Collateral Management Agreement shall revert to the Issuer and no further instrument or act shall be necessary to evidence such termination and reversion.

 

(d)                                 The Issuer represents that, as of the date hereof, the Issuer has not executed any other assignment of the Collateral Management Agreement.

 

(e)                                  The Issuer agrees that this assignment is irrevocable, and that it will not take any action which is inconsistent with this assignment or make any other assignment inconsistent herewith. The Issuer will, from time to time, execute all instruments of further assurance and all such supplemental instruments with respect to this assignment as may be necessary to continue and maintain the effectiveness of such assignment.

 

(f)                                   The Issuer hereby agrees, and hereby undertakes to obtain the agreement and consent of the Collateral Manager in the Collateral Management Agreement, to the following:

 

(i)                    The Collateral Manager shall consent to the provisions of this assignment and agree to perform any provisions of this Indenture applicable to the Collateral Manager subject to the terms (including the Collateral Manager Standard) of the Collateral Management Agreement.

 

(ii)                 The Collateral Manager shall acknowledge that the Issuer is assigning all of its right, title and interest in, to and under the Collateral Management Agreement to the Collateral Trustee as representative of the Holders and the Collateral Manager shall agree that all of the representations, covenants and agreements made by the Collateral Manager in the Collateral Management Agreement are also for the benefit of the Collateral Trustee.

 

(iii)              The Collateral Manager shall deliver to the Collateral Trustee copies of all notices, statements, communications and instruments delivered or required to be delivered by the Collateral Manager to the Issuer pursuant to the Collateral Management Agreement.

 

(iv)             Neither the Issuer nor the Collateral Manager will enter into any agreement amending, modifying or terminating the Collateral Management Agreement except as permitted by the Collateral Management Agreement.

 

(v)                Except as otherwise set forth herein and therein (including pursuant to Section 8 of the Collateral Management Agreement), the Collateral Manager shall continue to serve as Collateral Manager under the Collateral Management Agreement notwithstanding that the Collateral Manager shall not have received amounts due it under the Collateral Management Agreement because sufficient funds were not then available hereunder to pay such amounts in accordance with the Priority of Payments set forth under Section 11.1. The Collateral Manager agrees not to cause the filing of a petition in bankruptcy against the Issuer for the nonpayment of the fees or other amounts payable by the Issuer to the Collateral Manager under the Collateral Management Agreement until the payment in full of all Secured Debt issued under this Indenture and Subordinated Securities issued under the Issuer’s Memorandum and Articles and the expiration of a period equal to one year and a day, or, if longer, the applicable preference period, following such payment.

 

225

 

Nothing in this Section 15.1 shall preclude, or be deemed to stop, the Collateral Manager (i) from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer, or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Collateral Manager, or (ii) from commencing against the Issuer or any of its properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding.

 

(vi)             Except with respect to transactions contemplated by Section 5 of the Collateral Management Agreement, if the Collateral Manager determines that it or any of its Affiliates has a conflict of interest between the Holder of any Secured Debt or Subordinated Securities and any other account or portfolio for which the Collateral Manager or any of its Affiliates is serving as investment adviser which relates to any action to be taken with respect to any Asset, then the Collateral Manager will give written notice briefly describing such conflict and the action it proposes to take to the Collateral Trustee, who shall promptly forward such notice to the relevant Holder. The provisions of this clause (vi) shall not apply to any transaction permitted by the terms of the Collateral Management Agreement.

 

(vii)          On each Measurement Date on which the S&P CDO Monitor Test is used, the Collateral Manager on behalf of the Issuer will measure compliance under such test.

 

(g)                                  The Issuer and the Collateral Trustee agree that the Collateral Manager shall be a third party beneficiary of this Indenture, and shall be entitled to rely upon and enforce such provisions of this Indenture to the same extent as if it were a party hereto.

 

(h)                                 Upon a Trust Officer of the Collateral Trustee receiving written notice from the Collateral Manager that an event constituting “Cause” has occurred, the Collateral Trustee shall, not later than two (2) Business Days thereafter, forward such notice to the Holders (as their names appear in the Register).

 

[Signature Pages Follow]

 

226

 

IN WITNESS WHEREOF, we have set our hands as of the day and year first written above.

 

	
 
    	
OWL ROCK CLO I, LTD.,
    
	
 
    	
as Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
OWL ROCK CLO I, LLC,
    
	
 
    	
as Co-Issuer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

S-1-1

 

	
 
    	
STATE STREET BANK AND TRUST COMPANY,
    
	
 
    	
as Collateral Trustee
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

S-1-2

 

Schedule 1

 

List of Collateral Obligations

 

Distributed Separately

 

S-1-1

 

Schedule 2

 

[Reserved]

 

S-2-1

 

Schedule 3

 

S&P Industry Classifications

 

	
Asset Type Code
    	
 
    	
Asset Type Description
    
	
1020000
    	
 
    	
Energy Equipment & Services
    
	
1030000
    	
 
    	
Oil, Gas & Consumable Fuels
    
	
2020000
    	
 
    	
Chemicals
    
	
2030000
    	
 
    	
Construction Materials
    
	
2040000
    	
 
    	
Containers & Packaging
    
	
2050000
    	
 
    	
Metals & Mining
    
	
2060000
    	
 
    	
Paper & Forest Products
    
	
3020000
    	
 
    	
Aerospace & Defense
    
	
3030000
    	
 
    	
Building Products
    
	
3040000
    	
 
    	
Construction & Engineering
    
	
3050000
    	
 
    	
Electrical Equipment
    
	
3060000
    	
 
    	
Industrial Conglomerates
    
	
3070000
    	
 
    	
Machinery
    
	
3080000
    	
 
    	
Trading Companies & Distributors
    
	
3110000
    	
 
    	
Commercial Services & Supplies
    
	
9612010
    	
 
    	
Professional Services
    
	
3210000
    	
 
    	
Air Freight & Logistics
    
	
3220000
    	
 
    	
Airlines
    
	
3230000
    	
 
    	
Marine
    
	
3240000
    	
 
    	
Road & Rail
    
	
3250000
    	
 
    	
Transportation Infrastructure
    
	
4011000
    	
 
    	
Auto Components
    
	
4020000
    	
 
    	
Automobiles
    
	
4110000
    	
 
    	
Household Durables
    
	
4120000
    	
 
    	
Leisure Products
    
	
4130000
    	
 
    	
Textiles, Apparel & Luxury Goods
    
	
4210000
    	
 
    	
Hotels, Restaurants & Leisure
    
	
9551701
    	
 
    	
Diversified Consumer Services
    
	
4300001
    	
 
    	
Entertainment
    
	
4300002
    	
 
    	
Interactive Media and Services
    
	
4310000
    	
 
    	
Media
    
	
4410000
    	
 
    	
Distributors
    
	
4420000
    	
 
    	
Internet and Direct Marketing Retail
    
	
4430000
    	
 
    	
Multiline Retail
    
	
4440000
    	
 
    	
Specialty Retail
    
	
5020000
    	
 
    	
Food & Staples Retailing
    
	
5110000
    	
 
    	
Beverages
    
	
5120000
    	
 
    	
Food Products
    
	
5130000
    	
 
    	
Tobacco
    
	
5210000
    	
 
    	
Household Products
    
	
5220000
    	
 
    	
Personal Products
    

 

S-4-1

 

	
Asset Type Code
    	
 
    	
Asset Type Description
    
	
6020000
    	
 
    	
Health Care Equipment & Supplies
    
	
6030000
    	
 
    	
Health Care Providers & Services
    
	
9551729
    	
 
    	
Health Care Technology
    
	
6110000
    	
 
    	
Biotechnology
    
	
6120000
    	
 
    	
Pharmaceuticals
    
	
9551727
    	
 
    	
Life Sciences Tools & Services
    
	
7011000
    	
 
    	
Banks
    
	
7020000
    	
 
    	
Thrifts & Mortgage Finance
    
	
7110000
    	
 
    	
Diversified Financial Services
    
	
7120000
    	
 
    	
Consumer Finance
    
	
7130000
    	
 
    	
Capital Markets
    
	
7210000
    	
 
    	
Insurance
    
	
7311000
    	
 
    	
Real Estate Investment Trusts (REITs)
    
	
7310000
    	
 
    	
Real Estate Management & Development
    
	
8030000
    	
 
    	
IT Services
    
	
8040000
    	
 
    	
Software
    
	
8110000
    	
 
    	
Communications Equipment
    
	
8120000
    	
 
    	
Technology Hardware, Storage & Peripherals
    
	
8130000
    	
 
    	
Electronic Equipment, Instruments &   Components
    
	
8210000
    	
 
    	
Semiconductors & Semiconductor Equipment
    
	
9020000
    	
 
    	
Diversified Telecommunication Services
    
	
9030000
    	
 
    	
Wireless Telecommunication Services
    
	
9520000
    	
 
    	
Electric Utilities
    
	
9530000
    	
 
    	
Gas Utilities
    
	
9540000
    	
 
    	
Multi-Utilities
    
	
9550000
    	
 
    	
Water Utilities
    
	
9551702
    	
 
    	
Independent Power and Renewable Electricity   Producers
    
	
PF1
    	
 
    	
Project finance: Industrial equipment
    
	
PF2
    	
 
    	
Project finance: Leisure and gaming
    
	
PF3
    	
 
    	
Project finance: Natural resources and mining
    
	
PF4
    	
 
    	
Project finance: Oil and gas
    
	
PF5
    	
 
    	
Project finance: Power
    
	
PF6
    	
 
    	
Project finance: Public finance and real estate
    
	
PF7
    	
 
    	
Project finance: Telecommunications
    
	
PF8
    	
 
    	
Project finance: Transport
    

 

S-4-2

 

Schedule 4

 

Moody’s Rating Definitions

 

MOODY’S RATING

 

(a)                                 With respect to a Collateral Obligation that (A) is publicly rated by Moody’s, such public rating, or (B) is not publicly rated by Moody’s but for which a rating or rating estimate has been assigned by Moody’s upon the request of the Issuer or the Collateral Manager, such rating or, in the case of a rating estimate, the applicable rating estimate for such obligation;

 

(b)                                 With respect to a Collateral Obligation that is a Moody’s Senior Secured Loan or Participation Interest in a Moody’s Senior Secured Loan (if not determined pursuant to clause (a) above), if the Obligor of such Collateral Obligation has a corporate family rating by Moody’s, then such corporate family rating; and

 

(c)                                  With respect to a Collateral Obligation, if not determined pursuant to clause (a) or (b) above, if the Obligor of such Collateral Obligation has one or more senior unsecured obligations publicly rated by Moody’s, then the Moody’s public rating on any such obligation (or, if such Collateral Obligation is a Moody’s Senior Secured Loan, the Moody’s rating that is one subcategory higher than the Moody’s public rating on any such senior unsecured obligation) as selected by the Collateral Manager in its sole discretion.

 

For purposes of calculating a Moody’s Rating, each applicable rating, at the time of calculation, (i) on credit watch by Moody’s with positive implications will be treated as having been upgraded by one rating subcategory, (ii) on credit watch by Moody’s with negative implications will be treated as having been downgraded by two rating subcategories and (iii) on negative outlook by Moody’s will be treated as having been downgraded by one rating subcategory.

 

For purposes of this definition, any credit estimate assigned by Moody’s shall expire one year from the date such estimate was issued; provided that, for purposes of any calculation under this Indenture, if Moody’s fails to renew for any reason a credit estimate for a previously acquired Collateral Obligation thereunder on or before such one-year anniversary (which may be extended at Moody’s option to the extent the annual audited financial statements for the Obligor have not yet been received), after the Issuer or the Collateral Manager on the Issuer’s behalf has submitted to Moody’s all information that the Issuer or the Collateral Manager believed in good faith was required to provide such renewal, (1) the Issuer for a period of 30 days will continue using the previous credit estimate assigned by Moody’s with respect to such Collateral Obligation until such time as Moody’s renews the credit estimate for such Collateral Obligation, (2) after 30 days until the 90th day or until such time as Moody’s renews the credit estimate for such Collateral Obligation the Collateral Obligation will be treated as having been downgraded by one rating subcategory and (3) after 90 days but before Moody’s renews the credit estimate for such Collateral Obligation, the Collateral Obligation will be deemed to have a Moody’s rating of “Caa3”.

 

S-5-1

 

MOODY’S SENIOR SECURED LOAN

 

(a)                                 A loan that:

 

(i)                                     is not (and cannot by its terms become) subordinate in right of payment to any other debt obligation of the Obligor of the loan;

 

(ii)                                  (x) is secured by a valid first priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under the loan and (y) such specified collateral does not consist entirely of equity securities or common stock; provided that any loan that would be considered a Moody’s Senior Secured Loan but for clause (y) above shall be considered a Moody’s Senior Secured Loan if it is a loan made to a parent entity and as to which the Collateral Manager determines in good faith that the value of the common stock of the subsidiary (or other equity interests in the subsidiary) securing such loan at or about the time of acquisition of such loan by the Issuer has a value that is at least equal to the outstanding principal balance of such loan and the outstanding principal balances of any other obligations of such parent entity that are pari passu with such loan, which value may include, among other things, the enterprise value of such subsidiary of such parent entity; and

 

(iii)                               the value of the collateral securing the loan together with other attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the loan in accordance with its terms and to repay all other loans of equal seniority secured by a first lien or security interest in the same collateral; or

 

(b)                                 a loan that:

 

(i)                                     is not (and cannot by its terms become) subordinate in right of payment to any other debt obligation of the Obligor of the loan, except that such loan can be subordinate with respect to the liquidation of such Obligor or the collateral for such loan;

 

(ii)                                  with respect to such liquidation, is secured by a valid second priority perfected security interest or lien in, to or on specified collateral securing the Obligor’s obligations under the loan;

 

(iii)                               the value of the collateral securing the loan together with other attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the loan in accordance with its terms and to repay all other loans of equal or higher seniority secured in the same collateral; and

 

(iv)                              (x) has a Moody’s facility rating and the Obligor of such loan has a Moody’s corporate family rating and (y) such Moody’s facility rating is not lower than such Moody’s corporate family rating; and

 

S-5-2

 

(c)                                  a loan that is not is not a loan for which the security interest or lien (or the validity or effectiveness thereof) in substantially all of its collateral attaches, becomes effective, or otherwise “springs” into existence after the origination thereof.

 

S-5-3

 

Schedule 5

 

S&P RECOVERY RATE TABLES

 

Section 1.                                          S&P Recovery Rate Tables

 

(a)                                 (i) If a Collateral Obligation has an S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation will be the applicable percentage set forth in Table 1 below, based on such S&P Recovery Rating (for the applicable recovery point estimate) and the applicable Class of Secured Debt:

 

  Table 1: S&P Recovery Rates for Collateral Obligations with S&P Recovery Ratings*

 

	
 
    	
 
    	
Initial Liability Rating
    	
 
    
	
S&P Recovery
   Rating
   of a Collateral
   Obligation
    	
 
    	
Recovery
   Point
   Estimate by
   S&P**
    	
 
    	
“AAA”
    	
 
    	
“AA”
    	
 
    	
“A”
    	
 
    	
“BBB”
    	
 
    	
“BB”
    	
 
    	
“B”
    	
 
    	
“CCC”
    	
 
    
	
1+
    	
 
    	
100
    	
%
    	
75.00
    	
%
    	
85.00
    	
%
    	
88.00
    	
%
    	
90.00
    	
%
    	
92.00
    	
%
    	
95.00
    	
%
    	
95.00
    	
%
    
	
1
    	
 
    	
95
    	
%
    	
70.00
    	
%
    	
80.00
    	
%
    	
84.00
    	
%
    	
87.50
    	
%
    	
91.00
    	
%
    	
95.00
    	
%
    	
95.00
    	
%
    
	
1
    	
 
    	
90
    	
%
    	
65.00
    	
%
    	
75.00
    	
%
    	
80.00
    	
%
    	
85.00
    	
%
    	
90.00
    	
%
    	
95.00
    	
%
    	
95.00
    	
%
    
	
2
    	
 
    	
85
    	
%
    	
62.50
    	
%
    	
72.50
    	
%
    	
77.50
    	
%
    	
83.00
    	
%
    	
88.00
    	
%
    	
92.00
    	
%
    	
92.00
    	
%
    
	
2
    	
 
    	
80
    	
%
    	
60.00
    	
%
    	
70.00
    	
%
    	
75.00
    	
%
    	
81.00
    	
%
    	
86.00
    	
%
    	
89.00
    	
%
    	
89.00
    	
%
    
	
2
    	
 
    	
75
    	
%
    	
55.00
    	
%
    	
65.00
    	
%
    	
70.50
    	
%
    	
77.00
    	
%
    	
82.50
    	
%
    	
84.00
    	
%
    	
84.00
    	
%
    
	
2
    	
 
    	
70
    	
%
    	
50.00
    	
%
    	
60.00
    	
%
    	
66.00
    	
%
    	
73.00
    	
%
    	
79.00
    	
%
    	
79.00
    	
%
    	
79.00
    	
%
    
	
3
    	
 
    	
65
    	
%
    	
45.00
    	
%
    	
55.00
    	
%
    	
61.00
    	
%
    	
68.00
    	
%
    	
73.00
    	
%
    	
74.00
    	
%
    	
74.00
    	
%
    
	
3
    	
 
    	
60
    	
%
    	
40.00
    	
%
    	
50.00
    	
%
    	
56.00
    	
%
    	
63.00
    	
%
    	
67.00
    	
%
    	
69.00
    	
%
    	
69.00
    	
%
    
	
3
    	
 
    	
55
    	
%
    	
35.00
    	
%
    	
45.00
    	
%
    	
51.00
    	
%
    	
58.00
    	
%
    	
63.00
    	
%
    	
64.00
    	
%
    	
64.00
    	
%
    
	
3
    	
 
    	
50
    	
%
    	
30.00
    	
%
    	
40.00
    	
%
    	
46.00
    	
%
    	
53.00
    	
%
    	
59.00
    	
%
    	
59.00
    	
%
    	
59.00
    	
%
    
	
4
    	
 
    	
45
    	
%
    	
28.50
    	
%
    	
37.50
    	
%
    	
44.00
    	
%
    	
49.50
    	
%
    	
53.50
    	
%
    	
54.00
    	
%
    	
54.00
    	
%
    
	
4
    	
 
    	
40
    	
%
    	
27.00
    	
%
    	
35.00
    	
%
    	
42.00
    	
%
    	
46.00
    	
%
    	
48.00
    	
%
    	
49.00
    	
%
    	
49.00
    	
%
    
	
4
    	
 
    	
35
    	
%
    	
23.50
    	
%
    	
30.50
    	
%
    	
37.50
    	
%
    	
42.50
    	
%
    	
43.50
    	
%
    	
44.00
    	
%
    	
44.00
    	
%
    
	
4
    	
 
    	
30
    	
%
    	
20.00
    	
%
    	
26.00
    	
%
    	
33.00
    	
%
    	
39.00
    	
%
    	
39.00
    	
%
    	
39.00
    	
%
    	
39.00
    	
%
    
	
5
    	
 
    	
25
    	
%
    	
17.50
    	
%
    	
23.00
    	
%
    	
28.50
    	
%
    	
32.50
    	
%
    	
33.50
    	
%
    	
34.00
    	
%
    	
34.00
    	
%
    
	
5
    	
 
    	
20
    	
%
    	
15.00
    	
%
    	
20.00
    	
%
    	
24.00
    	
%
    	
26.00
    	
%
    	
28.00
    	
%
    	
29.00
    	
%
    	
29.00
    	
%
    
	
5
    	
 
    	
15
    	
%
    	
10.00
    	
%
    	
15.00
    	
%
    	
19.50
    	
%
    	
22.50
    	
%
    	
23.50
    	
%
    	
24.00
    	
%
    	
24.00
    	
%
    
	
5
    	
 
    	
10
    	
%
    	
5.00
    	
%
    	
10.00
    	
%
    	
15.00
    	
%
    	
19.00
    	
%
    	
19.00
    	
%
    	
19.00
    	
%
    	
19.00
    	
%
    
	
6
    	
 
    	
5
    	
%
    	
3.50
    	
%
    	
7.00
    	
%
    	
10.50
    	
%
    	
13.50
    	
%
    	
14.00
    	
%
    	
14.00
    	
%
    	
14.00
    	
%
    
	
6
    	
 
    	
0
    	
%
    	
2.00
    	
%
    	
4.00
    	
%
    	
6.00
    	
%
    	
8.00
    	
%
    	
9.00
    	
%
    	
9.00
    	
%
    	
9.00
    	
%
    
	
 
    	
 
    	
Recovery   rate
    	
 
    

 

*                                         The S&P Recovery Rate shall be the applicable rate set forth above based on the initial rating of the Highest Ranking Class at the time of determination.

 

**                                  From S&P’s published reports. Recovery point estimates are rounded down to the nearest 5%.

 

S-5-1

 

(ii)                                  If (x) a Collateral Obligation does not have an S&P Recovery Rating and such Collateral Obligation is a senior unsecured loan, First-Lien Last-Out Loans or Second Lien Loan and (y) the issuer of such Collateral Obligation has issued another debt instrument that is outstanding and senior to such Collateral Obligation that is a Senior Secured Loan (a “Senior Secured Debt Instrument”) that has an S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation shall be determined as follows:

 

For Collateral Obligations Domiciled in Group A*

 

	
S&P Recovery
   Rating
   of the Senior
    	
 
    	
Initial Liability Rating
    	
 
    
	
Secured
   Debt Instrument
    	
 
    	
“AAA”
    	
 
    	
“AA”
    	
 
    	
“A”
    	
 
    	
“BBB”
    	
 
    	
“BB”
    	
 
    	
“B” and
   “CCC”
    	
 
    
	
1+
    	
 
    	
18
    	
%
    	
20
    	
%
    	
23
    	
%
    	
26
    	
%
    	
29
    	
%
    	
31
    	
%
    
	
1
    	
 
    	
18
    	
%
    	
20
    	
%
    	
23
    	
%
    	
26
    	
%
    	
29
    	
%
    	
31
    	
%
    
	
2
    	
 
    	
18
    	
%
    	
20
    	
%
    	
23
    	
%
    	
26
    	
%
    	
29
    	
%
    	
31
    	
%
    
	
3
    	
 
    	
12
    	
%
    	
15
    	
%
    	
18
    	
%
    	
21
    	
%
    	
22
    	
%
    	
23
    	
%
    
	
4
    	
 
    	
5
    	
%
    	
8
    	
%
    	
11
    	
%
    	
13
    	
%
    	
14
    	
%
    	
15
    	
%
    
	
5
    	
 
    	
2
    	
%
    	
4
    	
%
    	
6
    	
%
    	
8
    	
%
    	
9
    	
%
    	
10
    	
%
    
	
6
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
 
    	
 
    	
Recovery rate
    	
 
    

 

*                                         The S&P Recovery Rate shall be the applicable rate set forth above based on the initial rating of the Highest Ranking Class at the time of determination.

 

For Collateral Obligations Domiciled in Group B*

 

	
S&P Recovery
   Rating
   of the Senior
    	
 
    	
Initial Liability Rating
    	
 
    
	
Secured
   Debt Instrument
    	
 
    	
“AAA”
    	
 
    	
“AA”
    	
 
    	
“A”
    	
 
    	
“BBB”
    	
 
    	
“BB”
    	
 
    	
“B” and
   “CCC”
    	
 
    
	
1+
    	
 
    	
13
    	
%
    	
16
    	
%
    	
18
    	
%
    	
21
    	
%
    	
23
    	
%
    	
25
    	
%
    
	
1
    	
 
    	
13
    	
%
    	
16
    	
%
    	
18
    	
%
    	
21
    	
%
    	
23
    	
%
    	
25
    	
%
    
	
2
    	
 
    	
13
    	
%
    	
16
    	
%
    	
18
    	
%
    	
21
    	
%
    	
23
    	
%
    	
25
    	
%
    
	
3
    	
 
    	
8
    	
%
    	
11
    	
%
    	
13
    	
%
    	
15
    	
%
    	
16
    	
%
    	
17
    	
%
    
	
4
    	
 
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    
	
5
    	
 
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    
	
6
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
 
    	
 
    	
Recovery rate
    	
 
    

 

S-5-2

 

*                                         The S&P Recovery Rate shall be the applicable rate set forth above based on the initial rating of the Highest Ranking Class at the time of determination.

 

For Collateral Obligations Domiciled in Group C*

 

	
S&P Recovery
   Rating
   of the Senior
    	
 
    	
Initial Liability Rating
    	
 
    
	
Secured
   Debt Instrument
    	
 
    	
“AAA”
    	
 
    	
“AA”
    	
 
    	
“A”
    	
 
    	
“BBB”
    	
 
    	
“BB”
    	
 
    	
“B” and
   “CCC”
    	
 
    
	
1+
    	
 
    	
10
    	
%
    	
12
    	
%
    	
14
    	
%
    	
16
    	
%
    	
18
    	
%
    	
20
    	
%
    
	
1
    	
 
    	
10
    	
%
    	
12
    	
%
    	
14
    	
%
    	
16
    	
%
    	
18
    	
%
    	
20
    	
%
    
	
2
    	
 
    	
10
    	
%
    	
12
    	
%
    	
14
    	
%
    	
16
    	
%
    	
18
    	
%
    	
20
    	
%
    
	
3
    	
 
    	
5
    	
%
    	
7
    	
%
    	
9
    	
%
    	
10
    	
%
    	
11
    	
%
    	
12
    	
%
    
	
4
    	
 
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    
	
5
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
6
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
 
    	
 
    	
Recovery rate
    	
 
    

 

*                                         The S&P Recovery Rate shall be the applicable rate set forth above based on the initial rating of the Highest Ranking Class at the time of determination.

 

(iii)                               If (x) a Collateral Obligation does not have an S&P Recovery Rating and such Collateral Obligation is a subordinated loan or subordinated bond and (y) the issuer of such Collateral Obligation has issued another debt instrument that is outstanding and senior to such Collateral Obligation that is a Senior Secured Debt Instrument that has an S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation shall be determined as follows:

 

For Collateral Obligations Domiciled in Groups A and B*

 

	
S&P Recovery
   Rating
   of the Senior
    	
 
    	
Initial Liability Rating
    	
 
    
	
Secured
   Debt Instrument
    	
 
    	
“AAA”
    	
 
    	
“AA”
    	
 
    	
“A”
    	
 
    	
“BBB”
    	
 
    	
“BB”
    	
 
    	
“B” and
   “CCC”
    	
 
    
	
1+ 
    	
 
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    
	
1 
    	
 
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    
	
2 
    	
 
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    
	
3 
    	
 
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    
	
4 
    	
 
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    
	
5 
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
6
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    

 

S-5-3

 

	
S&P Recovery
   Rating
   of the Senior
   Secured
   Debt Instrument
    	
 
    	
Initial Liability Rating
    	
 
    
	
 
    	
 
    	
Recovery rate
    	
 
    

 

*                                         The S&P Recovery Rate shall be the applicable rate set forth above based on the initial rating of the Highest Ranking Class at the time of determination.

 

For Collateral Obligations Domiciled in Group C*

 

	
S&P Recovery
   Rating
   of the Senior
    	
 
    	
Initial Liability Rating
    	
 
    
	
Secured
   Debt Instrument
    	
 
    	
“AAA”
    	
 
    	
“AA”
    	
 
    	
“A”
    	
 
    	
“BBB”
    	
 
    	
“BB”
    	
 
    	
“B” and
   “CCC”
    	
 
    
	
1+ 
    	
 
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    
	
1 
    	
 
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    
	
2 
    	
 
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    
	
3 
    	
 
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    	
2
    	
%
    
	
4 
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
5 
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
6
    	
 
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    	
0
    	
%
    
	
 
    	
 
    	
Recovery rate
    	
 
    

 

*                                         The S&P Recovery Rate shall be the applicable rate set forth above based on the initial rating of the Highest Ranking Class at the time of determination.

 

(b)                                 If a recovery rate cannot be determined using clause (a), the recovery rate shall be determined using the following table.

 

Recovery rates for Obligors Domiciled in Group A, B or C*:

 

	
 
    	
 
    	
Initial Liability Rating
    	
 
    
	
Priority Category
    	
 
    	
“AAA”
    	
 
    	
“AA”
    	
 
    	
“A”
    	
 
    	
“BBB”
    	
 
    	
“BB”
    	
 
    	
“B” and
   “CCC”
    	
 
    
	
Senior   Secured Loans** 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Group A
    	
 
    	
50
    	
%
    	
55
    	
%
    	
59
    	
%
    	
63
    	
%
    	
75
    	
%
    	
79
    	
%
    
	
Group B
    	
 
    	
39
    	
%
    	
42
    	
%
    	
46
    	
%
    	
49
    	
%
    	
60
    	
%
    	
63
    	
%
    
	
Group C
    	
 
    	
17
    	
%
    	
19
    	
%
    	
27
    	
%
    	
29
    	
%
    	
31
    	
%
    	
34
    	
%
    
	
Senior   Secured Loans (Cov-Lite Loans)*** 
    	
 
    

 

S-5-4

 

	
Priority Category
    	
 
    	
Initial Liability Rating
    	
 
    
	
Group A
    	
 
    	
41
    	
%
    	
46
    	
%
    	
49
    	
%
    	
53
    	
%
    	
63
    	
%
    	
67
    	
%
    
	
Group B
    	
 
    	
32
    	
%
    	
35
    	
%
    	
39
    	
%
    	
41
    	
%
    	
50
    	
%
    	
53
    	
%
    
	
Group C
    	
 
    	
17
    	
%
    	
19
    	
%
    	
27
    	
%
    	
29
    	
%
    	
31
    	
%
    	
34
    	
%
    
	
Second   Lien Loans, First-Lien Last-Out Loans, Unsecured Loans****
    	
 
    
	
Group A
    	
 
    	
18
    	
%
    	
20
    	
%
    	
23
    	
%
    	
26
    	
%
    	
29
    	
%
    	
31
    	
%
    
	
Group B
    	
 
    	
13
    	
%
    	
16
    	
%
    	
18
    	
%
    	
21
    	
%
    	
23
    	
%
    	
25
    	
%
    
	
Group C
    	
 
    	
10
    	
%
    	
12
    	
%
    	
14
    	
%
    	
16
    	
%
    	
18
    	
%
    	
20
    	
%
    
	
Subordinated   loans 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Group A
    	
 
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    
	
Group B
    	
 
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    	
8
    	
%
    
	
Group C
    	
 
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    	
5
    	
%
    
	
 
    	
 
    	
Recovery rate
    	
 
    

 

Group A:          Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Japan, Luxembourg, The Netherlands, Norway, Poland, Portugal, Singapore, Spain, Sweden, Switzerland, U.K., U.S.*****

 

Group B:          Brazil, Dubai International Finance Centre, Greece, Italy, Mexico, South Africa, Turkey, United Arab Emirates. *****

 

Group C:          India, Indonesia, Kazakhstan, Russia, Ukraine, Vietnam, countries that do not have a jurisdictional ranking assessment listed in “Jurisdiction Ranking Assessments Of National Insolvency Regimes Update: September 2017,” published September 7, 2017.*****

 

*                                         The S&P Recovery Rate will be the applicable rate set forth above based on the initial rating of the Highest Ranking Class at the time of determination.

 

**                                  Solely for the purpose of determining the S&P Recovery Rate for such loan, no loan will constitute a “Senior Secured Loan” unless such loan (a) is secured by a valid first priority security interest in collateral, (b) in the Collateral Manager’s commercially reasonable judgment (with such determination being made in good faith by the Collateral Manager at the time of such loan’s purchase and based upon information reasonably available to the Collateral Manager at such time and without any requirement of additional investigation beyond the Collateral Manager’s customary credit review procedures), is secured by specified collateral that has a value not less than an amount equal to the sum of (i) the aggregate principal balance of all loans senior or pari passu to such loans and (ii) the outstanding principal balance of such loan, which value may be derived from, among other things, the enterprise value (including equity and goodwill) of the issuer of such loan; provided that the terms of this footnote may be amended or revised at any time by a written notice from the Issuer and the Collateral Manager to the Collateral Trustee and the Collateral Administrator (without the consent of any holder of any Secured Debt or Subordinated Securities), subject to the satisfaction of the S&P Rating Condition, in order to conform to S&P then-current criteria for such loans and (c) is not subordinate to any other obligation; provided further that if 100% of the value of such loan is derived from the enterprise value of the issuer of such loan, such loan will have either (1) the S&P Recovery Rate specified for Unsecured Loans in the table above, or (2) the S&P Recovery Rate determined by S&P on a case by case basis.

 

***                           For the avoidance of doubt, each Cov-Lite Loan will constitute a “senior secured cov-lite loan”.

 

****                    Solely for the purpose of determining the S&P Recovery Rate for such loan, the Aggregate Principal Balance of all Unsecured Loans, First-Lien Last-Out Loans and Second Lien Loans that, in the aggregate, represent up to 15% of the Collateral Principal Amount shall have the S&P Recovery Rate specified for Unsecured Loans, First-Lien Last-Out Loans and Second Lien Loans in the table above and the Aggregate

 

S-5-5

 

Principal Balance of all Unsecured Loans, First-Lien Last-Out Loans and Second Lien Loans in excess of 15% of the Collateral Principal Amount shall have the S&P Recovery Rate specified for subordinated loans in the table above.

 

*****             In each case, or such other countries identified as such by S&P in a press release, written criteria or other public announcement from time to time or as may be notified by S&P to the Collateral Manager from time to time.

 

Notwithstanding the foregoing, for purposes of determining the S&P Recovery Rate of a Collateral Obligation that is a Senior Secured Loan (including any Cov-Lite Loan) secured solely or primarily by common stock or other equity interest, such Collateral Obligation shall be deemed to be an Unsecured Loan.

 

Section 2.                                          S&P CDO Monitor

 

	
Liability
    	
 
    	
An Amount (in increments of 0.05%)
    	
 
    
	
Rating
    	
 
    	
Not Less Than
    	
 
    	
Not Greater Than
    	
 
    
	
“AAA” (%)
    	
 
    	
35.00
    	
%
    	
55.00
    	
%
    
	
“AA” (%)
    	
 
    	
40.00
    	
%
    	
65.00
    	
%
    

 

Weighted Average Floating Spread. A spread between 1.50% and 7.00% (in increments of .01%) without exceeding the Weighted Average Floating Spread (determined as if all Discount Obligations instead constituted Collateral Obligations that are not Discount Obligations) as of such Measurement Date.

 

S-5-6

 

Section 3.                                          S&P Region Classifications

 

	
Region Code
    	
 
    	
Region Name
    	
 
    	
Country Code
    	
 
    	
Country Name
    
	
17
    	
 
    	
Africa: Eastern
    	
 
    	
253
    	
 
    	
Djibouti
    
	
17
    	
 
    	
Africa: Eastern
    	
 
    	
291
    	
 
    	
Eritrea
    
	
17
    	
 
    	
Africa: Eastern
    	
 
    	
251
    	
 
    	
Ethiopia
    
	
17
    	
 
    	
Africa: Eastern
    	
 
    	
254
    	
 
    	
Kenya
    
	
17
    	
 
    	
Africa: Eastern
    	
 
    	
252
    	
 
    	
Somalia
    
	
17
    	
 
    	
Africa: Eastern
    	
 
    	
249
    	
 
    	
Sudan
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
247
    	
 
    	
Ascension
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
267
    	
 
    	
Botswana
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
266
    	
 
    	
Lesotho
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
230
    	
 
    	
Mauritius
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
264
    	
 
    	
Namibia
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
248
    	
 
    	
Seychelles
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
27
    	
 
    	
South Africa
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
290
    	
 
    	
St. Helena
    
	
12
    	
 
    	
Africa: Southern
    	
 
    	
268
    	
 
    	
Swaziland
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
244
    	
 
    	
Angola
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
226
    	
 
    	
Burkina Faso
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
257
    	
 
    	
Burundi
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
225
    	
 
    	
Cote d’lvoire
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
240
    	
 
    	
Equatorial Guinea
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
241
    	
 
    	
Gabonese Republic
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
220
    	
 
    	
Gambia
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
233
    	
 
    	
Ghana
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
224
    	
 
    	
Guinea
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
245
    	
 
    	
Guinea-Bissau
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
231
    	
 
    	
Liberia
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
261
    	
 
    	
Madagascar
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
265
    	
 
    	
Malawi
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
223
    	
 
    	
Mali
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
222
    	
 
    	
Mauritania
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
258
    	
 
    	
Mozambique
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
227
    	
 
    	
Niger
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
234
    	
 
    	
Nigeria
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
250
    	
 
    	
Rwanda
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
239
    	
 
    	
Sao Tome & Principe
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
221
    	
 
    	
Senegal
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
232
    	
 
    	
Sierra Leone
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
255
    	
 
    	
Tanzania/Zanzibar
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
228
    	
 
    	
Togo
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
256
    	
 
    	
Uganda
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
260
    	
 
    	
Zambia
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
263
    	
 
    	
Zimbabwe
    

 

S-5-7

 

	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
229
    	
 
    	
Benin
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
237
    	
 
    	
Cameroon
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
238
    	
 
    	
Cape Verde Islands
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
236
    	
 
    	
Central African Republic
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
235
    	
 
    	
Chad
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
269
    	
 
    	
Comoros
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
242
    	
 
    	
Congo-Brazzaville
    
	
13
    	
 
    	
Africa: Sub-Saharan
    	
 
    	
243
    	
 
    	
Congo-Kinshasa
    
	
3
    	
 
    	
Americas: Andean
    	
 
    	
591
    	
 
    	
Bolivia
    
	
3
    	
 
    	
Americas: Andean
    	
 
    	
57
    	
 
    	
Colombia
    
	
3
    	
 
    	
Americas: Andean
    	
 
    	
593
    	
 
    	
Ecuador
    
	
3
    	
 
    	
Americas: Andean
    	
 
    	
51
    	
 
    	
Peru
    
	
3
    	
 
    	
Americas: Andean
    	
 
    	
58
    	
 
    	
Venezuela
    
	
4
    	
 
    	
Americas: Mercosur and Southern Cone
    	
 
    	
54
    	
 
    	
Argentina
    
	
4
    	
 
    	
Americas: Mercosur and Southern Cone
    	
 
    	
55
    	
 
    	
Brazil
    
	
4
    	
 
    	
Americas: Mercosur and Southern Cone
    	
 
    	
56
    	
 
    	
Chile
    
	
4
    	
 
    	
Americas: Mercosur and Southern Cone
    	
 
    	
595
    	
 
    	
Paraguay
    
	
4
    	
 
    	
Americas: Mercosur and Southern Cone
    	
 
    	
598
    	
 
    	
Uruguay
    
	
1
    	
 
    	
Americas: Mexico
    	
 
    	
52
    	
 
    	
Mexico
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
1264
    	
 
    	
Anguilla
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
1268
    	
 
    	
Antigua
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
1242
    	
 
    	
Bahamas
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
246
    	
 
    	
Barbados
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
501
    	
 
    	
Belize
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
441
    	
 
    	
Bermuda
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
284
    	
 
    	
British Virgin Islands
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
345
    	
 
    	
Cayman Islands
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
506
    	
 
    	
Costa Rica
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
809
    	
 
    	
Dominican Republic
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
503
    	
 
    	
El Salvador
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
473
    	
 
    	
Grenada
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
590
    	
 
    	
Guadeloupe
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
502
    	
 
    	
Guatemala
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
504
    	
 
    	
Honduras
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
876
    	
 
    	
Jamaica
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
596
    	
 
    	
Martinique
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
505
    	
 
    	
Nicaragua
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
507
    	
 
    	
Panama
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
869
    	
 
    	
St. Kitts/Nevis
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
758
    	
 
    	
St. Lucia
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
784
    	
 
    	
St. Vincent & Grenadines
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
597
    	
 
    	
Suriname
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
868
    	
 
    	
Trinidad& Tobago
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
649
    	
 
    	
Turks & Caicos
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
297
    	
 
    	
Aruba
    

 

S-5-8

 

	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
53
    	
 
    	
Cuba
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
599
    	
 
    	
Curacao
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
767
    	
 
    	
Dominica
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
594
    	
 
    	
French Guiana
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
592
    	
 
    	
Guyana
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
509
    	
 
    	
Haiti
    
	
2
    	
 
    	
Americas: Other Central and Caribbean
    	
 
    	
664
    	
 
    	
Montserrat
    
	
101
    	
 
    	
Americas: U.S. and Canada
    	
 
    	
2
    	
 
    	
Canada
    
	
101
    	
 
    	
Americas: U.S. and Canada
    	
 
    	
1
    	
 
    	
USA
    
	
7
    	
 
    	
Asia: China, Hong Kong, Taiwan
    	
 
    	
86
    	
 
    	
China
    
	
7
    	
 
    	
Asia: China, Hong Kong, Taiwan
    	
 
    	
852
    	
 
    	
Hong Kong
    
	
7
    	
 
    	
Asia: China, Hong Kong, Taiwan
    	
 
    	
886
    	
 
    	
Taiwan
    
	
5
    	
 
    	
Asia: India, Pakistan and Afghanistan
    	
 
    	
93
    	
 
    	
Afghanistan
    
	
5
    	
 
    	
Asia: India, Pakistan and Afghanistan
    	
 
    	
91
    	
 
    	
India
    
	
5
    	
 
    	
Asia: India, Pakistan and Afghanistan
    	
 
    	
92
    	
 
    	
Pakistan
    
	
6
    	
 
    	
Asia: Other South
    	
 
    	
880
    	
 
    	
Bangladesh
    
	
6
    	
 
    	
Asia: Other South
    	
 
    	
975
    	
 
    	
Bhutan
    
	
6
    	
 
    	
Asia: Other South
    	
 
    	
960
    	
 
    	
Maldives
    
	
6
    	
 
    	
Asia: Other South
    	
 
    	
977
    	
 
    	
Nepal
    
	
6
    	
 
    	
Asia: Other South
    	
 
    	
94
    	
 
    	
Sri Lanka
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
673
    	
 
    	
Brunei
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
855
    	
 
    	
Cambodia
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
62
    	
 
    	
Indonesia
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
81
    	
 
    	
Japan
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
856
    	
 
    	
Laos
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
60
    	
 
    	
Malaysia
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
95
    	
 
    	
Myanmar
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
850
    	
 
    	
North Korea
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
63
    	
 
    	
Philippines
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
65
    	
 
    	
Singapore
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
82
    	
 
    	
South Korea
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
66
    	
 
    	
Thailand
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
84
    	
 
    	
Vietnam
    
	
8
    	
 
    	
Asia: Southeast, Korea and Japan
    	
 
    	
670
    	
 
    	
East Timor
    
	
105
    	
 
    	
Asia-Pacific: Australia and New Zealand
    	
 
    	
61
    	
 
    	
Australia
    
	
105
    	
 
    	
Asia-Pacific: Australia and New Zealand
    	
 
    	
682
    	
 
    	
Cook Islands
    
	
105
    	
 
    	
Asia-Pacific: Australia and New Zealand
    	
 
    	
64
    	
 
    	
New Zealand
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
679
    	
 
    	
Fiji
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
689
    	
 
    	
French Polynesia
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
686
    	
 
    	
Kiribati
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
691
    	
 
    	
Micronesia
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
674
    	
 
    	
Nauru
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
687
    	
 
    	
New Caledonia
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
680
    	
 
    	
Palau
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
675
    	
 
    	
Papua New Guinea
    

 

S-5-9

 

	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
685
    	
 
    	
Samoa
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
677
    	
 
    	
Solomon Islands
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
676
    	
 
    	
Tonga
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
688
    	
 
    	
Tuvalu
    
	
9
    	
 
    	
Asia-Pacific: Islands
    	
 
    	
678
    	
 
    	
Vanuatu
    
	
15
    	
 
    	
Europe: Central
    	
 
    	
420
    	
 
    	
Czech Republic
    
	
15
    	
 
    	
Europe: Central
    	
 
    	
372
    	
 
    	
Estonia
    
	
15
    	
 
    	
Europe: Central
    	
 
    	
36
    	
 
    	
Hungary
    
	
15
    	
 
    	
Europe: Central
    	
 
    	
371
    	
 
    	
Latvia
    
	
15
    	
 
    	
Europe: Central
    	
 
    	
370
    	
 
    	
Lithuania
    
	
15
    	
 
    	
Europe: Central
    	
 
    	
48
    	
 
    	
Poland
    
	
15
    	
 
    	
Europe: Central
    	
 
    	
421
    	
 
    	
Slovak Republic
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
355
    	
 
    	
Albania
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
387
    	
 
    	
Bosnia and Herzegovina
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
359
    	
 
    	
Bulgaria
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
385
    	
 
    	
Croatia
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
383
    	
 
    	
Kosovo
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
389
    	
 
    	
Macedonia
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
382
    	
 
    	
Montenegro
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
40
    	
 
    	
Romania
    
	
16
    	
 
    	
Europe. Eastern
    	
 
    	
381
    	
 
    	
Serbia
    
	
16
    	
 
    	
Europe: Eastern
    	
 
    	
90
    	
 
    	
Turkey
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
374
    	
 
    	
Armenia
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
994
    	
 
    	
Azerbaijan
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
375
    	
 
    	
Belarus
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
995
    	
 
    	
Georgia
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
8
    	
 
    	
Kazakhstan
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
996
    	
 
    	
Kyrgyzstan
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
373
    	
 
    	
Moldova
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
976
    	
 
    	
Mongolia
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
7
    	
 
    	
Russia
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
992
    	
 
    	
Tajikistan
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
993
    	
 
    	
Turkmenistan
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
380
    	
 
    	
Ukraine
    
	
14
    	
 
    	
Europe: Russia & CIS
    	
 
    	
998
    	
 
    	
Uzbekistan
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
376
    	
 
    	
Andorra
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
43
    	
 
    	
Austria
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
32
    	
 
    	
Belgium
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
357
    	
 
    	
Cyprus
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
45
    	
 
    	
Denmark
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
358
    	
 
    	
Finland
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
33
    	
 
    	
France
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
49
    	
 
    	
Germany
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
30
    	
 
    	
Greece
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
354
    	
 
    	
Iceland
    

 

S-5-10

 

	
102
    	
 
    	
Europe: Western
    	
 
    	
353
    	
 
    	
Ireland
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
101
    	
 
    	
Isle of Man
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
39
    	
 
    	
Italy
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
102
    	
 
    	
Liechtenstein
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
352
    	
 
    	
Luxembourg
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
356
    	
 
    	
Malta
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
377
    	
 
    	
Monaco
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
31
    	
 
    	
Netherlands
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
47
    	
 
    	
Norway
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
351
    	
 
    	
Portugal
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
386
    	
 
    	
Slovenia
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
34
    	
 
    	
Spain
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
46
    	
 
    	
Sweden
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
41
    	
 
    	
Switzerland
    
	
102
    	
 
    	
Europe: Western
    	
 
    	
44
    	
 
    	
United Kingdom
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
973
    	
 
    	
Bahrain
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
98
    	
 
    	
Iran
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
964
    	
 
    	
Iraq
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
965
    	
 
    	
Kuwait
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
968
    	
 
    	
Oman
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
974
    	
 
    	
Qatar
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
966
    	
 
    	
Saudi Arabia
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
971
    	
 
    	
United Arab Emirates
    
	
10
    	
 
    	
Middle East: Gulf States
    	
 
    	
967
    	
 
    	
Yemen
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
213
    	
 
    	
Algeria
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
20
    	
 
    	
Egypt
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
972
    	
 
    	
Israel
    
	
11
    	
 
    	
Middle East MENA
    	
 
    	
962
    	
 
    	
Jordan
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
961
    	
 
    	
Lebanon
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
212
    	
 
    	
Morocco
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
970
    	
 
    	
Palestinian Settlements
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
963
    	
 
    	
Syrian Arab Republic
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
216
    	
 
    	
Tunisia
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
1212
    	
 
    	
Western Sahara
    
	
11
    	
 
    	
Middle East: MENA
    	
 
    	
218
    	
 
    	
Libya
    

 

S-5-11

 

Section 4.              S&P Default Rate.

 

	
Maturity
    	
 
    	
Initial Liability Rating
    	
 
    
	
(years)
    	
 
    	
“AAA”
    	
 
    	
“AA+”
    	
 
    	
“AA”
    	
 
    	
“AA-”
    	
 
    	
“A+”
    	
 
    	
“A”
    	
 
    	
“A-”
    	
 
    	
“BBB+”
    	
 
    	
“BBB”
    	
 
    	
“BBB-”
    	
 
    
	
0
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    
	
1
    	
 
    	
0.00003249168014
    	
 
    	
0.00008324133473
    	
 
    	
0.00017658665685
    	
 
    	
0.00049442537636
    	
 
    	
0.00100435283385
    	
 
    	
0.00198335724928
    	
 
    	
0.00305284013092
    	
 
    	
0.00403669389141
    	
 
    	
0.00461619431140
    	
 
    	
0.00524293676951
    	
 
    
	
2
    	
 
    	
0.00015699160323
    	
 
    	
0.00036996201042
    	
 
    	
0.00073622429264
    	
 
    	
0.00139938458667
    	
 
    	
0.00257399573659
    	
 
    	
0.00452472002175
    	
 
    	
0.00667328704185
    	
 
    	
0.00892888699405
    	
 
    	
0.01091718533602
    	
 
    	
0.01445988981952
    	
 
    
	
3
    	
 
    	
0.00041483816094
    	
 
    	
0.00091325396687
    	
 
    	
0.00172278071294
    	
 
    	
0.00276840924859
    	
 
    	
0.00474538444138
    	
 
    	
0.00770505273372
    	
 
    	
0.01100045166236
    	
 
    	
0.01484174712870
    	
 
    	
0.01895695617364
    	
 
    	
0.02702053897092
    	
 
    
	
4
    	
 
    	
0.00084783735367
    	
 
    	
0.00176280787635
    	
 
    	
0.00317752719845
    	
 
    	
0.00464897370222
    	
 
    	
0.00755268739144
    	
 
    	
0.01158808027690
    	
 
    	
0.01613532092160
    	
 
    	
0.02186031844418
    	
 
    	
0.02867799361424
    	
 
    	
0.04229668376188
    	
 
    
	
5
    	
 
    	
0.00149745582951
    	
 
    	
0.00296441043902
    	
 
    	
0.00513748509964
    	
 
    	
0.00708173062555
    	
 
    	
0.01102407117753
    	
 
    	
0.01621845931443
    	
 
    	
0.02213969353901
    	
 
    	
0.03000396020915
    	
 
    	
0.03994693333519
    	
 
    	
0.05969442574039
    	
 
    
	
6
    	
 
    	
0.00240402335808
    	
 
    	
0.00455938301677
    	
 
    	
0.00763414909529
    	
 
    	
0.01009969303017
    	
 
    	
0.01517930050335
    	
 
    	
0.02162162838004
    	
 
    	
0.02903924108898
    	
 
    	
0.03924150737171
    	
 
    	
0.05258484100533
    	
 
    	
0.07867653829083
    	
 
    
	
7
    	
 
    	
0.00360598844688
    	
 
    	
0.00658408410672
    	
 
    	
0.01069265583311
    	
 
    	
0.01372767418503
    	
 
    	
0.02002861319041
    	
 
    	
0.02780489164645
    	
 
    	
0.03682872062425
    	
 
    	
0.04950544130466
    	
 
    	
0.06639096774184
    	
 
    	
0.09877441995809
    	
 
    
	
8
    	
 
    	
0.00513925203265
    	
 
    	
0.00906952567554
    	
 
    	
0.01433135028927
    	
 
    	
0.01798206028262
    	
 
    	
0.02557255249779
    	
 
    	
0.03475933634592
    	
 
    	
0.04547803679069
    	
 
    	
0.06070419602795
    	
 
    	
0.08116014268566
    	
 
    	
0.11959163544802
    	
 
    
	
9
    	
 
    	
0.00703659581067
    	
 
    	
0.01204112355275
    	
 
    	
0.01856168027847
    	
 
    	
0.02287090497830
    	
 
    	
0.03180245322497
    	
 
    	
0.04246223104848
    	
 
    	
0.05493831311597
    	
 
    	
0.07273225514177
    	
 
    	
0.09669462876962
    	
 
    	
0.14080159863536
    	
 
    
	
10
    	
 
    	
0.00932721558018
    	
 
    	
0.01551858575581
    	
 
    	
0.02338835025976
    	
 
    	
0.02839429962031
    	
 
    	
0.03870134053607
    	
 
    	
0.05087961844696
    	
 
    	
0.06514747149521
    	
 
    	
0.08547803540196
    	
 
    	
0.11281151957447
    	
 
    	
0.16214168796922
    	
 
    
	
11
    	
 
    	
0.01203636450979
    	
 
    	
0.01951593238045
    	
 
    	
0.02880967203295
    	
 
    	
0.03454495951708
    	
 
    	
0.04624506060805
    	
 
    	
0.05996888869754
    	
 
    	
0.07603506151831
    	
 
    	
0.09882975172219
    	
 
    	
0.12934675905433
    	
 
    	
0.18340556287277
    	
 
    
	
12
    	
 
    	
0.01518510638111
    	
 
    	
0.02404163416342
    	
 
    	
0.03481805774334
    	
 
    	
0.04130896444852
    	
 
    	
0.05440351149008
    	
 
    	
0.06968118682835
    	
 
    	
0.08752624592744
    	
 
    	
0.11267955488484
    	
 
    	
0.14615674128289
    	
 
    	
0.20443491679272
    	
 
    
	
13
    	
 
    	
0.01879017477837
    	
 
    	
0.02909885294571
    	
 
    	
0.04140060854110
    	
 
    	
0.04866659574161
    	
 
    	
0.06314188127197
    	
 
    	
0.07996356467179
    	
 
    	
0.09954495300396
    	
 
    	
0.12692626165773
    	
 
    	
0.16311827279155
    	
 
    	
0.22511145500583
    	
 
    
	
14
    	
 
    	
0.02286393094556
    	
 
    	
0.03468576536752
    	
 
    	
0.04853975984763
    	
 
    	
0.05659321964303
    	
 
    	
0.07242183059306
    	
 
    	
0.09076083242049
    	
 
    	
0.11201626713245
    	
 
    	
0.14147698429601
    	
 
    	
0.18012750134259
    	
 
    	
0.24534954734253
    	
 
    
	
15
    	
 
    	
0.02741441064319
    	
 
    	
0.04079595071314
    	
 
    	
0.05621395127849
    	
 
    	
0.06506017556120
    	
 
    	
0.08220257939344
    	
 
    	
0.10201709768991
    	
 
    	
0.12486815855274
    	
 
    	
0.15624793193058
    	
 
    	
0.19709825519910
    	
 
    	
0.26508976972438
    	
 
    
	
16
    	
 
    	
0.03244544875941
    	
 
    	
0.04741882448743
    	
 
    	
0.06439829575802
    	
 
    	
0.07403563681456
    	
 
    	
0.09244187501892
    	
 
    	
0.11367700243875
    	
 
    	
0.13803266284923
    	
 
    	
0.17116461299395
    	
 
    	
0.21396010509223
    	
 
    	
0.28429339437018
    	
 
    
	
17
    	
 
    	
0.03795686957738
    	
 
    	
0.05454010071015
    	
 
    	
0.07306522817054
    	
 
    	
0.08348542006155
    	
 
    	
0.10309683146543
    	
 
    	
0.12568668220692
    	
 
    	
0.15144661780260
    	
 
    	
0.18616162353298
    	
 
    	
0.23065635817821
    	
 
    	
0.30293779563441
    	
 
    
	
18
    	
 
    	
0.04394473036551
    	
 
    	
0.06214226778788
    	
 
    	
0.08218511899319
    	
 
    	
0.09337372717552
    	
 
    	
0.11412463860794
    	
 
    	
0.13799447984096
    	
 
    	
0.16505205534227
    	
 
    	
0.20118216540699
    	
 
    	
0.24714211642608
    	
 
    	
0.32101268824753
    	
 
    
	
19
    	
 
    	
0.05040160622073
    	
 
    	
0.07020506494637
    	
 
    	
0.09172684273858
    	
 
    	
0.10366380975952
    	
 
    	
0.12548314646638
    	
 
    	
0.15055144894628
    	
 
    	
0.17879633320753
    	
 
    	
0.21617740303414
    	
 
    	
0.26338247665982
    	
 
    	
0.33851709269878
    	
 
    
	
20
    	
 
    	
0.05731690474411
    	
 
    	
0.07870594841153
    	
 
    	
0.10165829471868
    	
 
    	
0.11431855172602
    	
 
    	
0.13713133355595
    	
 
    	
0.16331168219788
    	
 
    	
0.19263207693491
    	
 
    	
0.23110573813940
    	
 
    	
0.27935091127019
    	
 
    	
0.35545691796023
    	
 
    
	
21
    	
 
    	
0.06467720005315
    	
 
    	
0.08762053868981
    	
 
    	
0.11194685266377
    	
 
    	
0.12530096944489
    	
 
    	
0.14902967068053
    	
 
    	
0.17623249751025
    	
 
    	
0.20651698936614
    	
 
    	
0.24593205864939
    	
 
    	
0.29502784323211
    	
 
    	
0.37184305725693
    	
 
    
	
22
    	
 
    	
0.07246657674287
    	
 
    	
0.09692304233146
    	
 
    	
0.12255978214336
    	
 
    	
0.13657463200185
    	
 
    	
0.16114039259518
    	
 
    	
0.18927451178181
    	
 
    	
0.22041357278348
    	
 
    	
0.26062699982603
    	
 
    	
0.31039941302623
    	
 
    	
0.38768990320407
    	
 
    
	
23
    	
 
    	
0.08066697561510
    	
 
    	
0.10658664340514
    	
 
    	
0.13346458660563
    	
 
    	
0.14810400624971
    	
 
    	
0.17342769013874
    	
 
    	
0.20240162811085
    	
 
    	
0.23428879835930
    	
 
    	
0.27516624211807
    	
 
    	
0.32545642561659
    	
 
    	
0.40301420123877
    	
 
    
	
24
    	
 
    	
0.08925853423660
    	
 
    	
0.11658386153875
    	
 
    	
0.14462930424521
    	
 
    	
0.15985473272686
    	
 
    	
0.18585783500387
    	
 
    	
0.21558095845599
    	
 
    	
0.24811374891951
    	
 
    	
0.28952986021038
    	
 
    	
0.34019346068715
    	
 
    	
0.41783417301371
    	
 
    
	
25
    	
 
    	
0.09821991660962
    	
 
    	
0.12688687477491
    	
 
    	
0.15602275489727
    	
 
    	
0.17179383930879
    	
 
    	
0.19839924848505
    	
 
    	
0.22878269995493
    	
 
    	
0.26186325396763
    	
 
    	
0.30370173060440
    	
 
    	
0.35460812735415
    	
 
    	
0.43216885327770
    	
 
    
	
26
    	
 
    	
0.10752862740247
    	
 
    	
0.13746780665156
    	
 
    	
0.16761474080616
    	
 
    	
0.18388989978303
    	
 
    	
0.21102252449299
    	
 
    	
0.24197997968242
    	
 
    	
0.27551553032431
    	
 
    	
0.31766900011297
    	
 
    	
0.36870044445001
    	
 
    	
0.44603759426533
    	
 
    
	
27
    	
 
    	
0.11716130726647
    	
 
    	
0.14829897785967
    	
 
    	
0.17937620549285
    	
 
    	
0.19611314451375
    	
 
    	
0.22370041596552
    	
 
    	
0.25514867959937
    	
 
    	
0.28905183739534
    	
 
    	
0.33142161435353
    	
 
    	
0.38247232845686
    	
 
    	
0.45945970060372
    	
 
    
	
28
    	
 
    	
0.12709400674022
    	
 
    	
0.15935312356895
    	
 
    	
0.19127935510379
    	
 
    	
0.20843553008938
    	
 
    	
0.23640779262780
    	
 
    	
0.26826725084491
    	
 
    	
0.30245615277997
    	
 
    	
0.34495190323981
    	
 
    	
0.39592717273876
    	
 
    	
0.47245416525357
    	
 
    
	
29
    	
 
    	
0.13730243710320
    	
 
    	
0.17060357806895
    	
 
    	
0.20329774661513
    	
 
    	
0.22083077440588
    	
 
    	
0.24912157691632
    	
 
    	
0.28131652434167
    	
 
    	
0.31571487147424
    	
 
    	
0.35825421926124
    	
 
    	
0.40906950354635
    	
 
    	
0.48503948316705
    	
 
    
	
30
    	
 
    	
0.14776219728465
    	
 
    	
0.18202442877234
    	
 
    	
0.21540634713369
    	
 
    	
0.23327436309552
    	
 
    	
0.26182066381869
    	
 
    	
0.29427952288898
    	
 
    	
0.32881653013776
    	
 
    	
0.37132462374109
    	
 
    	
0.42190470013462
    	
 
    	
0.49723352433811
    	
 
    

 

S-6-12

 

	
Maturity
    	
 
    	
Initial Liability Rating
    	
 
    
	
(years)
    	
 
    	
“BB+”
    	
 
    	
“BB”
    	
 
    	
“BB-”
    	
 
    	
“B+”
    	
 
    	
“B”
    	
 
    	
“B-”
    	
 
    	
“CCC+”
    	
 
    	
“CCC”
    	
 
    	
“CCC-”
    	
 
    
	
0
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    	
0.00000000000000
    	
 
    
	
1
    	
 
    	
0.01051626951540
    	
 
    	
0.02109451063219
    	
 
    	
0.02600238218261
    	
 
    	
0.03221175349449
    	
 
    	
0.07848052027128
    	
 
    	
0.10882127346154
    	
 
    	
0.15688600485092
    	
 
    	
0.20494983870945
    	
 
    	
0.25301274610780
    	
 
    
	
2
    	
 
    	
0.02499656454519
    	
 
    	
0.04644347602378
    	
 
    	
0.05872070298984
    	
 
    	
0.07597534275765
    	
 
    	
0.14781993688588
    	
 
    	
0.20010197918490
    	
 
    	
0.28039819269931
    	
 
    	
0.34622676009875
    	
 
    	
0.40104827389528
    	
 
    
	
3
    	
 
    	
0.04296728984267
    	
 
    	
0.07475880167357
    	
 
    	
0.09536299437344
    	
 
    	
0.12379110105596
    	
 
    	
0.20934989256384
    	
 
    	
0.27616831728107
    	
 
    	
0.37429808873546
    	
 
    	
0.44486182623555
    	
 
    	
0.49823180926143
    	
 
    
	
4
    	
 
    	
0.06375706489973
    	
 
    	
0.10488372919304
    	
 
    	
0.13369966912307
    	
 
    	
0.17163869422120
    	
 
    	
0.26396576049049
    	
 
    	
0.33956728434721
    	
 
    	
0.44585490662468
    	
 
    	
0.51602827454518
    	
 
    	
0.56644893859712
    	
 
    
	
5
    	
 
    	
0.08664543568793
    	
 
    	
0.13586821436722
    	
 
    	
0.17214556293531
    	
 
    	
0.21748448101304
    	
 
    	
0.31246336178428
    	
 
    	
0.39272129824310
    	
 
    	
0.50135334884654
    	
 
    	
0.56922984826034
    	
 
    	
0.61661406997870
    	
 
    
	
6
    	
 
    	
0.11095356236080
    	
 
    	
0.16697806761620
    	
 
    	
0.20966482949668
    	
 
    	
0.26041061250789
    	
 
    	
0.35559617193298
    	
 
    	
0.43770644618830
    	
 
    	
0.54540770782673
    	
 
    	
0.61035699119403
    	
 
    	
0.65491579211460
    	
 
    
	
7
    	
 
    	
0.13609032486632
    	
 
    	
0.19767400297576
    	
 
    	
0.24563596164635
    	
 
    	
0.30011114045302
    	
 
    	
0.39406428304708
    	
 
    	
0.47619999931623
    	
 
    	
0.58122985959186
    	
 
    	
0.64312999141532
    	
 
    	
0.68512299997909
    	
 
    
	
8
    	
 
    	
0.16156889823197
    	
 
    	
0.22757944125466
    	
 
    	
0.27972842394960
    	
 
    	
0.33660307587399
    	
 
    	
0.42849804714584
    	
 
    	
0.50951512801740
    	
 
    	
0.61102368657078
    	
 
    	
0.66995611089592
    	
 
    	
0.70963159373549
    	
 
    
	
9
    	
 
    	
0.18700580837749
    	
 
    	
0.25644677999303
    	
 
    	
0.31180555451716
    	
 
    	
0.37006268488077
    	
 
    	
0.45945037340867
    	
 
    	
0.53866495002890
    	
 
    	
0.63630625959677
    	
 
    	
0.69243071475508
    	
 
    	
0.73001158997065
    	
 
    
	
10
    	
 
    	
0.21211084035732
    	
 
    	
0.28412675027236
    	
 
    	
0.34185383793706
    	
 
    	
0.40073439438302
    	
 
    	
0.48739741129612
    	
 
    	
0.56442783804416
    	
 
    	
0.65813447581021
    	
 
    	
0.71163564980709
    	
 
    	
0.74731800853184
    	
 
    
	
11
    	
 
    	
0.23667314094497
    	
 
    	
0.31054264263660
    	
 
    	
0.36993387616211
    	
 
    	
0.42888152616124
    	
 
    	
0.51274446097825
    	
 
    	
0.58740339226248
    	
 
    	
0.67725700377843
    	
 
    	
0.72832114376329
    	
 
    	
0.76227639665042
    	
 
    
	
12
    	
 
    	
0.26054665876636
    	
 
    	
0.33566967587371
    	
 
    	
0.39614763984459
    	
 
    	
0.45476089725285
    	
 
    	
0.53583430552170
    	
 
    	
0.60805677528899
    	
 
    	
0.69421439889161
    	
 
    	
0.74301912258474
    	
 
    	
0.77539705473005
    	
 
    
	
13
    	
 
    	
0.28363659558653
    	
 
    	
0.35951905665999
    	
 
    	
0.42061729215497
    	
 
    	
0.47861083876451
    	
 
    	
0.55695611742152
    	
 
    	
0.62675242871282
    	
 
    	
0.70940493338196
    	
 
    	
0.75611514630921
    	
 
    	
0.78704696564217
    	
 
    
	
14
    	
 
    	
0.30588762208959
    	
 
    	
0.38212599668453
    	
 
    	
0.44347194216901
    	
 
    	
0.50064658739768
    	
 
    	
0.57635391124606
    	
 
    	
0.64377917518522
    	
 
    	
0.72312812694716
    	
 
    	
0.76789484926254
    	
 
    	
0.79749592477526
    	
 
    
	
15
    	
 
    	
0.32727407180692
    	
 
    	
0.40354090885716
    	
 
    	
0.46483968141201
    	
 
    	
0.52105958011379
    	
 
    	
0.59423406584219
    	
 
    	
0.65936872217181
    	
 
    	
0.73561381419564
    	
 
    	
0.77857439457102
    	
 
    	
0.80694660997118
    	
 
    
	
16
    	
 
    	
0.34779203545341
    	
 
    	
0.42382307208110
    	
 
    	
0.48484305663441
    	
 
    	
0.54001868607450
    	
 
    	
0.61077176721927
    	
 
    	
0.67370926400653
    	
 
    	
0.74704179108008
    	
 
    	
0.78832075169049
    	
 
    	
0.81555448782805
    	
 
    
	
17
    	
 
    	
0.36745314020415
    	
 
    	
0.44303616519638
    	
 
    	
0.50359672594052
    	
 
    	
0.55767228363735
    	
 
    	
0.62611639818625
    	
 
    	
0.68695550071172
    	
 
    	
0.75755527500643
    	
 
    	
0.79726540401237
    	
 
    	
0.82344119393145
    	
 
    
	
18
    	
 
    	
0.38627975067186
    	
 
    	
0.46124518847755
    	
 
    	
0.52120646691784
    	
 
    	
0.57415059395658
    	
 
    	
0.64039598203907
    	
 
    	
0.69923605651349
    	
 
    	
0.76727026109433
    	
 
    	
0.80551375832039
    	
 
    	
0.83070366542031
    	
 
    
	
19
    	
 
    	
0.40430132963573
    	
 
    	
0.47851439829326
    	
 
    	
0.53776899540229
    	
 
    	
0.58956796989869
    	
 
    	
0.65372081561665
    	
 
    	
0.71065901445795
    	
 
    	
0.77628212466144
    	
 
    	
0.81315170523112
    	
 
    	
0.83742047206234
    	
 
    
	
20
    	
 
    	
0.42155172182601
    	
 
    	
0.49490597076921
    	
 
    	
0.55337224854383
    	
 
    	
0.60402499985314
    	
 
    	
0.66618642723567
    	
 
    	
0.72131608316220
    	
 
    	
0.78467035300329
    	
 
    	
0.82025026616334
    	
 
    	
0.84365627512204
    	
 
    
	
21
    	
 
    	
0.43806715861018
    	
 
    	
0.51047918266808
    	
 
    	
0.56809591468229
    	
 
    	
0.61761037378072
    	
 
    	
0.67787598227180
    	
 
    	
0.73128576554444
    	
 
    	
0.79250198989996
    	
 
    	
0.82686893791883
    	
 
    	
0.84946501826992
    	
 
    
	
22
    	
 
    	
0.45388481719360
    	
 
    	
0.52528995390171
    	
 
    	
0.58201207638061
    	
 
    	
0.63040250473015
    	
 
    	
0.68886224172514
    	
 
    	
0.74063579446157
    	
 
    	
0.79983418248194
    	
 
    	
0.83305813869936
    	
 
    	
0.85489224805959
    	
 
    
	
23
    	
 
    	
0.46904180090904
    	
 
    	
0.53939063874386
    	
 
    	
0.59518588675300
    	
 
    	
0.64247092133036
    	
 
    	
0.69920916125231
    	
 
    	
0.74942502551257
    	
 
    	
0.80671609361297
    	
 
    	
0.83886102557309
    	
 
    	
0.85997682859142
    	
 
    
	
24
    	
 
    	
0.48357443564838
    	
 
    	
0.55282998463208
    	
 
    	
0.60767623324921
    	
 
    	
0.65387745604166
    	
 
    	
0.70897320184886
    	
 
    	
0.75770492428590
    	
 
    	
0.81319035960797
    	
 
    	
0.84431486609666
    	
 
    	
0.86475222861870
    	
 
    
	
25
    	
 
    	
0.49751780111272
    	
 
    	
0.56565320087529
    	
 
    	
0.61953636423910
    	
 
    	
0.66467725632041
    	
 
    	
0.71820440936178
    	
 
    	
0.76552074772016
    	
 
    	
0.81929421763250
    	
 
    	
0.84945208922783
    	
 
    	
0.86924750263494
    	
 
    
	
26
    	
 
    	
0.51090543460914
    	
 
    	
0.57790209665155
    	
 
    	
0.63081446667744
    	
 
    	
0.67491964477911
    	
 
    	
0.72694730840340
    	
 
    	
0.77291249247078
    	
 
    	
0.82506038981922
    	
 
    	
0.85430110229233
    	
 
    	
0.87348804983309
    	
 
    
	
27
    	
 
    	
0.52376916018026
    	
 
    	
0.58961526000669
    	
 
    	
0.64155419082782
    	
 
    	
0.68464885182201
    	
 
    	
0.73524164682987
    	
 
    	
0.77991566402222
    	
 
    	
0.83051778577124
    	
 
    	
0.85888693491442
    	
 
    	
0.87749620956371
    	
 
    
	
28
    	
 
    	
0.53613900757325
    	
 
    	
0.60082825839927
    	
 
    	
0.65179512243902
    	
 
    	
0.69390464113840
    	
 
    	
0.74312301943161
    	
 
    	
0.78656190650205
    	
 
    	
0.83569206768834
    	
 
    	
0.86323175320733
    	
 
    	
0.88129173477942
    	
 
    
	
29
    	
 
    	
0.54804319456997
    	
 
    	
0.61157384762435
    	
 
    	
0.66157320515020
    	
 
    	
0.70272284536398
    	
 
    	
0.75062339353433
    	
 
    	
0.79287952316911
    	
 
    	
0.84060611023618
    	
 
    	
0.86735527538576
    	
 
    	
0.88489217319288
    	
 
    
	
30
    	
 
    	
0.55950815306984
    	
 
    	
0.62188218039284
    	
 
    	
0.67092111705074
    	
 
    	
0.71113582641990
    	
 
    	
0.75777155452562
    	
 
    	
0.79889391025997
    	
 
    	
0.84528037876516
    	
 
    	
0.87127511150820
    	
 
    	
0.88831317771650
    	
 
    
	
 
    	
 
    	
Default   Rate
    	
 
    

 

S-6-13

 

Schedule 6

 

DIVERSITY SCORE CALCULATION

 

The Diversity Score is calculated as follows:

 

(a)                                 An “Issuer Par Amount” is calculated for each issuer of a Collateral Obligation, and is equal to the Aggregate Principal Balance of all Collateral Obligations issued by that issuer and all affiliates.

 

(b)                                 An “Average Par Amount” is calculated by summing the Issuer Par Amounts for all issuers, and dividing by the number of issuers.

 

(c)                                  An “Equivalent Unit Score” is calculated for each issuer, and is equal to the lesser of (x) one and (y) the Issuer Par Amount for such issuer divided by the Average Par Amount.

 

(d)                                 An “Aggregate Industry Equivalent Unit Score” is then calculated for each S&P Industry Classification, shown on Schedule 3, and is equal to the sum of the Equivalent Unit Scores for each issuer in such industry classification group.

 

(e)                                  An “Industry Diversity Score” is then established for each S&P Industry Classification, shown on Schedule 3, by reference to the following table for the related Aggregate Industry Equivalent Unit Score; provided that if any Aggregate Industry Equivalent Unit Score falls between any two such scores, the applicable Industry Diversity Score will be the lower of the two Industry Diversity Scores:

 

	
Aggregate
    	
 
    	
 
    	
 
    	
Aggregate
    	
 
    	
 
    	
 
    	
Aggregate
    	
 
    	
 
    	
 
    	
Aggregate
    	
 
    	
 
    	
 
    
	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    
	
Equivalent
    	
 
    	
Diversity
    	
 
    	
Equivalent
    	
 
    	
Diversity
    	
 
    	
Equivalent
    	
 
    	
Diversity
    	
 
    	
Equivalent
    	
 
    	
Diversity
    	
 
    
	
Unit Score
    	
 
    	
Score
    	
 
    	
Unit Score
    	
 
    	
Score
    	
 
    	
Unit Score
    	
 
    	
Score
    	
 
    	
Unit Score
    	
 
    	
Score
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
0.0000
    	
 
    	
0.0000
    	
 
    	
5.0500
    	
 
    	
2.7000
    	
 
    	
10.1500
    	
 
    	
4.0200
    	
 
    	
15.2500
    	
 
    	
4.5300
    	
 
    
	
0.0500
    	
 
    	
0.1000
    	
 
    	
5.1500
    	
 
    	
2.7333
    	
 
    	
10.2500
    	
 
    	
4.0300
    	
 
    	
15.3500
    	
 
    	
4.5400
    	
 
    
	
0.1500
    	
 
    	
0.2000
    	
 
    	
5.2500
    	
 
    	
2.7667
    	
 
    	
10.3500
    	
 
    	
4.0400
    	
 
    	
15.4500
    	
 
    	
4.5500
    	
 
    
	
0.2500
    	
 
    	
0.3000
    	
 
    	
5.3500
    	
 
    	
2.8000
    	
 
    	
10.4500
    	
 
    	
4.0500
    	
 
    	
15.5500
    	
 
    	
4.5600
    	
 
    
	
0.3500
    	
 
    	
0.4000
    	
 
    	
5.4500
    	
 
    	
2.8333
    	
 
    	
10.5500
    	
 
    	
4.0600
    	
 
    	
15.6500
    	
 
    	
4.5700
    	
 
    
	
0.4500
    	
 
    	
0.5000
    	
 
    	
5.5500
    	
 
    	
2.8667
    	
 
    	
10.6500
    	
 
    	
4.0700
    	
 
    	
15.7500
    	
 
    	
4.5800
    	
 
    
	
0.5500
    	
 
    	
0.6000
    	
 
    	
5.6500
    	
 
    	
2.9000
    	
 
    	
10.7500
    	
 
    	
4.0800
    	
 
    	
15.8500
    	
 
    	
4.5900
    	
 
    
	
0.6500
    	
 
    	
0.7000
    	
 
    	
5.7500
    	
 
    	
2.9333
    	
 
    	
10.8500
    	
 
    	
4.0900
    	
 
    	
15.9500
    	
 
    	
4.6000
    	
 
    
	
0.7500
    	
 
    	
0.8000
    	
 
    	
5.8500
    	
 
    	
2.9667
    	
 
    	
10.9500
    	
 
    	
4.1000
    	
 
    	
16.0500
    	
 
    	
4.6100
    	
 
    
	
0.8500
    	
 
    	
0.9000
    	
 
    	
5.9500
    	
 
    	
3.0000
    	
 
    	
11.0500
    	
 
    	
4.1100
    	
 
    	
16.1500
    	
 
    	
4.6200
    	
 
    
	
0.9500
    	
 
    	
1.0000
    	
 
    	
6.0500
    	
 
    	
3.0250
    	
 
    	
11.1500
    	
 
    	
4.1200
    	
 
    	
16.2500
    	
 
    	
4.6300
    	
 
    
	
1.0500
    	
 
    	
1.0500
    	
 
    	
6.1500
    	
 
    	
3.0500
    	
 
    	
11.2500
    	
 
    	
4.1300
    	
 
    	
16.3500
    	
 
    	
4.6400
    	
 
    
	
1.1500
    	
 
    	
1.1000
    	
 
    	
6.2500
    	
 
    	
3.0750
    	
 
    	
11.3500
    	
 
    	
4.1400
    	
 
    	
16.4500
    	
 
    	
4.6500
    	
 
    
	
1.2500
    	
 
    	
1.1500
    	
 
    	
6.3500
    	
 
    	
3.1000
    	
 
    	
11.4500
    	
 
    	
4.1500
    	
 
    	
16.5500
    	
 
    	
4.6600
    	
 
    
	
1.3500
    	
 
    	
1.2000
    	
 
    	
6.4500
    	
 
    	
3.1250
    	
 
    	
11.5500
    	
 
    	
4.1600
    	
 
    	
16.6500
    	
 
    	
4.6700
    	
 
    
	
1.4500
    	
 
    	
1.2500
    	
 
    	
6.5500
    	
 
    	
3.1500
    	
 
    	
11.6500
    	
 
    	
4.1700
    	
 
    	
16.7500
    	
 
    	
4.6800
    	
 
    
	
1.5500
    	
 
    	
1.3000
    	
 
    	
6.6500
    	
 
    	
3.1750
    	
 
    	
11.7500
    	
 
    	
4.1800
    	
 
    	
16.8500
    	
 
    	
4.6900
    	
 
    
	
1.6500
    	
 
    	
1.3500
    	
 
    	
6.7500
    	
 
    	
3.2000
    	
 
    	
11.8500
    	
 
    	
4.1900
    	
 
    	
16.9500
    	
 
    	
4.7000
    	
 
    

 

S-6-1

 

	
Aggregate
    	
 
    	
 
    	
 
    	
Aggregate
    	
 
    	
 
    	
 
    	
Aggregate
    	
 
    	
 
    	
 
    	
Aggregate
    	
 
    	
 
    	
 
    
	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    	
Industry
    	
 
    
	
Equivalent
    	
 
    	
Diversity
    	
 
    	
Equivalent
    	
 
    	
Diversity
    	
 
    	
Equivalent
    	
 
    	
Diversity
    	
 
    	
Equivalent
    	
 
    	
Diversity
    	
 
    
	
Unit Score
    	
 
    	
Score
    	
 
    	
Unit Score
    	
 
    	
Score
    	
 
    	
Unit Score
    	
 
    	
Score
    	
 
    	
Unit Score
    	
 
    	
Score
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
1.7500
    	
 
    	
1.4000
    	
 
    	
6.8500
    	
 
    	
3.2250
    	
 
    	
11.9500
    	
 
    	
4.2000
    	
 
    	
17.0500
    	
 
    	
4.7100
    	
 
    
	
1.8500
    	
 
    	
1.4500
    	
 
    	
6.9500
    	
 
    	
3.2500
    	
 
    	
12.0500
    	
 
    	
4.2100
    	
 
    	
17.1500
    	
 
    	
4.7200
    	
 
    
	
1.9500
    	
 
    	
1.5000
    	
 
    	
7.0500
    	
 
    	
3.2750
    	
 
    	
12.1500
    	
 
    	
4.2200
    	
 
    	
17.2500
    	
 
    	
4.7300
    	
 
    
	
2.0500
    	
 
    	
1.5500
    	
 
    	
7.1500
    	
 
    	
3.3000
    	
 
    	
12.2500
    	
 
    	
4.2300
    	
 
    	
17.3500
    	
 
    	
4.7400
    	
 
    
	
2.1500
    	
 
    	
1.6000
    	
 
    	
7.2500
    	
 
    	
3.3250
    	
 
    	
12.3500
    	
 
    	
4.2400
    	
 
    	
17.4500
    	
 
    	
4.7500
    	
 
    
	
2.2500
    	
 
    	
1.6500
    	
 
    	
7.3500
    	
 
    	
3.3500
    	
 
    	
12.4500
    	
 
    	
4.2500
    	
 
    	
17.5500
    	
 
    	
4.7600
    	
 
    
	
2.3500
    	
 
    	
1.7000
    	
 
    	
7.4500
    	
 
    	
3.3750
    	
 
    	
12.5500
    	
 
    	
4.2600
    	
 
    	
17.6500
    	
 
    	
4.7700
    	
 
    
	
2.4500
    	
 
    	
1.7500
    	
 
    	
7.5500
    	
 
    	
3.4000
    	
 
    	
12.6500
    	
 
    	
4.2700
    	
 
    	
17.7500
    	
 
    	
4.7800
    	
 
    
	
2.5500
    	
 
    	
1.8000
    	
 
    	
7.6500
    	
 
    	
3.4250
    	
 
    	
12.7500
    	
 
    	
4.2800
    	
 
    	
17.8500
    	
 
    	
4.7900
    	
 
    
	
2.6500
    	
 
    	
1.8500
    	
 
    	
7.7500
    	
 
    	
3.4500
    	
 
    	
12.8500
    	
 
    	
4.2900
    	
 
    	
17.9500
    	
 
    	
4.8000
    	
 
    
	
2.7500
    	
 
    	
1.9000
    	
 
    	
7.8500
    	
 
    	
3.4750
    	
 
    	
12.9500
    	
 
    	
4.3000
    	
 
    	
18.0500
    	
 
    	
4.8100
    	
 
    
	
2.8500
    	
 
    	
1.9500
    	
 
    	
7.9500
    	
 
    	
3.5000
    	
 
    	
13.0500
    	
 
    	
4.3100
    	
 
    	
18.1500
    	
 
    	
4.8200
    	
 
    
	
2.9500
    	
 
    	
2.0000
    	
 
    	
8.0500
    	
 
    	
3.5250
    	
 
    	
13.1500
    	
 
    	
4.3200
    	
 
    	
18.2500
    	
 
    	
4.8300
    	
 
    
	
3.0500
    	
 
    	
2.0333
    	
 
    	
8.1500
    	
 
    	
3.5500
    	
 
    	
13.2500
    	
 
    	
4.3300
    	
 
    	
18.3500
    	
 
    	
4.8400
    	
 
    
	
3.1500
    	
 
    	
2.0667
    	
 
    	
8.2500
    	
 
    	
3.5750
    	
 
    	
13.3500
    	
 
    	
4.3400
    	
 
    	
18.4500
    	
 
    	
4.8500
    	
 
    
	
3.2500
    	
 
    	
2.1000
    	
 
    	
8.3500
    	
 
    	
3.6000
    	
 
    	
13.4500
    	
 
    	
4.3500
    	
 
    	
18.5500
    	
 
    	
4.8600
    	
 
    
	
3.3500
    	
 
    	
2.1333
    	
 
    	
8.4500
    	
 
    	
3.6250
    	
 
    	
13.5500
    	
 
    	
4.3600
    	
 
    	
18.6500
    	
 
    	
4.8700
    	
 
    
	
3.4500
    	
 
    	
2.1667
    	
 
    	
8.5500
    	
 
    	
3.6500
    	
 
    	
13.6500
    	
 
    	
4.3700
    	
 
    	
18.7500
    	
 
    	
4.8800
    	
 
    
	
3.5500
    	
 
    	
2.2000
    	
 
    	
8.6500
    	
 
    	
3.6750
    	
 
    	
13.7500
    	
 
    	
4.3800
    	
 
    	
18.8500
    	
 
    	
4.8900
    	
 
    
	
3.6500
    	
 
    	
2.2333
    	
 
    	
8.7500
    	
 
    	
3.7000
    	
 
    	
13.8500
    	
 
    	
4.3900
    	
 
    	
18.9500
    	
 
    	
4.9000
    	
 
    
	
3.7500
    	
 
    	
2.2667
    	
 
    	
8.8500
    	
 
    	
3.7250
    	
 
    	
13.9500
    	
 
    	
4.4000
    	
 
    	
19.0500
    	
 
    	
4.9100
    	
 
    
	
3.8500
    	
 
    	
2.3000
    	
 
    	
8.9500
    	
 
    	
3.7500
    	
 
    	
14.0500
    	
 
    	
4.4100
    	
 
    	
19.1500
    	
 
    	
4.9200
    	
 
    
	
3.9500
    	
 
    	
2.3333
    	
 
    	
9.0500
    	
 
    	
3.7750
    	
 
    	
14.1500
    	
 
    	
4.4200
    	
 
    	
19.2500
    	
 
    	
4.9300
    	
 
    
	
4.0500
    	
 
    	
2.3667
    	
 
    	
9.1500
    	
 
    	
3.8000
    	
 
    	
14.2500
    	
 
    	
4.4300
    	
 
    	
19.3500
    	
 
    	
4.9400
    	
 
    
	
4.1500
    	
 
    	
2.4000
    	
 
    	
9.2500
    	
 
    	
3.8250
    	
 
    	
14.3500
    	
 
    	
4.4400
    	
 
    	
19.4500
    	
 
    	
4.9500
    	
 
    
	
4.2500
    	
 
    	
2.4333
    	
 
    	
9.3500
    	
 
    	
3.8500
    	
 
    	
14.4500
    	
 
    	
4.4500
    	
 
    	
19.5500
    	
 
    	
4.9600
    	
 
    
	
4.3500
    	
 
    	
2.4667
    	
 
    	
9.4500
    	
 
    	
3.8750
    	
 
    	
14.5500
    	
 
    	
4.4600
    	
 
    	
19.6500
    	
 
    	
4.9700
    	
 
    
	
4.4500
    	
 
    	
2.5000
    	
 
    	
9.5500
    	
 
    	
3.9000
    	
 
    	
14.6500
    	
 
    	
4.4700
    	
 
    	
19.7500
    	
 
    	
4.9800
    	
 
    
	
4.5500
    	
 
    	
2.5333
    	
 
    	
9.6500
    	
 
    	
3.9250
    	
 
    	
14.7500
    	
 
    	
4.4800
    	
 
    	
19.8500
    	
 
    	
4.9900
    	
 
    
	
4.6500
    	
 
    	
2.5667
    	
 
    	
9.7500
    	
 
    	
3.9500
    	
 
    	
14.8500
    	
 
    	
4.4900
    	
 
    	
19.9500
    	
 
    	
5.0000
    	
 
    
	
4.7500
    	
 
    	
2.6000
    	
 
    	
9.8500
    	
 
    	
3.9750
    	
 
    	
14.9500
    	
 
    	
4.5000
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.8500
    	
 
    	
2.6333
    	
 
    	
9.9500
    	
 
    	
4.0000
    	
 
    	
15.0500
    	
 
    	
4.5100
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4.9500
    	
 
    	
2.6667
    	
 
    	
10.0500
    	
 
    	
4.0100
    	
 
    	
15.1500
    	
 
    	
4.5200
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(f)                                   The Diversity Score is then calculated by summing each of the Industry Diversity Scores for each S&P Industry Classification shown on Schedule 3.

 

For purposes of calculating the Diversity Score, affiliated issuers in the same Industry are deemed to be a single issuer (provided that one obligor shall not be considered an affiliate of another obligor solely because they are controlled by the same financial sponsor) except as otherwise agreed to by S&P.

 

S-6-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00296-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00296-of-00352.parquet"}]]