GBDC Golub Capital BDC Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of report (Date of earliest event reported): November 15, 2024

 

 

GOLUB CAPITAL BDC, INC.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware		814-00794		27-2326940
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

200 Park Avenue, 25th Floor, New York, NY 10166

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s telephone number, including area code: (212) 750-6060

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol		Name of each exchange on which  registered
Common Stock, par value $0.001 per share		GBDC		The Nasdaq Global Select Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b–2 of the Securities Exchange Act of 1934.

 

Emerging growth company     ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

2024 Debt Securitization

 

On November 18, 2024 (the “Closing Date”), Golub Capital BDC CLO 8 LLC (the “2024 Issuer”), an indirect, wholly owned, consolidated subsidiary of Golub Capital BDC, Inc. (the “Company”) completed a $2,200,500,000 term debt securitization (the “2024 Debt Securitization”). Term debt securitizations are also known as collateralized loan obligations and are a form of secured financing incurred by a subsidiary of the Company, which is consolidated by the Company and subject to the Company’s overall asset coverage requirement.

 

On the Closing Date and in connection with the 2024 Debt Securitization, the 2024 Issuer entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Deutsche Bank Securities Inc., as the initial purchaser (the “Initial Purchaser”) pursuant to which the Initial Purchaser agreed to purchase certain of the notes to be issued pursuant to an indenture as part of the 2024 Securitization.

 

The notes offered in the 2024 Debt Securitization consist of $1,192,400,000 of Aaa/AAA Class A-1R Senior Secured Floating Rate Notes due 2036, which bear interest at the three-month secured overnight financing rate published by the Federal Reserve Bank of New York (“SOFR”) plus 1.56% (the “Class A-1R 2024 Notes”), $171,600,000 of AAA Class A-2RR Senior Secured Floating Rate Notes due 2036, which bear interest at SOFR plus 1.75% (the “Class A-2RR 2024 Notes”), $165,000,000 of AA Class B-R Senior Secured Floating Rate Notes due 2036, which bear interest at SOFR plus 1.70% (the “Class B-R Notes”) and $154,000,000 of A Class C-R Senior Secured Floating Rate Notes due 2036, which bear interest at SOFR plus 2.10% (the “Class C-R Notes” and, together with the Class A-1R Notes, the Class A-2RR Notes and the Class B-R Notes, the “Secured Notes”). Additionally, on the Closing Date, the Issuer will issue $517,500,000 Subordinated Notes due 2124 (the “Subordinated Notes”), which do not bear interest. The Secured Notes together with the Subordinated Notes are collectively referred to herein as the “2024 Notes”. The Company will indirectly retain the Class B-R Notes, the Class C-R Notes, and the Subordinated Notes.

 

The 2024 Debt Securitization is backed by a diversified portfolio of senior secured and second lien loans. Through October 20, 2028, all principal collections received on the underlying collateral may be used by the 2024 Issuer to purchase new collateral under the direction of GC Advisors LLC, the Company’s investment adviser (“GC Advisors”), in its capacity as collateral manager of the 2024 Issuer, in accordance with the Company’s investment strategy and subject to customary conditions set forth in the documents governing the 2024 Debt Securitization, allowing the Company to maintain the initial leverage in the 2024 Debt Securitization. The Secured Notes are due October 20, 2036. The Subordinated Notes are due in 2124.

 

The Company intends to use the proceeds from the 2024 Debt Securitization to, among other things, fully redeem (i) its $602.4 million term debt securitization completed on November 16, 2018, in which Golub Capital BDC CLO III LLC, the Company’s indirect subsidiary, issued an aggregate of $602.4 million of notes (the “2018 Debt Securitization”), (ii) its $908.2 million term debt securitization completed on December 13, 2018 that the Company acquired in connection with its merger with Golub Capital Investment Corporation, in which GCIC CLO II LLC, the Company’s indirect subsidiary, issued an aggregate of $908.2 million of notes (the “GCIC 2018 Debt Securitization”) and (iii) its $398.9 million term debt securitization completed on March 11, 2021, that the Company acquired in connection with its merger with Golub Capital BDC 3, Inc. (the “GBDC 3 Merger”), in which Golub Capital BDC 3 CLO 1 LLC, the Company’s indirect subsidiary, issued $398.9 million of notes (the “GBDC 3 Term Debt Securitization”).

 

Under the terms of the loan sale agreement entered into upon the Closing Date (the “Master Loan Sale Agreement”) that provided for the sale of assets on the Closing Date as well as future sales from the Company to the 2024 Issuer through Golub Capital BDC CLO 8 Depositor LLC, a direct, wholly-owned and consolidated subsidiary of the Company (the “2024 CLO Depositor”), (1) the Company sold and/or contributed to the 2024 CLO Depositor the remainder of its ownership interest in the portfolio company investments securing the 2024 Debt Securitization and participations for the purchase price and other consideration set forth in the Master Loan Sale Agreement and (2) 2024 CLO Depositor, in turn, sold to the 2024 Issuer all of its ownership interest in such portfolio loans and participations for the purchase price and other consideration set forth in the Master Loan Sale Agreement. Following these transfers, the 2024 Issuer, and not the 2024 CLO Depositor or the Company, holds all of the ownership interest in such portfolio company investments and participations. The Company made customary representations, warranties and covenants in these loan sale agreements.

 

 

The Secured Notes are the secured obligation of the 2024 Issuer, and the indenture governing the Secured Notes includes customary covenants and events of default.  The Secured Notes have not been, and will not be, registered under the Securities Act of 1933, as amended, or any state “blue sky” laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from registration.

 

GC Advisors serves as collateral manager to the 2024 Issuer under a collateral management agreement and is entitled to receive a fee for providing these services. Pursuant to the Company’s investment advisory agreement with GC Advisors (the “Investment Advisory Agreement”), the total fees paid to GC Advisors for rendering collateral management services, which will be less than the management fee payable under the Investment Advisory Agreement, will be offset against such management fee.

 

The descriptions of the documentation related to the 2024 Debt Securitization contained in this Current Report on Form 8-K do not purport to be complete and are qualified in their entirety by reference to the underlying agreements, attached hereto as Exhibits 10.1, 10.2, 10.3 and 10.4 and incorporated by reference herein.

 

JPMorgan Facility Upsize

 

On November 15, 2024, the Company entered into an agreement (the “Commitment Increase Agreement”), pursuant to which, through the accordion feature in the Senior Secured Revolving Credit Facility, dated as of August 6, 2024, by and among the Company, as borrower, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the lenders, syndication agents, joint bookrunners, and joint lead arrangers party thereto (as amended and supplemented, the “JPM Credit Facility”), the aggregate commitments under the JPM Credit Facility increased from $1,822.5 million to $1,897.5 million. The accordion feature in the JPM Credit Facility allows the Company, under certain circumstances, to increase the total size of the facility to a maximum of $2.0 billion. The other material terms of the JPM Credit Facility remain unchanged.

 

The foregoing description is only a summary of the material provisions of the Commitment Increase Agreement and is qualified in its entirety by reference to a copy of the Commitment Increase Agreement, which is filed as Exhibit 10.5 to this Current Report on Form 8-K and incorporated by reference herein.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

10.1*	Amended and Restated Indenture dated as of November 18, 2024 between Golub Capital BDC CLO 8 LLC, as issuer, and The Bank of New York Mellon Trust Company, National Association, as trustee.
10.2	Note Purchase Agreement dated as of November 18, 2024 between Golub Capital BDC CLO 8 LLC, as issuer, and Deutsche Bank Securities Inc., as initial purchaser.
10.3	Amended and Restated Collateral Management Agreement dated as of November 18, 2024 between Golub Capital BDC CLO 8 LLC, as issuer, and GC Advisors LLC, as collateral manager.
10.4*	Amended and Restated Master Loan Sale Agreement dated as of November 18, 2024 among Golub Capital BDC, Inc., as seller, Golub Capital BDC CLO 8 Depositor LLC, as intermediate seller, and Golub Capital BDC CLO 8 LLC, as buyer.
10.5	Commitment Increase Agreement, dated as of November 14, 2024, by BNP Paribas, as an Assuming Lender, in favor of Golub Capital BDC, Inc., as borrower, and JPMorgan Chase Bank, N.A., as administrative agent under the Senior Secured Revolving Credit Facility, dated as of August 6, 2024, as amended, among Golub Capital BDC, Inc., as borrower, JPMorgan Chase Bank, N.A., as administrative agent and as collateral agent, and the lenders, syndication agents, joint bookrunners, and joint lead arrangers party thereto.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
*	Exhibits and/or schedules to this Exhibit have been omitted in accordance with Item 601 of Regulation S-K. The registrant agrees to furnish supplementally a copy of all omitted exhibits and/or schedules to the SEC upon its request.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	Golub Capital BDC, Inc.
Date: November 21, 2024	By:	/s/ Christopher C. Ericson
		Name:	Christopher C. Ericson
		Title:	Chief Financial Officer

 

 

Exhibit 10.1

 

EXECUTION VERSION

 

 

AMENDED AND RESTATED INDENTURE

 

 

 

by and between

 

 

 

GOLUB CAPITAL BDC CLO 8 LLC,
Issuer

 

 

 

and

 

 

 

THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL
ASSOCIATION,
Trustee

 

 

 

 

Dated as of November 18, 2024

 

 

 

 

 

TABLE OF CONTENTS

 

		Page
ARTICLE I DEFINITIONS		3
Section 1.1	Definitions	3
Section 1.2	Usage of Terms	82
Section 1.3	Assumptions as to Assets	82
ARTICLE II THE NOTES		86
Section 2.1	Forms Generally	86
Section 2.2	Forms of Notes	86
Section 2.3	Authorized Amount; Stated Maturity; Denominations	88
Section 2.4	Execution, Authentication, Delivery and Dating	89
Section 2.5	Registration, Registration of Transfer and Exchange	90
Section 2.6	Mutilated, Defaced, Destroyed, Lost or Stolen Note	102
Section 2.7	Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved	103
Section 2.8	Persons Deemed Owners	106
Section 2.9	Cancellation	106
Section 2.10	DTC Ceases to be Depository	107
Section 2.11	Non-Permitted Holders	108
Section 2.12	Treatment and Tax Certification	110
Section 2.13	Additional Issuance	113
ARTICLE III CONDITIONS PRECEDENT		115
Section 3.1	Conditions to Issuance of Notes on Refinancing Date	115
Section 3.2	Conditions to Additional Issuance	118
Section 3.3	Custodianship; Delivery of Collateral Obligations and Eligible Investments	120
ARTICLE IV SATISFACTION AND DISCHARGE		121
Section 4.1	Satisfaction and Discharge of Indenture	121
Section 4.2	Application of Trust Money	122
Section 4.3	Repayment of Monies Held by Paying Agent	122
Section 4.4	Liquidation of Assets	122
ARTICLE V REMEDIES		123
Section 5.1	Events of Default	123
Section 5.2	Acceleration of Maturity; Rescission and Annulment	124
Section 5.3	Collection of Indebtedness and Suits for Enforcement by Trustee	126
Section 5.4	Remedies	128
Section 5.5	Optional Preservation of Assets	129
Section 5.6	Trustee May Enforce Claims Without Possession of Notes	131
Section 5.7	Application of Money Collected	131
Section 5.8	Limitation on Suits	132
Section 5.9	Unconditional Rights of Secured Noteholders to Receive Principal and Interest	132

 

 

TABLE OF CONTENTS

(continued)

 

		Page
Section 5.10	Restoration of Rights and Remedies	132
Section 5.11	Rights and Remedies Cumulative	133
Section 5.12	Delay or Omission Not Waiver	133
Section 5.13	Control by Supermajority of Controlling Class	133
Section 5.14	Waiver of Past Defaults	134
Section 5.15	Undertaking for Costs	134
Section 5.16	Waiver of Stay or Extension Laws	134
Section 5.17	Sale of Assets	135
Section 5.18	Action on the Notes	136
ARTICLE VI THE TRUSTEE		136
Section 6.1	Certain Duties and Responsibilities	136
Section 6.2	Notice of Event of Default	138
Section 6.3	Certain Rights of Trustee	138
Section 6.4	Not Responsible for Recitals or Issuance of Notes	143
Section 6.5	May Hold Notes	143
Section 6.6	Money Held in Trust	143
Section 6.7	Compensation and Reimbursement	143
Section 6.8	Corporate Trustee Required; Eligibility	145
Section 6.9	Resignation and Removal; Appointment of Successor	145
Section 6.10	Acceptance of Appointment by Successor	146
Section 6.11	Merger, Conversion, Consolidation or Succession to Business of Trustee	147
Section 6.12	Co-Trustees	147
Section 6.13	Certain Duties of Trustee Related to Delayed Payment of Proceeds	148
Section 6.14	Authenticating Agents	148
Section 6.15	Withholding	149
Section 6.16	Representative for Secured Noteholders only; Agent for each other Secured Party and the Holders of the Subordinated Notes	149
Section 6.17	Representations and Warranties of the Bank	150
ARTICLE VII COVENANTS		150
Section 7.1	Payment of Principal and Interest	150
Section 7.2	Maintenance of Office or Agency	151
Section 7.3	Money for Note Payments to be Held in Trust	151
Section 7.4	Existence of Issuer	153
Section 7.5	Protection of Assets	154
Section 7.6	Opinions as to Assets	155
Section 7.7	Performance of Obligations	155
Section 7.8	Negative Covenants	155
Section 7.9	Statement as to Compliance	157
Section 7.10	Issuer May Consolidate, etc., Only on Certain Terms	157
Section 7.11	Successor Substituted	159

 

 

TABLE OF CONTENTS

(continued)

 

		Page
Section 7.12	No Other Business	159
Section 7.13	[Reserved].	160
Section 7.14	Annual Rating Review	160
Section 7.15	Reporting	160
Section 7.16	Calculation Agent	160
Section 7.17	Certain Tax Matters	161
Section 7.18	Effective Date; Purchase of Additional Collateral Obligations	166
Section 7.19	Representations Relating to Security Interests in the Assets	169
Section 7.20	Representations of the Issuer.	172
ARTICLE VIII SUPPLEMENTAL INDENTURES		172
Section 8.1	Supplemental Indentures Without Consent of Holders of Notes	172
Section 8.2	Supplemental Indentures With Consent of Holders of Notes	176
Section 8.3	Execution of Supplemental Indentures	178
Section 8.4	Effect of Supplemental Indentures	180
Section 8.5	Reference in Notes to Supplemental Indentures	180
Section 8.6	Hedge Agreements	180
ARTICLE IX REDEMPTION OF NOTES		180
Section 9.1	Mandatory Redemption	180
Section 9.2	Optional Redemption	181
Section 9.3	Tax Redemption	185
Section 9.4	Redemption Procedures	185
Section 9.5	Notes Payable on Redemption Date	187
Section 9.6	Special Redemption	187
Section 9.7	Issuer Purchases of Secured Notes	188
Section 9.8	Optional Re-Pricing	190
Section 9.9	Clean-Up Call Redemption	192
ARTICLE X ACCOUNTS, ACCOUNTINGS AND RELEASES		194
Section 10.1	Collection of Money	194
Section 10.2	Collection Account	194
Section 10.3	Transaction Accounts.	197
Section 10.4	The Revolver Funding Account	200
Section 10.5	Ownership of the Accounts	201
Section 10.6	Reinvestment of Funds in Accounts; Reports by Trustee	201
Section 10.7	Accountings	202
Section 10.8	Release of Assets	211
Section 10.9	Reports by Independent Accountants	212
Section 10.10	Reports to the Rating Agencies and Additional Recipients	213
Section 10.11	Procedures Relating to the Establishment of Accounts Controlled by the Trustee	214
Section 10.12	Section 3(c)(7) Procedures	214
Section 10.13	No Further Reporting Following the Redemption of the Secured Notes	217

 

 

TABLE OF CONTENTS

(continued)

 

		Page
ARTICLE XI APPLICATION OF MONIES		217
Section 11.1	Disbursements of Monies from Payment Account	217
ARTICLE XII SALE OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS		224
Section 12.1	Sales of Collateral Obligations	224
Section 12.2	Purchase of Additional Collateral Obligations	227
Section 12.3	Conditions Applicable to All Sale and Purchase Transactions	231
ARTICLE XIII NOTEHOLDERS’ RELATIONS		232
Section 13.1	Subordination	232
Section 13.2	Standard of Conduct	233
ARTICLE XIV MISCELLANEOUS		233
Section 14.1	Form of Documents Delivered to Trustee	233
Section 14.2	Acts of Holders	235
Section 14.3	Notices, etc., to Trustee, the Issuer, the Collateral Manager, the Initial Purchaser, the Collateral Administrator, the Paying Agent and each Rating Agency	236
Section 14.4	Notices to Holders; Waiver	237
Section 14.5	Effect of Headings and Table of Contents	238
Section 14.6	Successors and Assigns	238
Section 14.7	Severability	238
Section 14.8	Benefits of Indenture	239
Section 14.9	Legal Holidays	239
Section 14.10	Governing Law	239
Section 14.11	Submission to Jurisdiction	239
Section 14.12	Waiver of Jury Trial	239
Section 14.13	Counterparts	240
Section 14.14	Acts of Issuer	240
Section 14.15	Confidential Information	241
Section 14.16	Communications with the Rating Agencies	242
Section 14.17	Notices to S&P; Rule 17g-5 Procedures	242
Section 14.18	Proceedings	245
ARTICLE XV ASSIGNMENT OF CERTAIN AGREEMENTS		245
Section 15.1	Assignment of Collateral Management Agreement	245

 

 

Schedules and Exhibits
Schedule 1	List of Collateral Obligations
Schedule 2	S&P Industry Classifications
Schedule 3	Moody’s Rating Definitions
Schedule 4	S&P Recovery Rate Tables
Schedule 5	[Reserved]
Schedule 6	Diversity Score Calculation
Schedule 7	Fitch Rating Definitions
Schedule 8	S&P Region Diversity Table
Exhibit A	Forms of Notes
A-1	Form of Global Secured Note
A-2	Form of Rule 144A Global Subordinated Note
A-3	Form of Certificated Secured Note
A-4	Form of Certificated Subordinated Note
Exhibit B	Forms of Transfer and Exchange Certificates
B-1	Form of Transferor Certificate for Transfer of Rule 144A Global Secured Note or Certificated Secured Note to Regulation S Global Secured Note
B-2	Form of Purchaser Representation Letter for Certificated Secured Notes
B-3	Form of Transferor Certificate for Transfer of Regulation S Global Secured Note or Certificated Secured Note to Rule 144A Global Secured Note
B-4	Form of Purchaser Representation Letter for Certificated Subordinated Notes
B-5	Form of ERISA Certificate
B-6	Form of Transferee Certificate of Rule 144A Global Secured Note
B-7	Form of Transferee Certificate of Temporary Regulation S Global Secured Note or Regulation S Global Secured Note
B-8	Form of Transferor Certificate for Transfer of Certificated Subordinated Note to Rule 144A Global Subordinated Note
B-9	Form of Transferee Certificate of Rule 144A Global Subordinated Note
Exhibit C	[Reserved]
Exhibit D	Form of Beneficial Ownership Certificate
Exhibit E	Form of NRSRO Certification
Exhibit F	Form of Notice of Contribution

 

 

 

AMENDED AND RESTATED INDENTURE, dated as of November 18, 2024, between GOLUB CAPITAL BDC CLO 8 LLC, a Delaware limited liability company (f/k/a GCIC CLO II LLC) (the “Issuer”) and THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (herein, together with its permitted successors and assigns in the trusts hereunder, the “Trustee”).

 

PRELIMINARY STATEMENT

 

WHEREAS, the Issuer and the Trustee are parties to that certain Indenture, dated as of December 13, 2018, as amended by that certain First Supplemental Indenture dated as of December 21, 2020 and that certain Second Supplemental Indenture dated as of June 30, 2023 (the “Original Indenture”), pursuant to which the Issuer issued, on the Original Closing Date, the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Subordinated Notes (as such terms are defined in the Original Indenture) and pursuant to which the Issuer issued, in connection with the First Supplemental Indenture, the Class A-2-R Notes (as such term is defined in the First Supplemental Indenture) (and the Class A-1 Notes, the Class A-2-R Notes, the Class B Notes, the Class C Notes, the Class D Notes together, the “Existing Secured Notes” and, the existing Subordinated Notes, the “Existing Subordinated Notes”);

 

WHEREAS, a Majority of the Existing Subordinated Notes, with the consent of the Collateral Manager and the U.S. Retention Provider, directed an Optional Redemption of the Existing Secured Notes and the Existing Subordinated Notes in whole, but not in part, from Refinancing Proceeds, to occur on the Refinancing Date;

 

WHEREAS, on the Refinancing Date, each of (i) Golub Capital BDC CLO III LLC (the “BDC CLO III Issuer”), a limited liability company formed under the laws of the State of Delaware and (ii) Golub Capital BDC 3 CLO 1 LLC (the “BDC 3 CLO 1 Issuer”), a limited liability company formed under the laws of the State of Delaware merged with the Issuer, with the Issuer as the surviving entity;

 

WHEREAS, the Issuer wishes to amend and restate the Original Indenture as set forth in this Indenture;

 

WHEREAS, the parties hereto acknowledge and agree that the Original Indenture is hereby amended, restated and replaced in its entirety by this Indenture;

 

WHEREAS, each purchaser of Notes issued on the Refinancing Date is deemed to consent to the Permitted Merger and the terms of this Indenture;

 

WHEREAS, the Issuer is duly authorized to execute and deliver this Indenture to, among other things, provide for the Notes issuable as provided herein;

 

WHEREAS, the Issuer is entering into this Indenture, and the Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged; and

 

WHEREAS, all things necessary to make this Indenture a valid agreement of the Issuer in accordance with the agreement’s terms have been done.

 

 

Now, THEREFORE, in consideration of the mutual agreements herein set forth the parties agrees as follows.

 

GRANTING CLAUSES

 

The Issuer has Granted to the Trustee, for the benefit and security of the Holders of the Secured Notes, the Trustee, the Custodian, the Collateral Manager and the Collateral Administrator (collectively, the “Secured Parties”), all of its right, title and interest in, to and under, in each case, whether now owned or existing, or hereafter acquired or arising any and all accounts, chattel paper, deposit accounts, financial assets, general intangibles, instruments, investment property, letter-of-credit rights, documents, goods and supporting obligations and other assets in which the Issuer has an interest and specifically including: (a) the Collateral Obligations (listed, as of the Original Closing Date, in Schedule 1 to this Indenture) which the Issuer causes to be delivered to the Trustee (directly or through an intermediary or bailee) herewith and all payments thereon or with respect thereto, and all Collateral Obligations which are delivered to the Trustee in the future pursuant to the terms hereof 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 Securities Account Control Agreement, any Custody Agreement, the Plans of Merger, the Master Loan Sale Agreement and the Collateral Administration Agreement (d) all Cash or Money delivered to the Trustee (or its bailee) from any source for the benefit of the Secured Parties or the Issuer, (e) any Equity Securities or Permitted Collateral Obligations received by the Issuer, (f) all accounts, chattel paper, deposit accounts, financial assets, general intangibles, payment intangibles, instruments, investment property, letter-of-credit rights, securities, money, documents, goods, commercial tort claims and securities entitlements, and other supporting obligations (as such terms are defined in the UCC), (g) any other property otherwise delivered to the Trustee by or on behalf of the Issuer (whether or not constituting Collateral Obligations, Equity Securities or Eligible Investments); and (h) all proceeds (as defined in the UCC) with respect to the foregoing; (the assets referred to in (a) through (h) are collectively referred to as the “Assets”).

 

The above Grant is made in trust to secure the Secured Notes, the Issuer’s other obligations to the Secured Parties under this Indenture, the other Transaction Documents, 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 Notes are secured by the Grant equally and ratably without prejudice, priority or distinction between any Secured Note and any other Secured Note by reason of difference in time of issuance or otherwise. 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 Notes in accordance with their terms, (ii) the payment of all other sums (other than in respect of the Subordinated Notes) payable under this Indenture, (iii) the payment of amounts owing by the Issuer under the Collateral Management Agreement, the Collateral Administration Agreement and the Master Loan Sale Agreement and (iv) compliance with the provisions of this Indenture, all as provided herein (collectively, the “Secured Obligations”). The foregoing Grant shall, for the purpose of determining the property subject to the lien of this Indenture, be deemed to include any securities and any investments granted to the Trustee by or on behalf of the Issuer, whether or not such securities or investments satisfy the criteria set forth in the definitions of “Collateral Obligation” or “Eligible Investments”, as the case may be.

 

 

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

 

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

 

“ABL Facility”: A lending facility pursuant to which the loans thereunder are secured by a perfected, first priority security interest in accounts receivable, inventory, machinery, equipment, real estate, oil and gas reserves, vessels or periodic revenues, where such collateral security consists of assets generated or acquired by the related Obligor in its business.

 

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

 

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

 

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

 

“Accountants’ Report”: An agreed upon procedures report 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 Custodial Account, (vii) the Supplemental Reserve Account and (viii) the Interest Reserve Account.

 

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

 

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

 

“Additional Notes”: Any Notes issued pursuant to Section 2.13.

 

 

“Additional Notes Closing Date”: The closing date for the issuance of any Additional Notes pursuant to Section 2.13 as set forth in an indenture supplemental to this Indenture pursuant to Section 8.1(a)(xii).

 

“Adjusted Class Break-even Default Rate”: With respect to the S&P Highest Ranking Class, 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 redemptions to the senior most Class during the Reinvestment Period (but not including any such redemption from Refinancing Proceeds), plus the S&P Collateral Value of all Defaulted Obligations plus (b)(i)(x) the Collateral Principal Amount, plus redemptions to the senior most Class during the Reinvestment Period (but not including any such redemption from Refinancing Proceeds), 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 redemptions to the senior most Class during the Reinvestment Period (but not including any such redemption from Refinancing Proceeds), 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, Deferring Obligations (except Permitted Deferrable Obligations), Discount Obligations (to the extent set forth in clause (d) below) and Long-Dated Obligations); plus (b) without duplication, the amounts on deposit in any Account (including Eligible Investments therein but excluding the Revolver Funding Account and the Supplemental Reserve Account) representing Principal Proceeds; plus (c) the aggregate, for each Defaulted Obligation and Deferring Obligation (other than Permitted Deferrable Obligations), of the Defaulted Obligation Balance of such Defaulted Obligation or Deferring Obligation; plus (d) the aggregate, for such portion of a Discount Obligation that does not fall into the Excess CCC Adjustment Amount, of the purchase price expressed as a percentage of par and multiplied by the outstanding principal balance thereof, for such Discount Obligation; minus (e) the Excess CCC Adjustment Amount; plus (f) the sum of the Long-Dated Obligation Amount of each Long-Dated Obligation; provided that, with respect to any Collateral Obligation that satisfies more than one of the definitions of Defaulted Obligation, Deferring Obligation (except Permitted Deferrable Obligations), Discount Obligation (to the extent set forth in clause (d) above) or Long-Dated Obligation, such Collateral Obligation shall, for the purposes of this definition, be treated as belonging to the category of Collateral Obligations which results in the lowest Adjusted Collateral Principal Amount on any date of determination.

 

“Administrative Expense Cap”: An amount equal on any Payment Date (when taken together with any Administrative Expenses in the order of priority contained in the definition thereof paid during the period since the preceding Payment Date or in the case of the first Payment Date following the Refinancing Date, the period since the Refinancing Date), to the sum of (a) 0.02% 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 at the beginning of the Collection Period relating to such Payment Date and (b) U.S.$200,000 per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year consisting of twelve 30-day months); provided that (1) in respect of any Payment Date after the third Payment Date following the Refinancing Date, if the aggregate amount of Administrative Expenses paid pursuant to Sections 11.1(a)(i)(A), 11.1(a)(ii)(A) and 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 Refinancing 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 Trustee pursuant to Section 6.7 and the other provisions of this Indenture, second, on a pro rata basis, to the Collateral Administrator pursuant to the Collateral Administration Agreement, the Custodian for its fees and expenses (including indemnities) under the Securities Account Control Agreement and the Bank in any of its other capacities under the Transaction Documents, third, on a pro rata basis, the following amounts (excluding indemnities) to the following parties: (i) the Independent accountants, agents (other than the Collateral Manager) and counsel of the Issuer for fees and expenses; (ii) the Rating Agencies for fees and expenses (including any annual fee, amendment fees and surveillance fees) in connection with any rating of the Secured Notes or in connection with the rating of (or provision of credit estimates in respect of) any Collateral Obligations; (iii) the Collateral Manager under this Indenture and the Collateral Management Agreement, including without limitation reasonable expenses of the Collateral Manager (including fees for its accountants, agents and counsel) incurred in connection with the purchase or sale of any Collateral Obligations, any other expenses incurred in connection with the Collateral Obligations and any other amounts payable pursuant to the Collateral Management Agreement but excluding the Aggregate Collateral Management Fee; (iv) the Independent Manager for any fees or expenses due under the management agreement between the Issuer and Independent Manager; (v) 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) and the Notes, including but not limited to, any amounts due in respect of the listing of the Secured Notes on any stock exchange or trading system; and (vi) any Person in connection with the consummation of the Permitted Mergers; and fourth, on a pro rata basis, indemnities payable to any Person pursuant to any Transaction Document; provided that (x) amounts due in respect of actions taken on or before the Refinancing 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 Notes) shall not constitute Administrative Expenses.

 

“Affected Class”: Any Class of Secured Notes that, as a result of the occurrence of a Tax Event described in the definition of “Tax Redemption” 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, (a) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (b) any other Person who is a director, Officer, employee or general partner (i) of such Person, (ii) of any subsidiary or parent company of such Person or (iii) of any Person described in clause (a) of this sentence. For the purposes of this definition, “control” of a Person means 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 Person or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise. For purposes of this definition, no entity shall be deemed an Affiliate of an Obligor solely because such Obligor and such entity are each controlled by the same or related holders of equity capital.

 

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

 

“Aggregate Collateral Management Fee”: All accrued and unpaid Collateral Management Fees, Current Deferred Management Fees, Cumulative Deferred Management Fees and Collateral Management Fee Shortfall Amounts (including accrued interest) due and payable to the Collateral Manager.

 

“Aggregate Coupon”: As of any Measurement Date, the sum of the products obtained by multiplying, in the case of each Fixed Rate Obligation (other than a Defaulted Obligation or Deferrable Obligation (other than a Permitted Deferrable Obligation)) (including, for any Permitted Deferrable Obligation, only the required current cash interest required by the Underlying Instruments thereon), (i) the stated coupon on such Collateral Obligation expressed as a percentage and (ii) the outstanding principal balance of such Collateral Obligation.

 

“Aggregate Funded Spread”: As of any Measurement Date, the sum of: (a) in the case of each Floating Rate Obligation (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation) that bears interest at a spread over the then-current Benchmark with respect to the Secured Notes, (i) the stated interest rate spread (including any applicable spread adjustments thereto) on such Collateral Obligation above such index multiplied by (ii) the outstanding principal balance of such Collateral Obligation; provided that the interest rate spread with respect to any Step-Up Obligation will be the then-current interest rate spread; and (b) in the case of each Floating Rate Obligation (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation) that bears interest at a spread over the London interbank offered rate or any other index other than the then-current Benchmark with respect to the Secured Notes, (i) the excess of the sum of such spread and such index (including, for the avoidance of doubt, any applicable floor) over the Benchmark as of the immediately preceding Interest Determination Date (which spread or excess may be expressed as a negative percentage) multiplied by (ii) the outstanding principal balance of each such Collateral Obligation; provided that the interest rate spread with respect to any Step-Up Obligation will be the then-current interest rate spread.

 

For purposes of calculating the Aggregate Funded Spread, (i) such calculation shall exclude any Deferring Obligation until the obligor thereof has resumed the payment of cash interest in cash, (ii) solely with respect to clause (a) above, with respect to any Floating Rate Floor Obligation, the stated interest rate spread on such Collateral Obligation over the applicable reference rate shall be deemed to be equal to the sum of (x) the stated interest rate spread over the applicable reference rate and (y) the excess, if any, of the specified “floor” rate relating to such Collateral Obligation over the Benchmark as of the immediately preceding Interest Determination Date and (iii) the stated interest rate of a Collateral Obligation will be excluded from such calculation to the extent the Issuer or the Collateral Manager has actual knowledge that such payment of interest will not be made by the obligor thereof during the applicable period

 

 

“Aggregate Outstanding Amount”: With respect to any of the Notes as of any date, the aggregate unpaid principal amount of such Notes Outstanding on such date.

 

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

 

“Aggregate Risk Adjusted Par Amount”: The amount specified below for the applicable Interest Accrual Period, listed sequentially, starting with the Interest Accrual Period commencing on the Refinancing Date:

 

Interest Accrual Period		Aggregate Risk Adjusted Par Amount ($)
1			2,200,000,000
2			2,194,390,000
3			2,191,061,842
4			2,187,702,214
5			2,184,347,737
6			2,181,071,215
7			2,177,763,257
8			2,174,424,020
9			2,171,089,904
10			2,167,833,269
11			2,164,545,388
12			2,161,226,419
13			2,157,912,538
14			2,154,639,704
15			2,151,371,834
16			2,148,073,064
17			2,144,779,352
18			2,141,562,183
19			2,138,314,147
20			2,135,035,398
21			2,131,761,677
22			2,128,564,035
23			2,125,335,713
24			2,122,076,865
25			2,118,823,013
26			2,115,644,779
27			2,112,436,051
28			2,109,196,982

 

 

Interest Accrual Period		Aggregate Risk Adjusted Par Amount ($)
29			2,105,962,880
30			2,102,768,837
31			2,099,579,637
32			2,096,360,282
33			2,093,145,863
34			2,090,006,144
35			2,086,836,301
36			2,083,636,486
37			2,080,441,576
38			2,077,320,914
39			2,074,170,311
40			2,070,989,916
41			2,067,814,398
42			2,064,712,677
43			2,061,581,196
44			2,058,420,105
45			2,055,263,860
46			2,052,146,710
47			2,049,034,288
48			2,045,892,435
49			2,042,755,400
50			2,039,691,267
51			2,036,597,735
52			2,033,474,952

 

“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 Method”: The meaning specified in Section 7.17(l).

 

“Alternative Rate”: The meaning specified in the definition of “Benchmark.”

 

“Asset-backed Commercial Paper”: Commercial paper or other short-term obligations of a program that primarily issues externally rated commercial paper backed by assets or exposures held in a bankruptcy-remote, special purpose entity.

 

“Assets”: The meaning assigned in the Granting Clause hereof.

 

“Assigned Moody’s Rating”: The meaning specified in Schedule 3 hereto.

 

 

“Assumed Reinvestment Rate”: The Benchmark (as determined on the most recent Interest Determination Date relating to an Interest Accrual Period beginning on a Payment Date or the Refinancing 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 Notes or a Class of the Notes, the Person designated by the Trustee to authenticate such Notes on behalf of the Trustee pursuant to Section 6.14 hereof.

 

“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”: The Bank of New York Mellon Trust Company, National Association (including any organization or entity succeeding to all or substantially all of its corporate trust business) in its individual capacity and not as Trustee, or any successor thereto (which shall include any successor Trustee pursuant to Section 6.11 hereof).

 

“Bank Officer”: When used with respect to the Bank, any officer within the Corporate Trust Office (or any successor group of the Bank) including any vice president, assistant vice president or officer of the Bank customarily performing functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred at the Corporate Trust Office because of such Person’s knowledge of and familiarity with the particular subject and, in each case, having direct responsibility for the administration of this transaction.

 

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

 

“Base Rate Modifier”: A modifier determined by the Collateral Manager applied to a reference rate to the extent necessary to cause such rate to be comparable to the Benchmark, which may include an addition to or subtraction from such unadjusted rate.

 

“BDC”: Golub Capital BDC, Inc., a Delaware corporation.

 

“Benchmark”: With respect to the Secured Notes for (i) the period from and including the Refinancing Date to but excluding the First Interest Determination End Date, (ii) the period from and including the First Interest Determination End Date to the first Payment Date after the Refinancing Date and (iii) any subsequent Interest Accrual Period, the greater of (a) 0.0% and (b) (I) the Term SOFR Reference Rate for the Designated Maturity, as such rate is published by the Term SOFR Administrator on the Term SOFR Source (the “Screen Rate”) on the related Interest Determination Date, (II) if as of 5:00 p.m. (New York City time) on any Interest Determination Date the rate referred to in clause (I) is temporarily or permanently unavailable or has not been published by the Term SOFR Administrator on the Term SOFR Source, the Interpolated Screen Rate, (III) if such rate cannot be determined under clauses (I) or (II), then the Term SOFR Reference Rate for the Designated Maturity as published by the Term SOFR Administrator on the Term SOFR Source on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for the Designated Maturity was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than five Business Days prior to such Interest Determination Date or (IV) if such rate cannot be determined under clauses (I), (II) or (III), the Term SOFR Reference Rate as determined on the previous Interest Determination Date. “Benchmark,” when used with respect to a Collateral Obligation, means the “benchmark” rate determined in accordance with the terms of such Collateral Obligation.

 

 

Notwithstanding anything in the foregoing, if at any time while any Secured Notes are outstanding a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the Benchmark, the Collateral Manager (on behalf of the Issuer) may select (with notice to the Trustee, the Rating Agencies, the Calculation Agent and the Collateral Administrator) an alternative rate, including any applicable spread adjustments thereto (the “Alternative Rate”) that in its commercially reasonable judgment is consistent with the successor for the Benchmark, which is, as certified to the Issuer and the Trustee, (x) Daily Simple SOFR, Compounded SOFR or any other rate proposed or recommended by the LSTA or ARRC as the successor for the Benchmark with respect to loans or (y) expected to be used in the quarterly pay Floating Rate Obligations included in the Assets or the new issue collateralized loan obligation market and all references herein to the “Benchmark” will mean such Alternative Rate selected by the Collateral Manager. If at any time while any Secured Notes are Outstanding, the Benchmark ceases to exist or be reported and the Collateral Manager has not determined an Alternative Rate in accordance with the foregoing, at the direction of the Collateral Manager (by notice to the Issuer, the Trustee (who shall forward such notice to the Holders) and the Calculation Agent) and without a supplemental indenture, the Alternative Rate with respect to the Secured Notes shall be the Fallback Rate. Notwithstanding anything to the contrary in this Indenture, neither the Calculation Agent nor the Trustee shall have any responsibility or liability for determining or selecting an Alternative Rate or a Fallback Rate (including, without limitation, any Base Rate Modifier or any other modifier thereto) as a successor or replacement benchmark to the Benchmark (including whether any such rate is an Alternative Rate or a Fallback Rate or whether a Benchmark Replacement Date or a Benchmark Transition Event has occurred, or any other conditions to the designation of such rate have been satisfied) and shall be entitled to rely upon any designation of such a rate (and any Base Rate Modifier) by the Collateral Manager. Notwithstanding anything herein, the Benchmark (including any Alternative Rate or Fallback Rate) with respect to the Secured Notes shall in no event be calculated below 0%.

 

“Benchmark Conforming Changes”: With respect to the Benchmark, any technical, administrative or operational changes (including changes to the definition of “Interest Accrual Period,” “Aggregate Funded Spread,” timing and frequency of determining rates and making payments of interest, and other administrative matters) that the Collateral Manager decides may be necessary or appropriate to correct an error with respect to the application or implementation of the Benchmark or to reflect the adoption or implementation of such Benchmark in a manner substantially consistent with market practice (or, if the Collateral Manager decides that adoption of any portion of such market practice is not administratively feasible or if the Collateral Manager determines that no market practice for use of the Benchmark exists, in such other manner as the Collateral Manager determines is reasonably necessary).

 

 

“Benchmark Replacement Date”: The earlier to occur of the following events with respect to the Benchmark, as determined by the Collateral Manager: (i) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (x) the date of the public statement or publication of information referenced therein and (y) the date on which the administrator of the Benchmark permanently or indefinitely ceases to provide the Benchmark; (ii) in the case of clause (c) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein; or (iii) in the case of clause (d) or (e) of the definition of “Benchmark Transition Event,” the date on which the Collateral Manager has notified the Trustee and the Calculation Agent that a “Benchmark Replacement Date” has occurred.

 

“Benchmark Transition Event”: The occurrence of one or more of the following events with respect to the Benchmark, as determined by the Collateral Manager: (a) a public statement or publication of information by or on behalf of the administrator of the Benchmark announcing that such administrator has ceased or will cease to provide the Benchmark, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark; (b) a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark, the Relevant Governmental Body, an insolvency official with jurisdiction over the administrator for the Benchmark, a resolution authority with jurisdiction over the administrator for the Benchmark or a court or an entity with similar insolvency or resolution authority over the administrator for the Benchmark, which states that the administrator of the Benchmark has ceased or will cease to provide the Benchmark permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Benchmark; (c) a public statement or publication of information by the regulatory supervisor for the administrator of the Benchmark announcing that the Benchmark is no longer representative; (d) at the option of the Collateral Manager in its sole discretion, (x) the aggregate principal balance of Floating Rate Obligations included in the Assets (on a trade date basis) that are utilizing a benchmark rate that is not the Benchmark (excluding any benchmark rate based on Libor) or has had a benchmark transition event (however denominated) occur divided by (y) the aggregate principal balance of all Floating Rate Obligations included in the Assets (on a trade date basis) is greater than 50%; or (e) the Collateral Manager reasonably determines that the Benchmark is likely to cease to exist or be reported.  If one year has passed since the occurrence of a Benchmark Transition Event and its related Benchmark Replacement Date and the Collateral Manager has not determined an Alternative Rate in accordance with the definition of “Benchmark”, then the Alternative Rate with respect to the Secured Notes shall be the rate (including any applicable spread adjustments thereto) that is consistent with the reference rate most commonly being used in the quarterly pay Floating Rate Obligations included in the Assets; provided that the Collateral Manager may following the implementation of such rate select a different Alternative Rate in accordance with the definition of “Benchmark”.

 

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

 

“Benefit Plan Investor”: An employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to the fiduciary responsibility provisions of Title I of ERISA, a plan to which Section 4975 of the Code applies or an entity whose underlying assets include “plan assets” by reason of such an employee benefit plan’s or a plan’s investment in such entity.

 

 

“Bond”: A debt security that is issued by a corporation, limited liability company, partnership or trust.

 

“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).

 

“Broadly Syndicated Loan”: A Loan (a) that is part of a credit facility with a Facility Size on the date of origination thereof at least equal to U.S.$250,000,000 and (b) as to which, on the date of origination thereof, (i) Moody’s has either (x) assigned a corporate family rating on an Obligor thereon or (y) assigned to such credit facility a monitored publicly available rating or (ii) S&P has either (x) assigned an issuer credit rating to the issuer thereof or (y) assigned to such credit facility a monitored publicly available rating.

 

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

 

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

 

“Cash”: Such funds denominated in currency of the United States of America 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.

 

“CCC Collateral Obligation”: A CCC S&P Collateral Obligation or a CCC Fitch Collateral Obligation, as the context requires.

 

“CCC Excess”: An amount equal to the greater of:

 

(i) the excess of the Principal Balance of all CCC S&P Collateral Obligations over an amount equal to 17.5% of the Collateral Principal Amount as of such date of determination; and

 

(ii) the excess of the Principal Balance of all CCC Fitch 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 CCC Collateral Obligations shall be included in the CCC Excess, the CCC Collateral Obligations with the lowest Market Value (expressed as a percentage of the outstanding principal balance of such Collateral Obligations as of such date of determination) shall be deemed to constitute such CCC Excess.

 

“CCC Fitch Collateral Obligation”: A Collateral Obligation (other than a Defaulted Obligation, or a Deferring Obligation) with a Fitch Rating of “CCC+” or lower.

 

 

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

 

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

 

“Certificated Notes”: The meaning specified in Section 2.2(b)(iv).

 

“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.

 

“Certificated Subordinated Note”: The meaning specified in Section 2.2(b)(iv).

 

“CFR”: The meaning specified in Schedule 3 hereto.

 

“Class”: In the case of the (x) Secured Notes, all of the Secured Notes having the same Interest Rate, Stated Maturity and class designation and (y) Subordinated Notes, all of the Subordinated Notes. With respect to any exercise of voting rights, consent rights, or right to give direction, any Pari Passu Classes of Notes that are entitled to vote, consent or give direction on a matter will vote, consent or give direction together as a single Class, except that each Pari Passu Class (A) will be treated as a separate Class for purposes of a Refinancing or a Re-Pricing and (B) will be treated as a separate Class, and will vote separately, in connection with any proposed supplemental indenture that affects any Pari Passu Class in a materially different manner.

 

“Class A/B Coverage Tests”: The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class A Notes and the Class B Notes.

 

“Class A Notes”: The Class A-1 Notes and the Class A-2 Notes, collectively.

 

“Class A-1 Notes”: The Class A-1R Senior Secured Floating Rate Notes issued on the Refinancing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class A-2 Notes”: The Class A-2RR Senior Secured Floating Rate Notes issued on the Refinancing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

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

 

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

 

(i)            during any S&P CDO Formula Election Period, the rate equal to (a) C0 plus (b) the product of (x) C1 and (y) the Weighted Average Floating Spread plus (c) the product of (x) C2 and (y) the Weighted Average S&P Recovery Rate, where C0, C1 and C2 shall be provided to the Collateral Manager by S&P upon request. C0, C1 and C2 shall not change unless S&P provides an updated S&P CDO Monitor input file at the request of the Collateral Manager following the Refinancing Date; or

 

 

(ii)            during any S&P CDO Monitor Election Period, the maximum percentage of defaults, at any time, that the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, determined through application of the S&P CDO Monitor, which, after giving effect to S&P’s 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 Notes in full. After any 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 (with a copy to the Collateral Administrator) from Section 2 of Schedule 4 or any other Weighted Average Floating Spread and Weighted Average S&P Recovery Rate selected by the Collateral Manager from time to time.

  

“Class C Coverage Tests”: The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class C Notes.

 

“Class C Notes”: The Class C-R Secured Deferrable Floating Rate Notes issued on the Refinancing Date pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

“Class Default Differential”: With respect to the S&P Highest Ranking Class, the rate calculated by subtracting the Class Scenario Default Rate at such time for such Class of Notes from (x) during any S&P CDO Formula Election Period, the Adjusted Class Break-even Default Rate or (y) during any S&P CDO Monitor Election Period, the Class Break-even Default Rate, in each case, for such Class of Notes at such time.

 

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

 

(i)            during any S&P CDO Formula Election Period, the rate at such time equal to (a) 0.247621 plus (b) the quotient of (x) the S&P Weighted Average Rating Factor divided by (y) 9162.65 minus (c) the quotient of (x) the Default Rate Dispersion divided by (y) 16757.2 minus (d) the quotient of (x) the Obligor Diversity Measure divided by (y) 7677.8 minus (e) the quotient of (x) the Industry Diversity Measure divided by (y) 2177.56 minus (f) the quotient of (x) the Regional Diversity Measure divided by (y) 34.0948 plus (g) the quotient of (x) the S&P Weighted Average Life divided by (y) 27.3896; or

 

(ii)            during any S&P CDO Monitor Election Period, 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 of Notes, determined by the Collateral Manager (which determination shall be made solely by application of the S&P CDO Monitor at such time).

 

“Clean-Up Call Purchase Price”: The meaning specified in Section 9.9(b).

 

“Clean-Up Call Redemption”: The meaning specified in Section 9.9(a).

 

“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).

 

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

 

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

 

“Collateral Administrator”: The Bank of New York Mellon Trust Company, National Association, 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 and Deferring Obligations, but including Interest Proceeds actually received from Defaulted Obligations and Deferring 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 Original 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 and restated as of the Refinancing Date, and as may be further amended from time to time in accordance with the terms thereof.

 

“Collateral Management Fee”: The fee payable to the Collateral Manager in arrears on each Payment Date (prorated for the related Interest Accrual Period) pursuant to Section 8(a) of the Collateral Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.35% per annum (calculated on the basis of the actual number of days in the applicable Collection Period divided by 360) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date.

 

“Collateral Management Fee Shortfall Amount”: To the extent the Collateral Management Fee is not paid on a Payment Date due to insufficient Interest Proceeds or Principal Proceeds (and such fee was not voluntarily deferred or waived by the Collateral Manager), the Collateral Management Fee due on such Payment Date (or the unpaid portion thereof, as applicable). Such amount is automatically deferred for payment on the succeeding Payment Date, with interest at the rate specified in the Collateral Management Agreement, as certified to the Trustee by the Collateral Manager (with a copy to the Collateral Administrator), in accordance with the Priority of Payments.

 

 

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

 

“Collateral Manager Standard”: The standard of care applicable to the Collateral Manager set forth in the Collateral Management Agreement.

 

“Collateral Obligation”: A Senior Secured Loan (including, but not limited to, interests in Broadly Syndicated Loans and Middle Market Loans acquired by way of a purchase or assignment), or a Participation Interest therein, or a Second Lien Loan, or a Participation Interest therein, or a Permitted Non-Loan Asset, that as of the date of purchase by the Issuer:

 

(i)            is not a Bond (unless it is a Permitted Non-Loan Asset) or a letter of credit;

 

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

 

(iii)          is not a Synthetic Security;

 

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

 

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

 

(vi)          is not a lease (including a finance lease);

 

(vii)         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;

 

(viii)        does not constitute Margin Stock;

 

(ix)           has payments that do not and will not subject the Issuer to withholding tax or other similar tax (except for withholding taxes pursuant to FATCA or withholding or other similar taxes on commitment fees or similar fees or fees that by their nature are commitment fees or similar fees) unless the related obligor is required to make “gross up” payments that ensure that the net amount actually received by the Issuer (after payment of all such taxes) will equal the full amount that the Issuer would have received had no such taxes been imposed;

 

 

(x)            has a Fitch Rating and an S&P Rating;

 

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

 

(xii)         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; provided that the Issuer may be required, as a lender under the Underlying Instruments, to make customary protective advances or provide customary indemnities to the agent of the Collateral Obligation (for which the Issuer may receive a Participation Interest or other right of repayment);

 

(xiii)        does not have an “f”, “p”, “sf” or “t” subscript assigned by S&P or an “sf” subscript assigned by Moody’s;

 

(xiv)        is not a repurchase obligation, a Zero Coupon Bond, an Unsecured Loan, a Bridge Loan, a Commercial Real Estate Loan, a Structured Finance Obligation, a Non-Recourse Obligation, an Interest Only Obligation, a Step-Up Obligation or a Step-Down Obligation;

 

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

 

(xvi)        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;

 

(xvii)       has an S&P Rating of at least “CCC-” and a Fitch Rating of at least “CCC-“;

 

(xviii)      does not mature after the earliest Stated Maturity of the Secured Notes;

 

(xix)         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, Libor, SOFR or the Bloomberg Short Term Bank Yield Index or (b) a similar interbank offered rate, commercial deposit rate or any other index;

 

(xx)          is Registered;

 

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

 

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

 

 

(xxiii)       is purchased at a price at least equal to 65% of its outstanding principal balance;

 

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

 

(xxv)        if it is a Participation Interest, the Third Party Credit Exposure Limits are satisfied with respect to the acquisition thereof;

 

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

 

(xxvii)      is not a commodity forward contract;

 

(xxviii)    does not include or support a letter of credit;

 

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

 

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

 

(xxxi)       is not issued by an Obligor with a most-recently calculated EBITDA (calculated in accordance with the related Underlying Instruments) of less than $5,000,000;

 

provided that, notwithstanding anything to the contrary, any Permitted Collateral Obligation shall be deemed a “Collateral Obligation” subject to treatment as a Defaulted Obligation as described in Section 12.2(i) herein.

 

For the avoidance of doubt, any Permitted Collateral Obligation or Equity Security designated as a Collateral Obligation by the Collateral Manager in accordance with the terms specified in the definitions of “Permitted Collateral Obligation” or “Equity Security,” as applicable, shall constitute a Collateral Obligation (and not a Permitted Collateral Obligation or Equity Security) following such designation.

 

“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 but excluding the Revolver Funding Account) representing Principal Proceeds.

 

“Collateral Quality Tests”: A test satisfied on any date of determination on or after the Effective Date if, in the aggregate, the Collateral Obligations owned (or in relation to a proposed purchase of a Collateral Obligation on or after the Effective Date, proposed to be owned) by the Issuer satisfy each of the tests set forth below (or, if a test is not satisfied on such date, the degree of compliance with such test is maintained or improved after giving effect to the investment), calculated in each case as required by Section 1.3 herein:

 

 

(i)            the Minimum Floating Spread Test;

 

(ii)           the Minimum Weighted Average Coupon Test;

 

(iii)          the S&P CDO Monitor Test;

 

(iv)          the Maximum Fitch Rating Factor Test;

 

(v)           the Minimum Weighted Average Fitch Recovery Rate Test;

 

(vi)          at any time during the S&P CDO Monitor Election Period, the Minimum Weighted Average S&P Recovery Rate Test;

 

(vii)         the Minimum Fitch Floating Spread Test; and

 

(viii)        the Weighted Average Life Test.

 

“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 following the Refinancing Date, the period commencing on the Refinancing Date and ending at the close of business on the tenth Business Day prior to the first Payment Date following the Refinancing 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 case of the final Collection Period preceding the latest Stated Maturity of any Class of Notes, 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 Notes, on the Redemption Date; provided that for purposes of preparing the Distribution Report in connection with such Redemption Date, such Collection Period shall be deemed to end on the Business Day immediately preceding such Redemption Date and any Sale Proceeds or Refinancing Proceeds received on the Redemption Date shall be deemed to be received on the immediately preceding Business Day and (c) in any other case, at the close of business on the tenth Business Day prior to the Payment Date; provided that with respect to any Payment Date after the date on which no Secured Notes are deemed or considered Outstanding, “Collection Period” shall mean the period commencing on the third Business Day prior to the preceding Payment Date (or in the case of the first Payment Date following the date in which the Secured Notes are no longer Outstanding, commencing on the day immediately following the prior Collection Period) and ending on (but excluding) the third Business Day prior to such Payment Date (provided that no Distribution Report shall be due for any such Payment Date set forth in this proviso).

 

“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.

 

“Commodity Exchange Act”: The United States Commodity Exchange Act of 1936, as amended.

 

 

“Compounded SOFR”: A rate equal to the compounded average of SOFRs for the applicable Corresponding Tenor, with such rate, or methodology for such rate, and conventions for such rate (which, for example, may be compounded in arrears with a lookback and/or suspension period as a mechanism to determine the interest amount payable prior to the end of each Interest Accrual Period or compounded in advance) being established by the Collateral Manager in accordance with the rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining compounded SOFR; provided that if, and to the extent that, the Collateral Manager determines that Compounded SOFR cannot be determined in accordance with the foregoing, then the rate, or methodology for this rate, and conventions for this rate shall be selected by the Collateral Manager giving due consideration to any industry-accepted market practice for similar Dollar-denominated collateralized loan obligation securitization transactions at such time.

 

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

 

(i)            not less than 96.0% of the Collateral Principal Amount may consist of Senior Secured Loans, Cash and Eligible Investments;

 

(ii)           not more than 4.0% of the Collateral Principal Amount may, in the aggregate, consist of First-Lien Last-Out Loans, Second Lien Loans, Senior Syndicated Secured Loans and Permitted Non-Loan Assets;

 

(iii)          not more than 2.5% of the Collateral Principal Amount may consist of obligations issued by a single Obligor and its Affiliates, except that, Collateral Obligations issued by up to five Obligors and their respective Affiliates may each constitute up to 3.0% of the Collateral Principal Amount;

 

(iv)          not more than 1.5% of the Collateral Principal Amount may consist of Collateral Obligations that are not Senior Secured Loans issued by a single Obligor and its Affiliates;

 

(v)           (x) not more than 22.5% of the Collateral Principal Amount may consist of CCC S&P Collateral Obligations and (y) not more than 22.5% of the Collateral Principal Amount may consist of CCC Fitch Collateral Obligations;

 

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

 

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

 

 

(viii)        not more than 5.0% of the Collateral Principal Amount may consist of DIP Collateral Obligations;

 

(ix)           not more than 5.0% 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;

 

(x)           (a) not more than 5.0% of the Collateral Principal Amount may consist of Participation Interests and (b) the Third Party Credit Exposure Limits may not be exceeded with respect to any such Participation Interest;

 

(xi)           not more than 10.0% 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”;

 

(xii)          (a) all of the Collateral Obligations must be issued by Non-Emerging Market Obligors; and (b) no more than the percentage listed below of the Collateral Principal Amount may be issued by Obligors Domiciled in the country or countries set forth opposite such percentage:

 

% Limit		Country or Countries
15.0%		All countries (in the aggregate) other than the United States;
15.0%		Canada;
5.0%		all countries (in the aggregate) other than the United States, Canada and the United Kingdom;
2.5%		any individual Group I Country;
2.0%		all Group II Countries in the aggregate;
2.0%		any individual Group II Country;
1.5%		all Group III Countries in the aggregate, except that up to 5.0% of the Collateral Principal Amount, collectively with all Collateral Obligations issued by Obligors Domiciled in Group III Countries, may be issued by Obligors Domiciled in Luxembourg;
0.0%		Greece, Italy, Portugal and Spain in the aggregate; and
1.0%		any individual country other than the United States, the United Kingdom, Canada, the Netherlands, any Group I Country, any Group II Country or any Group III Country.

 

 

(xiii)         not more than 12.0% of the Collateral Principal Amount may consist of Collateral Obligations that are issued by Obligors that belong to any single S&P Industry Classification, except that (x) the largest S&P Industry Classification may represent up to 20.0% of the Collateral Principal Amount; (y) the second-largest S&P Industry Classification may represent up to 17.0% of the Collateral Principal Amount and (z) the third-largest S&P Industry Classification may represent up to 15.0% of the Collateral Principal Amount;

 

(xiv)        not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations that pay interest less frequently than quarterly;

 

(xv)         not more than 10.0% of the Collateral Principal Amount may consist of Collateral Obligations that are Discount Obligations;

 

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

 

(xvii)       not more than 50.0% of the Collateral Principal Amount may consist of Cov-Lite Loans;

 

(xviii)      not more than 4.0% of the Collateral Principal Amount may consist of Collateral Obligations that are Permitted Non-Loan Assets; and

 

(xix)         not more than 10.0% of the Collateral Principal Amount may consist of Collateral Obligations with respect to which the related Obligor has an EBITDA (calculated in accordance with the related Underlying Instruments) of less than $10,000,000 at the time of the Issuer’s acquisition of, or commitment to acquire.

 

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

 

“Contribution”: The meaning specified in Section 11.1(e).

 

“Contributor”: The meaning specified in Section 11.1(e).

 

“Controlling Class”: The Class A-1 Notes so long as any Class A-1 Notes are Outstanding; then the Class A-2 Notes so long as any Class A-2 Notes are Outstanding; then the Class B Notes so long as any Class B Notes are Outstanding; then the Class C Notes so long as any Class C Notes are Outstanding; and then the Subordinated Notes.

 

“Controlling Person”: A Person (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of an entity or any Person who provides investment advice for a fee (direct or indirect) with respect to such assets or an affiliate of any such Person. For this purpose, an “affiliate” of a Person includes any Person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Person. “Control,” with respect to a Person other than an individual, means the power to exercise a controlling influence over the management or policies of such Person, and “Controlling” shall have the meaning correlative to the foregoing.

 

 

“Controlling Real Estate Equity Interest”:  A controlling equity interest in a Person whose assets consist primarily of interests in real property.

 

“Corporate Trust Office”: The principal corporate trust office of the Trustee, currently located at (a) for Note transfer purposes and for presentment and surrender of the Notes for final payment thereon, The Bank of New York Mellon Trust Company, National Association, 500 Ross Street, Suite 625, Pittsburgh, PA 15262, Attention: Transfers/Redemptions – Golub Capital BDC CLO 8 LLC and (b) for all other purposes, The Bank of New York Mellon Trust Company, National Association, 601 Travis Street, 16th Floor, Houston, Texas 77002, e-mail: Golub@bny.com, Attention: Global Corporate Trust – Golub Capital BDC CLO 8 LLC, or such other address as the 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 Trustee.

 

“Corresponding Tenor”: With respect to an Alternative Rate, a tenor having approximately the same length (disregarding business day adjustment) as the applicable tenor for the Benchmark or the then current Alternative Rate.

 

“Cov-Lite Loan”: A Collateral Obligation that is an interest in any Loan, the Underlying Instruments for which (i) do not contain any financial covenants or (ii) require the borrower to comply with an Incurrence Covenant, but do not require the borrower to comply with a Maintenance Covenant.

 

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

 

“Covered Audit Adjustment”: The meaning specified in Section 7.17(l).

 

“Credit Improved Obligation”: (a) If a Restricted Trading Period is not in effect, any Collateral Obligation that in the Collateral Manager’s commercially reasonable business judgment has significantly improved in credit quality from the condition of its credit at the time of purchase which judgment may (but need not) be based on one or more of the following facts:

 

(i)            it has a market price that is greater than the price that is warranted by its terms and credit characteristics, or improved in credit quality since its acquisition by the Issuer;

 

(ii)           the issuer of such Collateral Obligation has shown improved financial results since the published financial reports first produced after it was purchased by the Issuer;

 

(iii)          the obligor of such Collateral Obligation since the date on which such Collateral Obligation was purchased by the Issuer has raised significant equity capital or has raised other capital that has improved the liquidity or credit standing of such obligor; or

 

(iv)          with respect to which one or more of the following criteria applies:

 

 

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

 

(B)            if such Collateral Obligation is a loan, the Sale Proceeds (excluding Sale Proceeds that constitute Interest Proceeds) of such loan would be at least 101% of its purchase price;

 

(C)            if such Collateral Obligation is a loan or bond, the price of such loan or bond, as applicable, has changed during the period from the date on which it was acquired by the Issuer to the proposed sale date by a percentage either at least 0.25% more positive, or 0.25% less negative, as the case may be, than the percentage change in the average price of the applicable Eligible Loan Index or Eligible Bond Index, as applicable, over the same period;

 

(D)            if such Collateral Obligation is a loan, the spread over the applicable reference rate for such Collateral Obligation has been decreased in accordance with the underlying Collateral Obligation since the date of acquisition by (1) 0.25% or more (in the case of a loan with a spread (prior to such decrease) less than or equal to 2.00%), (2) 0.375% or more (in the case of a loan with a spread (prior to such decrease) greater than 2.00% but less than or equal to 4.00%) or (3) 0.50% or more (in the case of a loan with a spread (prior to such decrease) greater than 4.00%) due, in each case, to an improvement in the related borrower’s financial ratios or financial results;

 

(E)            with respect to fixed rate Collateral Obligations, there has been a decrease in the difference between its yield compared to the yield on the relevant United States Treasury security of more than 7.5% since the date of purchase; or

 

(F)            it has a projected cash flow interest coverage ratio (earnings before interest and taxes divided by cash interest expense as estimated by the Collateral Manager) of the underlying borrower or other obligor of such Collateral Obligation that is expected to be more than 1.15 times the current year’s projected cash flow interest coverage ratio; and

 

(b)

if a Restricted Trading Period is in effect, any Collateral Obligation:

 

(i)            that in the Collateral Manager’s commercially reasonable business judgment has significantly improved in credit quality from the condition of its credit at the time of purchase and with respect to which one or more of the criteria referred to in clause (a)(iv) above applies, or

 

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

 

 

“Credit Risk Obligation”: (a) So long as a Restricted Trading Period is not in effect, any Collateral Obligation that in the Collateral Manager’s commercially reasonable business judgment has a significant risk of declining in credit quality or market value which judgment may (but need not) be based on one or more of the following facts:

 

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

 

(ii)           if such Collateral Obligation is a loan, or bond the price of such loan or bond, as applicable, has changed during the period from the date on which it was acquired by the Issuer to the proposed sale date by a percentage either at least 0.25% more negative, or at least 0.25% less positive, as the case may be, than the percentage change in the average price of an Eligible Loan Index or Eligible Bond Index, as applicable;

 

(iii)          if such Collateral Obligation is a loan, the Market Value of such Collateral Obligation has decreased by at least 1.00% of the price paid by the Issuer for such Collateral Obligation;

 

(iv)          if such Collateral Obligation is a loan, the spread over the applicable reference rate for such Collateral Obligation has been increased in accordance with the underlying Collateral Obligation since the date of acquisition by (1) 0.25% or more (in the case of a loan with a spread (prior to such increase) less than or equal to 2.00%), (2) 0.375% or more (in the case of a loan with a spread (prior to such increase) greater than 2.00% but less than or equal to 4.00%) or (3) 0.50% or more (in the case of a loan with a spread (prior to such increase) greater than 4.00%) due, in each case, to a deterioration in the related borrower’s financial ratios or financial results;

 

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

 

(vi)          with respect to a fixed rate Collateral Obligation, there has been an increase since the date of purchase of more than 7.5% in the difference between the yield on such Collateral Obligation and the yield on the relevant United States Treasury security; or

 

(b)   if a Restricted Trading Period is in effect:

 

(i)            any Collateral Obligation as to which one or more of the criteria set forth in (a)(i) through (a)(vi) above applies; or

 

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

 

 

“Cumulative Deferred Management Fee”: All or a portion of the previously deferred Collateral Management Fees or Collateral Management Fee Shortfall Amounts (including accrued interest prior to the Payment Date on which the payment of such Collateral Management Fee Shortfall Amount was deferred by the Collateral Manager), which may be declared due and payable by the Collateral Manager on any Payment Date (with written notice to the Trustee and the Collateral Administrator).

 

“Current Deferred Management Fee”: With respect to a Payment Date, all or a portion of the Collateral Management Fees or Collateral Management Fee Shortfall Amounts (including accrued interest), due and owing to the Collateral Manager the payment of which is voluntarily deferred (for payment on a subsequent Payment Date), without interest, by the Collateral Manager (with written notice to the Trustee and the Collateral Administrator).

 

“Current Pay Obligation”: Any Collateral Obligation (other than a DIP 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 Trustee (with a copy to the Collateral Administrator) in writing that it believes, in its reasonable business judgment, that (a) the Obligor or issuer of such Collateral Obligation 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 or issuer 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, (c) the Collateral Obligation has a Market Value of at least 80% of its par value and (d) the Collateral Obligation has (A) an S&P Rating of at least “CCC+” (which if the facility rating of the Obligor has been withdrawn shall for the purposes of this definition be the facility rating prior to such withdrawal) and a Market Value of at least 80% of its par value or (B) an S&P Rating of at least “CCC” (which if the facility rating of the Obligor has been withdrawn shall for the purposes of this definition be the facility rating prior to such withdrawal) and its Market Value is at least 85% of its par value (Market Value being determined, solely for the purposes of clauses (c) and (d), without taking into consideration clause (iii) of the definition of the term “Market Value”).

 

“Current Portfolio”: At any time, the portfolio of Collateral Obligations, 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.‎

 

“Custody Agreement”: Any custody agreement dated as of the Refinancing Date between the Issuer and the custodian bank named therein.

 

 

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

 

“Daily Simple SOFR”: For any day, SOFR for the Corresponding Tenor, with the rate, or methodology for this rate, and conventions for this rate (which, for example, may include a lookback) being established by the Collateral Manager in accordance with: (1) the rate, or methodology for this rate, and conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR”; provided that: (2) if, and to the extent that, the Collateral Manager determines that Daily Simple SOFR cannot be determined in accordance with clause (1) above, then the rate, or methodology for this rate, and conventions for this rate that have been selected by the Collateral Manager giving due consideration to any industry-accepted market practice for similar U.S. dollar denominated collateralized loan obligation securitization transactions at such time.

 

“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 Rating Factor of such Collateral Obligation minus (y) the S&P Weighted Average Rating Factor multiplied 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, or waiver thereof, after the passage (in the case of a default that in the Collateral Manager’s judgment, as certified to the Trustee and the Collateral Administrator in writing, is not due to credit-related causes) of five Business Days or seven calendar days, whichever is greater, but in no case beyond the passage of any grace period applicable thereto);

 

(b)           a default known to the Collateral Manager as to the payment of principal and/or interest has occurred and is continuing on another debt obligation of the same Obligor or issuer which is senior or pari passu in right of payment to such Collateral Obligation (in the case of a default that in the Collateral Manager’s judgment, as certified to the Trustee and the Collateral Administrator in writing, is not due to credit-related causes) after the passage of five Business Days or seven calendar days, whichever is greater, but in no case beyond the passage of any grace period applicable thereto; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable Obligor or issuer or secured by the same collateral;

 

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

 

 

(d)           such Collateral Obligation has an S&P Rating of “D,” “SD” or “CC” or lower or had such rating before such rating was withdrawn or such Collateral Obligation has a Fitch Rating of “CC,” “C,” “D” or “RD” or had such rating immediately 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 “D,” “SD” or “CC” or lower or had such rating before such rating was withdrawn or another debt obligation of an Obligor which has a Fitch Rating of “CC,” “C,” “D” or “RD” or had such rating immediately 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 Instruments 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 Instruments;

 

(g)           the Collateral Manager has in its reasonable commercial judgment otherwise declared such debt obligation to be a “Defaulted Obligation” and such declaration remains in effect or determined that such debt obligation will be disposed of in connection with a “Distressed Exchange”;

 

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

 

(j)            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 (x) 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 Balance of Current Pay Obligations exceeding 5% of the Collateral Principal Amount will be treated as Defaulted Obligations); (y) a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to any of clauses (b), (c), (d), (e) and (i)(A) above if such Collateral Obligation (or, in the case of a Participation Interest, the underlying Loan) is a DIP Collateral Obligation (other than a DIP Collateral Obligation that has an S&P Rating of “SD” or “CC” or lower or a Fitch Rating of “CC,” “C,” “D” or “RD”) and (z) a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to clause (j) above if, since the effective date of such amendment, waiver or modification, such Collateral Obligation has received a new S&P Rating (in the case of S&P, so long as any Notes are Outstanding and rated by S&P) or rating or credit estimate (or a confirmation of a prior S&P Rating, rating or credit estimate, as applicable) assigned by each Rating Agency then rating the Notes, which S&P Rating or other rating or credit estimate must be at least “CCC”.

 

  

Notwithstanding anything in this Indenture to the contrary, the Collateral Manager shall give the Trustee and the Collateral Administrator prompt written notice should any Collateral Obligation become a Defaulted Obligation. Until so notified or until a Responsible Officer of the Trustee obtains actual knowledge that a Collateral Obligation has become a Defaulted Obligation, the Trustee shall not be deemed to have any notice or knowledge that a Collateral Obligation has become a Defaulted Obligation.

 

“Defaulted Obligation Balance”: (a) For any Defaulted Obligation (other than a Permitted Collateral Obligation that meets the requirements of clause (b) below) or Deferring Obligation, the lesser of (i) the S&P Collateral Value of such Defaulted Obligation or Deferring Obligation and (ii) the Fitch Collateral Value of such Defaulted Obligation or Deferring Obligation; and (b) for any Permitted Collateral Obligation that (i) is deemed to constitute a Defaulted Obligation pursuant to Section 12.2(i)  but would not constitute a Defaulted Obligation pursuant to the definition thereof, (ii) is senior to the related Collateral Obligation and (iii) does not have an S&P Recovery Rating, the lower of the Market Value and 75% of the par value of such Permitted Collateral Obligation.

 

“Deferrable Obligation”: A Collateral Obligation that by its terms permits the deferral or capitalization of payment of accrued, unpaid interest (other than supplemental interest in the case of a Collateral Obligation that continues to pay interest in cash on a current basis in accordance with the terms of such Collateral Obligation as such terms existed prior to the applicable deferral or capitalization of interest); provided that, the foregoing shall include any Permitted Deferrable Obligation other than, for purposes of clause (xvi) of the Concentration Limitations, (1) any Permitted Deferrable Obligation that carries a current cash pay interest rate of not less than (i) in the case of a Floating Rate Obligation, the Benchmark plus 50% of the stated interest spread over the applicable benchmark with respect to such Deferrable Obligation (excluding from the denominator any supplemental interest) or (ii) in the case of a Fixed Rate Loan, 50% of the stated interest rate on such Deferrable Obligation (excluding from the denominator any supplemental interest), in each case, so long as, at the time of acquisition of such Permitted Deferrable Obligation, (x) no more than 15% of the Collateral Principal Amount consists of Deferrable Obligations whose acquisition would have resulted in a failure to satisfy clause (xvi) of the Concentration Limitations but for this proviso and (y) no more than 5% of the Collateral Principal Amount consists of Deferrable Obligations that do not have an S&P Rating and a Fitch Rating of at least B- at such time and whose acquisition would have resulted in a failure to satisfy clause (xvi) of the Concentration Limitations but for this proviso and (2) any Permitted Deferrable Obligation that is not currently deferring the payment of accrued, unpaid interest (other than supplemental interest in the case of a Collateral Obligation that continues to pay interest in cash on a current basis in accordance with the terms of such Collateral Obligation as such terms existed prior to the applicable deferral or capitalization of interest).

 

 

“Deferred Interest”: With respect to the Class C Notes, the meaning specified in Section 2.7(a).

 

“Deferring Obligation”: A Deferrable Obligation that is currently deferring the payment of the cash interest due thereon and (i) with respect to Collateral Obligations that have an S&P Rating of at least “BBB-,” has been so deferring the payment of cash interest due thereon for twelve consecutive months or has deferred payments of interest in an amount equal to two periodic payments, and (ii) with respect to Collateral Obligations that have an S&P Rating of “BB+” or below, has been so deferring the payment of interest for six consecutive months or deferred payments of interest in an amount equal to one periodic interest payment, 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 Instruments relating thereto, (b) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates, and (c) does not permit the re-borrowing of any amount previously repaid by the borrower thereunder; 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.

 

“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 or the Trustee by registering the same in the name of the Custodian or the Trustee or its affiliated nominee or by endorsing the same to the Custodian or the Trustee 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 or the Trustee 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 or the Trustee; 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 of America or agency or instrumentality thereof and that is maintained in book-entry records of a Federal Reserve Bank (“FRB”) (each such security, a “Government Security”),

 

(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,

 

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

 

(c)

causing the Custodian 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 appropriate filing office in accordance with the Uniform Commercial Code as in effect in any relevant jurisdiction.

 

In addition, the Collateral Manager on behalf of the Issuer will obtain any and all consents required by the Underlying Instruments 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).

 

“Delivery Certificate”: An Officer’s certificate of the Collateral Manager to the effect that immediately before the Delivery of the Collateral Obligations:

 

(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 Issuer purchased or entered into each Collateral Obligation in the Schedule of Collateral Obligations in compliance with Section 12.2.

 

“Designated Maturity”: With respect to the Secured Notes and each Interest Determination Date, three months; provided that, (i) with respect to the period (x) from and including the Refinancing Date to but excluding the First Interest Determination End Date, the Designated Maturity shall be determined by interpolating linearly (and rounding to five decimal places) between the rate for the next shorter period of time for which rates are available and the rate for the next longer period of time for which rates are available and (y) from and including the First Interest Determination End Date to but excluding the first Payment Date after the Refinancing Date, the Designated Maturity shall be three months and (ii) in connection with any Refinancing upon a redemption of the Secured Notes in whole, but not in part, solely with respect to the first Interest Accrual Period following the related Redemption Date, the Designated Maturity of the replacement securities issued in connection with such Refinancing will be determined by the Collateral Manager in connection with such Refinancing.

 

 

“Designated Principal Proceeds”: The meaning set forth in Section 10.2(h).

 

“Designated Unused Proceeds”: The meaning set forth in Section 10.3(c).

 

“Determination Date”: The last day of each Collection Period and, for the purposes of determining whether Interest Proceeds and Principal Proceeds can be transferred to the Payment Account and applied pursuant to the Priority of Payments in connection with a Redemption Distribution Date, the Business Day preceding such Redemption Distribution 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”: In the case of 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% of its outstanding principal balance, if such Collateral Obligation has an S&P Rating lower than “B-”, or (b) 80% of its outstanding 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% of its outstanding principal balance;

 

(y)            any Collateral Obligation that would otherwise be considered a Discount Obligation, but that is purchased in accordance with the Investment Criteria with the proceeds of a sale of a Collateral Obligation that was not a Discount Obligation at the time of its purchase, will not be considered to be a Discount Obligation so long as such purchased Collateral Obligation (A) is purchased or committed to be purchased within five Business Days of such sale, (B) is purchased at a purchase price (expressed as a percentage of the par amount of such Collateral Obligation) not less than 65% of its outstanding principal balance, (C) is purchased at a purchase price (expressed as a percentage of the par amount of such Collateral Obligation) equal to or greater than the sale price of the sold Collateral Obligation, (D) has (x) an S&P Rating that is equal to or greater than the S&P Rating of the sold Collateral Obligation or (y) a Fitch Rating that is equal to or greater than the Fitch Rating of the sold Collateral Obligation, as applicable, and (E) has a stated maturity no later than the stated maturity of the sold Collateral Obligation; and

 

(z)            clause (y) above in this proviso shall not apply to any such Collateral Obligation at any time on or after the acquisition by the Issuer of such Collateral Obligation if, as determined at the time of such acquisition, such application would result in (A) more than 5% of the Collateral Principal Amount consisting of Collateral Obligations to which such clause (y) has been applied (or more than 2.5% of the Collateral Principal Amount consisting of Collateral Obligations to which such clause (y) has been applied if the purchase price of the Collateral Obligation is less than 75% of the outstanding principal balance thereof) or (B) the Aggregate Principal Balance of all Collateral Obligations to which such clause (y) has been applied since the Refinancing Date being more than 10% of the Reinvestment Target Par Balance.

 

 

“Distressed Exchange”: In connection with any Collateral Obligation, a distressed exchange or other debt restructuring has occurred, as reasonably determined by the Collateral Manager, pursuant to which the Obligor or issuer of such Collateral Obligation or any affiliate thereof has issued to the holders of such Collateral Obligation a new debt obligation or security or package of debt obligations or securities that, in the sole judgment of the Collateral Manager, amounts to a diminished financial obligation or has the purpose of helping the Obligor or issuer of such Collateral Obligation avoid imminent default; provided that each such security or debt obligation (i) shall not be subject to a “Distressed Exchange” and shall be treated as a Collateral Obligation that is not a Defaulted Obligation only if (x) such security or debt obligation satisfies the definition of Collateral Obligation and (y) the Aggregate Principal Balance of all securities and debt obligations to which this clause (i) applies or has applied, measured cumulatively from the Refinancing Date, does not exceed 25.0% of the Target Initial Par Amount and (ii) in all other cases, any such (x) debt obligation that satisfies the definition of Collateral Obligation (except that such debt obligation constitutes a Defaulted Obligation) shall be treated as a Collateral Obligation that is a Defaulted Obligation and (y) security shall be treated as an Equity Security.

 

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

 

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

 

“Distribution Compliance Period”: The 40-day period prescribed by Regulation S commencing on the later of (a) the date upon which Notes are first offered to Persons other than the initial Holders and any other distributor (as such term is defined in Regulation S) of the Notes and (b) the Refinancing Date.

 

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

 

(a)           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 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 issuer); 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.

 

“E.U. Securitization Regulation”: Regulation (EU) 2017/2402, as amended by Regulation (EU) 2021/557.

 

“E.U. Securitization Laws”: The E.U. Securitization Regulation, together with any supplementary regulatory technical standards, implementing technical standards and any official binding guidance adopted in relation thereto by the European regulatory authorities, and any implementing laws or regulations.

 

“E.U./U.K. Retained Interest”: Together, the E.U./U.K. Retention Provider’s 100% ownership interest (the “Ownership Interest”) in the U.S. Retention Provider, and the U.S. Retention Provider’s material net economic interest (the “Retained Amount”) in the securitization, of not less than 5% in the form specified in paragraph (d) of Article 6(3) of each Securitization Regulation, as each such regulation is in effect on the Refinancing Date, by way of holding, subject to the provisions of the Risk Retention Letter, the minimum principal amount of the Subordinated Notes required by the E.U. Securitization Laws and the U.K. Securitization Laws as of the Refinancing Date, being an amount equal to 5% of the nominal value of the Collateral Obligations.

 

“E.U./U.K. Retention Deficiency”: The failure of the E.U./U.K. Retention Provider to hold the E.U./U.K. Retained Interest at the relevant measurement time.

 

“E.U./U.K. Retention Provider”: The BDC.

 

“Effective Date”: The earlier to occur of (i) March 20, 2025 and (ii) the first date on which the Collateral Manager certifies to the Trustee and the Collateral Administrator that the Target Initial Par Condition has been satisfied.

 

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

 

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

 

“Effective Date Interest Deposit Restriction”: The meaning specified in Section 10.3(c).

 

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

 

“Eligible Bond Index”: The Merrill Lynch US High Yield Master II Index (or, with the consent of a Majority of the Controlling Class, such other nationally recognized high yield index as the Collateral Manager selects and provides notice to each Rating Agency).

 

“Eligible Investment Required Ratings”: (a) Such obligation or security has a short-term credit rating of at least “A-1” from S&P and, in the case of any obligation or security with a maturity of greater than 60 days, a long-term credit rating of at least “AA-” by S&P and (b) to the extent that Fitch is rating any Notes then Outstanding, for obligations or securities (i) with remaining maturities up to 30 days, such obligation or security has a short-term credit rating of at least “F1” or a long-term credit rating of at least “A” from Fitch or (ii) with remaining maturities of more than 30 days but not in excess of 60 days, such obligation or security has a short-term credit rating of “F1+” or a long-term credit rating of at least “AA-” from Fitch.

 

 

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

 

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

 

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

 

(iv)          registered money market funds that have, at all times, credit ratings of “AAAm” by S&P and, to the extent that Fitch is rating any Notes then Outstanding, either the highest credit rating assigned by Fitch (“AAAmmf”) to the extent rated by Fitch or otherwise the highest rating assigned by Moody’s, respectively (provided that such equivalent ratings shall comply with each of Fitch’s and S&P’s then current criteria);

 

provided that (1) 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, other than those referred to in clause (iv) above, as mature (or are putable at par to the issuer thereof) no later than the earlier of (a) 60 days from the date of purchase and (b) the Business Day prior to the next Payment Date unless such Eligible Investments are issued by the Trustee in its capacity as a banking institution, in which event such Eligible Investments may mature on such Payment Date; and (2) none of the foregoing obligations shall constitute Eligible Investments if (a) such obligation has an “f”, “p”, “t” or “sf” subscript assigned to the rating by S&P, (b) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments, (c) payments with respect to such obligations or proceeds of disposition are subject to withholding taxes by any jurisdiction unless the payor is required to make “gross-up” payments that cover the full amount of any such withholding tax on an after-tax basis, (d) such obligation is secured by real property, (e) such obligation is purchased at a price greater than 100% of the principal or face amount thereof, (f) such obligation is subject of a tender offer, voluntary redemption, exchange offer, conversion or other similar action, (g) in the Collateral Manager’s judgment, such obligation is subject to material non-credit related risks, (h) such obligation is a Structured Finance Obligation or (i) such obligation is represented by a certificate of interest in a grantor trust. Eligible Investments may include, without limitation, those investments issued by or made with the Bank or for which the Bank or the Trustee or an Affiliate of the Bank or the Trustee acts as offeror, is the obligor or depository institution, or provides services and receives compensation.

 

 

“Eligible Loan Index”: With respect to each Collateral Obligation that is a Senior Secured Loan or a Second Lien Loan, one of the following indices as selected by the Collateral Manager in writing delivered to the Trustee and the Collateral Administrator upon acquisition of such Collateral Obligation: CS Leveraged Loan Index (formerly CSFB Leveraged Loan Index), the Deutsche Bank Leveraged Loan Index, the Goldman Sachs/Loan Pricing Corporation Liquid Leveraged Loan Index, the Banc of America Securities Leveraged Loan Index, the S&P/LSTA Leveraged Loan Indices or any other loan index for which the Global Rating Agency Condition has been satisfied.

 

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

 

“Equity Security”: Any security that at the time of acquisition, conversion or exchange is not eligible for purchase by the Issuer as a Collateral Obligation and is not an Eligible Investment or any debt obligation received by the Issuer pursuant to Section 10.2(d) or Section 12.2(i) that is not a Collateral Obligation or a Permitted Collateral Obligation; provided that on any Business Day as of which such Equity Security satisfies the definition of “Collateral Obligation,” (as tested on such date and without giving effect to the proviso set forth therein), the Collateral Manager may designate (by written notice to the Issuer and the Collateral Administrator) such Equity Security as a “Collateral Obligation”. For the avoidance of doubt, any Equity Security designated as a Collateral Obligation in accordance with the terms of this definition shall constitute a Collateral Obligation (and not an Equity Security), in each case, following such designation.

 

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

 

“ERISA Restricted Notes”: The Subordinated Notes.

 

“Euroclear”: Euroclear Bank S.A./N.V.

 

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

 

“Excel Default Model Input File”: The meaning specified in Section 7.18(c)(i).

 

“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; provided that (x) any Long-Dated Obligation shall be included in clause (i) at its value in the Long-Dated Obligation Amount and (y) for purposes of this definition, the Market Value of each Long-Dated Obligation shall not exceed its value in the Long-Dated Obligation Amount.

 

 

“Excess Par Amount”: An amount, as of any Determination Date, equal to the greater of (a) zero and (b) (i) the Collateral Principal Amount less (ii) the Reinvestment Target Par Balance.

 

“Excess Weighted Average Coupon”: A percentage equal as of any date of determination to a number obtained by multiplying (a) the excess, if any, of the Weighted Average Coupon over the Minimum Weighted Average Coupon by (b) the number obtained by dividing the aggregate outstanding principal balance of all Fixed Rate Obligations by the aggregate outstanding principal balance of all Floating Rate Obligations.

 

“Excess Weighted Average Floating Spread”: A percentage equal as of any date of determination to a number obtained by multiplying (a) the excess, if any, of the Weighted Average Floating Spread over the greater of (x) the Minimum Floating Spread and (y) the Minimum Fitch Floating Spread by (b) the number obtained by dividing the aggregate outstanding principal balance of all Floating Rate Obligations by the aggregate outstanding principal balance of all Fixed Rate Obligations.

 

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

 

“Exercise Notice”: The meaning specified in Section 9.8.

 

“Existing Secured Notes”: The meaning specified in the Preliminary Statement.

 

“Existing Subordinated Notes”: The meaning specified in the Preliminary Statement.

 

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

 

“Facility Size”: With respect to any credit facility on any date of determination, the maximum aggregate principal amount of indebtedness for borrowed money that is or, in accordance with commitments to extend additional credit, may become outstanding under the term loan agreement, revolving loan agreement or other similar credit agreement that governs such credit facility; provided that, for this purpose, such aggregate principal amount shall include deposits and reimbursement obligations arising from drawings pursuant to letters of credit and other similar instruments.

 

“Failed Optional Redemption”: Any announced Optional Redemption (i) with respect to which notice of redemption has been given pursuant to Section 9.4, (ii) such notice is no longer capable of being withdrawn pursuant to Section 9.4(c), and (iii) the Issuer has insufficient funds to pay the Redemption Prices due and payable on the Secured Notes in respect of such announced Optional Redemption on the related Redemption Date in accordance with the Priority of Payments.

 

“Fallback Rate“: The reference rate (which may include a Base Rate Modifier and, if applicable, the methodology for calculating such reference rate) determined by the Collateral Manager based on (1) a quarterly rate acknowledged as a standard replacement in the leveraged loan market for leveraged loans by the Loan Syndications and Trading Association® or (2) if 50% or more of the Assets are quarterly pay Floating Rate Obligations, the rate that is consistent with the reference rate most commonly being used in (x) the quarterly pay Floating Rate Obligations included in the Assets or (y) the floating quarterly rate securities issued in the new issue collateralized loan obligation market in the prior month that bear interest based on a reference rate other than Term SOFR; provided, that if at any time when the Fallback Rate is effective the Collateral Manager notifies the Issuer, the Trustee and the Calculation Agent that any Alternative Rate can be determined by the Collateral Manager, then the Fallback Rate shall be replaced with such Alternative Rate commencing with the Interest Accrual Period immediately succeeding the Interest Accrual Period during which the Collateral Manager provides such notification. For the avoidance of doubt, the Fallback Rate shall not be the Benchmark.

 

 

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

 

“Fee Basis Amount”: As of any date of determination, the sum of (a) the Collateral Principal Amount, (b) the aggregate outstanding 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 Interest Determination End Date”: January 20, 2025.

 

”First-Lien Last-Out Loan”: A Collateral Obligation that is a Senior Secured Loan that, prior to an event of default under the applicable Underlying Instruments, is entitled to receive payments pari passu with other senior secured loans of the same Obligor, but following an event of default under the applicable Underlying Instruments, 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.

 

“Fitch”: Fitch Ratings, Inc. and any successor thereto.

 

“Fitch Collateral Value”: With respect to any Defaulted Obligation or Deferring Obligation, the lesser of (i) the product of the Fitch Recovery Rate of such Defaulted Obligation or Deferring Obligation multiplied by its principal balance, in each case, as of the relevant Measurement Date and (ii) the Market Value of such Defaulted Obligation or Deferring Obligation as of the relevant Measurement Date; provided that if the Market Value cannot be determined for any reason, the Fitch Collateral Value shall be determined in accordance with clause (i) above.

 

“Fitch Rating”: The meaning specified in Schedule 7 hereto.

 

“Fitch Rating Factor”: In respect of any Collateral Obligation, the number set forth in the table below opposite the Fitch Rating in respect of such Collateral Obligation:

 

 

Fitch Rating		Fitch Rating Factor
AAA			0.136
AA+			0.349
AA			0.629
AA-			0.858
A+			1.237
A			1.572
A-			2.099
BBB+			2.630
BBB			3.162
BBB-			6.039
BB+			8.903
BB			11.844
BB-			15.733
B+			19.627
B			23.671
B-			32.221
CCC+			41.111
CCC			50.000
CCC-			63.431
CC			100.000
C			100.000

 

“Fitch Rating Reporting Items”: With respect to each Collateral Obligation, the information listed in the following table:

 

Indenture Reporting Requirement	Indenture- Defined Term	Fitch Data Feed Name
Fitch Rating	Y	N/A – Derived per definition
Fitch public long-term issuer default rating (LT IDR) or long-term issuer default credit opinion (LT IDCO)	N	Long-Term Issuer Default Rating <or> Long-Term Issuer Default Credit Opinion
Fitch recovery rating (RR) or credit opinion RR	N	Issue Recovery Rating <or> Issue Recovery Credit Opinion
Watch or outlook status	N	LT IDR Alert Code <or> LT IDCO Alert Code
Fitch rating effective date	N	LT IDR Effective Date <or> LT IDCO Effective Date
Fitch Industry Classification	N	CLO Industry

 

“Fitch Recovery Rate”: The meaning specified in Schedule 7 hereto.

 

“Fitch Test Matrix”: The meaning specified in Schedule 7 hereto.

 

“Fitch Weighted Average Rating Factor”: The number determined by (a) summing the products of (i) the Principal Balance of each Collateral Obligation multiplied by (ii) its Fitch Rating Factor, (b) dividing such sum by the aggregate Principal Balance of all such Collateral Obligations and (c) rounding the result down to the nearest two decimal places. For the purposes of determining the Principal Balance and aggregate Principal Balance of Collateral Obligations in this definition, the Principal Balance of each Defaulted Obligation shall be excluded.

 

 

“Fixed Rate Notes”: Any Notes issued under this Indenture that bear a fixed rate of interest.

 

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

 

“Floating Rate Notes”: All of the Secured Notes, collectively, other than the Fixed Rate Notes.

 

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

 

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

 

“FRB”: The meaning specified in the definition of the terms “Deliver”, “Delivered” or “Delivery”.

 

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

 

“Global Note”: The Global Secured Notes and the Rule 144A Global Subordinated Notes.

 

“Global Rating Agency Condition”: With respect to any action taken or to be taken by or on behalf of the Issuer, satisfaction of the S&P Rating Condition (to the extent applicable) together with prior notice to Fitch delivered at least five Business Days prior to such action (to the extent that Fitch is rating any Notes then Outstanding).

 

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

 

“Government Security”: The meaning specified in the definition of the terms “Deliver”, “Delivered” or “Delivery”.

 

“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, Japan, Singapore and New Zealand (and any other additional countries as may be determined by the Collateral Manager in its sole discretion which may be based on publicly available published criteria from Moody’s from time to time).

 

 

“Group II Country”: Germany, Ireland, Sweden and Switzerland (and any other additional countries as may be determined by the Collateral Manager in its sole discretion which may be based on publicly available published criteria from Moody’s from time to time).

 

“Group III Country”: Austria, Belgium, Denmark, Finland, France, Luxembourg and Norway (and any other additional countries as may be determined by the Collateral Manager in its sole discretion which may be based on publicly available published criteria from Moody’s from time to time).

 

“Incurrence Covenant”: A covenant by any borrower to comply with one or more financial covenants only upon the occurrence of certain actions of the borrower, including a debt issuance, 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 manager or director of any Person will fail to be Independent solely because such Person acts as an independent manager or independent director thereof or of any such Person’s Affiliates.

 

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

 

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

 

“Independent Manager”: A natural person who, (A) for the five-year period prior to his or her appointment as Independent Manager, has not been, and during the continuation of his or her service as Independent Manager is not: (i) an employee, director, stockholder, member, manager, partner or officer or direct or indirect legal or beneficial owner (or a Person who controls, whether directly, indirectly, or otherwise any of the foregoing) of the Issuer, the member of the Issuer or any of their respective Affiliates (other than his or her service as a special member or an independent manager of the Issuer or other Affiliates that are structured to be “bankruptcy remote”); (ii) a customer, consultant, creditor, contractor or supplier (or a Person who controls, whether directly, indirectly, or otherwise any of the foregoing) of the Issuer, the member of the Issuer or any of their respective Affiliates (other than his or her service as a special member or an independent manager of the Issuer); (iii) affiliated with a tax-exempt entity that receives significant contributions from the member of the Issuer or any of its Affiliates; or (iv) any member of the immediate family of a person described in clause (i), (ii) or (iii) above (other than with respect to clause (i), (ii) or (iii) relating to his or her service as (y) an Independent Manager of the Issuer or (z) an independent manager of any Affiliate of the Issuer which is a bankruptcy remote limited purpose entity), and (B) has, (i) prior experience as an Independent Manager for a corporation or limited liability company whose charter documents required the unanimous consent of all Independent Managers thereof before such corporation or limited liability company could consent to the institution of bankruptcy or insolvency proceedings against it or could file a petition seeking relief under any applicable federal or state law relating to bankruptcy and (ii) at least three years of employment experience with one or more entities that provide, in the ordinary course of their respective businesses, advisory, management or placement services to issuers of securitization or structured finance instruments, agreements or securities.

 

 

“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 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”: The information outlined in S&P’s “Credit FAQ: Anatomy Of A Credit Estimate: What It Means And How We Do It” dated January 14, 2021 and any other available information S&P reasonably requests in order to produce a credit estimate for a particular asset.

 

“Information Agent”: The Collateral Administrator.

 

“Initial Purchaser”: Deutsche Bank Securities Inc., in its capacity as initial purchaser of the Secured Notes under the Purchase Agreement.

 

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

 

“Institutional Accredited Investor”: An Accredited Investor identified in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.

 

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

 

“Interest Accrual Period”: (i) With respect to the initial Payment Date following the Refinancing Date (or, in the case of a Re-Priced Class or a Class that is subject to Refinancing or Notes issued in connection with an additional issuance, the first Payment Date following the Re-Pricing Date, the Refinancing or the date of such additional issuance, respectively), the period from and including the Refinancing Date (or, in the case of (x) a Refinancing, the date of issuance of the replacement notes or debt obligations and (y) a Re-Pricing, the Re-Pricing Date) 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 (or, in the case of a Class that is being redeemed on a Partial Redemption Date, to but excluding such Partial Redemption Date) until the principal of the Secured Notes is paid or made available for payment.

 

 

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

 

“Interest Coverage Ratio”: For any designated Class or Classes of Secured Notes, 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) in Section 11.1(a)(i); and

 

C = Interest due and payable on the Secured Notes of such Class or Classes and each Class of Secured Notes that rank senior to or pari passu with such Class or Classes (excluding Deferred Interest but including any interest on Deferred Interest with respect to the Class C Notes) on such Payment Date.

 

“Interest Coverage Test”: A test that is satisfied with respect to any Class or Classes of Secured Notes as of any date of determination on, or subsequent to, the Determination Date occurring immediately prior to the second Payment Date following the Refinancing Date, 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 Notes are no longer outstanding.

 

“Interest Determination Date”: (a) With respect to the first Interest Accrual Period (x) for the period from and including the Refinancing Date to but excluding the First Interest Determination End Date, the second U.S. Government Securities Business Day preceding the Refinancing Date and (y) for the period from and including the First Interest Determination End Date to but excluding the first Payment Date following the Refinancing Date, the second U.S. Government Securities Business Day preceding the First Interest Determination End Date and (b) with respect to each Interest Accrual Period thereafter, the second U.S. Government Securities Business Day preceding the first day of each Interest Accrual Period; provided that, in connection with any Refinancing upon a redemption of the Secured Notes in whole, but not in part, solely with respect to the first Interest Accrual Period following the related Redemption Date, the Interest Determination Date for the replacement securities issued in connection with such Refinancing will be determined by the Collateral Manager in connection with such Refinancing.

 

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

 

“Interest Proceeds”: With respect to any 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, in each case, as determined by the Collateral Manager with notice to the Trustee 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 as Interest Proceeds;

 

(vi)           any amounts deposited in the Interest Reserve Account as Interest Proceeds;

 

(vii)         any Designated Principal Proceeds and any Designated Unused Proceeds;

 

(viii)        any Principal Proceeds designated by the Collateral Manager (with notice to the Collateral Administrator) as Interest Proceeds in connection with any Refinancing of the Secured Notes in whole, up to the Excess Par Amount for payment on the Redemption Date of such Refinancing;

 

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

 

(x)           net proceeds from the issuance of additional Subordinated Notes and/or Junior Mezzanine Notes that have been designated as Interest Proceeds by the Collateral Manager with the consent of a Majority of the Subordinated Notes;

 

provided that:

 

(1) except as expressly set forth in clauses (2) and (3) below, any amounts received in respect of any Defaulted Obligation will constitute Principal Proceeds (and not Interest Proceeds) until the aggregate of all recoveries in respect of such Defaulted Obligation (including, (x) in connection with clause (2) below, the aggregate of all recoveries up to an amount equal to the amount of any reduction in the principal balance of such Defaulted Obligation in connection with the creation or acquisition of the relevant Permitted Collateral Obligation and (y) in connection with clause (3) below, the excess of the aggregate of all recoveries in respect of a related Permitted Collateral Obligation acquired using Principal Proceeds over the aggregate amount of Principal Proceeds used to acquire such Permitted Collateral Obligation and treated as Principal Proceeds pursuant to clause (3) below) since it became a Defaulted Obligation equals the outstanding principal balance of such Collateral Obligation at the time it became a Defaulted Obligation;

 

 

(2) any amounts received (including, but not limited to, any fees, commissions or other recoveries) in respect of any Permitted Collateral Obligation that is acquired using Interest Proceeds and/or Contributions and treated as a Defaulted Obligation pursuant to Section 12.2(i) shall constitute (A) Principal Proceeds (and not Interest Proceeds) until the aggregate of all recoveries in respect of such Permitted Collateral Obligation since it was acquired by the Issuer equals the Defaulted Obligation Balance of such Permitted Collateral Obligation and then (B) Interest Proceeds thereafter; and

 

(3) any amounts received (including, but not limited to, any fees, commissions or other recoveries) in respect of any Permitted Collateral Obligation that is acquired in part or in whole using Principal Proceeds and treated as a Defaulted Obligation pursuant to Section 12.2(i) shall constitute (x) Principal Proceeds (and not Interest Proceeds) until the aggregate of all recoveries in respect of such Permitted Collateral Obligation (together with all recoveries in respect of the obligation for which it was exchanged or to which it relates) since it was acquired by the Issuer (or, in the case of any exchanged obligation, since the earliest date on which such obligation became an Equity Security, a Credit Risk Obligation or a Defaulted Obligation, as applicable) equals the sum of (A) the greater of (I) the Issuer's purchase price for such Permitted Collateral Obligation and (II) the Defaulted Obligation Balance of such Permitted Collateral Obligation (calculated excluding a portion of the principal balance of such Permitted Collateral Obligation equal to the amount of any reduction of the related Defaulted Obligation or Credit Risk Obligation in connection with the creation or acquisition of such Permitted Collateral Obligation) and (B) (I) in the case of a related Defaulted Obligation, the outstanding principal balance of such Defaulted Obligation as of the date it became a Defaulted Obligation and (II) in the case of a related Credit Risk Obligation, the outstanding principal balance of such Credit Risk Obligation at the time it was exchanged or, if no exchange occurred, at the time of acquisition of such Permitted Collateral Obligation and then (y) Interest Proceeds thereafter;

 

provided further that capitalized interest shall not constitute Interest Proceeds. Notwithstanding the foregoing, the Collateral Manager may designate in its discretion (to be exercised on or before the related Determination Date), on any date after the first Payment Date following the Refinancing Date, that any portion of Interest Proceeds in a Collection Period be deemed to be Principal Proceeds so long as the Collateral Manager believes that such designation will not result in an Event of Default pursuant to clause (a) of the definition thereof on the next succeeding Payment Date.

 

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

 

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

 

"Interest Reserve Amount": U.S.$0.00.

 

 

"Interpolated Screen Rate": The rate which results from interpolating on a linear basis (and rounding to the sixth decimal place) between (a) the applicable Screen Rate for the longest period (for which that Screen Rate is available or can be obtained) which is less than the Designated Maturity and (b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available or can be obtained) which exceeds the Designated Maturity. For purposes of determining the Interpolated Screen Rate for a period of less than one month, the "Screen Rate" shall be deemed to include overnight SOFR as published on the Federal Reserve Bank of New York's website.

 

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

 

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

 

"Investment Criteria Adjusted Balance": With respect to each Collateral Obligation, the outstanding principal balance of such Collateral Obligation; provided that the Investment Criteria Adjusted Balance of any:

 

(i)

Deferring Obligation will be the S&P Collateral Value of such Deferring Obligation;

 

(ii)

Defaulted Obligation will be the S&P Collateral Value of such Defaulted Obligation;

 

(iii)

Discount Obligation, will be the product of the (x) purchase price (expressed as a percentage of par) and (y) the principal balance of such Collateral Obligation;

 

(iv)

Long-Dated Obligation will equal its applicable Long-Dated Obligation Amount; and

 

(v)

Collateral Obligation included in the CCC Excess will be the Market Value of such Collateral Obligation;

 

provided further that the Investment Criteria Adjusted Balance for any Collateral Obligation that satisfies more than one of the definitions of Deferring Obligation, Defaulted Obligation, Long-Dated Obligation or Discount Obligation and/or is included in the CCC Excess will be the lowest amount determined pursuant to clauses (i) – (v) above.

 

"IRS": The U.S. Internal Revenue Service.

 

"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 by a Responsible Officer of the Issuer or by the Collateral Manager by a Responsible Officer thereof, on behalf of the Issuer. An order or request provided in email or other electronic communication by a Responsible Officer of the Issuer or by a Responsible Officer of the Collateral Manager on behalf of the Issuer shall constitute an Issuer Order, in each case except to the extent the Trustee requests otherwise.

 

 

"Issuer's Website": The internet website of the Issuer, initially located at www.structuredfn.com access to which is limited to Fitch and S&P and to NRSRO's that have provided an NRSRO Certification.

 

"Junior Class": With respect to a particular Class of Notes, each Class of Notes that is subordinated to such Class, as indicated in Section 2.3.

 

"Junior Mezzanine Notes": The meaning specified in Section 2.13(a).

 

"Knowledgeable Employee": The meaning set forth in Rule 3c-5(a)(4) promulgated under the 1940 Act.

 

"Libor": The London interbank offered rate.

 

"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).

 

"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.

 

"Long-Dated Obligation": Any Collateral Obligation (or portion thereof) with a maturity later than the earliest Stated Maturity of the Notes.

 

"Long-Dated Obligation Amount": As of any date of determination, for each Long-Dated Obligation, an amount equal to the product of the Principal Balance of such Long-Dated Obligation multiplied by 70%.

 

"LSTA": The Loan Syndications and Trading Association®, together with any successor organization.

 

"Maintenance Covenant": A covenant by any borrower to comply with one or more financial covenants during each reporting period, whether or not such borrower has taken any specified action and includes a covenant that applies only when the related Loan is funded, regardless of whether such covenant is only applicable until or after the expiration of a certain period of time after the initial issuance of such loan.

 

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

 

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

 

 

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

 

(i)             the bid price determined by the Loan Pricing Corporation, LoanX Inc., Markit Group Limited or any other nationally recognized pricing service subscribed to by the Collateral Manager; or

 

(ii)            if the price described in clause (i) is not available or the Collateral Manager determines in accordance with the Collateral Manager Standard that such price does not reflect the value of such asset;

 

(A)            the average of the bid prices determined by three broker-dealers active in the trading of such asset that are Independent (without giving effect to the last sentence in the definition thereof) from each other and the Issuer and the Collateral Manager;

 

(B)            if only two such bids can be obtained, the lower of the bid prices of such two bids; or

 

(C)            if only one such bid can be obtained, and such bid was obtained from a Qualified Broker/Dealer, such bid; or

 

(iii)            if such quote or bid described in clause (i) or (ii) is not available, the value determined as the bid side market value of such Collateral Obligation as reasonably determined by the Collateral Manager (so long as the Collateral Manager is a Registered Investment Adviser, or has applied to be a Registered Investment Adviser) consistent with the Collateral Manager Standard and certified by the Collateral Manager to the Trustee; provided that, solely for purposes of calculating the CCC Excess and the Excess CCC Adjustment Amount, unless the Market Value determined pursuant to this clause (iii) has been verified by an independent valuation firm, the Market Value determined pursuant to this clause (iii) for each CCC Collateral Obligation shall be the lower of (x) the amount calculated in accordance with this clause (iii) and (y) 75%; or

 

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

 

"Master Loan Sale Agreement": The amended and restated master loan sale agreement dated as of the Refinancing Date, among the BDC, as seller, the U.S. Retention Provider, as intermediate seller, and the Issuer, as buyer, as amended or otherwise modified from time to time.

 

"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 Instruments, 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 related Stated Maturity or by declaration of acceleration, call for redemption or otherwise.

 

"Maturity Amendment": An amendment (other than in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the Obligor thereof if the Collateral Manager determines (i) in the case of a Collateral Obligation that in the Collateral Manager's determination is likely to become a Defaulted Obligation, that such amendment in connection therewith would reduce the likelihood that such Collateral Obligation will become a Defaulted Obligation or (ii) if such Collateral Obligation is already a Defaulted Obligation, would in the Collateral Manager's determination be advisable to increase recovery; provided that, in either case, the extended maturity date of such Collateral Obligation would not be later than the earliest Stated Maturity of the Secured Notes) to the Underlying Instruments governing a Collateral Obligation that extends the stated maturity of such Collateral Obligation. For the avoidance of doubt, an amendment that would extend the stated maturity date of any tranche of the credit facility of which a Collateral Obligation is part, but would not extend the stated maturity date of the Collateral Obligation held by the Issuer, does not constitute a Maturity Amendment.

 

"Maximum Fitch Rating Factor Test": A test that will be satisfied on any date of determination if the Fitch Weighted Average Rating Factor as at such date is less than or equal to the applicable level in the Fitch Test Matrix.

 

"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 Business Days prior written notice, any Business Day requested by either Rating Agency and (v) the Effective Date.

 

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

 

"Middle Market Loan": Any Loan other than a Broadly Syndicated Loan.

 

"Minimum Fitch Floating Spread": As of any date of determination, the weighted average spread (expressed as a percentage) applicable to the current Fitch Test Matrix selected by the Collateral Manager.

 

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

 

"Minimum Floating Spread": The applicable percentage set forth in the definition of "S&P CDO Monitor" upon the option chosen by the Collateral Manager in accordance with Section 2 of Schedule 4.

 

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

 

 

"Minimum Weighted Average Coupon": If any of the Collateral Obligations are Fixed Rate Obligations, 7.00%.

 

"Minimum Weighted Average Coupon Test": A test that is satisfied on any date of determination as of which the Collateral Obligations include any Fixed Rate Obligations if the Weighted Average Coupon plus the Excess Weighted Average Floating Spread equals or exceeds the Minimum Weighted Average Coupon.

 

"Minimum Weighted Average Fitch Recovery Rate Test": A test that will be satisfied on any date of determination if the Weighted Average Fitch Recovery Rate is greater than or equal to the applicable level in the Fitch Test Matrix.

 

"Minimum Weighted Average S&P Recovery Rate Test": A test that will be satisfied on any date of determination, during any S&P CDO Monitor Election Period if the Weighted Average S&P Recovery Rate for the S&P Highest Ranking Class equals or exceeds the Weighted Average S&P Recovery Rate for such Class selected by the Collateral Manager in connection with the S&P CDO Monitor.

 

"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 thereto.

 

"Moody's Default Probability Rating": With respect to any Collateral Obligation, the rating determined pursuant to Schedule 3 hereto (or such other schedule provided by Moody's to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager).

 

"Moody's Derived Rating": With respect to any Collateral Obligation whose Moody's Rating or Moody's Default Probability Rating cannot otherwise be determined pursuant to the definitions thereof, the rating determined for such Collateral Obligation as set forth in Schedule 3 hereto (or such other schedule provided by Moody's to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager).

 

"Moody's Rating": With respect to any Collateral Obligation, the rating determined pursuant to Schedule 3 hereto (or such other schedule provided by Moody's to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager).

 

"Net Exposure Amount": As of the applicable Cut-Off Date, with respect to any 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, on the applicable Cut-Off Date with respect to such Collateral Obligation, 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.

 

 

"Net Purchased Loan Balance": As of any date of determination, an amount equal to (a) the sum of (i) the Aggregate Principal Balance of all Collateral Obligations conveyed by the E.U./U.K. Retention Provider to the Issuer prior to such date, calculated as of the respective Cut-Off Dates of such Collateral Obligations, and (ii) the Aggregate Principal Balance of all Collateral Obligations acquired by the Issuer other than from the E.U./U.K. Retention Provider prior to such date minus (b) the Aggregate Principal Balance of all Collateral Obligations sold to or repurchased or substituted by, or otherwise transferred to, the E.U./U.K. Retention Provider prior to such date.

 

"Non-Call Period": The period from the Refinancing Date to October 20, 2026.

 

"Non-Emerging Market Obligor": An Obligor that is Domiciled in (a) the United States of America, (b) any country that has a foreign currency government bond rating of at least "Aa3" by Moody's and a foreign currency issuer credit rating of at least "AA" by S&P or (c) a Tax Jurisdiction.

 

"Non-Permitted ERISA Holder": The meaning specified in Section 2.11(d).

 

"Non-Permitted Holder": The meaning specified in Section 2.11(b).

 

"Non-Recourse Obligation": An asset that falls into any one of the following types of specialized lending, except any obligation that is assigned a rating by S&P pursuant to clause (i)(a) of the definition of S&P Rating:

 

(a)            Project Finance: a method of funding in which the lender looks primarily to the revenues generated by a single project, both as the source of repayment and as security for the exposure. Repayment depends primarily on the project's cash flow and on the collateral value of the project's assets, such as power plants, chemical processing plants, mines, transportation infrastructure, environment, and telecommunications infrastructure.

 

(b)            Object Finance: a method of funding the acquisition of physical assets (e.g. ships, aircraft, satellites, railcars, and fleets) where the repayment of the exposure is dependent on the cash flows generated by the specific assets that have been financed and pledged or assigned to the lender. A primary source of these cash flows might be rental or lease contracts with one or several third parties.

 

(c)            Commodities Finance: a structured short-term lending to finance reserves, inventories, or receivable of exchange-traded commodities (e.g. crude oil, metals, or crops), where the exposure will be repaid from the proceeds of the sale of the commodity and the borrower has no independent capacity to repay the exposure. This is the case when the borrower has no other activities and no other material assets on its balance sheet.

 

(d)            Income-producing real estate: a method of providing funding to real estate (such as, office buildings to let, retail space, multifamily residential buildings, industrial or warehouse space, and hotels) where the prospects for repayment and recovery on the exposure depend primarily on the cash flows generated by the asset. The primary source of these cash flows would generally be lease or rental payments or the sale of the asset.

 

 

(e)            High-volatility commercial real estate: a financing any of the land acquisition, development and construction phases for properties of those types in such jurisdictions, where the source of repayment at origination of the exposure is either the future uncertain sale of the property or cash flows whose source of repayment is substantially uncertain (e.g. the property has not yet been leased to the occupancy rate prevailing in that geographic market for that type of commercial real estate).

 

"Note Interest Amount": With respect to any Class of Secured Notes 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 Notes.

 

"Note 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 of principal of the Class A-1 Notes until the Class A-1 Notes have been paid in full;

 

(ii)           to the payment of principal of the Class A-2 Notes until the Class A-2 Notes have been paid in full;

 

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

 

(iv)          to the payment of (1) first, any accrued and unpaid interest (excluding Deferred Interest but including interest on Deferred Interest) on the Class C Notes and (2) second, to the payment of any Deferred Interest on the Class C Notes, in each case, until such amounts have been paid in full; and

 

(v)           to the payment of principal of the Class C Notes until the Class C Notes have been paid in full.

 

"Note Purchase Agreement": The agreement dated as of the Refinancing Date by and between the Issuer and the U.S. Retention Provider, as amended from time to time in accordance with the terms thereof.

 

"Noteholder" or "Holder": With respect to any Note, the Person whose name appears on the Register as the registered holder of such Note.

 

"Notes": Collectively, the Secured Notes and the Subordinated Notes authorized by, and authenticated and delivered under, this Indenture (as specified in Section 2.4) or any supplemental indenture (and including any Additional Notes issued hereunder pursuant to Section 2.13).

 

"NRSRO": A nationally recognized statistical rating organization registered with the SEC under the Exchange Act.

 

"NRSRO Certification": A certification substantially in the form of Exhibit E executed by a NRSRO in favor of the Issuer that states that such NRSRO has provided the Issuer with the appropriate certifications under Exchange Act Rule 17g-5(e) and that such NRSRO has access to the Issuer's 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": The meaning specified in Section 10.8(c).

 

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

 

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

 

"Officer": (a) With respect to the 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 (b) with respect to the Collateral Manager, any manager of the Collateral Manager or any duly authorized officer of the Collateral Manager (as indicated on an incumbency certificate delivered to the Trustee) 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 Trustee and, if required by the terms hereof, each Rating Agency, in form and substance reasonably satisfactory to the Trustee (and, if so addressed, each Rating Agency), of an attorney admitted to practice, or 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 attorney or law firm, as the case may be, may, except as otherwise expressly provided herein, be counsel for the Issuer, and which attorney or law firm, as the case may be, shall be reasonably satisfactory to the Trustee. Whenever an Opinion of Counsel is required hereunder, such Opinion of Counsel may rely on opinions of other counsel who are so admitted and so satisfactory, which opinions of other counsel shall accompany such Opinion of Counsel and shall be addressed to the Trustee (and, if required by the terms hereof, each Rating Agency) or shall state that the Trustee (and, if required by the terms hereof, each Rating Agency) shall be entitled to rely thereon.

 

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

 

 

"Original Closing Date": December 13, 2018.

 

"Original Indenture": The meaning specified in the Preliminary Statement.

 

"Other Plan Law": Any state, local, federal, non-U.S. or other 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 the Notes or the Notes of any specified Class, as of any date of determination, all of the Notes or all of the Notes of such Class, as the case may be, theretofore authenticated and delivered under this Indenture, except:

 

(i)            Notes theretofore canceled by the Registrar or delivered to the Registrar for cancellation in accordance with the terms of Section 2.9 (including, without limitation and for the avoidance of doubt, pursuant to Section 9.7);

 

(ii)           Notes or portions thereof for whose payment or redemption funds in the necessary amount have been theretofore irrevocably deposited with the Trustee or any Paying Agent in trust for the Holders of such Notes pursuant to Section 4.1(a)(ii); provided that if such Notes or portions thereof are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;

 

(iii)          Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, unless proof satisfactory to the Trustee is presented that any such Notes are held by a "protected purchaser" (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 2.6;

 

provided that in determining whether the Holders of the requisite Aggregate Outstanding Amount of any Class of Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (a) Notes owned by the Issuer or (only in the case of a vote on (i) the removal of the Collateral Manager for "cause" and (ii) the waiver of any event constituting "cause", in each case, unless all Notes of such Class are Collateral Manager Notes) Collateral Manager Notes shall be disregarded and deemed not to be Outstanding, except that (x) in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Bank Officer of the Trustee actually knows, based solely on transfer certificates received pursuant to the terms of Section 2.5, to be so owned shall be so disregarded and (y) if all Notes of such Class are Collateral Manager Notes, Collateral Manager Notes shall not be so disregarded and (b) Notes so owned that have been pledged in good faith shall be regarded as Outstanding if the pledgee establishes to the reasonable satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not one of the Persons specified above.

 

"Overcollateralization Ratio": With respect to any specified Class or Classes of Secured Notes 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 Notes of such Class or Classes (including, in the case of the Class C Notes, any accrued Deferred Interest that remains unpaid), each Priority Class of Secured Notes and each Pari Passu Class of Secured Notes.

 

 

"Overcollateralization Ratio Test": A test that is satisfied with respect to any designated Class or Classes of Secured Notes as of any date of determination on which such test is applicable 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 Notes is no longer Outstanding.

 

"Pari Passu Class": With respect to any specified Class of Notes, each Class of Notes that ranks pari passu to such Class, 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 Notes occurs.

 

"Partial Refinancing Interest Proceeds": In connection with a Refinancing in part by Class of one or more Classes of Secured Notes, 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 (without giving effect to clause (ii) of the definition thereof), only to the extent that the Collateral Manager determines 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 prior to the next Determination Date).

 

"Participation Interest": An undivided 100% participation interest in a loan that, at the time of acquisition, or the Issuer's commitment to acquire the same, satisfies each of the following criteria: (i) such participation would constitute a Collateral Obligation were it acquired directly, (ii) the seller of the participation is the lender on the loan, (iii) the aggregate participation in the loan does not exceed the principal amount or commitment of such loan, (iv) such participation does not grant, in the aggregate, to the participant in such participation a greater interest than the seller 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) at the time of its acquisition (or, in the case of a participation in 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 a Loan Syndications and Trading Association, Loan Market Association or similar agreement standard for loan participation transactions among institutional market participants; provided that, any Refinancing Date Participation Interest shall be deemed to (a) be a Collateral Obligation for all purposes under the Indenture (provided that the related Senior Secured Loan or Second Lien Loan in which such Refinancing Date Participation Interest is granted satisfies the definition of Collateral Obligation) and (b) not be a Participation Interest until the 90th day following the Refinancing Date if such Refinancing Date Participation Interest has not been elevated by such day. For the avoidance of doubt a Participation Interest shall not include a sub-participation interest in any loan.

 

 

"Partner": The meaning specified in Section 7.17(a).

 

"Partnership Interest": The meaning specified in Section 7.17(a).

 

"Partnership Representative": The meaning specified in Section 7.17(k).

 

"Partnership Tax Audit Rules": The meaning specified in Section 7.17(l).

 

"Paying Agent": Any Person authorized by the Issuer to pay the principal of or interest on any Notes on behalf of the Issuer as specified in Section 7.2.

 

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

 

"Payment Date": (i) Each of the 20^th day of January, April, July and October of each year (or, if such day is not a Business Day, the next succeeding Business Day), commencing in April 2025, except that the final Payment Date (subject to any earlier redemption or payment of the Notes) shall be the latest Stated Maturity, (ii) each Redemption Date (other than a Redemption Date in connection with a Failed Optional Redemption or a Redemption Date in connection with a redemption of Secured Notes in part by Class) and (iii) after the date on which no Secured Notes are deemed or considered Outstanding, any Business Day that the Collateral Manager shall designate as a "Payment Date" pursuant to Section 11.1(f).

 

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

 

"Permitted Collateral Obligation": A debt obligation, other than a subordinated loan, received by the Issuer in exchange for a Collateral Obligation or received in connection with the insolvency, bankruptcy, reorganization, restructuring or workout of a Collateral Obligation or the related Obligor (1) which, if it is a debt obligation of the same Obligor as the related Collateral Obligation, is senior or pari passu in right of payment to the obligation for which it is received or the related Collateral Obligation, (2) the receipt of which will, in the Collateral Manager's reasonable business judgment, result in a better overall likelihood of recovery, (3) which is issued by the same Obligor (or any Affiliate thereof) as the Collateral Obligation for which it is exchanged or the related Collateral Obligation and (4) that does not satisfy one or more of the following criteria in the definition of "Collateral Obligation" but otherwise satisfies the remaining criteria in such definition: the introductory clause (provided that such Permitted Collateral Obligation shall be a loan, bond or note) and clauses (i) (only with respect to whether such debt obligation is a Bond that is not a Permitted Non-Loan Asset; provided that any such debt obligation shall be an unsecured bond or subordinated bond issued by a corporation, limited liability company, partnership, trust or similar business entity), (v), (x), (xvii), (xx), (xxvi), (xxix) or (xxxi); provided that on any Business Day as of which such Permitted Collateral Obligation satisfies the definition of "Collateral Obligation," (as tested on such date and without giving effect to the proviso set forth therein), the Collateral Manager may designate (by written notice to the Issuer and the Collateral Administrator) such Permitted Collateral Obligation as a "Collateral Obligation". For the avoidance of doubt, any Permitted Collateral Obligation designated as a Collateral Obligation in accordance with the terms of this definition shall constitute a Collateral Obligation (and not a Permitted Collateral Obligation), in each case, following such designation.

 

 

"Permitted Deferrable Obligation": Any Deferrable Obligation that (or the Underlying Instruments of which) carries a current cash pay interest rate of not less than (a) in the case of a Floating Rate Obligation, the Benchmark 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.

 

"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, (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 and (iv) security interests, liens and other encumbrances, if any, which have priority over first priority perfected security interests in the Collateral Obligations or any portion thereof under the UCC or any other applicable law.

 

"Permitted Merger": Each or any of (as applicable) the (a) merger of the BDC CLO III Issuer with and into the Issuer pursuant to a Plan of Merger and in connection with which the Issuer is the surviving entity and/or (b) merger of the BDC 3 CLO 1 Issuer with and into the Issuer pursuant to a Plan of Merger and in connection with which the Issuer is the surviving entity.

 

"Permitted Non-Loan Assets": Senior Secured Bonds and Senior Secured Notes issued by a corporation, limited liability company, partnership, trust or similar business entity.

 

"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 solely of Cash in an amount equal to or greater than the full face amount of such debt obligation plus any accrued and unpaid interest 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.

 

"Permitted Use": With respect to any amount on deposit in the Supplemental Reserve Account, any of the following uses: (i) the transfer of the applicable portion of such amount to the Collection Account for application as Principal Proceeds; provided that amounts designated as Principal Proceeds pursuant to this clause (i) shall not be re-designated as Interest Proceeds; (ii) the repurchase of Secured Notes of any Class through a tender offer, in the open market, or in a private negotiated transaction (in each case, subject to applicable law and the provisions of Section 9.7); (iii) the purchase of assets described in Section 12.2(f); (iv) after the Non-Call Period, to pay expenses or other amounts due in connection with an Optional Redemption; and (v) any other application or purpose not specifically prohibited by this Indenture.

 

 

"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.

 

"Plan of Merger": Each or any of (as applicable) the (a) Agreement of Merger, dated as of the Refinancing Date, between the Issuer and the BDC CLO III Issuer and/or (b) Agreement of Merger, dated as of the Refinancing Date, between the Issuer and the BDC 3 CLO 1 Issuer.

 

"Portfolio Company": Any company that at the time the Loan is acquired by the Issuer 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(a).

 

"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 any Equity Security or interest only strip shall be deemed to be zero.

 

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

 

"Principal Financed Accrued Interest": The amount of Principal Proceeds, if any, applied towards the purchase of accrued interest on a Collateral Obligation.

 

"Principal Proceeds": With respect to any Collection Period or Determination Date, all amounts received by the Issuer from any source 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. For the avoidance of doubt, Principal Proceeds will include interest purchased with Principal Proceeds on the Refinancing Date.

 

"Priority Category": With respect to any Collateral Obligation, the applicable category listed in the table under the heading "Priority Category" in Section 1(b) of Schedule 4.

 

"Priority Class": With respect to any specified Class of Notes, each Class of Notes that ranks senior to such Class, as indicated in Section 2.3.

 

"Priority 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.

 

"Purchase Agreement": The note purchase agreement dated November 18, 2024, between the Issuer and the Initial Purchaser, as amended from time to time.

 

"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.

 

"Qualified Broker/Dealer": Any of Bank of America/Merrill Lynch; The Bank of Montreal; The Bank of New York Mellon; Barclays Bank plc; BNP Paribas; Broadpoint Securities; Calyon; Citibank, N.A.; Credit Agricole S.A.; Canadian Imperial Bank of Commerce; Credit Suisse; Deutsche Bank AG; Dresdner Bank AG; GE Capital; Goldman Sachs & Co.; Guggenheim Securities LLC; HSBC Bank; Imperial Capital LLC; Jefferies & Company, Inc.; JPMorgan Chase Bank, N.A.; Key Bank National Association; Lloyds TSB Bank; Madison Capital; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co.; Natixis; NewStar Financial, Inc.; Northern Trust Company; 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; and Wells Fargo Bank, National Association, and any successor or successors to each of the foregoing.

 

"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 2a51-1, 2a51-2 or 2a51-3 under the 1940 Act.

 

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

 

"Rating Agency": Each of Fitch and S&P, or, with respect to Assets generally, if at any time Fitch or 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).

 

"Record Date": With respect to any applicable Payment Date, Redemption Date, Redemption Distribution Date or Re-Pricing Date, (i) with respect to the Global Secured Notes and the Rule 144A Global Subordinated Notes, the date one day prior to such Payment Date, Redemption Date, Redemption Distribution Date or Re-Pricing Date, as applicable, and (ii) with respect to the Certificated Secured Notes and the Certificated Subordinated Notes, the last day of the month immediately preceding such Payment Date, Redemption Date, Redemption Distribution Date or Re-Pricing Date, as applicable (whether or not a Business Day) (or, after the date on which no Secured Notes are deemed or considered Outstanding, the third Business Day preceding such Payment Date).

 

"Redemption Date": Any Business Day specified for a redemption of Notes pursuant to Article IX (other than a mandatory redemption pursuant to Section 9.1).

 

 

"Redemption Distribution Date": The meaning set forth in Section 9.2(j).

 

"Redemption Distribution Direction": The meaning set forth in Section 10.7(j).

 

"Redemption Price": (a) For the Secured Notes of each Class to be redeemed, (x) 100% of the Aggregate Outstanding Amount of such Secured Note, plus (y) accrued and unpaid interest thereon (including any defaulted interest and any accrued and unpaid interest thereon and any Deferred Interest and any accrued and unpaid interest thereon) to the Redemption Date or the Re-Pricing Date, as applicable, and (b) for each Subordinated Note, (x) if such Subordinated Note is being redeemed in connection with a liquidation of Assets, its proportional share (based on the outstanding principal amount of such Subordinated Note) of the amount of the proceeds of the Assets remaining after giving effect to the Optional Redemption, Tax Redemption or Clean-Up Call Redemption of the Secured Notes in whole or after all of the Secured Notes have been repaid in full and payment in full of (and/or creation of a reserve for) all expenses (including all Aggregate Collateral Management Fees and Administrative Expenses) of the Issuer or (y) if such Subordinated Note is being redeemed upon the occurrence of a Refinancing of all of the Secured Notes (including on the Refinancing Date), the applicable Subordinated Note Redemption Price; provided that, in connection with any Re-Pricing, Tax Redemption, Optional Redemption or Clean-Up Call Redemption of the Secured Notes in whole, holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the holders of such Class of Secured Notes, and such price shall be the "Redemption Price".

 

"Refinancing": A loan or an issuance of replacement securities, whose terms in each case will be negotiated by the Collateral Manager on behalf of the Issuer, from one or more financial institutions or purchasers to refinance the Notes in connection with an Optional Redemption.

 

"Refinancing Date": November 18, 2024.

 

"Refinancing Date Participation Condition": A condition satisfied as of any date of determination if all Refinancing Date Participation Interests have been elevated to assignments on or prior to such date.

 

"Refinancing Date Participation Interests": Participation arrangements entered into by the Issuer with the BDC and/or one or more of its subsidiaries to provide for participation interests in certain Collateral Obligations (whose title is held by the BDC or a subsidiary thereof) prior to being elevated to a full assignment.

 

"Refinancing Proceeds": The Cash proceeds from the Refinancing.

 

 

"Refinancing Rate Condition": With respect to any Refinancing upon a redemption of the Secured Notes in part by Class, a condition that is satisfied for the related refinanced Notes that are to be refinanced by the related replacement Notes when: (x) the obligations providing the Refinancing shall have the same or lower spread over the Benchmark as the Class or Classes of Secured Notes subject to such Refinancing (measured as of the date of such Refinancing) if both the obligations providing the Refinancing and the Class or Classes of Secured Notes subject to such Refinancing are Floating Rate Notes, (y) the obligations providing the Refinancing shall have the same or lower Interest Rate as the Class or Classes of Secured Notes subject to such Refinancing (measured as of the date of such Refinancing), if both the obligations providing the Refinancing and the Class or Classes of Secured Notes subject to such Refinancing are Fixed Rate Notes or (z) the weighted average spread over the Benchmark of the replacement obligations does not exceed the weighted average spread over the Benchmark of the Secured Notes subject to such Refinancing; provided that (A) a Class of Floating Rate Notes may be refinanced with a Class of Fixed Rate Notes and a Class of Fixed Rate Notes may be refinanced with a Class of Floating Rate Notes and (B) if the foregoing clause (A) applies, if in the Collateral Manager's reasonable business judgment, the interest payable on the replacement obligations providing the Refinancing is anticipated to be lower than the interest that would have been payable in respect of the Class or Classes being redeemed (determined on a weighted average basis over the expected life of such Class or Classes) if such Refinancing had not occurred; provided further that, in the case of a Refinancing of the Class A-1 Notes, the Class A-2 Notes and/or the Class B Notes, the S&P Rating Condition shall be satisfied with respect to each Class of Secured Notes that remains Outstanding and is not subject to such Refinancing if the obligations providing the Refinancing with respect to the Class A-1 Notes, the Class A-2 Notes and/or the Class B Notes have a higher spread over the Benchmark than the corresponding Class or Classes of Secured Notes subject to such Refinancing, as applicable.

 

"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 set forth in the regions and associated countries table included in the Global Methodology And Assumptions For CLOs And Corporate CDOs, 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 2.5(a).

 

"Registered": In registered form for U.S. federal income tax purposes (or in registered or bearer form if not a "registration-required obligation" as defined in Section 163(f)(2)(A) of the Code).

 

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

 

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

 

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

 

"Reinvestment Balance Criteria": Criteria that shall be satisfied if, excluding Collateral Obligations being sold but including, without duplication, the Collateral Obligations being purchased and the anticipated cash proceeds, if any, of such sale that are not applied to the purchase of such additional Collateral Obligations, either (1) the Investment Criteria Adjusted Balance is maintained or increased, (2) the Collateral Principal Amount is greater than or equal to the Reinvestment Target Par Balance or (3) the Aggregate Principal Balance of the Collateral Obligations and Eligible Investments (excluding Eligible Investments in the Revolver Funding Account and the Supplemental Reserve Account) constituting Principal Proceeds is maintained or increased.

 

 

"Reinvestment Period": The period from and including the Refinancing Date to and including the earliest of (i) the Payment Date in October 2028, (ii) the date of the acceleration of the Maturity of any Class of Secured Notes pursuant to Section 5.2 and (iii) (A) an Optional Redemption in whole from Sale Proceeds and/or Contributions of Cash pursuant to Section 9.2(b) and (B) a redemption in whole of the Subordinated Notes pursuant to Section 9.2(c), in each case, in connection with which all Assets are sold; provided that in the case of clause (iii), the Collateral Manager notifies the Issuer, the Trustee (who shall notify the Holders of Notes) and the Collateral Administrator thereof in writing at least one Business Day prior to such date.

 

"Reinvestment Target Par Balance": (x) Solely for purposes of the definition of Restricted Trading Period, the Aggregate Risk Adjusted Par Amount plus the Aggregate Outstanding Amount of any Additional Notes issued pursuant to Sections 2.13 and 3.2 or, if greater, the aggregate amount of Principal Proceeds that result from the issuance of Additional Notes and (y) for all other purposes, as of any date of determination, the Target Initial Par Amount plus the Aggregate Outstanding Amount of any Additional Notes issued pursuant to Sections 2.13 and 3.2, or, if greater, the aggregate amount of Principal Proceeds that result from the issuance of such Additional Notes (excluding, at the election of the Collateral Manager, any Subordinated Notes and/or Junior Mezzanine Notes in excess of the respective pro rata proportion required to be issued in connection with an additional issuance of Secured Notes) minus, in each case, the amount of any reduction in the Aggregate Outstanding Amount of the Notes occurring after the Refinancing Date through the payment of Principal Proceeds.

 

"Relevant Governmental Body": The Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System and/or the Federal Reserve Bank of New York, including the Alternative Reference Rates Committee ("ARRC"), or any successor thereto.

 

"Re-Priced Class": The meaning specified in Section 9.8.

 

"Re-Pricing": The meaning specified in Section 9.8.

 

"Re-Pricing Date": The meaning specified in Section 9.8.

 

"Re-Pricing Eligible Notes": Each Class of Secured Notes indicated as such in Section 2.3.

 

"Re-Pricing Intermediary": The meaning specified in Section 9.8.

 

"Re-Pricing Rate": The meaning specified in Section 9.8(a).

 

"Required Interest Coverage Ratio": (a) For the Class A Notes and the Class B Notes (in aggregate and not separately by Class), 120.00% and (b) for the Class C Notes, 110.0%;.

 

"Required Overcollateralization Ratio": (a) For the Class A Notes and the Class B Notes (in aggregate and not separately by Class), 133.88% and (b) for the Class C Notes, 122.72%.

 

 

"Resolution": With respect to the Issuer, a resolution of the board of directors of the designated manager of the 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 (which may contain contact information including an email address) 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": Each day during which, both: (i) (A) S&P's rating of the Class A-1 Notes or Fitch's rating of the Class A-1 Notes is one or more subcategories below its Initial Rating thereof or has been withdrawn (unless it has been reinstated) or (B) S&P's rating of the Class A-2 Notes, the Class B Notes or the Class C Notes is two or more subcategories below its Initial Rating thereof or has been withdrawn (unless it has been reinstated) and (ii) (A) after giving effect to the applicable sale and reinvestment in Collateral Obligations, the sum of the Aggregate Principal Balance of all Collateral Obligations (excluding the Collateral Obligations being sold) and all Eligible Investments constituting Principal Proceeds (including, without duplication, the net proceeds of any such sale) is less than the Reinvestment Target Par Balance or (B) during the Reinvestment Period, any Collateral Quality Test or Coverage Test is not satisfied; provided however that a Majority of the Controlling Class may elect to waive the Restricted Trading Period, which waiver will remain in effect until the earlier of (A) revocation of such waiver by a Majority of the Controlling Class and (B) further downgrade or withdrawal of the rating of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes or the Class C Notes that notwithstanding such waiver would cause the conditions set forth in clause (i)(A) or (i)(B) to be true.

 

"Revolver Funding Account": The account established pursuant to Section 10.4.

 

"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, 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.

 

"Risk Retention Issuance": An additional issuance of Notes directed by the Collateral Manager in connection with a Refinancing or a Re-Pricing and for purpose of compliance with the U.S. Risk Retention Rules and/or the E.U. Securitization Laws and the U.K. Securitization Laws.

 

"Risk Retention Letter": The letter agreement entered into by the E.U./U.K. Retention Provider on the Refinancing Date and delivered to the Issuer and the Trustee.

 

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

 

 

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

 

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

 

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

 

"Rule 17g-5": Rule 17g-5 under the Exchange Act.

 

"S&P": S&P Global Ratings, an S&P Global Ratings Inc. business, and any successor or successors thereto.

 

"S&P CDO Formula Election Date": The date designated by the Collateral Manager upon at least five Business Days' prior written notice to S&P, the Trustee and the Collateral Administrator as the date on which the Issuer will cease to utilize the S&P CDO Monitor in determining compliance with the S&P CDO Monitor Test.

 

"S&P CDO Formula Election Period": (i) The period from the Effective Date until the occurrence of an S&P CDO Monitor Election Date and (ii) thereafter, any date on and after an S&P CDO Formula Election Date. Only one S&P CDO Formula Election Date may occur following the Refinancing Date.

 

"S&P CDO Monitor": The dynamic, analytical computer model developed by S&P 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 Trustee, the Collateral Manager and the Collateral Administrator. The model is available at https://platform.ratings360.spglobal.com. Each S&P CDO Monitor will be chosen by the Collateral Manager and associated with either (x) a Weighted Average S&P Recovery Rate and a Weighted Average Floating Spread from Section 2 of Schedule 4 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 S&P 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.

 

"S&P CDO Monitor Benchmarks": The S&P Weighted Average Rating Factor, the Default Rate Dispersion, the Obligor Diversity Measure, the Industry Diversity Measure, the Regional Diversity Measure and the S&P Weighted Average Life.

 

"S&P CDO Monitor Election Date": The meaning specified in Section 7.18(f).

 

"S&P CDO Monitor Election Period": Any date on and after an S&P CDO Monitor Election Date so long as no S&P CDO Formula Election Date has occurred since such S&P CDO Monitor Election Date.

 

 

"S&P CDO Monitor Non-Model Adjustments": For purposes of determining compliance with the S&P CDO Monitor Test in connection with the Effective Date Report, (a) the Aggregate Funded Spread will be calculated without giving effect to (1) clause (ii) in the second paragraph thereof and (2) the parenthetical in clause (b) thereof which states "(including, for the avoidance of doubt, any applicable floor)" and each Floating Rate Floor Obligation will be assumed to bear interest at a rate equal to the stated interest rate spread over the Term SOFR-based index or other applicable index for such Collateral Obligation and (b) any Principal Proceeds that may be designated by the Collateral Manager as Interest Proceeds will be excluded from the Collateral Principal Amount in the calculation of the Adjusted Class Break-even Default Rate.

 

"S&P CDO Monitor Test": A test that will be satisfied on any date of determination on and after the Effective Date (and, during any S&P CDO Monitor Election Period, following receipt by the Collateral Manager 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 the sale of a Collateral Obligation or the purchase of a Collateral Obligation, the Class Default Differential of the Proposed Portfolio with respect to the S&P Highest Ranking Class is positive. The S&P CDO Monitor Test will be considered to be improved if each Class Default Differential of the Proposed Portfolio with respect to the S&P Highest Ranking Class is greater than the corresponding Class Default Differential of the Current Portfolio.

 

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

 

"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 determined by summing the products obtained by multiplying the Principal Balance of each Collateral Obligation by its S&P Equivalent Rating Factor, dividing such sum by the Aggregate Principal Balance of all such Collateral Obligations and then rounding the result up to the nearest whole number.

 

"S&P Highest Ranking Class": The Class A-2 Notes, or, if the Class A-2 Notes are no longer Outstanding, any Outstanding Class rated by S&P with respect to which there is no Priority Class rated by S&P.

 

"S&P Industry Classification": The S&P Industry Classifications set forth in Schedule 2 hereto, which industry classifications may be updated at the option of the Collateral Manager if S&P publishes revised industry classifications.

 

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

 

 

(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 that complies with the then-current S&P criteria, 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, (a) 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, and (b) the Collateral Manager (on behalf of the Issuer) will notify S&P if the Collateral Manager has actual knowledge of the occurrence of any material amendment or event with respect to such Collateral Obligation that would, in the reasonable business judgment of the Collateral Manager, have a material adverse impact on the credit quality of such Collateral Obligation, including any amortization modifications, extensions of maturity, reductions of principal amount owed, or non-payment of timely interest or principal due;

 

(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:

 

(a)

if an obligation of the issuer is publicly rated by Moody's, then the S&P Rating will be determined in accordance with the methodologies for establishing the Moody's Rating set forth above except that the S&P Rating of such obligation will be the S&P equivalent of the Moody's Rating;

 

 

(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 shall, prior to or within 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 shall have an S&P Rating as determined by the Collateral Manager in its sole discretion if the Collateral Manager certifies to the 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 30-day period, then, pending receipt from S&P of such estimate, the Collateral Obligation shall have (1) the S&P Rating as determined by the Collateral Manager for a period of up to 90 days after the acquisition of such Collateral Obligation and (2) an S&P Rating of "CCC-" following such 90-day period; unless, during such 90-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 if the Collateral Obligation has had a public rating by S&P that S&P has withdrawn or suspended within six months prior to the date of such application for a credit estimate in respect of such Collateral Obligation, the S&P Rating in respect thereof shall be "CCC-" pending receipt from S&P of such estimate, and S&P may elect not to provide such estimate until a period of six months (or such other period as provided in S&P's then current criteria) have elapsed after the withdrawal or suspension of the public rating; 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) will request that S&P confirm or update such estimate annually (and pending receipt of such confirmation or new estimate, the Collateral Obligation will 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) (and concurrently submits all available Information in respect of such renewal), 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 confirmed or updated credit estimate; provided further that the Issuer will promptly notify S&P of any material events affecting any such Collateral Obligation if the Collateral Manager reasonably determines that such notice is required in accordance with S&P's publication on credit estimates titled "Credit FAQ: Anatomy Of A Credit Estimate: What It Means And How We Do It?" dated January 14, 2021 (as the same may be amended or updated from time to time); or

 

 

(c)

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 were applying to S&P for a credit estimate; provided further that the Issuer will promptly notify S&P of any material events affecting any such Collateral Obligation if the Collateral Manager reasonably determines that such notice is required in accordance with S&P's publication on credit estimates titled "Credit FAQ: Anatomy Of A Credit Estimate: What It Means And How We Do It?" dated January 14, 2021 (as the same may be amended or updated from time to time); or

 

(iv)            (a) with respect to a DIP Collateral Obligation that has no issue rating by S&P, the S&P Rating of such DIP Collateral Obligation will be, at the election of the Issuer (at the direction of the Collateral Manager), "CCC-" or, for a period of up to 90 days following the issuance of such DIP Collateral Obligation (or such earlier date if an S&P Rating is assigned prior to the expiration of such 90-day period), such higher rating as reasonably determined by the Collateral Manager (not to be called into question as a result of subsequent events) so long as the Collateral Manager reasonably expects that such DIP Collateral Obligation will be assigned an S&P Rating equal to or higher than such S&P Rating determined by the Collateral Manager no later than 90 days after such determination; provided that (A) if such DIP Collateral Obligation has no issue rating by S&P at the expiration of such 90-day period, the S&P Rating will be, at the election of the Issuer, "CCC-" and (B) the Collateral Manager will provide Information with respect to such DIP Collateral Obligation to S&P, if available and (b) with respect to a Current Pay Obligation, the S&P Rating of such Current Pay Obligation will be the higher of such obligation's issue rating and "CCC";

 

provided that, for purposes of the determination of the S&P Rating, (x) if the applicable rating assigned to an obligor or its obligations is on "credit watch positive", such rating will be treated as being one sub-category above such assigned rating and (y) if the applicable rating assigned to an obligor or its obligations is on "credit watch negative", such rating will be treated as being one sub-category below such assigned rating, subject to a floor of "CCC-"; provided further that, for purposes of the determination of the S&P Rating, if (x) the issuer or Obligor of any Collateral Obligation was a debtor under Chapter 11, during which time such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) either had an S&P rating of "SD" or "CC" or lower from S&P or had an S&P rating that was withdrawn by S&P and (y) such issuer, Obligor or Selling Institution, as applicable, is no longer a debtor under Chapter 11, then, notwithstanding the fact that such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) continues to have an S&P rating of "SD" or "CC" or lower from S&P (or, in the case of any withdrawal, continues to have no S&P rating), the S&P Rating for any such obligation (including any Collateral Obligation), issuer, Obligor or Selling Institution, as applicable, shall be deemed to be "CCC-", so long as S&P has not taken any rating action with respect thereto since the date on which the issuer, Obligor or Selling Institution, as applicable, ceased to be a debtor under Chapter 11; provided further that, (i) if any issuer, Obligor or Selling Institution, as applicable, has not exited the applicable bankruptcy proceeding and (ii) the applicable rating assigned by S&P to such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) has been withdrawn, then the S&P Rating for such issuer, Obligor or Selling Institution, as applicable, or any of its obligations (including any Collateral Obligation) shall be deemed to be such withdrawn S&P rating, so long as S&P has not taken any rating action with respect thereto since the date on which such S&P rating was withdrawn.

 

 

"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 has confirmed in writing (including by means of electronic message, press release or posting to its internet website) to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager (unless in the form of a press release or posted to its internet website that does not require the Issuer and the Trustee to be identified as addressees) that no immediate withdrawal or reduction with respect to its then-current rating by S&P of any Class of Secured Notes will occur as a result of such action; provided that such rating condition shall be deemed inapplicable with respect to such event or circumstance if (i) S&P has given 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 communicated to the Issuer, the Collateral Manager or the 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 Notes. In the event that S&P no longer rates any Class of Notes, the S&P Rating Condition shall not apply to such Class.

 

"S&P Equivalent Rating Factor": With respect to each Collateral Obligation, the number set forth in the table below opposite the S&P Rating for such Collateral Obligation.

 

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

 

 

"S&P Rating Factor": With respect to each Collateral Obligation, the number set forth in the table below opposite the S&P Rating for such Collateral Obligation.

 

S&P Rating		S&P Rating Factor
AAA			13.51
AA+			26.75
AA			46.36
AA-			63.90
A+			99.50
A			146.35
A-			199.83
BBB+			271.01
BBB			361.17
BBB-			540.42
BB+			784.92
BB			1233.63
BB-			1565.44
B+			1982.00
B			2859.50
B-			3610.11
CCC+			4641.40
CCC			5293.00
CCC-			5751.10
CC or lower			10000.00
SD			10000.00
D			10000.00

 

"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 4 using the Initial Rating of the S&P Highest Ranking Class 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 4 hereto.

 

"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 stated maturity 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.

 

"S&P Weighted Average Rating Factor": The number determined by: (a) summing the products of (i) the Principal Balance of each Collateral Obligation (excluding Defaulted Obligations and Equity Securities) multiplied by (ii) the S&P Rating Factor of such Collateral Obligation and (b) dividing such sum by the Principal Balance of all such Collateral Obligations.

 

"Sale": The meaning specified in Section 5.17(a).

 

"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 Article XII less any reasonable expenses incurred by the Collateral Manager, the Collateral Administrator or the Trustee (other than amounts payable as Administrative Expenses) in connection with such sales. 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 issuer, Principal Balance, coupon/spread, the stated maturity, the S&P Rating (unless such rating is based on a credit estimate or is a private or confidential rating from either Rating Agency), Fitch Rating and the S&P Industry Classification for each Collateral Obligation and the percentage of the aggregate commitment under each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation that is funded, 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, the inclusion of additional Collateral Obligations pursuant to Section 7.18 hereof and the inclusion of additional Collateral Obligations as provided in Section 12.2 hereof.

 

"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 the related Cut-Off Date, as adjusted pursuant to the terms of the related Underlying Instruments.

 

"Screen Rate": The meaning specified in the definition of "Benchmark".

 

 

"Second Lien 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 but which is subordinated (with respect to liquidation preferences with respect to pledged collateral but subject to exceptions for customary permitted liens) to a Senior Secured Loan of the obligor; and (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 Second Lien Loan the value of which 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.

 

"Secured Noteholders": The Holders of the Secured Notes.

 

"Secured Notes": The Class A-1 Notes, the Class A-2 Notes, the Class B Notes and the Class C Notes, collectively.

 

"Secured Obligations": The meaning specified in the Granting Clauses.

 

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

 

"Securities Account Control Agreement": The Securities Account Control Agreement dated as of the Original Closing Date between the Issuer, the Trustee and The Bank of New York Mellon Trust Company, National Association, as Custodian, as amended and restated as of the Refinancing Date, and as may be further amended from time to time in accordance with the terms thereof.

 

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

 

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

 

"Securitization Regulation": The E.U. Securitization Regulation or the U.K. Securitization Framework, as applicable.

 

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

 

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

 

"Senior Secured Bond":  A debt security (that is not a loan) that (i) if it is subordinated by its terms, is subordinated only with respect to liquidation, trade claims, capitalized leases or similar obligations, (ii) is secured by a valid first priority perfected security interest on specified collateral, (iii) has the most senior pre-petition priority (including pari passu with other obligations of the Obligor) in any bankruptcy, reorganization, arrangement, insolvency, winding up, moratorium or liquidation proceedings, and (iv) the value of the collateral securing the debt security 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 debt security in accordance with its terms and to repay all other debt obligations of equal seniority secured by a first lien or security interest in the same collateral.

 

 

"Senior Secured Debt Instrument": The meaning specified in Schedule 4 hereto.

 

"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 liquidation, 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; and (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 debt obligations of equal seniority secured by a first lien or security interest in the same collateral.

 

"Senior Secured Note": Any assignment of or Participation Interest in or other interest in a senior secured note issued pursuant to an indenture or equivalent document by a corporation, partnership, limited liability company, trust or other Person (other than any government or any agency or political subdivision thereof), bearing interest at a floating rate and that is secured by a pledge of collateral and has a senior pre-petition priority (including pari passu with other obligations of the Obligor, but subject to customary permitted liens, such as, but not limited to, any tax liens, liquidation, trade claims, capitalized leases or similar obligations) in any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings.

 

"Senior Syndicated Secured Loan": A Senior Secured Loan (i) with a total loan-to-value of not greater than 75% that in the case of an event of default under the applicable Underlying Instrument, the lenders thereunder will be paid after one or more Syndicated Tranches and (ii) that is not a Cov-Lite Loan, a Deferrable Obligation or a Current Pay Obligation. For the avoidance of doubt, a Senior Syndicated Secured Loan is not a First-Lien Last-Out Loan.

 

"SIFMA Website" means the internet website of the Securities Industry and Financial Markets Association, currently located at https://www.sifma.org/resources/general/holidayschedule, or such successor website as identified by the Collateral Manager to the Trustee and the Calculation Agent.

 

"Signature Law": The meaning specified in Section 14.13.

 

"Similar Law": Any federal, state, local, non-U.S. or other law or regulation that could cause the underlying assets of the Issuer to be treated as assets of the investor in any Note (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.

 

"SOFR": With respect to any day, the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark, (or a successor administrator) on the Federal Reserve Bank of New York's Website.

 

"Special Redemption": The meaning specified in Section 9.6.

 

 

"Special Redemption Amount": The meaning specified in Section 9.6.

 

"Special Redemption Date": The meaning specified in Section 9.6.

 

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

 

"STAMP": The meaning specified in Section 2.5.

 

"Standby Directed Investment": The JP Morgan US Government MMF (OGVXX) (which for the avoidance of doubt, is an Eligible Investment) or such other Eligible Investment designated by the Issuer (or the Collateral Manager on behalf of the Issuer) by written notice to the Trustee.

 

"Stated Maturity": With respect to (i) the Secured Notes, the Payment Date in October 2036 and (ii) the Subordinated Notes, November 18, 2124.

 

"Step-Down Obligation": An obligation or security which by the terms of the related Underlying Instruments 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 Instruments provides for an increase in the per annum interest rate on such obligation or security, 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-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 ABL Facility and loans directly to financial service companies, factoring businesses, health care providers and other genuine operating businesses do not constitute Structured Finance Obligations.

 

"Subordinated Note Redemption Price": The price for such Subordinated Note, as determined by the Collateral Manager on or about the date of a Refinancing, equal to the following: (a) amounts on deposit in the Principal Collection Subaccount, the Interest Collection Subaccount and the Revolver Funding Account immediately prior to such Refinancing plus (b) an amount equal to the sum of the products of (x) the average of the "bid" and "ask" price for each Collateral Obligation held by the Issuer (as determined in the sole discretion of the Collateral Manager) and (y) the principal balance of each such Collateral Obligation (excluding solely for purposes of this definition the unfunded commitments under any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation) plus (c) an amount equal to the sum of the products of (x) the average of the "bid" and "ask" price of each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation minus 100% and (y) the unfunded commitments under each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation plus (d) an amount equal to the accrued interest on the Collateral Obligations (other than Defaulted Obligations) held by the Issuer immediately prior to such Refinancing plus (e) the sum of the "fair market values" (as determined in the sole discretion of the Collateral Manager) of each Asset not included in clauses (a) through (d) above minus (f) the Redemption Prices of the Secured Notes minus (g) any fees and expenses incurred in connection with such Refinancing and the associated supplemental indenture that are allocable to the redemption of the applicable Notes as determined by the Collateral Manager.

 

 

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

 

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

 

"Supermajority": With respect to any Class of Notes, the Holders of at least 66-2/3% of the Aggregate Outstanding Amount of the Notes of such Class.

 

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

 

"Syndicated Tranche": With respect to any loan, a senior secured facility incurred by the Obligor of such loan that is prior in right of payment to such loan (a) so long as the outstanding principal balance and unfunded commitments of such facility does not exceed 25% of the sum of (x) the outstanding principal balance of the loan, plus (y) the outstanding principal balance and unfunded commitments of such revolving facility, plus (z) the outstanding principal balance of any other debt for borrowed money incurred by such Obligor that is pari passu with such loan and (b) which (i) have a leverage ratio of not greater than 1.5x, or (ii) have a loan-to-value of not greater than 17.5%.

 

"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.$2,200,000,000.

 

"Target Initial Par Condition": A condition satisfied (I) as of the Effective Date or (II) with respect to any Designated Unused Proceeds or Designated Principal Proceeds after the Effective Date and on or prior to the Determination Date related to the first Payment Date after the Refinancing Date, on the date of such designation 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 (a) any unreceived Principal Financed Accrued Interest, (b) the amount of any proceeds of prepayments, maturities or redemptions of Collateral Obligations purchased by the Issuer prior to such date (other than any such proceeds that have been reinvested, or committed to be reinvested, in Collateral Obligations by the Issuer on the Effective Date) and (c) without duplication of clause (a) or (b) above, amounts designated as Principal Proceeds and transferred to the Collection Account (other than any such amounts that have been reinvested or committed to be reinvested in Collateral Obligations, by the Issuer on the Effective Date), will equal or exceed the Target Initial Par Amount; provided that for purposes of this definition, any Defaulted Obligation shall be treated as having a Principal Balance equal to its S&P Collateral Value.

 

 

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

 

"Tax Event": An event that occurs if either (i) (x) one or more Collateral Obligations that were not subject to withholding tax when the Issuer committed to purchase them have become subject to withholding tax or the rate of withholding has increased on one or more Collateral Obligations that were subject to withholding tax when the Issuer committed to purchase them and (y) in any Collection Period, the aggregate of the payments subject to withholding tax on new withholding tax obligations and the increase in payments subject to withholding tax on increased rate withholding tax obligations, in each case to the extent not "grossed-up" (on an after-tax basis) by the related obligor, represent 5% or more of the aggregate amount of Interest Proceeds that have been received or that is expected to be received for such Collection Period; or (ii) taxes, fees, assessments, or other similar charges are imposed on the Issuer in an aggregate amount in any twelve-month period in excess of U.S.$2,000,000, other than any deduction or withholding for or on account of any tax with respect to any payment owing in respect of any obligation that at the time of acquisition, conversion, or exchange does not satisfy the requirements of a Collateral Obligation.

 

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

 

"Tax Jurisdiction": A sovereign jurisdiction that is commonly used as the place of organization of special purpose vehicles (including, by way of example, the Cayman Islands, Ireland, Bermuda, Curacao, St. Maarten and the Channel Islands).

 

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

 

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

 

"Term SOFR": The forward-looking term rate for the Corresponding Tenor based on SOFR that has been selected or recommended by the Relevant Governmental Body.

 

"Term SOFR Administrator": The CME Group Benchmark Administration Limited or a successor administrator of the rate currently identified as "3 Month CME Term SOFR", as applicable.

 

"Term SOFR Reference Rate": The forward-looking term rate based on SOFR, as such rate is published by the Term SOFR Administrator on the Term SOFR Source.

 

 

"Term SOFR Source": The CME Market Data Platform (or any alternative source designated by CME Group Benchmark Administration Limited, as administrator of Term SOFR, from time to time) for the rate currently identified as "3 Month CME Term SOFR."

 

"Third Party Credit Exposure": As of any date of determination, the sum (without duplication) of the outstanding 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%
A- or below	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(b).

 

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

 

"Transaction Documents": This Indenture, the Collateral Management Agreement, the Collateral Administration Agreement, the Securities Account Control Agreement, any Custody Agreement, the Plans of Merger, the Note Purchase Agreement, the Purchase Agreement and the Master Loan Sale 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 Deposit Amount": On any date of determination with respect to any Collateral Obligation, an amount equal to the sum of the outstanding Principal Balance of such Collateral Obligation, together with accrued interest thereon through such date of determination, and in connection with any Collateral Obligation which is a Revolving Collateral Obligation or a Delayed Drawdown Collateral Obligation, an amount equal to the Net Exposure Amount thereof as of the applicable Cut-Off Date.

 

 

"Treasury Regulations": The United States Department of Treasury regulations promulgated under the Code.

 

"Trustee": The meaning specified in the first sentence of this Indenture.

 

"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.

 

"U.K. Securitization Framework": The framework for the regulation of securitization in the UK is set out in (i) the Securitisation Regulations 2024 (as amended), (ii) the securitisation sourcebook of the handbook of rules and guidance adopted by the Financial Conduct Authority of the UK, (iii) the Securitisation Part of the rulebook of published policy of the Prudential Regulation Authority of the Bank of England and (iv) relevant provisions of the Financial Services and Markets Act 2000 (as amended) (in each case as amended, supplemented or replaced from time to time).

 

"U.K. Securitization Laws": The U.K. Securitization Regulation, together with any supplementary regulatory standards, implementing technical standards and any official guidance published in relation thereto by the U.K. Financial Conduct Authority and/or the U.K. Prudential Regulation Authority, and any implementing laws or regulations.

 

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

 

"Underlying Instruments": The 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 Tax Person": A "United States person" within the meaning of Section 7701(a)(30) of the Code.

 

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

 

"Unsaleable Asset": (a) Any Defaulted Obligation (during the continuation of an Event of Default only), Equity Security, obligation received in connection with a tender offer, voluntary redemption, exchange offer, conversion, restructuring or plan of reorganization with respect to the Obligor, or other exchange or any other security or debt obligation that is part of the Assets, in respect of which the Issuer has not received a payment in Cash during the preceding 12 months or (b) any asset, claim or other property identified in a certificate of the Collateral Manager as having a Market Value of less than U.S.$1,000, in each case with respect to which the Collateral Manager certifies to the Trustee that (x) it has made commercially reasonable efforts to dispose of such Collateral Obligation for at least 90 days and (y) in its commercially reasonable judgment such Collateral Obligation is not expected to be saleable for the foreseeable future.

 

"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. Government Securities Business Day": Any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities as indicated on the SIFMA Website.

 

"U.S. Person" and "U.S. person": The meanings specified in Regulation S.

 

"U.S. Retention Provider": On the Refinancing Date, Golub Capital BDC CLO 8 Depositor LLC (f/k/a GCIC CLO II Depositor LLC), in its capacity as a "majority-owned affiliate" of a "sponsor" of this transaction (as such term is defined in the U.S. Risk Retention Rules in effect on the Refinancing Date), in its capacity as U.S. Retention Provider and thereafter any successor, assignee or transferee thereof or any Person permitted under the U.S. Risk Retention Rules to hold an "eligible horizontal residual interest", an "eligible vertical interest" or any combination thereof for purposes of the U.S. Risk Retention Rules.

 

"U.S. Risk Retention Rules": The federal interagency credit risk retention rules, codified at 17 C.F.R. part 246.

 

"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 Coupon": As of any Measurement Date, the number obtained by dividing:

 

(a)            the amount equal to the Aggregate Coupon; by

 

(b)            an amount equal to the aggregate outstanding principal balance of all Fixed Rate Obligations as of such Measurement Date.

 

"Weighted Average Fitch Recovery Rate": As of any date of determination, the rate (expressed as a percentage) determined by summing the products obtained by multiplying the Principal Balance of each Collateral Obligation by the Fitch Recovery Rate in relation thereto and dividing such sum by the Aggregate Principal Balance of all Collateral Obligations and rounding up to the nearest 0.1 percent. For the purposes of determining the Principal Balance and Aggregate Principal Balance of Collateral Obligations in this definition, the Principal Balance of each Defaulted Obligation shall be excluded.

 

"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 aggregate outstanding principal balance of all Floating Rate Obligations as of such Measurement Date.

 

"Weighted Average Life": On any date of determination with respect to any Collateral Obligation (other than any Defaulted Obligation), the number obtained by (a) summing the products obtained by multiplying (i) the Average Life at such time of each such Collateral Obligation by (ii) the outstanding principal balance of such Collateral Obligation and (b) dividing such sum by the aggregate outstanding principal balance at such time of all Collateral Obligations (excluding any Defaulted Obligation); provided, that when determining the Weighted Average Life of the Collateral Obligations for the Weighted Average Life Test the Issuer and the Collateral Manager shall only take into account that portion of the aggregate outstanding principal balance that is equal to or less than the product of (1) the Reinvestment Target Par Balance and (2) 100.25% (using the Collateral Obligations that will result in the shortest Weighted Average Life) and the outstanding aggregate principal balance of all other Collateral Obligations may be excluded from the calculation thereof.

 

 

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 after the Refinancing Date, the Refinancing Date:

 

Weighted Average Life Value
Refinancing Date	8.00
April 20, 2025	7.58
July 20, 2025	7.33
October 20, 2025	7.08
January 20, 2026	6.83
April 20, 2026	6.58
July 20, 2026	6.33
October 20, 2026	6.08
January 20, 2027	5.83
April 20, 2027	5.58
July 20, 2027	5.33
October 20, 2027	5.08
January 20, 2028	4.83
April 20, 2028	4.58
July 20, 2028	4.33
October 20, 2028	4.08
January 20, 2029	3.83
April 20, 2029	3.58
July 20, 2029	3.33
October 20, 2029	3.08
January 20, 2030	2.83
April 20, 2030	2.58
July 20, 2030	2.33
October 20, 2030	2.08
January 20, 2031	1.83
April 20, 2031	1.58
July 20, 2031	1.33
October 20, 2031	1.08
January 20, 2032	0.83
April 20, 2032	0.58
July 20, 2032	0.33
October 20, 2032	0.08
January 20, 2033 (and thereafter)	0.0

 

 

"Weighted Average S&P Recovery Rate": As of any date of determination, the number, expressed as a percentage and determined based on the Initial Rating of the S&P Highest Ranking Class, obtained by summing the products obtained by multiplying the Principal Balance of each Collateral Obligation (excluding any Defaulted Obligation) by its corresponding S&P Recovery Rate, dividing such sum by the Aggregate Principal Balance of all Collateral Obligations (excluding any 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 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 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 securing the Notes 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 and DIP Collateral 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 received as scheduled, will be available in the Collection Account at the end of the Collection Period and (ii) any such amounts received in prior Collection Periods that were not disbursed on a previous Payment Date.

 

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

 

(e)            References in Section 11.1(a) to calculations and determinations made on a "pro forma basis" or to the extent such Class of Notes "are the Controlling Class" shall mean such calculations and determinations 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.

 

(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 clause (x) of the proviso to the definition of "Defaulted Obligation", then the Current Pay Obligations with the lowest Market Value (expressed as a percentage of the outstanding 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 Tests, the S&P Equivalent Weighted Average Rating Factor or the S&P Equivalent Diversity Score.

 

(i)             For purposes of calculating compliance with the Investment Criteria, upon the direction of the Collateral Manager by notice to the Trustee and the Collateral Administrator, any Eligible Investment representing Principal Proceeds received upon the sale or other disposition of a Collateral Obligation shall be deemed to have the characteristics of such Collateral Obligation as of the date of such sale or other disposition 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 "principal balance" and "outstanding 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 herein to an amount of the Trustee's or the Collateral Administrator's fees calculated with respect to a period at a per annum rate shall be computed on the basis of the actual number of days in the applicable Interest Accrual Period divided by 360 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 Manager may direct the Collateral Administrator or the Collateral Administrator may, but shall not be obligated to, 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 Trustee, shall be entitled to conclusively rely thereon without any responsibility or liability therefor.

 

 

(o)            For purposes of calculating the Collateral Quality Tests, DIP Collateral Obligations will be treated as having an S&P Recovery Rate equal to the S&P Recovery Rate for Senior Secured Loans.

 

(p)            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.

 

(q)            For all purposes where expressly used in this Indenture, the "principal balance" and "outstanding principal balance" shall exclude capitalized interest (other than any such interest that was added to principal on or before the date when such Collateral Obligation was acquired by the Issuer), if any.

 

(r)            [Reserved].

 

(s)            For purposes of the definition of Collateral Obligation, the reference to the "purchase" of an obligation shall include the purchase of an obligation with cash, the receipt of an obligation by the Issuer in connection with a Contribution and the receipt of a new obligation in connection with the redemption and re-issuance of an obligation in a cashless roll where the redemption proceeds with respect to the Collateral Obligation being redeemed are "rolled" into the new obligation.

 

(t)            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.

 

(u)            Any direction or Issuer Order required hereunder relating to the purchase, acquisition, sale, disposition or other transfer of Assets may be in the form of a trade ticket, confirmation of trade, instruction to post or to commit to the trade or similar instrument or document or other written instruction (including by email or other electronic communication) from the Collateral Manager on which the Trustee and Collateral Administrator may rely.

 

(v)            [Reserved].

 

(w)            To the fullest extent permitted by applicable law and notwithstanding anything to the contrary contained in this Indenture, whenever herein the Collateral Manager is permitted or required to make a decision in its "sole discretion," "reasonable discretion" or "discretion" or under a grant of similar authority or latitude, the Collateral Manager shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Issuer, Holders or any other Person. The intent of granting authority to act in its "discretion" to the Collateral Manager is that no other express consent of another party is required to be obtained by the Collateral Manager when acting pursuant to such grant of authority under this Indenture; provided that any action taken pursuant to such grant of discretion is consistent with the legal, contractual and fiduciary duties owed by the Collateral Manager. If any questions should arise with respect to the operation of the Issuer that are not specifically provided for in this Indenture, or with respect to the interpretation of this Indenture, the Collateral Manager is authorized to make a final determination in its sole discretion with respect to any such question, and its determination and interpretation so made shall be final and binding on all parties.

 

 

(x)            All calculations related to Maturity Amendments, sales of Collateral Obligations, the Investment Criteria (and definitions related to sales of Collateral Obligations and the Investment Criteria), and other tests that would be calculated cumulatively since the Refinancing Date shall be reset at zero on the date of any Refinancing of all Classes of Notes.

 

ARTICLE II

 

The Notes

 

Section 2.1      Forms Generally. The Notes and the Trustee's or Authenticating Agent's certificate of authentication thereon (the "Certificate of Authentication") shall be in substantially the forms required by this Article, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon, as may be consistent herewith, determined by the Responsible Officers of the 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.

 

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

 

(b)            Secured Notes and Subordinated Notes.

 

(i)            The Secured Notes of each Class sold to Qualified Purchasers or any corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser who are not U.S. persons in offshore transactions (as defined in Regulation S) in reliance on Regulation S shall each be issued initially in the form of one temporary global Secured Note per Class in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-1 hereto (each, a "Temporary Regulation S Global Secured Note"), which shall be deposited on the Closing Date on behalf of the purchasers of such Secured Notes represented thereby with the Trustee, at its applicable Corporate Trust Office, as custodian for, and registered in the name of a nominee of, DTC for the account of designated agents holding on behalf of Euroclear and/or Clearstream. Prior to the end of the Distribution Compliance Period, beneficial interests in each Temporary Regulation S Global Secured Note may be held only through Euroclear or Clearstream. After the expiration of the Distribution Compliance Period, beneficial interests in a Temporary Regulation S Global Secured Note shall be exchanged for an interest in one permanent global Secured 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 Secured Note"), and shall be deposited on behalf of the subscribers for such Notes represented thereby with the Trustee as custodian for, and registered in the name of a nominee of, DTC for the respective accounts of Euroclear and Clearstream, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. During the Distribution Compliance Period, distributions due in respect of a beneficial interest in a Temporary Regulation S Global Secured Note shall only be made upon delivery to the Trustee by Euroclear or Clearstream, as applicable, of a certificate (a "Non-U.S. Beneficial Ownership Certification") to the effect that Euroclear or Clearstream, as applicable, has received a certificate substantially in the form of Exhibit B-7 hereto. After the expiration of the Distribution Compliance Period, distributions due in respect of any beneficial interests in a Temporary Regulation S Global Secured Note shall not be made to the holders of such beneficial interests unless exchange for a beneficial interest in such Regulation S Global Secured Note is improperly withheld or refused.

 

 

(ii)            The Notes of each Class sold to Persons that are QIB/QPs shall each be issued initially in the form of one permanent global Secured Note per Class in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-1 hereto, in the case of the Secured Notes (each, a "Rule 144A Global Secured Note") and in the form of one permanent global Subordinated Note in definitive, fully registered form without interest coupons substantially in the applicable form attached as Exhibit A-2 hereto, in the case of the Subordinated Notes (each, a "Rule 144A Global Subordinated Note") and shall be deposited on behalf of the subscribers for such Notes represented thereby with the Trustee as custodian for, and registered in the name of Cede & Co., a nominee of, DTC, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

 

(iii)            The Secured Notes sold to persons that, at the time of the acquisition, purported acquisition or proposed acquisition of any such Secured Note, are Institutional Accredited Investors (that are not Qualified Institutional Buyers) and Qualified Purchasers (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) shall be issued in the form of definitive, fully registered notes without coupons substantially in the applicable form attached as Exhibit A-3 hereto (a "Certificated Secured Note") which shall be registered in the name of the beneficial owner or a nominee thereof, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

 

(iv)            The Subordinated Notes sold to U.S. Persons that are Accredited Investors (that are not Qualified Institutional Buyers) and either Qualified Purchasers, Knowledgeable Employees with respect to the Issuer, Collateral Manager, or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser or a Knowledgeable Employee with respect to the Issuer or the Collateral Manager and shall be issued in the form of definitive, fully registered notes without coupons substantially in the form attached as Exhibit A-4 hereto (each, a "Certificated Subordinated Note" and, together with the Certificated Secured Notes, "Certificated Notes") which shall be registered in the name of the beneficial owner or a nominee thereof, duly executed by the Issuer and authenticated by the Trustee as hereinafter provided.

 

 

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

 

(c)            Book Entry Provisions. This Section 2.2(c) shall apply only to Global Secured Notes and Rule 144A Global Subordinated 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 Secured Notes and the Rule 144A Global Subordinated Notes insofar as interests in such Global Secured Notes and Rule 144A Global Subordinated 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 Secured Notes or Rule 144A Global Subordinated Notes held on their behalf by the Trustee, as custodian for DTC, and DTC may be treated by the Issuer, the Trustee, and any agent of the Issuer or the Trustee as the absolute owner of such Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee, or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.

 

Section 2.3      Authorized Amount; Stated Maturity; Denominations. The aggregate principal amount of Secured Notes and Subordinated Notes that may be authenticated and delivered under this Indenture is limited to U.S.$2,200,500,000 aggregate principal amount of Notes (except for (i) Deferred Interest with respect to the Class C Notes, (ii) Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section 2.5, Section 2.6 or Section 8.5 of this Indenture or (iii) Additional Notes issued in accordance with Sections 2.13 and 3.2).

 

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

 

 

Notes

 

Class Designation		A-1R		A-2RR		B-R		C-R		Subordinated
Original Principal Amount		U.S. $1,192,400,000		U.S. $171,600,000		U.S. $165,000,000		U.S. $154,000,000		U.S. $517,500,000
Stated Maturity		Payment Date in October, 2036		Payment Date in October, 2036		Payment Date in October, 2036		Payment Date in October, 2036		November 18, 2124
Fixed Rate Note		No		No		No		No		N/A
Interest Rate1		Benchmark + 1.56%		Benchmark + 1.75%		Benchmark + 1.70%		Benchmark + 2.10%		N/A
Floating Rate Note		Yes		Yes		Yes		Yes		N/A
Initial Rating(s):
S&P		"AAA(sf)"		"AAA(sf)"		"AA(sf)"		"A(sf)"		N/A
Fitch		"AAAsf"		N/A		N/A		N/A		N/A
Priority Classes		None		A-1R		A-1R, A-2RR		A-1R, A-2RR, B-R		A-1R, A-2RR, B-R, C-R
Pari Passu Classes		None		None		None		None		None
Junior Classes		A-2RR, B-R, C-R, Subordinated		B-R, C-R, Subordinated		C-R, Subordinated		Subordinated		None
Interest Deferrable		No		No		No		Yes		N/A
Re-Pricing Eligible Notes		No		Yes		Yes		Yes		N/A

 

1

The spread over the Benchmark for each Class of Re-Pricing Eligible Notes is subject to reduction pursuant to Section 9.8.

 

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 Subordinated Notes shall be issued in minimum denominations of U.S.$5,751,000 and integral multiples of U.S.$1.00 in excess thereof. Notes shall only be transferred or resold in compliance with the terms of this Indenture.

 

Section 2.4      Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Issuer by one of its Officers. The signature of such Officer on the Notes may be manual.

 

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

 

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

 

 

Each Note authenticated and delivered by the Trustee or the Authenticating Agent upon Issuer Order on the Refinancing Date shall be dated as of the Refinancing Date. All other Notes that are authenticated after the Refinancing 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 Trustee or by the Authenticating Agent by the manual signature of one of their authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

Section 2.5      Registration, Registration of Transfer and Exchange. (a) The Issuer shall cause the Notes to be Registered and shall cause to be kept a register (the "Register") at the office of the Trustee in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Trustee is hereby initially appointed registrar (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 Trustee is appointed by the Issuer as Registrar, the Issuer will give the Trustee prompt written notice of the appointment of a Registrar and of the location, and any change in the location, of the Register, and the Trustee shall have the right to inspect the Register at all reasonable times and to obtain copies thereof and the Trustee shall have the right to rely upon a certificate executed on behalf of the Registrar by an Officer thereof as to the names and addresses of the Holders of the Notes and the principal or face amounts and numbers of such Notes. Upon written request at any time the Registrar shall provide to the Issuer, the Collateral Manager, the Initial Purchaser or any Holder a current list of Holders as reflected in the Register.

 

Subject to this Section 2.5, upon surrender for registration of transfer of any Notes at the office or agency of the Issuer to be maintained as provided in Section 7.2, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal or face amount. At any time, the Issuer, the Collateral Manager, the Initial Purchaser may request a list of Holders from the Trustee.

 

 

In addition, the Issuer, the Trustee and the Collateral Manager shall be entitled to rely conclusively upon any certificate of ownership provided to the 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 Issuer, the Collateral Manager or the Initial Purchaser, the Trustee shall provide such requesting Person a copy of each Beneficial Ownership Certificate that the Trustee has received; provided, however, the Trustee shall have no obligation or duty to verify information with respect to such Beneficial Ownership Certificate or certificate in the form of Exhibit D and shall only be required to retain copies of such documents presented to it.

 

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 Issuer shall execute, and the Trustee shall authenticate and deliver, the Notes that the Holder making the exchange is entitled to receive.

 

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

 

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer in a form reasonably satisfactory to the Registrar, duly executed by the Holder thereof or such Holder's attorney duly authorized in writing with such signature guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Securities Transfer Agents Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

 

No service charge shall be made to a Holder for any registration of transfer or exchange of Notes, but the Trustee may require payment of a sum sufficient to cover any transfer, tax or other governmental charge payable in connection therewith. The Registrar or the 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 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 Issuer to become subject to the requirement that it register as an investment company under the 1940 Act.

 

 

(c)            No transfer of any ERISA Restricted Note (or any interest therein) will be effective if after giving effect to such transfer 25% or more of the Aggregate Outstanding Amount of any class of the ERISA Restricted Notes would be held by Persons who have represented that they are Benefit Plan Investors. For purposes of these calculations and all other calculations required by this sub-section, (A) any Notes of the Issuer held by a Person (other than a Benefit Plan Investor) who is a Controlling Person, the Trustee, the Collateral Manager, the E.U./U.K. Retention Provider, the U.S. Retention Provider, the Initial Purchaser or any of their respective affiliates (other than those interests held by a Benefit Plan Investor) shall be disregarded and not treated as Outstanding and (B) an "affiliate" of a Person shall include any Person, directly or indirectly through one or more intermediaries, controlling, controlled by or under common control with the Person, and "control" with respect to a Person other than an individual shall mean the power to exercise a controlling influence over the management or policies of such Person. The Trustee shall be entitled to rely exclusively upon the information set forth in the face of the transfer certificates received pursuant to the terms of this Section 2.5 and only Notes that a Bank Officer of the Trustee actually knows to be so held shall be so disregarded. In addition, no ERISA Restricted Notes in the form of a Global Note (other than ERISA Restricted Notes in the form of a Global Note (x) purchased from the Issuer as part of the initial offering on the Refinancing Date or (y) transferred to accounts managed by the Collateral Manager or its affiliates (other than any Benefit Plan Investor) following the Refinancing Date with the consent of the Issuer and the Collateral Manager) may be held by or transferred to a Benefit Plan Investor or Controlling Person and each beneficial owner of an ERISA Restricted Note in the form of a Global Note acquiring its interest in the ERISA Restricted Notes in the initial offering on the Refinancing Date shall provide to the Issuer a written certification in the form of Exhibit B-5 attached hereto.

 

(d)            [Reserved].

 

(e)            Each subsequent transferee of a Note, by acceptance of such Note or an interest in such Note, shall be deemed to have agreed to comply with Section 2.12.

 

(f)            Notwithstanding anything contained herein to the contrary, the 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 2.5 to be provided to the Trustee by a prospective transferor or transferee, the Trustee shall be under a duty to receive and examine the same to determine whether 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.

 

(g)            [Reserved].

 

(h)            Transfers of Global Secured Notes shall only be made in accordance with Section 2.2(b) and this Section 2.5(h).

 

 

(i)            Rule 144A Global Secured Note to Temporary Regulation S Global Secured Note or Regulation S Global Secured Note. If a holder of a beneficial interest in a Rule 144A Global Secured Note deposited with DTC wishes at any time to exchange its interest in such Rule 144A Global Secured Note for, during the Distribution Compliance Period, an interest in a corresponding Temporary Regulation S Global Secured Note, or after the Distribution Compliance Period, to transfer its interest in such Rule 144A Global Secured Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Secured Note, such holder; provided that such holder or, in the case of a transfer, the transferee is a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) that is not a U.S. person and is acquiring such interest in an offshore transaction (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 Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable. 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 Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable, 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 Secured 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 Secured Notes, including that the holder or the transferee, as applicable, is a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) that is not a U.S. person, and is acquiring such interest in an offshore transaction pursuant to and in accordance with 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 a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) that is a non-U.S. person purchasing such beneficial interest in an offshore transaction pursuant to Regulation S, then the Registrar shall approve the instructions at DTC to reduce the principal amount of the Rule 144A Global Secured Note and to increase the principal amount of the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable, by the aggregate principal amount of the beneficial interest in the Rule 144A Global Secured 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 Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable, equal to the reduction in the principal amount of the Rule 144A Global Secured Note.

 

 

(ii)            Temporary Regulation S Global Secured Note or Regulation S Global Secured Note to Rule 144A Global Secured Note. If a holder of a beneficial interest in, during the Distribution Compliance Period, a Temporary Regulation S Global Secured Note or, after the Distribution Compliance Period, a Regulation S Global Secured Note, as applicable, deposited with DTC wishes at any time to exchange its interest in such Temporary Regulation S Global Secured Note or Regulation S Global Secured Note, as applicable, for an interest in the corresponding Rule 144A Global Secured Note or to transfer its interest in such Temporary Regulation S Global Secured Note or such Regulation S Global Secured Note, as applicable, to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Secured 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 Secured 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 Secured Note in an amount equal to the beneficial interest in such Temporary Regulation S Global Secured Note or such Regulation S Global Secured Note, as applicable, 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-3 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 Temporary Regulation S Global Secured Note or such Regulation S Global Secured Note, as applicable, reasonably believes that the Person acquiring such interest in a Rule 144A Global Secured Note is a Qualified Purchaser and a Qualified Institutional Buyer, is obtaining such beneficial interest in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction 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 Qualified Institutional Buyer and a Qualified Purchaser, then the Registrar will approve the instructions at DTC to reduce, or cause to be reduced, the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable, by the aggregate principal amount of the beneficial interest in the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable, 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 Secured Note equal to the reduction in the principal amount of the Temporary Regulation S Global Secured Note or the Regulation S Global Secured Note, as applicable.

 

 

(iii)           Global Secured Note to Certificated Secured Note. Subject to Section 2.10(a), if a holder of a beneficial interest in a Global Secured Note (other than a Temporary Regulation S Global Secured Note) deposited with DTC wishes at any time to transfer its interest in such Global Secured Note to a Person who wishes to take delivery thereof in the form of a corresponding Certificated Secured 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 Secured Note. Upon receipt by the Registrar of (A) certificates substantially in the form of Exhibit B-2 attached hereto executed by the transferee (and, in the case of ERISA Restricted Notes, a certificate substantially in the form of Exhibit B-5) 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 Secured Note by the aggregate principal amount of the beneficial interest in the Global Secured Note to be transferred, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more corresponding Certificated Secured 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 Secured Note transferred by the transferor), and in authorized denominations.

 

(iv)           Temporary Regulation S Global Secured Note to Regulation S Global Secured Note. Interests in a Temporary Regulation S Global Secured Note may be exchanged after the Distribution Compliance Period for interests in a Regulation S Global Secured Note. Until so exchanged in full and except as provided therein, the Temporary Regulation S Global Secured Note, and the Notes evidenced thereby, shall in all respects be entitled to the same benefits under this Indenture as the Regulation S Global Secured Note and Rule 144A Global Secured Note authenticated and delivered hereunder.

 

(v)            Distribution Compliance Period. Prior to the termination of the Distribution Compliance Period with respect to the issuance of the Notes, transfers of interests in the Temporary Regulation S Global Secured Notes to U.S. persons (as defined in Regulation S) shall be limited to transfers made pursuant to the provisions of clause (ii) above. The Trustee shall be entitled to assume that the Distribution Compliance Period ends on the 40th day following the Refinancing Date, except to the extent notified to the contrary by the Issuer or the Collateral Manager on the Issuer's behalf.

 

(i)            Transfers of Certificated Secured Notes shall only be made in accordance with Section 2.2(b) and this Section 2.5(i).

 

 

(i)            Certificated Secured Notes to Global Secured Notes. If a holder of a Certificated Secured Note wishes at any time to transfer such Certificated Secured Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a corresponding Global Secured 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 Secured Note for a beneficial interest in a corresponding Global Secured Note. Upon receipt by the Registrar of (A) a Holder's Certificated Secured Note properly endorsed for assignment to the transferee, (B) a certificate substantially in the form of Exhibit B-1 or Exhibit B-3 (as applicable) (and, in the case of ERISA Restricted Notes, a certificate substantially in the form of Exhibit B-5) 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 Secured Notes in an amount equal to the Certificated Secured 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 Secured Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(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 Secured Note equal to the principal amount of the Certificated Secured Note transferred or exchanged.

 

(ii)           Certificated Secured Notes to Certificated Secured Notes. Upon receipt by the Registrar of (A) a Holder's Certificated Secured Note properly endorsed for assignment to the transferee, and (B) certificates substantially in the form of Exhibit B-2 attached hereto (and, in the case of ERISA Restricted Notes, certificates substantially in the form of Exhibit B-5) executed by the transferee, the Registrar shall cancel such Certificated Secured Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more Certificated Secured Notes bearing the same designation as the Certificated Secured 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 Secured Note surrendered by the transferor), and in authorized denominations.

 

(j)            Transfers and exchanges of Subordinated Notes shall only be made in accordance with Section 2.2(b) and this Section 2.5(j).

 

(i)            Certificated Subordinated Note to Certificated Subordinated Note. Upon receipt by the Registrar of (A) a Holder's Certificated Subordinated Note properly endorsed for assignment to the transferee, and (B) certificates in the form of Exhibits B-4 and B-5 attached hereto given by the transferee of such Certificated Subordinated Note, the Registrar shall cancel such Certificated Subordinated Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more Certificated Subordinated Notes bearing the same designation as the Certificated Subordinated 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 Subordinated Note surrendered by the transferor), and in authorized denominations.

 

 

(ii)            Rule 144A Global Subordinated Note to Certificated Subordinated Note. Subject to Section 2.10(a), if a holder of a beneficial interest in a Rule 144A Global Subordinated Note deposited with DTC wishes at any time to transfer its interest in such Rule 144A Global Subordinated Note to a Person who wishes to take delivery thereof in the form of a corresponding Certificated Subordinated 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 Subordinated Note. Upon receipt by the Registrar of (A) certificates substantially in the form of Exhibits B-4 and B-5 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 Rule 144A Global Subordinated Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Subordinated Note to be transferred, record the transfer in the Register in accordance with Section 2.5(a) and upon execution by the Issuer and authentication and delivery by the Trustee, deliver one or more corresponding Certificated Subordinated 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 Rule 144A Global Subordinated Note transferred by the transferor), and in authorized denominations.

 

(iii)           Certificated Subordinated Notes to Rule 144A Global Subordinated Notes. If a holder of a Certificated Subordinated Note wishes at any time to transfer such Certificated Subordinated Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a corresponding Rule 144A Global Subordinated 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 Subordinated Note for a beneficial interest in a corresponding Rule 144A Global Subordinated Note. Upon receipt by the Registrar of (A) a Holder's Certificated Subordinated Note properly endorsed for assignment to the transferee, (B) a certificate substantially in the form of Exhibit B-8 attached hereto executed by the transferor and a certificate substantially in the form of Exhibit B-9 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 Rule 144A Global Subordinated Note in an amount equal to the Certificated Subordinated 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 Subordinated Note in accordance with Section 2.9, record the transfer in the Register in accordance with Section 2.5(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 Rule 144A Global Subordinated Note equal to the principal amount of the Certificated Subordinated Note transferred or exchanged.

 

 

(k)           If Notes are issued upon the transfer, exchange or replacement of Notes bearing the applicable legends set forth in the applicable part of Exhibit A hereto, and if a request is made to remove such applicable legend on such Notes, the Notes so issued shall bear such applicable legend, or such applicable legend shall not be removed, as the case may be, unless there is delivered to the Trustee and the Issuer such satisfactory evidence, which may include an Opinion of Counsel acceptable to them, as may be reasonably required by the Issuer (and which shall by its terms permit reliance by the Trustee), to the effect that neither such applicable legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of the Securities Act, the 1940 Act, ERISA or the Code. Upon provision of such satisfactory evidence, the Trustee or its Authenticating Agent, at the written direction of the Issuer shall, after due execution by the Issuer, authenticate and deliver Notes that do not bear such applicable legend.

 

(l)            Each Person who becomes a beneficial owner of Notes represented by an interest in a Global Secured Note or a Rule 144A Global Subordinated Note will be deemed to have represented and agreed as follows:

 

(i)            In connection with the purchase of such Notes: (A) none of the Issuer, the Collateral Manager, the Initial Purchaser, the Trustee, the Collateral Administrator, the E.U./U.K. Retention Provider, the U.S. Retention Provider or any of their respective Affiliates is acting as a fiduciary or financial or investment adviser for such beneficial owner; (B) such beneficial owner is not relying (for purposes of making any investment decision or otherwise) upon any advice, counsel or representations (whether written or oral) of the Issuer, the Collateral Manager, the Trustee, the Collateral Administrator, the Initial Purchaser, the E.U./U.K. Retention Provider, the U.S. Retention Provider or any of their respective Affiliates other than any statements in the final Offering Circular for such Notes, and such beneficial owner has read and understands such final Offering Circular; (C) such beneficial owner has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary and has made its own investment decisions (including decisions regarding the suitability of any transaction pursuant to this Indenture) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the Issuer, the Collateral Manager, the Trustee, the Collateral Administrator, the Initial Purchaser, the E.U./U.K. Retention Provider, the U.S. Retention Provider or any of their respective Affiliates; (D) such beneficial owner is either (1) (in the case of a beneficial owner of an interest in a Rule 144A Global Secured Note or Rule 144A Global Subordinated Note)  both (a) a "qualified institutional buyer" (as defined under Rule 144A under the Securities Act) that is not a broker-dealer which owns and 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 a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) or (2) (in the case of a beneficial owner of an interest in a Regulation S Global Secured Note) both (a) not a "U.S. person" as defined in Regulation S and is acquiring the Notes in an offshore transaction (as defined in Regulation S) in reliance on the exemption from registration provided by Regulation S 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"; (E) such beneficial owner is acquiring its interest in such Notes for its own account; (F) such beneficial owner was not formed for the purpose of investing in such Notes; (G) such beneficial owner understands that the Issuer may receive a list of participants holding interests in the Notes from one or more book-entry depositories; (H) such beneficial owner will hold and transfer at least the minimum denomination of such Notes; (I) such beneficial owner is a sophisticated investor and is purchasing the Notes with a full understanding of all of the terms, conditions and risks thereof, and is capable of and willing to assume those risks; and (J) such beneficial owner will provide notice of the relevant transfer restrictions to subsequent transferees.

 

 

(ii)            With respect to the Secured Notes (other than any ERISA Restricted Notes), (A) if such Person is, or is acting on behalf of, a Benefit Plan Investor, its acquisition, holding and disposition of such Notes do 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, or is acting on behalf of, 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 Note will not constitute or result in a non-exempt violation of any such Other Plan Law.

 

(iii)           With respect to an ERISA Restricted Note or any interest therein (1) if it is a purchaser of ERISA Restricted Notes from the Issuer as part of the initial offering on the Refinancing Date, it will be required to represent and warrant (a) whether or not it is or will be, or is or will be acting on behalf of, a Benefit Plan Investor for so long as it holds such ERISA Restricted Notes or interest therein, (b) whether or not it is or will be a Controlling Person for so long as it holds such ERISA Restricted Notes or interest therein and (c) (i) if it is, or is acting on behalf of, a Benefit Plan Investor, that its acquisition, holding and disposition of such ERISA Restricted Notes will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or (ii) if it is, or is acting on behalf of, a governmental, church, non-U.S. or other plan, (x) it is not, and for so long as it holds such ERISA Restricted Notes or interest therein will not be, subject to Similar Law and (y) its acquisition, holding and disposition of such ERISA Restricted Notes does not and will not constitute or result in a non-exempt violation of any Other Plan Law, (2) if it is a purchaser or subsequent transferee, as applicable, of an interest in an ERISA Restricted Note in the form of a Global Note transferred to accounts managed by the Collateral Manager or its affiliates following the Refinancing Date with the consent of the Issuer and the Collateral Manager, it will be required to represent and warrant to the Trustee that (a) it is not, and for so long as it holds an interest in such ERISA Restricted Notes or interest therein will not be, a Benefit Plan Investor or acting on behalf of a Benefit Plan Investor, (b) it is, for so long as it holds such ERISA Restricted Notes or interest therein, a Controlling Person, (c) if it is, or is acting on behalf of, a governmental, church, non-U.S. or other plan, (x) it will not, and for so long as it holds such ERISA Restricted Notes or interest therein will not be, subject to Similar Law and (y) its acquisition, holding and disposition of such ERISA Restricted Notes does not and will not constitute or result in a non-exempt violation of any Other Plan Law, and (3) each purchaser or subsequent transferee, as applicable, of an interest in an ERISA Restricted Note in the form of a Global Note other than from the Issuer as part of the initial offering on the Refinancing Date and other than as specified in clause (2) above, on each day from the date on which such beneficial owner acquires its interest in such ERISA Restricted Notes through and including the date on which such beneficial owner disposes of its interest in such ERISA Restricted Notes, will be deemed to have represented and agreed that (a) it is not, and is not acting on behalf of, a Benefit Plan Investor and it is not a Controlling Person and (b) if it is, or is acting on behalf of, a governmental, church, non-U.S. or other plan, (x) it is not, and for so long as it holds such ERISA Restricted Notes or interest therein will not be, subject to Similar Law and (y) its acquisition, holding and disposition of such ERISA Restricted Notes will not constitute or result in a non-exempt violation of any Other Plan Law.

 

 

(iv)           Such beneficial owner understands that such Notes are being offered only in a transaction not involving any public offering in the United States within the meaning of the Securities Act, such Notes have not been and will not be registered under the Securities Act, and, if in the future such beneficial owner decides to offer, resell, pledge or otherwise transfer such Notes, such Notes may be offered, resold, pledged or otherwise transferred only in accordance with the provisions of this Indenture and the legend on such Notes. Such beneficial owner acknowledges that no representation has been made as to the availability of any exemption under the Securities Act or any state securities laws for resale of such Notes. Such beneficial owner understands that the Issuer has not been registered under the 1940 Act, and that the Issuer is exempt from registration as such by virtue of Section 3(c)(7) of the 1940 Act.

 

 

(v)            Such 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 Secured Notes, as applicable, and that in each case beneficial interests therein may be held only through DTC for the respective accounts of Euroclear or Clearstream.

 

(vi)           Such beneficial owner will provide notice to each Person to whom it proposes to transfer any interest in the Secured Notes of the transfer restrictions and representations set forth in this Section 2.5, including the Exhibits referenced herein.

 

(vii)          Such beneficial owner consents on behalf of itself to the Issuer's acquisition of the initial Collateral Obligations.

 

(viii)         Such beneficial owner is obtaining such beneficial interest in compliance with certain restrictions imposed during the Distribution Compliance Period.

 

(m)           Each Person who becomes an owner of a Certificated Secured Note will be required to make the representations and agreements set forth in Exhibit B-2. Each Person who purchases an interest in an ERISA Restricted Note in the form of a Global Note directly from the Issuer as part of the initial offering on the Refinancing Date will be required to make the representations and agreements set forth in Exhibit B-5. Each account managed by the Collateral Manager or its affiliates who is transferred a beneficial interest in an ERISA Restricted Note in the form of a Global Note following the Refinancing Date with the consent of the Issuer and the Collateral Manager will be required to make the representations and agreements set forth in Exhibit B-5. Each Person who becomes an owner of a Certificated Subordinated Note (including a transfer of an interest in a Rule 144A Global Subordinated Note to a transferee acquiring a Subordinated Note in certificated form) will be required to make the representations and agreements set forth in Exhibit B-4 and each Person who becomes an owner of a Certificated ERISA Restricted Note (including a transfer of an interest in an ERISA Restricted Note in the form of a Global Note to a transferee acquiring an ERISA Restricted Note in certificated form) will be required to make the representations and agreements set forth in Exhibit B-5.

 

(n)            Any purported transfer of a Note not in accordance with this Section 2.5 shall be null and void and shall not be given effect for any purpose whatsoever.

 

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

 

 

(p)           The Registrar, the Trustee and the Issuer shall be entitled to conclusively rely on the information set forth on the face of any transferor and transferee certificate delivered pursuant to this Section 2.5 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 Trustee shall not be required to obtain any certificate specifically required by the terms of this Section 2.5 if the 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.

 

(q)           For the avoidance of doubt, notwithstanding anything in this Indenture to the contrary, the Initial Purchaser may hold a position in a Regulation S Global Secured Note prior to the distribution of the applicable Notes represented by such position.

 

(r)            Neither the Trustee nor the Registrar shall be liable for any delay in the delivery of directions from the depository and may conclusively rely on, and shall be fully protected in relying on, such direction as to the names of the beneficial owners in whose names such Certificated Notes shall be registered or as to delivery instructions for such Certificated Notes.

 

Section 2.6     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 Issuer, the Trustee and the relevant Transfer Agent evidence to their reasonable satisfaction of the destruction, loss or theft of any Note, and (b) there is delivered to the Issuer, the Trustee and such Transfer Agent such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to the Issuer, the Trustee or such Transfer Agent that such Note has been acquired by a protected purchaser, the Issuer shall execute and, upon Issuer Order, the Trustee shall 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 Issuer, the Transfer Agent and the Trustee shall be entitled to recover such new Note from the Person to whom it was delivered or any Person taking therefrom, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer, the Trustee and the Transfer Agent in connection therewith.

 

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

 

Upon the issuance of any new Note under this Section 2.6, the 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 Trustee) connected therewith.

 

 

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

 

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

 

Section 2.7     Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved. (a) The Secured Notes of each Class shall accrue interest during each Interest Accrual Period at the applicable Interest Rate and such interest will be payable in arrears on each Payment Date on the Aggregate Outstanding Amount (and, with respect to the Class C Notes, any Deferred Interest thereon, as applicable, as described below) thereof on 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, for the avoidance of doubt, with respect to any payment of interest on a Redemption Date, such interest shall be determined in accordance with the calculation above solely for the period from, and including, the first day of such Interest Accrual Period through, but excluding, such Redemption Date; 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. So long as any Priority Class is Outstanding with respect to the Class C Notes, any payment of interest due on the Class C Notes which is not available to be paid in accordance with the Priority of Payments on any Payment Date ("Deferred Interest") shall not be considered "due and payable" for the purposes of Section 5.1(a) (and the failure to pay such interest shall not be an Event of Default) until the earliest of (i) the Payment Date on which funds are available to pay such Deferred Interest in accordance with the Priority of Payments, (ii) the Redemption Date or the Re-Pricing Date, as applicable, with respect to the Class C Notes and (iii) the Stated Maturity of the Class C Notes. Deferred Interest on the Class C Notes shall be payable on the first Payment Date on which funds are available to be used for such purpose in accordance with the Priority of Payments, but in any event no later than the earlier of the Payment Date (i) which is the Redemption Date or Re-Pricing Date, as applicable, with respect to the Class C Notes and (ii) which is the Stated Maturity of the Class C Notes. Regardless of whether any Priority Class is Outstanding with respect to the Class C Notes, to the extent that funds are not available on any Payment Date (other than the Redemption Date or Re-Pricing Date, as applicable, with respect to, or Stated Maturity of, the Class C Notes) to pay previously accrued Deferred Interest, such previously accrued Deferred Interest will not be due and payable on such Payment Date and any failure to pay such previously accrued Deferred Interest on such Payment Date will not be an Event of Default. Interest will cease to accrue on each Secured Note, or in the case of a partial repayment, on such repaid part, from the date of repayment. To the extent lawful and enforceable, interest on any interest that is not paid when due on any Class A-1 Notes, or if no Class A-1 Notes are Outstanding, any Class A-2 Notes, or if no Class A Notes are Outstanding, any Class B Notes, or if no Class A Notes or Class B Notes are Outstanding, any Class C Notes, , shall accrue at the Interest Rate for such Class until paid as provided herein.

 

 

(b)            The principal of each Secured Note 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 Note becomes due and payable at an earlier date by declaration of acceleration, call for redemption or otherwise. Notwithstanding the foregoing, the payment of principal of each Class of Secured Notes (and payments of Principal Proceeds to the Holders of the Subordinated Notes) may only occur in accordance with the Priority of Payments. Payments of principal on any Class of Secured Notes, and distributions of Principal Proceeds to Holders of Subordinated Notes, which are not paid, in accordance with the Priority of Payments, on any Payment Date (other than the Payment Date which is the Stated Maturity of such Class of Notes or any Redemption Date or Re-Pricing Date, as applicable), 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.

 

(c)            Principal payments on the Notes 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 IRS Form W-9 (or applicable successor form) in the case of a United States Tax Person or the appropriate IRS Form W-8 (or applicable successor form) in the case of a Person that is not a United States Tax Person) or other certification acceptable to it to enable the Issuer, the Trustee and any Paying Agent to determine their duties and liabilities with respect to any taxes or other charges that they may be required to pay, deduct or withhold from payments in respect of such Note or the Holder or beneficial owner of such Note 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 (including, without limitation, any cost basis reporting obligations) and the delivery of any information required under FATCA to prevent the Issuer from being subject to withholding or to determine if payments by the Issuer are subject to withholding. The Issuer shall not be obligated to pay any additional amounts to the Holders or beneficial owners of the Notes as a result of deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges with respect to the Notes (including any amounts deducted on account of FATCA). Nothing herein shall be construed to obligate the Paying Agent to determine the duties or liabilities of the Issuer 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.

 

(e)            Payments in respect of interest on and principal of any Secured Note and any payment with respect to any Subordinated Note shall be made by the Trustee in Dollars to DTC or its designee with respect to a Global Secured Note or Rule 144A Global Subordinated Note and to the Holder or its nominee with respect to a Certificated Note, by wire transfer, as directed by the Holder, in immediately available funds to a Dollar account maintained by DTC or its nominee with respect to a Global Secured Note or a Rule 144A Global Subordinated Note, and 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 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 Note, the Holder thereof shall present and surrender such Note at the Corporate Trust Office of the Trustee or at the office of any Paying Agent on or prior to such Maturity; provided that if the Trustee and the Issuer 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 Issuer or the Trustee that the applicable Note has been acquired by a protected purchaser, such final payment shall be made without presentation or surrender. Neither the Issuer, the 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 relating to or for payments made thereby on account of beneficial interests in a Global Secured Note or Rule 144A Global Subordinated Note. In the case where any final payment of principal and interest is to be made on any Secured Note (other than on the Stated Maturity thereof) or any final payment is to be made on any Subordinated Note (other than on the Stated Maturity thereof), the Trustee, in the name and at the expense of the Issuer 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 Notes, original principal amount of Subordinated Notes and the place where such Notes may be presented and surrendered for such payment.

 

 

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

 

(g)            Interest accrued with respect to the Secured Notes shall be calculated on the basis of the actual number of days elapsed in the applicable Interest Accrual Period divided by 360.

 

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

 

 

(i)             Notwithstanding any other provision of this Indenture, the obligations of the Issuer under the Notes and this Indenture are limited recourse obligations of the Issuer, payable solely from the Assets and following realization of the Assets, and application of the proceeds thereof in accordance with this Indenture, all obligations of and any claims against the Issuer 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, trustee, beneficial owner, partner, member, employee, shareholder, authorized Person or incorporator of the Issuer, the Collateral Manager, the E.U./U.K. Retention Provider, the U.S. Retention Provider or their respective Affiliates, successors or assigns for any amounts payable under the Notes or this Indenture. It is understood that the foregoing provisions of this paragraph (i) shall not (i) prevent recourse to the 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 Notes or secured by this Indenture until such Assets have been realized. It is further understood that the foregoing provisions of this paragraph (i) shall not limit the right of any Person to name the Issuer as a party defendant in any Proceeding or in the exercise of any other remedy under the Notes or this Indenture, so long as no judgment in the nature of a deficiency judgment or seeking personal liability shall be asked for or (if obtained) enforced against any such Person or entity. The Subordinated Notes are not secured hereunder.

 

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

 

Section 2.8     Persons Deemed Owners. The Issuer, the Trustee, and any agent of the Issuer or the Trustee shall treat as the owner of each Note the Person in whose name such Note is registered on the Register on the applicable Record Date for the purpose of receiving payments of principal of and interest on such Note and on any other date for all other purposes whatsoever (whether or not such Note is overdue), and none of the Issuer, the Trustee or any agent of the Issuer or the Trustee shall be affected by notice to the contrary.

 

Section 2.9     Cancellation. All Notes surrendered for payment, cancellation pursuant to Section 9.7, registration of transfer, exchange or redemption, or deemed lost or stolen, shall be promptly canceled by the Trustee and may not be reissued or resold. No Note may be surrendered (including any surrender in connection with any abandonment, gift, donation or other cause or event) except for payment as provided herein, for cancellation pursuant to Section 9.7 or for registration of transfer, exchange or redemption in accordance with Article IX hereof (in the case of a Special Redemption or a mandatory redemption, only to the extent that such Special Redemption or mandatory redemption results in 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 2.9 shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.9, except as expressly permitted by this Indenture. All canceled Notes held by the Trustee shall be destroyed or held by the Trustee in accordance with its standard retention policy unless the Issuer shall direct by an Issuer Order received prior to destruction that they be returned to it.

 

 

Section 2.10   DTC Ceases to be Depository. (a) A Global Secured Note or Rule 144A Global Subordinated 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 2.5 of this Indenture and (B) either (x) (i) DTC notifies the Issuer that it is unwilling or unable to continue as depository for such Global Secured Note or Rule 144A Global Subordinated 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 the Issuer within 90 days after 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 Secured Note or Rule 144A Global Subordinated Note.

 

(b)            Any Global Secured Note or Rule 144A Global Subordinated Note that is transferable in the form of a corresponding Certificated Note to the beneficial owner thereof pursuant to this Section 2.10 shall be surrendered by DTC to the Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Issuer shall execute and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Secured Note or Rule 144A Global Subordinated 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 Secured Note or Rule 144A Global Subordinated Note shall, except as otherwise provided by Section 2.5, 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 2.10, the Holder of a Global Secured Note or Rule 144A Global Subordinated 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 clause (B) of sub-section (a) of this Section 2.10, the Issuer will promptly make available to the Trustee a reasonable supply of Certificated Notes.

 

If Certificated Notes are not so issued by the Issuer to such beneficial owners of interests in Global Secured Notes or Rule 144A Global Subordinated Notes as required by sub-section (a) of this Section 2.10, the Issuer expressly acknowledges that the beneficial owners shall be entitled to pursue any remedy that the Holders of a Global Secured Note or Rule 144A Global Subordinated 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 Secured Note or Rule 144A Global Subordinated Note) as if corresponding Certificated Notes had been issued; provided that the Trustee shall be entitled to rely upon any certificate of ownership provided by such beneficial owners (including a certificate in the form of Exhibit C) and/or other forms of reasonable evidence of such ownership.

 

 

Neither the Trustee nor the Registrar shall be liable for any delay in the delivery of directions from the depository and may conclusively rely on, and shall be fully protected in relying on, such direction as to the names of the beneficial owners in whose names such Certificated Notes shall be registered or as to delivery instructions for such Certificated Notes.

 

Section 2.11   Non-Permitted Holders. (a) Notwithstanding anything to the contrary elsewhere herein, (x) any transfer of a beneficial interest in any Secured Note to a U.S. person that is not a QIB/QP (other than a U.S. person that is an Institutional Accredited Investor and is also a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser)) and (y) any transfer of a beneficial interest in any Subordinated Note to (i) a non-U.S. person or (ii) a U.S. person that is not (A) a Qualified Institutional Buyer or an Accredited Investor and (B) a Qualified Purchaser, a Knowledgeable Employee with respect to the Issuer, Collateral Manager or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser or a Knowledgeable Employee with respect to the Issuer or Collateral Manager shall be null and void and any such purported transfer of which the Issuer or the Trustee shall have notice may be disregarded by the Issuer and the Trustee for all purposes.

 

(b)            If (w) any U.S. person that is not a QIB/QP (other than a U.S. person that is an Institutional Accredited Investor and is also a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser)) shall become the holder or beneficial owner of an interest in any Secured Note, (x) any U.S. person that is not both (i) a Qualified Institutional Buyer or an Accredited Investor and also (ii) a Qualified Purchaser, a Knowledgeable Employee with respect to the Issuer, Collateral Manager or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser or a Knowledgeable Employee with respect to the Issuer or the Collateral Manager shall become the holder or beneficial owner of an interest in any Subordinated Note, (y)  any non-U.S. person shall become the holder or beneficial owner of an interest in any Subordinated Note or (z) any non-U.S. person that is not a Qualified Purchaser (or a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser) shall become the holder or beneficial owner of an interest in any Secured Note (any such Person a "Non-Permitted Holder"), the acquisition of Notes by such holder shall be null and 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 Trustee or upon notice to the Issuer from the Trustee (if a Bank Officer of the Trustee obtains actual knowledge) (and who agrees to notify the Issuer), send notice to such Non-Permitted Holder demanding that such Non-Permitted Holder transfer its interest in the Notes held by such Person to a Person that is not a Non-Permitted Holder within 30 days 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 Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted Holder. The terms and conditions of any sale under this sub-section shall be determined in the sole discretion of the Issuer, and none of the Issuer, the 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)            Notwithstanding anything to the contrary elsewhere herein, any transfer of a beneficial interest in any ERISA Restricted Note to a Person who has made an ERISA-related representation required by Section 2.5(c) that is subsequently shown to be false or misleading shall be null and void and any such purported transfer of which the Issuer or the Trustee shall have notice may be disregarded by the Issuer and the Trustee for all purposes.

 

(d)            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, Controlling Person, Similar Law or Other Plan Law representation required by Section 2.5 that is subsequently shown to be false or misleading or whose beneficial ownership otherwise causes Benefit Plan Investors to hold 25% or more of the value of any class of the ERISA Restricted Notes (any such Person a "Non-Permitted ERISA Holder"), 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 Trustee (if a Bank Officer of the Trustee obtains actual knowledge), send notice to such Non-Permitted ERISA Holder demanding that such Non-Permitted ERISA Holder transfer its interest in such Notes 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 its interest in such Notes, the Issuer shall have the right, without further notice to the Non-Permitted ERISA Holder, to sell such Non-Permitted ERISA Holder's 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. However, the Issuer may select a purchaser by any other means determined by the Issuer in its sole discretion. The Holder of each Note, the Non-Permitted ERISA Holder and each other Person in the chain of title from the Holder to the Non-Permitted ERISA Holder, by its acceptance of an interest in the Notes, agrees to cooperate with the Issuer and the Trustee to effect such transfers. The proceeds of such sale, net of any commissions, expenses and taxes due in connection with such sale shall be remitted to the Non-Permitted ERISA Holder. The terms and conditions of any sale under this sub-section shall be determined in the sole discretion of the Issuer, and none of the Issuer, the 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.

 

 

Section 2.12   Treatment and Tax Certification. (a) Each Holder (including, for purposes of this Section 2.12, a beneficial owner of an interest in a Note) of a Secured Note agrees to treat the Secured Notes as indebtedness for U.S. federal, state and local income and franchise tax purposes, except as otherwise required by law.

 

(b)            Each Holder of a Subordinated Note agrees to treat the Subordinated Notes as equity for U.S. federal, state and local income and franchise tax purposes.

 

(c)            Each Holder of a Note agrees and understands that the failure to provide the Issuer 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) in the case of a person that is a United States Tax Person or the appropriate IRS Form W-8 (or applicable successor form) in the case of a person that is not a United States Tax Person) may result in withholding from payments in respect of such Note, including U.S. federal withholding or back-up withholding.

 

(d)            Each Holder of a Subordinated Note represents that it is a United States Tax Person, agrees to provide the Issuer and the Trustee (and any of their agents) with a correct, complete and properly executed IRS Form W-9 (or applicable successor form), and acknowledges that if it fails to provide the Issuer and the Trustee (and any of their agents) with the properly completed and signed tax certifications specified above, the acquisition of its interest in such Note shall be void ab initio.

 

(e)            Each Holder of a Note agrees to provide the Issuer and any relevant intermediary with any information or documentation that is required under FATCA or that the Issuer or relevant intermediary deems appropriate to enable the Issuer or relevant intermediary to determine their duties and liabilities with respect to any taxes they may be required to withhold pursuant to FATCA in respect of such Notes or the holder of such Notes or beneficial interest therein. In addition, each purchaser and subsequent transferee of such Notes (or any interest therein) understands and acknowledges, and will be deemed to have understood and acknowledged, that the Issuer has the right under the Indenture to withhold on any holder or any beneficial owner of an interest in Notes that fails to comply with FATCA.

 

(f)            Each Holder of a Secured Note that is not a United States Tax Person represents that either (a) it is not (i) a bank (or an entity affiliated with a bank) extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business (within the meaning of Section 881(c)(3)(A) of the Code), (ii) a "10 percent shareholder" with respect to the Issuer within the meaning of Section 871(h)(3) or Section 881(c)(3)(D) of the Code, or (iii) a "controlled foreign corporation" that is related to the Issuer within the meaning of Section 881(c)(3)(C) of the Code; (b) it is a person that is eligible for benefits under an income tax treaty with the United States that eliminates U.S. federal income taxation of U.S. source interest not attributable to a permanent establishment in the United States, or (c) it has provided an IRS Form W-8ECI representing that all payments received or to be received by it on the Secured Notes is effectively connected with the conduct of a trade or business in the United States.

 

 

(g)            Each Holder of a Subordinated Note represents, acknowledges and agrees that: (A) such Subordinated Note may not be acquired or owned by any person that is classified for U.S. federal income tax purposes as a partnership, Subchapter S corporation or grantor trust unless (i) (a) except in the case of the U.S. Retention Provider for so long as it holds 100% of the Outstanding Subordinated Notes, none of the direct or indirect beneficial owners of any interest in such person have or ever will have more than 40% of the value of its interest in such person attributable to the aggregate interest of such person in the combined value of the Subordinated Notes (and any other interest treated as equity in the Issuer for U.S. federal income tax purposes), and (b) it is not and will not be a principal purpose of the arrangement involving the investment of such person in any Subordinated Notes and any other equity interests of the Issuer to permit any partnership to satisfy the 100 partner limitation of Treasury Regulations Section 1.7704-1(h)(1)(ii) or (ii) such person obtains written advice of Dechert LLP or Cadwalader, Wickersham & Taft LLP or an opinion of nationally recognized U.S. tax counsel reasonably acceptable to the Issuer that such transfer will not cause the Issuer to be treated as a publicly traded partnership taxable as a corporation; (B) it will not participate in the creation or other transfer of any financial instrument or contract the value of which is determined in whole or in part by reference to the Issuer (including the amount of distributions by the Issuer, the value of the Issuer's assets, or the results of the Issuer's operations) or the Subordinated Notes; (C) it will not acquire, or sell, transfer, assign, participate, pledge or otherwise dispose of the Subordinated Note (or any interest therein) or cause the Subordinated Note (or any interest therein) to be marketed, (i) on or through an "established securities market" within the meaning of Section 7704(b)(1) of the Code and Treasury Regulations Section 1.7704-1(b), including without limitation, an interdealer quotation system that regularly disseminates firm buy or sell quotations or (ii) if such acquisition, sale, transfer, assignment, participation, pledge or other disposition would cause the combined number of holders of the Subordinated Notes and any other equity interests in the Issuer to be more than 90; and (D) it acknowledges and agrees that any sale, transfer, assignment, participation, pledge, or other disposition of the Subordinated Note (or any interest therein) that would violate any of the foregoing clauses (A) through (C) or otherwise cause the Issuer to be unable to rely on the "private placement" safe harbor of Treasury Regulations Section 1.7704-1(h) will be void and of no force or effect, and it will not transfer any interest in the Subordinated Note to any Person that does not agree to be bound by this paragraph.

 

(h)            Each Holder of a Secured Note that is not a United States Tax Person represents and acknowledges that it is not and will not become a member of an "expanded group" (within the meaning of the regulations issued under Section 385 of the Code) that includes a domestic corporation (as determined for U.S. federal income tax purposes) if either (i) the Issuer is an entity disregarded as separate from such domestic corporation for U.S. federal income tax purposes or (ii) the Issuer is a "controlled partnership" (within the meaning of the regulations) with respect to such expanded group or an entity disregarded as separate from such controlled partnership for U.S. federal income tax purposes.

 

 

(i)            Each Holder of a Subordinated Note acknowledges and agrees that, for so long as the Issuer is classified as a partnership for U.S. federal income tax purposes, it shall not acquire any Subordinated Notes (or any other interest treated as equity in the Issuer for U.S. federal income tax purposes) if such transfer would result in the Issuer being treated as a disregarded entity for U.S. federal income tax purposes.

 

(j)            Each Holder of a Subordinated Note acknowledges and agrees that, for so long as the Issuer is disregarded as separate from it for U.S. federal income tax purposes, a Note may not be transferred by it (except to a person that is disregarded as separate from such holder or beneficial owner for U.S. federal income tax purposes), unless it has received written advice of Dechert LLP or an opinion of nationally recognized U.S. tax counsel reasonably acceptable to the Issuer that such transfer will not result in the Issuer becoming classified as an association taxable as a corporation or as a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes and will not cause the Issuer to be subject to U.S. federal income tax on a net basis.

 

(k)           Each Holder of a Subordinated Note acknowledges and agrees that, it shall not transfer any Secured Note (except to a Person that is disregarded as separate from it for U.S. federal income tax purposes) if at any time prior to such transfer the Issuer was disregarded as separate from such holder for U.S. federal income tax purposes, unless it shall have received written advice of Dechert LLP or an opinion of tax counsel of nationally recognized standing in the United States experienced in such matters that, immediately following such transfer, such Note and other outstanding Notes of the same Class (other than any Notes that it holds immediately after such transfer) will be fungible for U.S. federal income tax purposes.

 

(l)            Each Holder of a Subordinated Note agrees to deliver to the transferee, with a copy to the Trustee, prior to the transfer of such Note (or any interest therein), a properly completed certificate, in a form reasonably acceptable to the transferee and the Trustee, stating, under penalty of perjury, the transferor's United States taxpayer identification number and that the transferor is not a foreign person within the meaning of Section 1446(f)(2) of the Code (such certificate, a "Non-Foreign Status Certificate"). Each holder or beneficial owner of a Subordinated Note (or any interest therein) acknowledges that the failure to provide a Non-Foreign Status Certificate to the transferee may result in withholding on the amount realized on its disposition of such Note.

 

(m)          Each Holder of Notes agrees that it will indemnify the Issuer, the Trustee and their respective agents from any and all damages, cost and expenses (including any amount of taxes, fees, interest, additions to tax, or penalties) resulting from the failure by it to comply with its obligations under the Notes. It acknowledges that the indemnification will continue with respect to any period during which it held such Notes (or any interest therein), notwithstanding it ceasing to be a holder of the Notes.

 

 

Section 2.13   Additional Issuance. (a) At any time within the Reinvestment Period (or, in the case of an issuance solely of additional Subordinated Notes or Junior Mezzanine Notes, at any time), the Issuer may, pursuant to a supplemental indenture in accordance with Section 8.1 hereof, issue (i) Additional Notes of each Class (on a pro rata basis with respect to each Class of Notes that is subordinate to the Class A-1 Notes, except, that a larger proportion of Subordinated Notes may be issued) and/or (ii) additional Subordinated Notes and/or additional notes of any one or more new classes of notes that are fully subordinated to the existing Secured Notes (or to the most junior class of securities of the Issuer (other than the Subordinated Notes) issued pursuant to this Indenture, if any class of securities issued pursuant to this Indenture other than the Secured Notes and the Subordinated Notes is then outstanding) (such additional notes, "Junior Mezzanine Notes") and use the proceeds to purchase additional Collateral Obligations or as otherwise permitted under this Indenture (including Permitted Uses); provided that the following conditions are met:

 

(i)            the Collateral Manager and the U.S. Retention Provider each consent to such issuance and such issuance is consented to by a Supermajority of the Subordinated Notes;

 

(ii)           the aggregate principal amount of Additional Notes of any Class issued in all additional issuances shall not exceed 100% of the respective original outstanding principal amount of the Notes of such Class;

 

(iii)          the terms of the Notes issued must be identical to the respective terms of previously issued Notes of the applicable Class (except that the interest due on additional Secured Notes will accrue from the issue date of such additional Secured Notes and that the interest rate and prices of such Notes may be lower (but not higher) than those of the initial Notes of that Class) and such additional issuance shall not be considered a Refinancing hereunder;

 

(iv)          unless only additional Subordinated Notes or Junior Mezzanine Notes are being issued, the Global Rating Agency Condition shall have been satisfied;

 

(v)           the net proceeds of the issuance of any additional Subordinated Notes shall be deposited in the Supplemental Reserve Account and employed in connection with any Permitted Use; provided that this subclause (v) shall only apply if such additional Subordinated Notes are the only Notes included in such additional issuance;

 

(vi)          the proceeds of any Additional Notes (net of fees and expenses incurred in connection with such issuance) shall be treated as Principal Proceeds, used to purchase additional Collateral Obligations or, solely in the case of (x) additional Subordinated Notes in excess of the amount of additional Subordinated Notes that would be on a pro rata basis with respect to each Class of Notes that are subordinate to the Class A-1 Notes and (y) Junior Mezzanine Notes other than additional Subordinated Notes, as another Permitted Use;

 

 

(vii)          to the extent such issuance would be of additional Secured Notes (other than in connection with a Risk Retention Issuance), the prior written consent of a Majority of the Controlling Class has been obtained;

 

(viii)         the Overcollateralization Ratio with respect to each Class of Notes shall not be reduced after giving effect to such issuance;

 

(ix)           written advice from Dechert LLP or Cadwalader, Wickersham & Taft LLP or an opinion of tax counsel of nationally recognized standing in the United States experienced in such matters will be delivered to the Issuer (with a copy to the Trustee), in form and substance satisfactory to the Collateral Manager, to the effect that (A) any additional Class A-1 Notes, Class A-2 Notes, Class B Notes and Class C Notes will be characterized as indebtedness for U.S. federal income tax purposes and (B) such additional 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 or otherwise subject to U.S. federal income tax on a net basis; provided, however, that the advice or opinion described in this clause (A) will not be required with respect to any additional Secured Notes that bear a different CUSIP number (or equivalent identifier) from the Secured Notes of the same Class that are outstanding at the time of the additional issuance;

 

(x)            such issuance is accomplished in a manner that allows the independent accountants of the Issuer to accurately provide the tax information relating to original issue discount that this Indenture requires to be provided to the Holders of Secured Notes (including the Additional Notes); and

 

(xi)           an Officer's certificate of the Issuer shall be delivered to the Trustee stating that the conditions of this Section 2.13(a) have been satisfied.

 

(b)            The terms and conditions of the Additional Notes of each Class issued pursuant to this Section 2.13 shall be identical to those of the initial Notes of that Class (except that the interest due on the Additional Notes that are Secured Notes shall accrue from the issue date of such Additional Notes and the interest rate and price of such Additional Notes may be lower (but not higher) than those of the initial Notes of that Class). Interest on the Additional Notes that are Secured Notes shall be payable commencing on the first Payment Date following the issue date of such Additional Notes (if issued prior to the applicable Record Date). The Additional Notes shall rank pari passu in all respects with the initial Notes of that Class.

 

(c)            Except with respect to a Risk Retention Issuance, any Additional Notes of each Class issued pursuant to this Section 2.13 shall, to the extent reasonably practicable, be offered first to Holders of that Class in such amounts as are necessary to preserve their pro rata holdings of Notes of such Class.

 

(d)            In addition, Additional Notes may be issued in connection with any Refinancing of the Secured Notes in whole without regard to the restrictions in this Section 2.13.

 

 

(e)            For the avoidance of doubt, at any time the Holders of the Subordinated Notes may make additional capital contributions to the Issuer.

 

(f)            The issuance of the Notes on the Refinancing Date shall not be subject to the restrictions in this Section 2.13 or the conditions set forth in Section 3.2 and each holder of Notes by its acquisition thereof consents to such issuance on the Refinancing Date and to the Permitted Mergers.

 

ARTICLE III

 

Conditions Precedent

 

Section 3.1     Conditions to Issuance of Notes on Refinancing Date. (a) The Notes to be issued on the Refinancing Date may be executed by the Issuer and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered by the Trustee upon Issuer Order and upon receipt by the Trustee of the following:

 

(i)            Officers' Certificate of the Issuer Regarding Corporate Matters. An Officer's certificate of the Issuer (A) evidencing the authorization by Resolution of the execution and delivery of this Indenture, the Collateral Management Agreement, the Collateral Administration Agreement, the Master Loan Sale Agreement and related transaction documents and in each case the execution, authentication and delivery of the Notes applied for by it and specifying the Stated Maturity, principal amount and Interest Rate of each Class of Secured Notes to be authenticated and delivered and the Stated Maturity and principal amount of Subordinated Notes to be authenticated and delivered and (B) certifying that (1) the attached copy of the Resolution is a true and complete copy thereof, (2) such Resolutions have not been rescinded and are in full force and effect on and as of the Refinancing 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 approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of the Issuer that no other approval or consent of any governmental body is required for the valid issuance of the Notes or (B) an Opinion of Counsel of the Issuer that no such approval or consent of any governmental body is required for the valid issuance of the Notes except as has been given.

 

(iii)          U.S. Counsel Opinions. Opinions of (A) Dechert LLP, U.S. counsel to the Issuer, the Collateral Manager, the E.U./U.K. Retention Provider, the U.S. Retention Provider, and special U.S. tax counsel to the Issuer, (B) Clark Hill PLC, Delaware counsel to the Issuer and (C) Locke Lord LLP, counsel to the Trustee and Collateral Administrator, each dated the Refinancing Date.

 

 

(iv)          Officers' Certificate of the Issuer Regarding Indenture. An Officer's certificate of the Issuer stating that, to the best of the signing Officer's knowledge, the Issuer is not in default under this Indenture and that the issuance of the Notes 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 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 applied for by it have been complied with; that all expenses due or accrued with respect to the Offering of such Notes or relating to actions taken on or in connection with the Refinancing Date have been paid or reserves therefor have been made; and that, to the best of the signing Officer's knowledge, all of its respective representations and warranties contained herein are true and correct as of the Refinancing Date.

 

(v)           Transaction Documents. An executed counterpart of each Transaction Document.

 

(vi)          Certificate of the Collateral Manager. An Officer's certificate of the Collateral Manager dated as of the Refinancing Date delivered pursuant to Section 9.2(g) of the Original Indenture.

 

(vii)         [Reserved].

 

(viii)        [Reserved].

 

(ix)           Rating Letters. An Officer's certificate of the Issuer to the effect that it has received a letter from each Rating Agency and confirming that each Class of Secured Notes has been assigned the applicable Initial Rating and that such ratings are in effect on the Refinancing Date.

 

(x)           Accounts. Evidence of the establishment of each of the Ramp-Up Account, the Expense Reserve Account and the Interest Reserve Account.

 

(xi)           Issuer Order for Deposit of Funds into Accounts. (A) An Issuer Order signed in the name of the Issuer by a Responsible Officer of the Issuer, dated as of the Refinancing Date, authorizing the deposit of U.S.$379,421,959.83 from the proceeds of the issuance of the Notes into the Ramp-Up Account for use pursuant to Section 10.3(c), (B) an Issuer Order signed in the name of the Issuer by a Responsible Officer of the Issuer, dated as of the Refinancing Date, authorizing the deposit of U.S.$2,308,770.00 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) and (C) an Issuer Order signed in the name of the Issuer by a Responsible Officer of the Issuer, dated as of the Refinancing Date, authorizing the deposit of the Interest Reserve Amount from the proceeds of the issuance of the Notes into the Interest Reserve Account as Interest Proceeds for use pursuant to Section 10.3(f).

 

 

(xii)          Other Documents. Such other documents as the Trustee may reasonably require; provided that nothing in this clause (xii) shall imply or impose a duty on the part of the Trustee to require any other documents.

 

(b)           Notwithstanding anything in the Original Indenture to the contrary, the Issuer hereby directs the Trustee to (i) make distributions of Interest Proceeds and Principal Proceeds on deposit in the Collection Account as of the related Determination Date pursuant to Sections 11.1(a)(i) and 11.1(a)(ii) of the Indenture, (ii)(A) deposit an amount of the proceeds of the Notes into the Payment Account as is necessary to pay in full the items listed in clauses (ii)(E) and (ii)(F) below; (B) deposit an amount of the proceeds of the Notes into the Expense Reserve Account as Interest Proceeds in an amount equal to $2,308,770.00; (C) deposit an amount of the proceeds of the Notes into the Interest Reserve Account an amount equal to the Interest Reserve Amount; (D) deposit into the Ramp-Up Account the remaining proceeds of the Notes received on the Refinancing Date in an amount equal to $379,421,959.83; (E) pay the Redemption Prices of the Existing Secured Notes using such proceeds and any other available funds as identified by the Collateral Manager; and (F) pay all accrued and unpaid Administrative Expenses (regardless of the Administrative Expense Cap) including any applicable expenses, fees, costs, charges and other amounts referred to in Section 9.2(e) of the Original Indenture (including all fees and expenses incurred in connection with the Optional Redemption of the Existing Secured Notes and the issuance of the Notes) (as separately identified by, or on behalf of, the Issuer to the Trustee), in each case, in accordance with Section 9.2 of the Original Indenture and the Priority of Payments; (iii) pay an amount equal to $555,153,322.77 in connection with the Permitted Mergers sufficient to pay the redemption prices of the outstanding notes of each of the BDC CLO III Issuer and the BDC 3 CLO 1 Issuer and (iv) pay the “Redemption Price” of the Existing Subordinated Notes (which shall be the Subordinated Note Redemption Price as agreed by the Holders of the Existing Subordinated Notes and as shall be separately notified to the Trustee in writing by, or on behalf of, the Issuer), which includes an amount equal to $6,488,820.81 which represents accrued and unpaid interest on the Collateral Obligations as owned by the Issuer on the Refinancing Date, using any remaining proceeds and any other available funds as identified by the Collateral Manager to the Holders of the Existing Subordinated Notes. For administrative convenience, any of the foregoing described steps or transfers of cash will take place simultaneously. With respect to payment of the Redemption Price to Holders of certain of the Existing Secured Notes and the Existing Subordinated Notes and the redemption of certain of the outstanding notes of each of the BDC CLO III Issuer and the BDC 3 CLO 1 Issuer, the Issuer may separately direct that such payments may be made on a net basis in respect of the purchase price of new Secured Notes and new Subordinated Notes (any amounts owing by one party may be offset by amounts owed to such party, and vice versa) and the Issuer or any other party may direct amounts owed to it to be wired directly to another party to which it may owe any amounts. Amounts to be directed to a certain account and then deposited into another account may be directly deposited into such other account. For the avoidance of doubt (i) the Collection Period for the Refinancing Date shall end on the Refinancing Date and (ii) no Distribution Report shall be required to be prepared for the Refinancing Date.

 

 

(c)            In connection with the netting of amounts in respect of the purchase price of new Class B Notes, Class C Notes and Subordinated Notes as described above and the settlement thereof in the form of beneficial ownership interests in Global Notes, the Issuer shall be entitled to settle the delivery of such Class B Notes, Class C Notes and Subordinated Notes with the related purchaser thereof by delivery of such Class B Notes, Class C Notes and Subordinated Notes via DTC's “Deposit and Withdrawal at Custodian” service to the account of such purchaser. For purposes of effecting such settlement, the Trustee is hereby authorized and, if directed by the Issuer in an Issuer Order, to approve instructions provided by such purchaser at DTC in order to effect such delivery, in each case on the date and in respect of the purchaser (and account thereof) identified to the Trustee by, or on behalf of, the Issuer. If applicable, each such purchaser shall cooperate with the Issuer (and the Trustee on its behalf) in connection with such settlement, including by providing any necessary instructions to DTC.

 

Section 3.2     Conditions to Additional Issuance. Additional Notes to be issued on an Additional Notes Closing Date pursuant to Section 2.13 may be executed by the Issuer and delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered to the Issuer by the Trustee upon Issuer Order (setting forth registration, delivery and authentication instructions) and upon receipt by the Trustee of the following:

 

(i)            Officers' Certificates of the Issuer Regarding Corporate Matters. An Officer's certificate of the Issuer (A) evidencing the authorization by Resolution of the execution and delivery of a supplemental indenture pursuant to Section 8.1(a)(xii) and the execution, authentication and delivery of the Additional Notes applied for by it, and specifying the Stated Maturity, the principal amount and Interest Rate of each Class of such Additional Notes that are Secured Notes and the Stated Maturity and principal amount of the Subordinated Notes to be authenticated and delivered and (B) certifying that (1) the attached copy of such Resolution is a true and complete copy thereof, (2) such Resolutions have not been rescinded and are in full force and effect on and as of the Additional Notes 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 the Issuer to the effect that no other authorization, approval or consent of any governmental body is required for the valid issuance of such Additional Notes or (B) an Opinion of Counsel of the Issuer to the effect that no such authorization, approval or consent of any governmental body is required for the valid issuance of such Additional Notes except as have been given (provided that the opinion delivered pursuant to Section 3.2(iii) may satisfy the requirement).

 

(iii)          U.S. Counsel Opinions. Opinions of Dechert LLP, special U.S. counsel to the Issuer or other counsel acceptable to the Trustee, dated the Additional Notes Closing Date, in form and substance satisfactory to the Issuer and the Trustee. An opinion of Dechert LLP, special U.S. tax counsel to the Issuer, or tax counsel of nationally recognized standing in the United States experienced in such matters delivered pursuant to Section 2.13(a)(ix).

 

 

(iv)          Officers' Certificates of Issuer Regarding Indenture. An Officer's certificate of the Issuer stating that the Issuer is not in default under this Indenture and that the issuance of the Additional Notes applied for by it shall not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its organizational documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in this Indenture and the supplemental indenture pursuant to Section 8.1(a)(xii) relating to the authentication and delivery of the Additional Notes applied for have been complied with and that the authentication and delivery of the Additional Notes is authorized or permitted under this Indenture and the supplemental indenture entered into in connection with such Additional Notes; and that all expenses due or accrued with respect to the offering of the Additional Notes or relating to actions taken on or in connection with the Additional Notes Closing Date have been paid or reserved. The Officer's certificate of the Issuer shall also state that, to the best of the signing Officer's knowledge, all of its representations and warranties contained herein are true and correct as of the Additional Notes Closing Date.

 

(v)           Accountants' Report. An Accountants' Report in form and content satisfactory to the Issuer (A) if applicable, comparing the issuer, Principal Balance, coupon/spread, Stated Maturity, S&P Rating, Fitch Rating and country of Domicile with respect to each Collateral Obligation pledged in connection with the issuance of such Additional Notes and the information provided by the Issuer with respect to every other asset included in the Assets, by reference to such sources as shall be specified therein, if additional Assets are pledged directly in accordance with such Additional Notes issuance and (B) specifying the procedures undertaken by them to review data and computations relating to the foregoing statement; provided that if only additional Subordinated Notes are being issued, no such Accountants' Report shall be required.

 

(vi)          [Reserved].

 

(vii)         Global Rating Agency Condition. Unless only additional Subordinated Notes or Junior Mezzanine Notes are being issued, evidence that the Global Rating Agency Condition has been satisfied with respect to such issuance of Additional Notes.

 

(viii)        Other Documents. Such other documents as the Trustee may reasonably require; provided that nothing in this clause (viii) shall imply or impose a duty on the Trustee to so require any other documents.

 

 

Prior to any Additional Notes Closing Date, the Trustee shall provide to the Holders notice of such issuance of Additional Notes as soon as reasonably practicable but in no case less than fifteen (15) days prior to the Additional Notes Closing Date; provided that the Trustee shall receive such notice at least five (5) Business Days prior to the 15th day prior to such Additional Notes Closing Date. On or prior to any Additional Notes Closing Date, the Trustee shall provide to the Holders copies of any supplemental indentures executed as part of such issuance pursuant to the requirements of Section 8.1.

 

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 delivered to a custodian appointed by the Issuer, which shall be a Securities Intermediary (the "Custodian") or the Trustee, as applicable, all Assets in accordance with the definition of "Deliver." The Custodian appointed hereby shall act as custodian for the Issuer and as custodian, agent and bailee for the Trustee on behalf of the Secured Parties for purposes of perfecting the Trustee's security interest in those Assets in which a security interest is perfected by Delivery of the related Assets to the Custodian. Initially, the Custodian shall be The Bank of New York Mellon Trust Company, National Association. Any successor custodian shall be a state or national bank or trust company that (i) has (A) capital and surplus of at least U.S.$200,000,000, (B) a credit risk assessment or senior unsecured rating of at least "BBB+" by S&P and (C) to the extent that Fitch is rating any Class of Notes then Outstanding, a short-term credit rating of at least "F1" and a long-term credit rating of at least "A" by Fitch and (ii) is a Securities Intermediary. Subject to the limited right to relocate Assets as provided in Section 7.5(b), the Trustee or the Custodian, as applicable, shall hold (i) all Collateral Obligations, Eligible Investments, Cash and other investments purchased in accordance with this Indenture and (ii) any other property of the Issuer otherwise Delivered to the Trustee or the Custodian, as applicable, by or on behalf of the Issuer, in the relevant Account established and maintained pursuant to Article X; as to which in each case the Trustee shall have entered into the Securities Account Control Agreement with the Custodian providing, inter alia, that the establishment and maintenance of such Account will be governed by a law of a jurisdiction satisfactory to the Issuer and the 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 an Eligible Investment, in the Account in which the funds used to purchase the investment are held in accordance with Article X) for the benefit of the Trustee in accordance with this Indenture. The security interest of the Trustee in the funds or other property used in connection with the acquisition shall, immediately and without further action on the part of the Trustee, be released. The security interest of the Trustee shall nevertheless come into existence and continue in the Collateral Obligation, Eligible Investment or other investment so acquired, including all interests of the Issuer in to any contracts related to and proceeds of 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 and immunities of the Trustee hereunder and the obligations set forth in Section 4.2, (v) the rights, obligations and immunities of the Collateral Manager hereunder and under the Collateral Management Agreement, (vi) the rights and immunities of the Collateral Administrator under the Collateral Administration Agreement and (vii) the rights of Holders as beneficiaries hereof with respect to the property deposited with the Trustee and payable to all or any of them (and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture) when:

 

(a)            either:

 

(i)            all Notes theretofore authenticated and delivered to Holders (other than (A) Notes which have been mutilated, defaced, destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.6 and (B) Notes for whose payment Money has theretofore irrevocably been deposited in trust and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 7.3) have been delivered to the Trustee for cancellation; or

 

(ii)           all Notes not theretofore delivered to the Trustee for cancellation (A) have become due and payable, or (B) will become due and payable at their Stated Maturity within one year, or (C) are to be called for redemption pursuant to Article IX under an arrangement satisfactory to the Trustee for the giving of notice of redemption by the Issuer pursuant to Section 9.4 and the Issuer has irrevocably deposited or caused to be deposited with the Trustee, in trust for such purpose, Cash or non-callable direct obligations of the United States of America; provided that the obligations are entitled to the full faith and credit of the United States of America or are debt obligations which are rated "Aaa" by Moody's and "AAA" by S&P, in an amount sufficient, as recalculated in an Accountants' Report by a firm of Independent certified public accountants which are nationally recognized, to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the case of Notes which have become due and payable), or to their Stated Maturity or Redemption Date, as the case may be, and shall have Granted to the Trustee a valid perfected security interest in such Eligible Investment that is of first priority and free of any adverse claim, as applicable, and shall have furnished an Opinion of Counsel with respect thereto; provided that this sub-section (ii) shall not apply if an election to act in accordance with the provisions of Section 5.5(a) shall have been made and not rescinded, it being understood that the requirements of this clause (a) may be satisfied as set forth in Section 5.7; and

 

 

(b)            the Issuer has delivered to the Trustee Officers' 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.

 

Notwithstanding the satisfaction and discharge of this Indenture, the rights and obligations of the Issuer, the Trustee, the Collateral Manager and, if applicable, the Holders, as the case may be, under Sections 2.7, 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, 14.12 and 14.16 shall survive.

 

Section 4.2     Application of Trust Money. All Cash and obligations deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it in accordance with the provisions of the Notes and this Indenture, including, without limitation, the Priority of Payments, to the payment of principal and interest (or other amounts with respect to the Subordinated Notes), either directly or through any Paying Agent, as the Trustee may determine; and such Cash and obligations shall be held in a segregated account identified as being held in trust for the benefit of the Secured Parties.

 

Section 4.3     Repayment of Monies Held by Paying Agent. In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all Monies then held by any Paying Agent other than the Trustee under the provisions of this Indenture shall, upon demand of the Issuer, be paid to the Trustee to be held and applied pursuant to Section 7.3 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     Liquidation of Assets. (a) In the event of the liquidation of the Assets as specified in accordance with Article V and the net proceeds from such liquidation and all available Cash has been used for the payment of (or establishment of a reserve for) all Administrative Expenses (in the same manner and order of priority in the definition thereof), Aggregate Collateral Management Fees and interest and principal on the Secured Notes so that the Secured Notes have been redeemed and paid in full, the Subordinated Notes will become the Controlling Class and the holders of the Subordinated Notes will have all rights of the holders of the Controlling Class under this Indenture. In addition, the holders of the Subordinated Notes, as the holders of the Controlling Class, would be able to cause the satisfaction and discharge of this Indenture.

 

(b)  To the extent the Assets are liquidated as specified in Article V herein in any way and the net proceeds from such liquidation and all available Cash has been used for the payment of (or establishment of a reserve for) all Administrative Expenses (in the same manner and order of priority in the definition thereof), Aggregate Collateral Management Fees and interest and principal on the Secured Notes so that the Secured Notes have been redeemed and paid in full, any excess amounts shall be paid on the Subordinated Notes pursuant to Section 11.1(a) and if such amounts are insufficient to pay the Subordinated Notes in full or there are no excess amounts to pay on the Subordinated Notes, the Subordinated Notes shall be deemed to be redeemed and paid in full, unless such Subordinated Notes were previously redeemed or repaid prior thereto as otherwise described herein.

 

 

ARTICLE V

 

Remedies

 

Section 5.1     Events of Default. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

(a)            a default in the payment, when due and payable, of (i) any interest on any Class A Note or any Class B Note (and after the Class A Notes and Class B Notes are paid in full, a default in the payment, when due and payable, of any interest on any Secured Note in the Class then comprising the Controlling Class) and, in each case, the continuation of any such default, for five Business Days after a Bank Officer of the Trustee has actual knowledge or receives written notice from any holder of Notes of such payment default or (ii) any principal of, or interest or Deferred Interest on, or any Redemption Price in respect of, any Secured Note 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, Trustee, Collateral Administrator or any Paying Agent, such failure continues for seven Business Days after a Bank Officer of the Trustee receives written notice or has actual knowledge of such administrative error or omission;

 

(b)            the failure on any Payment Date to disburse amounts available in the Payment Account in excess of U.S.$1,000 in accordance with the Priority of Payments and continuation of such failure for a period of ten Business Days or, in the case of a failure to disburse due to an administrative error or omission by the Trustee, Collateral Administrator or any Paying Agent, such failure continues for five Business Days after a Bank Officer of the Trustee receives written notice or has actual knowledge of such administrative error or omission;

 

(c)            either the Issuer or the Assets becomes an investment company required to be registered under the 1940 Act and such requirement has not been eliminated after a period of 45 days;

 

(d)            except as otherwise provided in this Section 5.1, a material breach of any other covenant of the Issuer herein (other than any failure to satisfy any of the Concentration Limitations, Collateral Quality Tests or Coverage Tests, or other covenants or agreements for which a specific remedy has been provided hereunder or any failure to satisfy the requirements of Section 7.18), or the failure of any material representation or warranty of the Issuer made herein 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 breach or failure has a material adverse effect on the Holders of the Notes, and the continuation of such breach or failure for a period of 45 days after notice to the Issuer and the Collateral Manager by the Trustee (at the direction of a Supermajority of the Controlling Class) or to the Issuer, the Collateral Manager and the Trustee by the Holders of at least a Supermajority of the Controlling Class in each case, by registered or certified mail or overnight delivery service, specifying such 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 clause (a) of the Investment Criteria shall cure any breach or failure arising therefrom as of the date of such failure;

 

 

(e)            the entry of a decree or order by a court having competent jurisdiction adjudging the Issuer as bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of the Issuer under the Bankruptcy Code or any other applicable law, or appointing a receiver, liquidator, assignee, or sequestrator (or other similar official) of the Issuer or of any substantial part of its property, respectively, 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 60 consecutive days;

 

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

 

(g)            on any Measurement Date as of which the Class A-1 Notes are 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-1 Notes, to equal or exceed 102.5%.

 

Upon a Responsible Officer's (or a Bank Officer's, in the case of the Trustee) obtaining knowledge of the occurrence of an Event of Default, each of (i) the Issuer, (ii) the Trustee and (iii) the Collateral Manager shall notify each other. Upon the occurrence of an Event of Default known to a Bank Officer of the Trustee, the Trustee shall promptly (and in no event later than three Business Days thereafter) notify the Noteholders (as their names appear on the Register), each Paying Agent and each Rating Agency (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(e) or (f)), the Trustee may, and shall, upon the written direction of a Supermajority of the Controlling Class, by notice to the Issuer and each Rating Agency, declare the principal of all the Secured Notes to be immediately due and payable, and upon any such declaration such principal, together with all accrued and unpaid interest thereon, and other amounts payable hereunder, shall become immediately due and payable. If an Event of Default specified in Section 5.1(e) or (f) occurs, all unpaid principal, together with all accrued and unpaid interest thereon, of all the Secured Notes, and other amounts payable thereunder and hereunder, shall automatically become due and payable without any declaration or other act on the part of the Trustee or any Noteholder.

 

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

 

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

 

(A)           all unpaid installments of interest and principal then due on the Secured Notes (other than any principal amounts due to the occurrence of an acceleration);

 

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

 

(C)            all unpaid taxes and Administrative Expenses of the Issuer and other sums paid or advanced by the Trustee hereunder or by the Collateral Administrator under the Collateral Administration Agreement or hereunder, accrued and unpaid Aggregate Collateral Management Fees then due and owing and any other amounts then payable by the Issuer hereunder prior to such Administrative Expenses and such Aggregate Collateral Management Fees.

 

(ii)            It has been determined that all Events of Default, other than the nonpayment of the interest on or principal of the Secured Notes 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 Notes or the Class B Notes or in the case of an Event of Default specified in Section 5.1(g), the Holders of at least a Majority of the Class A-1 Notes, by written notice to the Trustee, has agreed with such determination (which agreement shall not be unreasonably withheld); provided that no Class of Secured Notes (other than the Class A-1 Notes) shall have any rights pursuant to this subclause (I), regardless of whether any such Class subsequently becomes the Controlling Class; or

 

 

(II)          in the case of any other Event of Default, the Holders of at least a Majority of each Class of Secured Notes (voting separately by Class), in each case, by written notice to the Trustee, has agreed with such determination (which agreement shall not be unreasonably withheld); or

 

(B)            been waived as provided in Section 5.14.

 

No such rescission shall affect any subsequent Default or impair any right consequent thereon. The Trustee shall promptly give written notice of any such rescission to each Rating Agency.

 

(c)            Notwithstanding anything in this Section 5.2 to the contrary, the Secured Notes will not be subject to acceleration by the Trustee solely as a result of the failure to pay any amount due on the Secured Notes that are not of the Controlling Class other than any failure to pay interest due on the Class A-2 Notes or the Class B Notes.

 

Section 5.3     Collection of Indebtedness and Suits for Enforcement by Trustee. The Issuer covenants that if a default shall occur in respect of the payment of any principal of or interest when due and payable on any Secured Note, the Issuer will, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holder of such Secured Note, the whole amount, if any, then due and payable on such Secured Note for principal and interest with interest upon the overdue principal 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 Trustee and its agents and counsel.

 

If the Issuer fails to pay such amounts forthwith upon such demand, the 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 Notes 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 Trustee may in its discretion, and shall, subject to the terms of this Indenture (including Section 6.3(e)) upon written direction of the Supermajority of the Controlling Class, proceed to protect and enforce its rights and the rights of the Secured Parties by such appropriate Proceedings as the Trustee shall deem most effectual (if no such direction is received by the Trustee) or as the Trustee may be directed by the Majority of the Controlling Class, to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement 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 Trustee by this Indenture or by law.

 

 

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

 

(a)            to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Secured Notes 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 Trustee (including any claim for reasonable compensation to the Trustee and each predecessor Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all reasonable expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith) and of the Secured Noteholders 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 Secured Noteholders 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 Noteholders and of the Trustee on their behalf; and any trustee, receiver or liquidator, custodian or other similar official is hereby authorized by each of the Secured Noteholders to make payments to the Trustee, and, if the Trustee shall consent to the making of payments directly to the Secured Noteholders to pay to the Trustee such amounts as shall be sufficient to cover reasonable compensation to the Trustee, each predecessor Trustee and their respective agents, attorneys and counsel, and all other reasonable expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee except as a result of negligence or bad faith.

 

Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Secured Noteholders, any plan of reorganization, arrangement, adjustment or composition affecting the Secured Notes or any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Secured Noteholders, 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 Trustee on behalf of the Holders of the Secured Notes (and any such Proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party), the Trustee shall be held to represent all the Holders of the Secured Notes.

 

Notwithstanding anything in this Section 5.3 to the contrary, the Trustee may not sell or liquidate the Assets or institute Proceedings in furtherance thereof pursuant to this Section 5.3 except according to the provisions specified in Section 5.5(a).

 

Section 5.4     Remedies. (a) If an Event of Default has occurred and is continuing, and the Secured Notes have been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Issuer agrees that the Trustee may, and shall, subject to the terms of this Indenture (including Section 6.3(e)), upon written direction of a Supermajority 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 Notes or otherwise payable under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Assets any Monies adjudged due;

 

(ii)           sell or cause the sale of all or a portion of the Assets or rights or interests therein, at one or more public or private sales called and conducted in any manner permitted by law and in accordance with Section 5.17 hereof; provided that the Trustee shall promptly give written notice of any such sale of Assets to each Rating Agency;

 

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

 

(iv)          exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Trustee and the Holders of the Secured Notes hereunder (including exercising all rights of the Trustee under the Securities Account Control Agreement); and

 

(v)          exercise any other rights and remedies that may be available at law or in equity;

 

provided that the Trustee may not sell or liquidate the Assets or institute Proceedings in furtherance thereof pursuant to this Section 5.4 except according to the provisions of Section 5.5(a).

 

The Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking firm of national reputation (the cost of which shall be payable as an Administrative Expense) in structuring and distributing securities similar to the Secured Notes, which may be the Initial Purchaser, as to the feasibility of any action proposed to be taken in accordance with this Section 5.4 and as to the sufficiency of the proceeds and other amounts receivable with respect to the Assets to make the required payments of principal of and interest on the Secured Notes which opinion shall be conclusive evidence as to such feasibility or sufficiency.

 

 

(b)            If an Event of Default as described in Section 5.1(d) hereof shall have occurred and be continuing the Trustee may, and at the direction of the Holders of not less than 25% of the Aggregate Outstanding Amount of the Controlling Class 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 Section 5.1(d), 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 Secured Party may bid for and purchase the Assets or any part thereof and, upon compliance with the terms of sale, may hold, retain, possess or dispose of such property in its or their own absolute right without accountability.

 

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

 

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

 

(d)            Notwithstanding any other provision of this Indenture, none of the Issuer, the Trustee, the Secured Parties or the Noteholders may, prior to the date which is one year and one day (or if longer, any applicable preference period and one day) after the payment in full of all Notes, institute against, or join any other Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceedings, or other Proceedings under U.S. federal or state bankruptcy or similar laws. Nothing in this Section 5.4 shall preclude, or be deemed to stop, the Trustee (i) from taking any action prior to the expiration of the aforementioned period in (A) any case or Proceeding voluntarily filed or commenced by the Issuer or (B) any involuntary insolvency Proceeding filed or commenced by a Person other than the Trustee, or (ii) from commencing against the Issuer or any of their respective properties any legal action which is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation Proceeding.

 

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 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 Trustee shall retain the Assets securing the Secured Notes intact, collect and cause the collection of the proceeds thereof and make and apply all payments and deposits and maintain all accounts in respect of the Assets and the Notes in accordance with the Priority of Payments and the provisions of Article X, Article XII and Article XIII unless:

 

 

(i)            the Trustee, pursuant to Section 5.5(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 Notes for principal and interest (including accrued and unpaid Deferred Interest), and all other amounts payable prior to payment of principal on such Secured Notes (including amounts due and owing as Administrative Expenses (without regard to the Administrative Expense Cap) and due and unpaid Aggregate Collateral Management Fees) and a Supermajority of the Controlling Class agrees with such determination;

 

(ii)           in the case of an Event of Default specified in Section 5.1(a) due to failure to pay interest on the Class A-1 Notes, the Holders of at least a Supermajority of the Class A-1 Notes (so long as the Class A-1 Notes are Outstanding) direct the sale and liquidation of the Assets (without regard to whether another Event of Default has occurred prior, contemporaneously or subsequent to such Event of Default); provided that no Class of Secured Notes (other than the Class A-1 Notes) shall have any rights to direct the sale and liquidation of the Assets pursuant to this clause (ii), regardless of whether any such Class subsequently becomes the Controlling Class;

 

(iii)          in the case of an Event of Default specified in Section 5.1(e), (f) or (g) of the definition of such term, the Holders of at least a Supermajority of the Class A-1 Notes direct the sale and liquidation of the Assets (without regard to whether another Event of Default has occurred prior, contemporaneously or subsequent to such Event of Default); provided that no Class of Secured Notes (other than the Class A-1 Notes) will have any rights to direct the sale and liquidation of the Assets pursuant to the provisions of this Indenture as described in this clause (iii), regardless of whether any such Class becomes the Controlling Class; or

 

(iv)          in the case of each other Event of Default, the Holders of at least a Supermajority of each Class of Secured Notes (in each case, 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), (iii) or (iv) exist. In the event that a liquidation of the Assets is effected pursuant to clause (i), (ii), (iii) or (iv) above, the Trustee shall use reasonable efforts to notify each Rating Agency.

 

(b)           Nothing contained in Section 5.5(a) shall be construed to require the Trustee to sell the Assets securing the Secured Notes if the conditions set forth in clause (i), (ii), (iii) or (iv) of Section 5.5(a) are not satisfied. Nothing contained in Section 5.5(a) shall be construed to require the Trustee to preserve the Assets securing the Notes if prohibited by applicable law.

 

 

(c)            In determining whether the condition specified in Section 5.5(a)(i)  exists, the 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 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 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 Trustee may retain and conclusively rely on an opinion of an Independent investment banking firm of national reputation (the cost of which shall be payable as an Administrative Expense).

 

(d)            The Trustee shall deliver to the Noteholders and the Collateral Manager a report stating the results of any determination required pursuant to Section 5.5(a)(i) no later than 10 days after such determination is made. The 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 Supermajority of the Controlling Class at any time during which the Trustee retains the Assets pursuant to Section 5.5(a)(i).

 

(e)            Prior to the sale of any Assets in connection with Section 5.5(a), the Trustee shall offer the Collateral Manager or an Affiliate thereof the right to purchase such Asset at a price equal to the highest bid price received by the Trustee in accordance with Section 5.5(c) (or if only one bid price is received, such bid price). The Collateral Manager or an Affiliate thereof shall have the right to bid on any Assets sold in any sale pursuant to this Section 5.5.

 

Section 5.6     Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or under any of the Secured Notes may be prosecuted and enforced by the Trustee without the possession of any of the Secured Notes or the production thereof in any trial or other Proceeding relating thereto, and any such action or Proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be applied as set forth in Section 5.7 hereof.

 

Section 5.7     Application of Money Collected. Any Money collected by the Trustee (after payment of costs of collection, liquidation and enforcement) with respect to the Notes pursuant to this Article V and any Money that may then be held or thereafter received by the Trustee with respect to the Notes hereunder shall be applied, subject to Section 13.1 and in accordance with the provisions of Section 11.1(a)(iii), at the date or dates fixed by the Trustee. Upon the final distribution of all proceeds of any liquidation effected hereunder, the provisions of Section 4.1(a) and (b) shall be deemed satisfied for the purposes of discharging this Indenture pursuant to Article IV. Furthermore, upon such liquidation and final distribution, the Subordinated Notes shall be deemed to be redeemed and paid in full, even if amounts paid pursuant to Section 11.1(a) are insufficient to pay the Subordinated Notes in full as set forth in Section 4.4(b).

 

 

Section 5.8      Limitation on Suits. No Holder of any Note shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:

 

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

 

(b)            the Holders of not less than 25% of the then Aggregate Outstanding Amount of the Notes of the Controlling Class shall have made written request to the Trustee to institute Proceedings in respect of such Event of Default in its own name as Trustee hereunder and such Holder or Holders have provided the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses (including reasonable attorneys' fees and expenses) and liabilities to be incurred in compliance with such request;

 

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

 

(d)            no direction inconsistent with such written request has been given to the Trustee during such 30-day period by a Majority of the Controlling Class; it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing itself of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes of the same Class or to obtain or to seek to obtain priority or preference over any other Holders of the Notes of the same Class or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Notes of the same Class subject to and in accordance with Section 13.1 and the Priority of Payments.

 

In the event the Trustee shall receive conflicting or inconsistent requests and indemnity pursuant to this Section 5.8 from two or more groups of Holders of the Controlling Class, each representing less than a Majority of the Controlling Class, the Trustee shall act in accordance with the request specified by the group of Holders with the greatest percentage of the Aggregate Outstanding Amount of the Controlling Class, notwithstanding any other provisions of this Indenture. If all such groups represent the same percentage, the Trustee, in its sole discretion, may determine what action, if any, shall be taken.

 

Section 5.9     Unconditional Rights of Secured Noteholders to Receive Principal and Interest. Subject to Section 2.7(i), but notwithstanding any other provision of this Indenture, the Holder of any Secured Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest on such Secured Note, as such principal, 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 Notes ranking junior to Notes still Outstanding shall have no right to institute Proceedings or, except as otherwise expressly set forth in Section 5.8(b), to request the Trustee to institute proceedings for the enforcement of any such payment until such time as no Secured Note ranking senior to such Secured Note remains Outstanding, which right shall be subject to the provisions of Section 5.8, and shall not be impaired without the consent of any such Holder.

 

 

Section 5.10    Restoration of Rights and Remedies. If the Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Noteholder, then and in every such case the Issuer, the Trustee and the Noteholder shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and the Noteholder shall continue as though no such Proceeding had been instituted.

 

Section 5.11    Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.12    Delay or Omission Not Waiver. No delay or omission of the Trustee or any Holder of Secured Notes to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein or of a subsequent Event of Default. Every right and remedy given by this Article V or by law to the Trustee or to the Holders of the Secured Notes may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders of the Secured Notes.

 

Section 5.13   Control by Supermajority of Controlling Class. A Supermajority of the Controlling Class shall have the right following the occurrence, and during the continuance, of an Event of Default to cause the institution of and direct the time, method and place of conducting any Proceeding for any remedy available to the Trustee or exercising any trust or power conferred upon the 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;

 

(b)            the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction; provided that subject to Section 6.1, the Trustee need not take any action that it determines might involve it in liability or expense (unless the Trustee has received the indemnity as set forth in (c) below);

 

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

 

 

(d)            notwithstanding the foregoing, any direction to the Trustee to undertake a Sale of the Assets shall be by the Holders of Notes representing the requisite percentage of the Aggregate Outstanding Amount of Notes 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 Trustee, as provided in this Article V, a Majority of the Controlling Class may on behalf of the Holders of all the Notes waive any past Default or Event of Default and its consequences, except a Default:

 

(a)            in the payment of the principal of any Secured Note (which may be waived only with the consent of the Holder of such Secured Note);

 

(b)            in the payment of interest on any Secured Note (which may be waived only with the consent of the Holder of such Secured Note);

 

(c)            in respect of a covenant or provision hereof that under Section 8.2 cannot be modified or amended without the waiver or consent of the Holder of each Outstanding Note materially and adversely affected thereby (which may be waived 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 Global Rating Agency Condition is satisfied).

 

In the case of any such waiver, the Issuer, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively, but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto. The Trustee shall promptly give written notice of any such waiver to each 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 Note 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 Trustee for any action taken, or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Noteholder, or group of Noteholders, holding in the aggregate more than 10% of the Aggregate Outstanding Amount of the Controlling Class, or to any suit instituted by any Noteholder for the enforcement of the payment of the principal of or interest on any Note on or after the applicable Stated Maturity (or, in the case of redemption, on or after the applicable Redemption Date).

 

Section 5.16    Waiver of Stay or Extension Laws. The Issuer covenants (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 Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law or rights, and covenant that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted 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 (subject to Section 5.5(e) in the case of sales pursuant to Section 5.5) until the entire Assets shall have been sold or all amounts secured by the Assets shall have been paid. The Trustee may upon notice to the Noteholders, 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 Trustee hereby expressly waives its rights to any amount fixed by law as compensation for any Sale; provided that the Trustee shall be authorized to deduct the reasonable costs, charges and expenses incurred by it in connection with such Sale from the proceeds thereof notwithstanding the provisions of Section 6.7 or other applicable terms hereof.

 

(b)            The Trustee may bid for and acquire any portion of the Assets in connection with a public Sale thereof, and may pay all or part of the purchase price by crediting against amounts owing on the Secured Notes 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 Trustee in connection with such Sale notwithstanding the provisions of Section 6.7 hereof or other applicable terms hereof. The Secured Notes need not be produced in order to complete any such Sale, or in order for the net proceeds of such Sale to be credited against amounts owing on the Notes. The Trustee may hold, lease, operate, manage or otherwise deal with any property so acquired in any manner permitted by law in accordance with this Indenture.

 

(c)            If any portion of the Assets consists of securities issued without registration under the Securities Act ("Unregistered Securities"), the Trustee may seek an Opinion of Counsel, or, if no such Opinion of Counsel can be obtained and with the consent of a Majority of the Controlling Class, seek a no action position from the Securities and Exchange Commission or any other relevant federal or State regulatory authorities, regarding the legality of a public or private Sale of such Unregistered Securities.

 

(d)           The Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Assets in connection with a Sale thereof, without recourse, representation or warranty. In addition, the Trustee is hereby irrevocably appointed the agent and attorney in fact of the Issuer to transfer and convey its interest in any portion of the Assets in connection with a Sale thereof, and to take all action necessary to effect such Sale. No purchaser or transferee at such a sale shall be bound to ascertain the Trustee's authority, to inquire into the satisfaction of any conditions precedent or see to the application of any Monies.

 

 

Section 5.18    Action on the Notes. The Trustee's right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking or obtaining of or application for any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Assets or upon any of the assets of the Issuer.

 

ARTICLE VI

 

The Trustee

 

Section 6.1      Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default known to the Trustee:

 

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

 

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

 

(b)            In case an Event of Default known to the Trustee has occurred and is continuing, the Trustee shall, prior to the receipt of directions, if any, from a Majority of the Controlling Class, or such other percentage or Class 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 shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

 

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

 

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

 

 

(iii)          the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Issuer or the Collateral Manager in accordance with this Indenture and/or a Majority (or such other percentage as may be required by the terms hereof) of the Controlling Class (or other Class if required or permitted by the terms hereof), relating to the time, method and place of conducting any Proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

 

(iv)          no provision of this Indenture shall require the 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 incidental services, including providing notices under this Indenture; and

 

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

 

(d)            For all purposes under this Indenture, the Trustee shall not be deemed to have notice or knowledge of any Default or Event of Default described in Sections 5.1(c), (d), (e), or (f) unless a Bank Officer assigned to and working in the Corporate Trust Office has actual knowledge thereof or unless written notice of any event which is in fact such an Event of Default or Default is received by the Trustee at the Corporate Trust Office, and such notice references the Notes generally, the Issuer, the Assets or this Indenture. For purposes of determining the 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 or Default of which the Trustee is deemed to have notice as described in this Section 6.1.

 

(e)            Upon the Trustee receiving written notice from the Collateral Manager that an event constituting "Cause" as defined in the Collateral Management Agreement has occurred, the Trustee shall, not later than three Business Days thereafter, forward such notice to the Noteholders (as their names appear in the Register).

 

(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 Trustee shall be subject to the provisions of this Section 6.1.

 

(g)           The Trustee is hereby directed to accept and acknowledge the Risk Retention Letter. The Trustee shall have no responsibility to monitor any obligation under the Risk Retention Letter.

 

 

Section 6.2      Notice of Event of Default. Promptly (and in no event later than three Business Days) after the occurrence of any Event of Default actually known to a Bank Officer of the Trustee or after any declaration of acceleration has been made or delivered to the Trustee pursuant to Section 5.2, the Trustee shall provide to the Collateral Manager, each Rating Agency, and all Holders, as their names and addresses appear on the Register, notice of all Event of Defaults hereunder known to the Trustee, unless such Default shall have been cured or waived.

 

Section 6.3      Certain Rights of Trustee. Except as otherwise provided in Section 6.1:

 

(a)            the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, electronic communication, notice, request, direction, consent, order, judgment, note or other paper or document believed by it to be genuine and to have been signed, sent or presented by the proper party or parties, any electronically signed document delivered via electronic mail or other transmission method from a person purporting to be a Responsible Officer shall be considered signed or executed by such Responsible Officer on behalf of the applicable Person. The Trustee shall have no duty to inquire into or investigate the authenticity or authorization of any such electronic signature and shall be entitled to conclusively rely on any such electronic signature without any liability with respect thereto. Any electronically signed document delivered via electronic mail or other transmission method from a person purporting to be a Responsible Officer shall be considered signed or executed by such Responsible Officer on behalf of the applicable Person. The Trustee shall have no duty to inquire into or investigate the authenticity or authorization of any such electronic signature and shall be entitled to conclusively rely on any such electronic signature without any liability with respect thereto;

 

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

 

(c)            whenever in the administration of this Indenture the Trustee shall (i) deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officer's certificate or Issuer Order or (ii) be required to determine the value of any Assets or funds hereunder or the cash flows projected to be received therefrom, the Trustee may, in the absence of bad faith on its part, rely on reports of nationally recognized accountants (which may or may not be the Independent accountants appointed by the Issuer pursuant to Section 10.9), 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 Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in reliance thereon;

 

 

(e)            the Trustee shall be under no obligation to exercise, enforce or to honor any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have provided to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses (including reasonable attorneys' fees and expenses) and liabilities which might reasonably be incurred by it in compliance with such request or direction;

 

(f)            the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, note, electronic communication or other paper or document, but the Trustee, in its discretion, may, and upon the written direction of a Majority of the Controlling Class or of a Rating Agency shall (subject to the right hereunder to be indemnified to its reasonable satisfaction 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 Trustee shall be entitled, on reasonable prior notice to the Issuer and the Collateral Manager, to examine the books and records relating to the Notes and the Assets, personally or by agent or attorney, during the Issuer's or the Collateral Manager's normal business hours; provided that the Trustee shall, and shall cause its agents to, hold in confidence all such information, except (i) to the extent disclosure may be required by law or by any regulatory, administrative or governmental authority and (ii) to the extent that the Trustee, in its sole discretion, may determine that such disclosure is consistent with its obligations hereunder; provided further that the Trustee may disclose on a confidential basis any such information to its agents, attorneys and auditors in connection with the performance of its responsibilities hereunder;

 

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

 

(h)            the Trustee shall not be liable for any action it takes or omits to take in good faith that it reasonably 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 Trustee to monitor, recalculate, evaluate or verify or independently determine the accuracy of any report, electronic communication, certificate or information received from the Issuer or Collateral Manager (unless and except to the extent otherwise expressly set forth herein);

 

(j)             to the extent any defined term hereunder, or any calculation required to be made or determined by the Trustee hereunder, is dependent upon or defined by reference to generally accepted accounting principles (as in effect in the United States) ("GAAP"), the Trustee shall be entitled to request and receive (and 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 Trustee shall not be liable for the actions or omissions of, or any inaccuracies in the records of, the Collateral Manager, the Issuer, any Paying Agent (other than the Trustee), DTC, Euroclear, Clearstream, or any other clearing agency or depository and without limiting the foregoing, the Trustee shall not be under any obligation to monitor, evaluate or verify compliance by the Collateral Manager with the terms hereof or of the Collateral Management Agreement, or to verify or independently determine the accuracy of information received by the 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 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 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 Issuer in connection with its Grant or otherwise, or in that regard to examine any Underlying Instrument, 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, Custodian, Calculation Agent or Securities Intermediary, the rights, protections, benefits, immunities and indemnities afforded to the Trustee pursuant to this Article VI shall also be afforded to the Bank acting in such capacities; provided that such rights, protections, benefits, immunities and indemnities shall be in addition to any rights, protections, benefits, immunities and indemnities provided in the Securities Account Control Agreement or any other documents to which the Bank in such capacity is a party;

 

(n)            any permissive right of the Trustee to take or refrain from taking actions enumerated herein shall not be construed as a duty;

 

(o)            to the extent permitted by applicable law, the Trustee shall not be required to give any bond or surety in respect of the execution of this Indenture or otherwise;

 

(p)            the Trustee shall not be deemed to have notice or knowledge of any matter unless a Bank Officer has actual knowledge thereof or unless written notice thereof is received by the Trustee at the Corporate Trust Office and such notice references the Notes generally, the Issuer 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 Trustee is concerned, be construed to refer only to a Default or an Event of Default of which the Trustee is deemed to have knowledge in accordance with this paragraph. Notwithstanding anything to the contrary contained herein, (i) until so notified or until a Bank Officer of the Trustee obtains actual knowledge that a Collateral Obligation has become a Defaulted Obligation, the Trustee shall not be deemed to have any notice or knowledge that a Collateral Obligation has become a Defaulted Obligation and (ii) the Trustee shall not be responsible for determining or overseeing compliance with the definition of "Eligible Investments";

 

 

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

 

(s)            to the extent not inconsistent herewith, the rights, protections, immunities and indemnities afforded to the Trustee pursuant to this Indenture also shall be afforded to the Bank in each of its capacities under the Transaction Documents and also to the Collateral Administrator; provided that, with respect to the Collateral Administrator, such protections, rights, immunities and indemnities shall be in addition to any protections, rights, immunities and indemnities provided in the Collateral Administration Agreement;

 

(t)            in making or disposing of any investment permitted by this Indenture, the Trustee is authorized to deal with itself (in its individual capacity) or with any one or more of its Affiliates, in each case on an arm's-length basis, whether it or such Affiliate is acting as a subagent of the 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;

 

(u)            none of the Collateral Administrator, the Calculation Agent or the Trustee shall have any liability or responsibility for (i) the monitoring or determination of the unavailability or the cessation of the Benchmark, (ii) the determination (other than, in the case of the Calculation Agent, the calculation of such rate once such applicable rate has been selected and adopted pursuant to the provisions of this Indenture), selection or verification of an Alternative Rate, a Fallback Rate, or an alternative base rate (including, without limitation, whether any such rate is an Alternative Rate or a Fallback Rate or whether a Benchmark Replacement Date or a Benchmark Transition Event has occurred, or any other conditions to the designation of such rate have been satisfied), (iii) the determination or selection of any Base Rate Modifier or any other modifier thereto, or (iv) the determination or selection of any methodology or conventions for the calculation of an Alternative Rate (which, for example, may include operational, administrative or technical parameters for compounding such Alternative Rate). None of the Collateral Administrator, the Trustee or the Calculation Agent shall have any liability for any failure or delay in performing its duties under this Indenture or the other Transaction Documents as a result of the unavailability of a "Term SOFR" rate as described in the definition thereof, or as a result of the Collateral Manager's failure or delay in selecting or designating a non-Term SOFR reference rate or timely proposing an Alternative Rate, Fallback Rate or other alternative base rate;

 

 

(v)            the Trustee or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Trustee's economic self-interest for (i) serving as investment adviser, administrator, shareholder, servicing agent, custodian or 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;

 

(w)            the Trustee shall have no duty (i) to see to any recording, filing, or depositing of this Indenture or any supplemental indenture or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording, filing or depositing or to any rerecording, refiling or redepositing of any thereof or (ii) to maintain any insurance;

 

(x)            if within 80 calendar days of delivery of financial information or disbursements (which delivery may be via posting to the Trustee's website) the Trustee receives written notice of an error or omission related to financial information or disbursements thereto and within eight calendar days of the Trustee’s receipt of such notice the Collateral Manager and Issuer confirm such error or omission, the Trustee shall agree to use reasonable efforts to correct such error or omission and such use of reasonable efforts will be the only obligation of the Trustee in connection therewith. The Trustee shall not be required to take any action beyond such period and will have no responsibility for the same. In no event shall the Trustee be obligated to take any action at any time at the request or direction of any Person unless such Person shall have offered to the Trustee indemnity reasonably satisfactory to it;

 

(y)            neither the Trustee nor the Collateral Administrator will be under any obligation to (i) confirm or verify whether the conditions to the Delivery of the Assets have been satisfied or to determine whether or not a Collateral Obligation is eligible for purchase hereunder or meets the criteria in the definition thereof or (ii) evaluate the sufficiency of the documents or instruments delivered to it by or on behalf of the Issuer in connection with the Grant by the Issuer to the Trustee of any item constituting the Assets or otherwise, or in that regard to examine any Underlying Instruments, in order to determine compliance with the applicable requirements of and restrictions on transfer of a Collateral Obligation;

 

(z)            the Trustee shall have no obligation to determine the E.U./U.K. Retained Interest or verify or monitor whether an E.U./U.K. Retention Deficiency has occurred or whether the E.U. Securitization Laws, the U.K. Securitization Laws or the U.S. Risk Retention Rules have been or will be complied with; and

 

(aa)      in order to comply with the laws, rules, regulations, and executive orders in effect from time to time applicable to banking institutions, including, without limitation, those relating to the funding of terrorist activities and money laundering including Section 326 of the USA PATRIOT Act of the United States ("Applicable Law"), the Trustee is required to obtain, verify, record, and update certain information relating to individuals and entities which maintain a business relationship with the Trustee. Accordingly, each of the parties agrees to provide to the Trustee upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Trustee to comply with Applicable Law.

 

 

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 Trustee assumes no responsibility for their correctness. The Trustee makes no representation as to the validity or sufficiency of this Indenture (except as may be made with respect to the validity of the Trustee's obligations hereunder), the Assets or the Notes. The Trustee shall not be accountable for the use or application by the Issuer of the Notes or the proceeds thereof or any Money paid to the Issuer pursuant to the provisions hereof.

 

Section 6.5      May Hold Notes. The Trustee, any Paying Agent, Registrar or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Issuer or any of its Affiliates with the same rights it would have if it were not Trustee, Paying Agent, Registrar or such other agent.

 

Section 6.6      Money Held in Trust. Money held by the Trustee hereunder shall be held in trust to the extent required herein. The Trustee shall be under no liability for interest on any Money received by it hereunder except to the extent of income or other gain on investments which are deposits in or certificates of deposit of the Bank in its commercial capacity and income or other gain actually received by the Trustee on Eligible Investments.

 

Section 6.7      Compensation and Reimbursement. (a) The Issuer agrees:

 

(i)            to pay the Trustee on each Payment Date reasonable compensation, as set forth in a separate fee schedule, for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);

 

(ii)           except as otherwise expressly provided herein, to reimburse the Trustee in a timely manner upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture or other Transaction Document (including, without limitation, any costs related to FATCA compliance, securities transaction charges and the reasonable compensation and expenses and disbursements of its agents and legal counsel and of any accounting firm or investment banking firm employed by the Trustee pursuant to Section 5.4, 5.5, 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 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 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 attorneys' 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 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 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 which the 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 Trustee shall continue to serve as Trustee under this Indenture notwithstanding the fact that the Trustee shall not have received amounts due it hereunder; provided that nothing herein shall impair or affect the Trustee's rights under Section 6.9. No direction by the Noteholders shall affect the right of the Trustee to collect amounts owed to it under this Indenture. If, on any date when a fee or an expense shall be payable to the 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 Trustee hereby agrees not to cause the filing against the Issuer or any of its subsidiaries, of a petition in bankruptcy for the non-payment to the Trustee of any amounts provided by this Section 6.7 until at least one year and one day, or, if longer, the applicable preference period then in effect and one day, after the payment in full of all Notes issued under this Indenture.

 

(d)            The Issuer's payment obligations to the Trustee under this Section 6.7 shall be secured by the lien of this Indenture payable in accordance with the Priority of Payments, and shall survive the discharge of this Indenture and the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default or an Event of Default under Section 5.1(e) or Section 5.1(f), the expenses are intended to constitute expenses of administration under the Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency or similar law.

 

 

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 of America or of any state thereof, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least U.S.$200,000,000, subject to supervision or examination by federal or state authority, having a long term issuer rating of at least "BBB-" by S&P and (to the extent that Fitch is rating any Notes then Outstanding) a long-term issuer rating of at least "BBB" by Fitch and having an office within the United States. If the Trustee is downgraded by S&P or Fitch below S&P's or Fitch's, as applicable, minimum rating provided in this Section 6.8, the Trustee may obtain, at its own expense, a confirmation from S&P or Fitch, as applicable, that such Rating Agency's then-current rating of the Secured Notes will not be downgraded or withdrawn by reason of its downgrade of the Trustee's rating and upon receipt of such confirmation the Trustee shall be deemed to be eligible for purposes of this Section 6.8 until a further downgrade. If such organization or entity publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purposes of this Section 6.8, the combined capital and surplus of such organization or entity shall be deemed to be its combined capital and surplus as set forth in its most recent published report of condition. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 6.8, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI.

 

Section 6.9      Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Trustee under Section 6.10.

 

(b)            Subject to Section 6.9(a), the Trustee may resign at any time by giving not less than 30 days' written notice thereof to the Issuer, the Collateral Manager, the Holders of the Notes and each 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 Trustee so resigning and one copy to the successor Trustee or Trustees, together with a copy to each Holder and the Collateral Manager; provided that such successor Trustee shall be appointed only upon the written consent of a Majority of the Secured Notes of each Class or, at any time when an Event of Default shall have occurred and be continuing or when a successor Trustee has been appointed pursuant to Section 6.9(e), by an Act of a Majority of the Controlling Class. If no successor Trustee shall have been appointed and an instrument of acceptance by a successor Trustee shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee or any Holder, on behalf of itself and all others similarly situated, may petition any court of competent jurisdiction for the appointment of a successor Trustee satisfying the requirements of Section 6.8.

 

(c)            The Trustee may be removed at any time upon 30 days written notice by Act of a Majority of each Class of Notes or, at any time when an Event of Default shall have occurred and be continuing by an Act of a Majority of the Controlling Class, delivered to the Trustee and to the Issuer.

 

(d)            If at any time:

 

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

 

 

(ii)            the Trustee shall become incapable of acting or shall be adjudged as bankrupt or insolvent or a receiver or liquidator of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

 

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

 

(e)            If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of the Trustee for any reason (other than resignation), the Issuer, by Issuer Order, shall promptly appoint a successor Trustee. If the Issuer shall fail to appoint a successor Trustee within 30 days after such resignation, removal or incapability or the occurrence of such vacancy, a successor Trustee may be appointed by a Majority of the Controlling Class by written instrument delivered to the Issuer and the retiring Trustee. The successor Trustee so appointed shall, forthwith upon its acceptance of such appointment, become the successor Trustee and supersede any successor Trustee proposed by the Issuer. If no successor Trustee shall have 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 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 Trustee.

 

(f)            The Issuer shall give prompt notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee by providing notice of such event to the Collateral Manager, to each Rating Agency and to the Holders of the Notes as their names and addresses appear in the Register. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. If the Issuer fails to provide such notice within ten days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be given at the expense of the Issuer. If the Bank shall resign or be removed as Trustee, the Bank shall also resign or be removed as Paying Agent, Calculation Agent, Registrar, Custodian and any other capacity in which the Bank is then acting pursuant to this Indenture or any other Transaction Document.

 

Section 6.10      Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall meet the requirements of Section 6.8 and shall execute, acknowledge and deliver to the Issuer and the retiring Trustee an instrument accepting such appointment. Upon delivery of the required instruments, the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts, duties and obligations of the retiring Trustee; but, on request of the Issuer or a Majority of any Class of Secured Notes or the successor Trustee, such retiring Trustee shall, upon payment of its charges then unpaid, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee, and shall duly assign, transfer and deliver to such successor Trustee all property and Money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts.

 

 

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

 

Section 6.12      Co-Trustees. At any time or times, the Issuer and the Trustee shall have power to appoint one or more Persons to act as co-trustee (subject to written notice to the Rating Agencies), jointly with the Trustee, of all or any part of the Assets, with the power to file such proofs of claim and take such other actions pursuant to Section 5.6 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 Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint a co-trustee. If the Issuer does not join in such appointment within 15 days after the receipt by it of a request to do so, the Trustee shall have 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 Trustee hereunder, shall be exercised solely by the Trustee;

 

(b)            the rights, powers, duties and obligations hereby conferred or imposed upon the Trustee in respect of any property covered by the appointment of a co-trustee shall be conferred or imposed upon and exercised or performed by the Trustee or by the Trustee and such co-trustee jointly as shall be provided in the instrument appointing such co-trustee;

 

 

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

 

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

 

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

 

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

 

The Issuer shall notify each Rating Agency of the appointment of a co-trustee hereunder.

 

Section 6.13      Certain Duties of Trustee Related to Delayed Payment of Proceeds. If the Trustee shall not have received a payment with respect to any Asset on its Due Date, (a) the Trustee shall promptly notify the Issuer and the Collateral Manager in writing or electronically and (b) unless within three Business Days (or the end of the applicable grace period for such payment, if any) after such notice (x) such payment shall have been received by the 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 Trustee in accordance with Section 10.2(a), the 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 Instrument or a paying agent designated by either of them, as the case may be, to make such payment not later than three Business Days after the date of such request. If such payment is not made within such time period, the Trustee, subject to the provisions of clause (iv) of Section 6.1(c), shall take such reasonable 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 and/or substitution shall be subject to Section 10.8 and Article XII of this Indenture, as the case may be. Notwithstanding any other provision hereof, the Trustee shall deliver to the Issuer or its designee any payment with respect to any 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 Trustee in accordance with this Section 6.13 and such payment shall not be deemed part of the Assets.

 

Section 6.14      Authenticating Agents. Upon the request of the Issuer, the Trustee shall, and if the Trustee so chooses the Trustee may, appoint one or more Authenticating Agents with power to act on its behalf and subject to its direction in the authentication of Notes in connection with issuance, transfers and exchanges under Sections 2.4, 2.5, 2.6 and 8.5, as fully to all intents and purposes as though each such Authenticating Agent had been expressly authorized by such Sections to authenticate such Notes. For all purposes of this Indenture, the authentication of Notes by an Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the authentication of Notes by the Trustee.

 

 

Any 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 Person.

 

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

 

Unless the Authenticating Agent is also the same entity as the Trustee, the Issuer agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services, and reimbursement for its reasonable expenses relating thereto as an Administrative Expense. The provisions of Sections 2.8, 6.4 and 6.5 shall be applicable to any Authenticating Agent.

 

Section 6.15      Withholding. The Trustee is hereby authorized and directed to retain from amounts otherwise distributable to any Holder sufficient funds for the payment of any such tax that is legally owed or required to be withheld by the Issuer (but such authorization shall not prevent the 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) and to timely remit such amounts to the appropriate taxing authority. The amount of any withholding tax imposed with respect to any Note shall be treated as Cash distributed to the relevant Holder at the time it is withheld by the Trustee. If there is a reasonable possibility that withholding is required by applicable law with respect to a distribution, the Paying Agent or the 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 Trustee shall reasonably cooperate with such Person in providing readily available information so long as such Person agrees to reimburse the Trustee for any out-of-pocket expenses incurred. Nothing herein shall impose an obligation on the part of the Trustee to determine the amount of any tax or withholding obligation on the part of the Issuer or in respect of the Notes.

 

Section 6.16      Representative for Secured Noteholders only; Agent for each other Secured Party and the Holders of the Subordinated Notes. With respect to the security interest created hereunder, the delivery of any item of Asset to the Trustee is to the Trustee as representative of the Secured Noteholders and agent for each other Secured Party and the Holders of the Subordinated Notes. In furtherance of the foregoing, the possession by the Trustee of any Asset, and the endorsement to or registration in the name of the Trustee of any Asset (including without limitation as entitlement holder of the Custodial Account) are all undertaken by the Trustee in its capacity as representative of the Secured Noteholders, and agent for each other Secured Party and the Holders of the Subordinated Notes.

 

 

Section 6.17      Representations and Warranties of the Bank. The Bank hereby represents and warrants as follows:

 

(a)            Organization. The Bank has been duly organized and is validly existing as a national banking association with trust powers under the laws of the United States and has the power to conduct its business and affairs as a trustee, paying agent, registrar, transfer agent, custodian and calculation agent.

 

(b)            Authorization; Binding Obligations. The Bank has the corporate power and authority to perform the duties and obligations of Trustee, Paying Agent, Registrar, Transfer Agent, Custodian, Collateral Administrator, Securities Intermediary and Calculation Agent 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 Trustee hereunder.

 

(d)            No Conflict. Neither the execution, delivery and performance of this Indenture, nor the consummation of the transactions contemplated by this Indenture, is prohibited by, or requires the Bank to obtain any consent, authorization, approval or registration under, any law, statute, rule, regulation, judgment, order, writ, injunction or decree that is binding upon the Bank.

 

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 Notes, in accordance with the terms of such Notes 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 Notes, in accordance with the Subordinated Notes and this Indenture.

 

Amounts properly withheld under the Code or other applicable law by any Person from a payment under a Note shall be considered as having been paid by the Issuer to the relevant Holder for all purposes of this Indenture.

 

 

Section 7.2      Maintenance of Office or Agency. The Issuer hereby appoints the Trustee as a Paying Agent for payments on the Notes, and appoints the Trustee as Transfer Agent at its applicable Corporate Trust Office as the Issuer's agent where Notes may be surrendered for registration of transfer or exchange. The Issuer hereby appoints CT Corporation System as its agent upon whom process or demands may be served in any action arising out of or based on this Indenture or the transactions contemplated hereby in the Borough of Manhattan, the City of New York.

 

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; provided that (x) the Issuer will maintain in the Borough of Manhattan, the City of New York, an office or agency where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served and, subject to any laws or regulations applicable thereto, an office or agency outside of the United States where Notes may be presented for payment; and (y) no paying agent shall be appointed in a jurisdiction which subjects payments on the Notes to withholding tax solely as a result of such Paying Agent's activities. The Issuer shall at all times maintain a duplicate copy of the Register at the Corporate Trust Office. The Issuer shall give prompt written notice to the Trustee, each 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 Issuer shall fail to maintain any such required office or agency in the Borough of Manhattan, The City of New York, or outside the United States, or shall fail to furnish the Trustee with the address thereof, presentations and surrenders may be made (subject to the limitations described in the preceding paragraph) at, notices and demands may be served on the Issuer, and Notes may be presented and surrendered for payment to the appropriate Paying Agent at its main office, and the Issuer hereby appoints the same as its agent to receive such respective presentations, surrenders, notices and demands.

 

Section 7.3      Money for Note Payments to be Held in Trust. All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Payment Account shall be made on behalf of the Issuer by the Trustee or a Paying Agent with respect to payments on the Notes.

 

When the Issuer shall have a Paying Agent that is not also the Registrar, it 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 Issuer shall have a Paying Agent other than the Trustee, it shall, on or before the Business Day next preceding each Payment Date and any Redemption Date, as the case may be, direct the 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 Trustee) the Issuer shall promptly notify the Trustee of its action or failure so to act. Any Monies deposited with a Paying Agent (other than the Trustee) in excess of an amount sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall be paid over by such Paying Agent to the Trustee for application in accordance with Article XI.

 

 

The initial Paying Agent shall be as set forth in Section 7.2. Any additional or successor Paying Agents (other than a successor Trustee who shall automatically become the Paying Agent hereunder) shall be appointed by Issuer Order with written notice thereof to the Trustee; provided that so long as the Notes of any Class are rated by a Rating Agency, with respect to any additional or successor Paying Agent, 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 and (to the extent that Fitch is rating any Notes then Outstanding) a short-term crediting rating of at least "F2" or a long-term rating of at least "BBB" by Fitch or (ii) the Global Rating Agency Condition is satisfied. If such successor Paying Agent ceases to have a long-term debt rating of "A+" or higher by S&P or a short-term debt rating "A-1" by S&P and (to the extent that Fitch is rating any Notes then Outstanding) a short-term credit rating of at least "F2" or a long-term rating of at least "BBB" by Fitch, the Issuer shall promptly remove such Paying Agent and appoint a successor Paying Agent. The Issuer 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 Issuer shall cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee and if the Trustee acts as Paying Agent, it hereby so agrees, subject to the provisions of this Section 7.3, that such Paying Agent will:

 

(a)            allocate all sums received for payment to the Holders of Notes for which it acts as Paying Agent on each Payment Date and any Redemption Date among such Holders in the proportion specified in the applicable Distribution Report to the extent permitted by applicable law;

 

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

 

(c)            if such Paying Agent is not the Trustee, immediately resign as a Paying Agent and forthwith pay to the Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment;

 

(d)            if such Paying Agent is not the Trustee, immediately give the Trustee notice of any default by the Issuer in the making of any payment required to be made; and

 

(e)            if such Paying Agent is not the Trustee, during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent.

 

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

 

 

Except as otherwise required by applicable law, any Money deposited with the Trustee or any Paying Agent in trust for any payment on any Note and remaining unclaimed for two years after such amount has become due and payable shall be paid to the Issuer on Issuer Order; and the Holder of such Note 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 Trustee or such Paying Agent with respect to such trust Money shall thereupon cease. The Trustee or such Paying Agent, before being required to make any such release of payment, may, but shall not be required to, adopt and employ, at the expense of the Issuer any reasonable means of notification of such release of payment, including, but not limited to, mailing notice of such release to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in Monies due and payable but not claimed is determinable from the records of any Paying Agent, at the last address of record of each such Holder.

 

Section 7.4      Existence of Issuer. (a) The Issuer shall, to the maximum extent permitted by applicable law, maintain in full force and effect its existence and rights as a limited liability company formed under the laws of the State of Delaware, and shall obtain and preserve its qualification to do business in each jurisdiction in which such qualifications are or shall be necessary to protect the validity and enforceability of this Indenture, the Notes or any of the Assets; provided that the Issuer shall be entitled to change its jurisdiction of formation from the State of Delaware to any other jurisdiction reasonably selected by the Issuer at the direction of a Majority of the Subordinated Notes so long as (i) the Issuer has received a legal opinion (upon which the Trustee may conclusively rely) to the effect that such change is not disadvantageous in any material respect to the Holders, (ii) written notice of such change shall have been given to the Trustee by the Issuer, which notice shall be promptly forwarded by the Trustee to the Holders, the Collateral Manager and to each Rating Agency, (iii) the Global Rating Agency Condition is satisfied and (iv) on or prior to the 15th Business Day following receipt of such notice the Trustee shall not have received written notice from a Majority of the Controlling Class objecting to such change.

 

(b)            The Issuer (i) shall ensure that all organizational or other formalities regarding its existence (including, if required, holding regular meetings of its manager(s) and member(s) or other similar meetings) are followed and (ii) shall not have any employees (other than its managers and members to the extent they are employees). The Issuer shall not take any action, or conduct its affairs in a manner, that is likely to result in its separate existence being ignored 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, (A) the Issuer shall not have any subsidiaries; and (B) (x) the Issuer shall not (1) except as contemplated by the Collateral Management Agreement or the Issuer's limited liability company agreement, engage in any transaction with any member that would constitute a conflict of interest or (2) pay dividends or distributions other than in accordance with the terms of this Indenture and the Issuer's limited liability company agreement and (y) the Issuer shall (1) maintain books and records separate from any other Person, (2) maintain its accounts separate from those of any other Person, (3) not commingle its assets with those of any other Person, (4) conduct its own business in its own name, (5) maintain separate financial statements, (6) pay its own liabilities out of its own funds, (7) maintain an arm's length relationship with its Affiliates, (8) use separate stationery, invoices and checks, (9) hold itself out as a separate Person, (10) correct any known misunderstanding regarding its separate identity and (11) have at least one Independent Manager.

 

 

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 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 delivered on the Original Closing Date 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 Notes 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 Trustee and the Holders of the Secured Notes 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.

 

The Issuer hereby designates the 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 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 United States counsel to file without the Issuer's signature a Financing Statement that names the Issuer as debtor and the Trustee, on behalf of the Secured Parties, as secured party and that describes "all personal property of the Debtor now owned or hereafter acquired" as the Assets in which the Trustee has a Grant.

 

 

(b)            The 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 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 Original Closing Date) unless the Trustee shall have received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property and the priority thereof will continue to be maintained after giving effect to such action or actions.

 

Section 7.6      Opinions as to Assets. Within the six month period preceding the fifth anniversary of the Original Closing Date (and every five years thereafter), the Issuer shall furnish to the Trustee, S&P and (so long as any Class A-1 Note is Outstanding at the time such Opinion of Counsel is delivered) Fitch, an Opinion of Counsel stating that in the opinion of such counsel as of the date of such opinion under the Delaware UCC, the UCC financing statement(s) filed in connection with the lien and security interests created by this Indenture shall remain effective and that no further action (other than as specified in such opinion) shall be required to maintain the continued effectiveness of such lien over the next five years.

 

Section 7.7      Performance of Obligations. (a) The Issuer 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.

 

(b)            The Issuer shall notify S&P and Fitch within 10 Business Days after it has received notice from any Noteholder or the Issuer of any material breach of any Transaction Document, following any applicable cure period for such breach.

 

Section 7.8      Negative Covenants. (a) The Issuer has not, since the Original Closing Date, and will not, on and after the Refinancing 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 pursuant to the Original Indenture and as expressly permitted by this Indenture and the Collateral Management Agreement;

 

 

(ii)           claim any credit on, make any deduction from, or dispute the enforceability of payment of the principal or interest payable (or any other amount) in respect of the Notes (other than amounts withheld or deducted in accordance with the Code or any applicable laws of any other applicable jurisdiction);

 

(iii)           (A) incur or assume or guarantee any indebtedness, other than the Notes, this Indenture and the transactions contemplated hereby or (B) (1) issue any additional class of Notes except in accordance with Sections 2.13 and 3.2 or (2) issue any additional limited liability company interests, except in accordance with the Issuer's limited liability company agreement, other than 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 or the Notes except as may be permitted hereby or by the Collateral Management Agreement, (B) except as permitted by this Indenture, permit any lien, charge, adverse claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden any part of the Assets, any interest therein or the proceeds thereof, or (C) except as permitted by this Indenture, take any action that would permit the lien of this Indenture not to constitute a valid first priority security interest in the Assets;

 

(v)           amend the Collateral Management Agreement except pursuant to the terms thereof 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 distributions other than in accordance with the Priority of Payments;

 

(viii)        permit the formation of any subsidiaries;

 

(ix)           conduct business under any name other than its own;

 

(x)            have any employees (other than its managers and members to the extent they are employees);

 

(xi)           sell, transfer, exchange or otherwise dispose of Assets, or enter into an agreement or commitment to do so or enter into or engage in any business with respect to any part of the Assets, except as expressly permitted by both this Indenture and the Collateral Management Agreement;

 

(xii)          fail to maintain an Independent Manager under the Issuer's limited liability company agreement; and

 

 

(xiii)        elect, or take any other action, to be treated as an association taxable as a corporation for U.S. federal income tax purposes.

 

(b)            [Reserved].

 

(c)            The Issuer shall not be party to any agreements without including customary "non-petition" and "limited recourse" provisions therein (and shall not amend or eliminate such provisions in any agreement to which it is party), except for any agreements related to the purchase and sale of any 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 Issuer may not acquire any of the Secured Notes; provided that this Section 7.8(d) shall not be deemed to limit an optional or mandatory redemption pursuant to the terms of this Indenture or the purchase of Secured Notes pursuant to Section 9.7 hereof.

 

(e)            The Issuer shall not acquire or hold any Collateral Obligation or Eligible Investment that is a debt obligation in bearer form unless the Collateral Obligation or Eligible Investment is not required to be in registered form under Section 163(f)(2)(A) of the Code.

 

Section 7.9      Statement as to Compliance. On or before December 31^st in each calendar year commencing in 2025, or immediately if there has been a Default under this Indenture and prior to the issuance of any Additional Notes pursuant to Section 2.13, the Issuer shall deliver to the Trustee (to be forwarded by the Trustee to the Collateral Manager, each Noteholder making a written request therefor and each 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      Issuer May Consolidate, etc., Only on Certain Terms. Except for the Permitted Mergers (which the Issuer is hereby expressly authorized to perform the actions necessary to consummate the Permitted Mergers), the Issuer (the "Merging Entity") shall not consolidate or merge with or into any other Person or transfer or convey all or substantially all of its assets to any Person, unless permitted by United States and Delaware law and unless:

 

(a)            the Merging Entity shall be the surviving entity, or the Person (if other than the Merging Entity) formed by such consolidation or into which the Merging Entity is merged or to which all or substantially all of the assets of the Merging Entity are transferred (the "Successor Entity") (A) if the Merging Entity is the Issuer, shall be a limited liability company or other entity organized and existing under the laws of the State of Delaware 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 formation pursuant to Section 7.4, and (B) shall expressly assume, by an indenture supplemental hereto and an omnibus assumption agreement, executed and delivered to the Trustee, each Holder, the Collateral Manager and the Collateral Administrator, the due and punctual payment of the principal of and interest on all Secured Notes, the payments of the Subordinated Notes and the performance and observance of every covenant of this Indenture and of each other Transaction Document on its part to be performed or observed, all as provided herein or therein, as applicable;

 

 

(b)            each Rating Agency shall have been notified in writing of such consolidation or merger and the Trustee shall have received written confirmation from each Rating Agency that its then-current ratings issued with respect to the Secured Notes then rated by each Rating Agency will not be reduced or withdrawn as a result of the consummation of such transaction;

 

(c)            if the Merging Entity is not the Successor Entity, the Successor Entity shall have agreed with the Trustee (i) to observe the same legal requirements for the recognition of such formed or surviving entity as a legal entity separate and apart from any of its Affiliates as are applicable to the Merging Entity with respect to its Affiliates and (ii) not to consolidate or merge with or into any other Person or transfer or convey the Assets or all or substantially all of its assets to any other Person except in accordance with the provisions of this Section 7.10;

 

(d)            if the Merging Entity is not the Successor Entity, the Successor Entity shall have delivered to the Trustee and each Rating Agency an Officer's certificate and an Opinion of Counsel each stating that such Person is 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 sub-section (a) above and to execute and deliver an indenture supplemental hereto for the purpose of assuming such obligations; that such Person has duly authorized the execution, delivery and performance of a supplemental indenture hereto for the purpose of assuming such obligations and that such supplemental indenture is a valid, legal and binding obligation of such Person, enforceable in accordance with its terms, subject only to bankruptcy, reorganization, insolvency, moratorium and other laws affecting the enforcement of creditors' rights generally and to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); if the Merging Entity is the Issuer, that, immediately following the event which causes such Successor Entity to become the successor to the Issuer, (i) such Successor Entity has title, free and clear of any lien, security interest or charge, other than the lien and security interest of this Indenture and any other Permitted Liens, to the Assets securing all of the Secured Notes and (ii) the Trustee continues to have a valid perfected first priority security interest in the Assets securing all of the Secured Notes; and in each case as to such other matters as the Trustee or any Noteholder may reasonably require; provided that nothing in this clause shall imply or impose a duty on the Trustee to require such other documents;

 

 

(e)            immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;

 

(f)            the Merging Entity shall have notified each Rating Agency of such consolidation, merger, transfer or conveyance and shall have delivered to the Trustee and each Noteholder an Officer's certificate and an Opinion of Counsel each stating that such consolidation, merger, transfer or conveyance and such supplemental indenture comply with this Article VII and that all conditions precedent in this Article VII relating to such transaction have been complied with;

 

(g)            the Merging Entity shall have delivered to the Trustee an Opinion of Counsel stating that after giving effect to such transaction, the Issuer (or, if applicable, the Successor Entity) (i) will not be required to register as an investment company under the 1940 Act and (ii) will not be treated as an association or a publicly traded partnership, in each case, that is taxable as a corporation for U.S. federal income tax purposes or otherwise subject to U.S. federal income tax on a net basis;

 

(h)            after giving effect to such transaction, the outstanding stock of the Merging Entity (or, if applicable, the Successor Entity) will not be beneficially owned within the meaning of the 1940 Act by any U.S. Person; and

 

(i)            the fees, costs and expenses of the Trustee (including any reasonable legal fees and expenses) associated with the matters addressed in this Section 7.10 shall have been paid by the Merging Entity (or, if applicable, the Successor Entity) or otherwise provided for to the satisfaction of the Trustee.

 

Section 7.11      Successor Substituted. Upon any consolidation or merger, or transfer or conveyance of all or substantially all of the assets of the Issuer in accordance with Section 7.10 in which the Merging Entity is not the surviving entity, the Successor Entity shall succeed to, and be substituted for, and may exercise every right and power of, the Merging Entity under this Indenture with the same effect as if such Person had been named as the Issuer herein. In the event of any such consolidation, merger, transfer or conveyance, the Person named as the "Issuer" in the first paragraph of this Indenture or any successor which shall theretofore have become such in the manner prescribed in this Article VII may be dissolved, wound up and liquidated at any time thereafter, and such Person thereafter shall be released from its liabilities as obligor and maker on all the Notes and from its obligations under this Indenture and the other Transaction Documents to which it is a party.

 

Section 7.12      No Other Business. The Issuer shall not have any employees (other than its managers and members to the extent they are employees) and shall not engage in any business or activity other than issuing, selling, paying and redeeming the Notes and any Additional Notes issued pursuant to this Indenture, 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. The Issuer may amend, or permit the amendment of, its limited liability company agreement or certificate of formation only if such amendment would satisfy the Global Rating Agency Condition.

 

 

Section 7.13      [Reserved].

 

Section 7.14      Annual Rating Review. (a) So long as any of the Secured Notes of any Class remain Outstanding, on or before December 31^st in each year commencing in 2025, the Issuer shall obtain and pay for an annual review of the rating of each such Class of Secured Notes from each Rating Agency, as applicable. The Issuer shall promptly notify the Trustee and the Collateral Manager in writing (and the Trustee shall promptly provide the Holders with a copy of such notice) if at any time the then-current rating of any such Class of Secured Notes has been, or is known will be, changed or withdrawn.

 

(b)            The Issuer shall obtain and pay for an annual review of (i) any Collateral Obligation which has an S&P Rating derived as set forth in clause (iii)(b) of the definition of the term "S&P Rating" and (ii) to the extent that Fitch is rating any Notes then outstanding, any middle market loan that has a Fitch Rating determined pursuant to clause (e) under the heading "Fitch Rating" in Schedule 7.

 

Section 7.15      Reporting. At any time when the Issuer is 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 Issuer shall promptly furnish or cause to be furnished Rule 144A Information to such Holder or beneficial owner, to a prospective purchaser of such Note designated by such Holder or beneficial owner, or to the Trustee for delivery 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 Issuer hereby agrees that for so long as any Secured Notes remain Outstanding there will at all times be an agent appointed (which does not control or is not controlled or under common control with the Issuer or its Affiliates or the Collateral Manager or its Affiliates) to calculate the Benchmark in respect of each Interest Accrual Period (or, in the case of the first Interest Accrual Period commencing on the Refinancing Date, each portion thereof) (the "Calculation Agent"). The Issuer hereby appoints the Collateral Administrator as Calculation Agent. The Calculation Agent may be removed by the Issuer or the Collateral Manager, on behalf of the Issuer at any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Issuer or the Collateral Manager, on behalf of the Issuer, in respect of any Interest Accrual Period, the Issuer or the Collateral Manager, on behalf of the Issuer, 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. 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 does hereby agree) that, as soon as practicable after 5:00 a.m. Chicago time on each Interest Determination Date, but in no event later than 5:00 a.m. New York time on the U.S. Government Securities Business Day immediately following each Interest Determination Date, the Calculation Agent will calculate the Interest Rate applicable to each Class of Floating Rate Notes during the related Interest Accrual Period (or portion thereof) and the Note 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 Notes in respect of the related Interest Accrual Period. At such time, the Calculation Agent will communicate such rates and amounts to the Issuer, the Trustee, each Paying Agent, the Collateral Manager, Euroclear and Clearstream. The Calculation Agent shall notify the Issuer before 5:00 p.m. (New York time) on every Interest Determination Date if it has not determined and is not in the process of determining any such Interest Rate or Note Interest Amount, together with its reasons therefor. The Calculation Agent's determination of the foregoing rates and amounts for any Interest Accrual Period (or portion thereof) will (in the absence of manifest error) be final and binding upon all parties.

 

 

(c)            Neither the Trustee nor the Calculation Agent shall have any liability or responsibility for the determination (other than the calculation of such rate once such applicable rate has been selected), selection or verification of an alternative base rate (including, without limitation, whether any such rate is an Alternative Rate or whether the conditions for the designation of such rate have been satisfied).  The Trustee, the Collateral Administrator and the Calculation Agent shall be entitled to rely upon the Collateral Manager's designation of any such rate and shall have no liability for any failure or delay in performing its duties under this Indenture as a result of the unavailability of a reference rate as described herein‎, including as a result of any inability, delay, error or inaccuracy on the part of any other transaction party, ‎including without limitation the Collateral Manager and the Term SOFR Administrator, in providing any direction, instruction, ‎notice or information required or contemplated by the terms of this Indenture and reasonably required for the ‎performance of such duties.

 

Section 7.17      Certain Tax Matters. (a) The Issuer has not filed and shall not file any election to be treated as other than a disregarded entity or a partnership for U.S. federal, state or local income or franchise tax purposes. Each Holder or beneficial owner of Subordinated Notes or any Class of Secured Notes that is characterized as equity in the Issuer for U.S. federal income tax purposes (each such Note, a "Partnership Interest" and each such Holder or beneficial owner, 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 Treasury Regulations.

 

(b)            The Issuer shall treat (i) the Secured Notes as indebtedness of the Issuer for U.S. federal, state and local income and franchise tax purposes, except as otherwise required by law and (ii) the Subordinated Notes as equity in the Issuer for U.S. federal, state and local income and franchise tax purposes.

 

(c)            The Issuer shall file, or cause to be filed, any tax returns, including information tax returns, required by any governmental authority.

 

(d)            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 a Subordinated Note (or any Class of Secured Notes that is characterized 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.

 

 

(e)            Notwithstanding anything herein to the contrary, the Collateral Manager, the Issuer, the Trustee, the Collateral Administrator, the Initial Purchaser, the E.U./U.K. Retention Provider, the U.S. Retention Provider, the Holders and beneficial owners of the Notes 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 Trustee, the Collateral Administrator, the Initial Purchaser, the E.U./U.K. Retention Provider, the U.S. Retention Provider 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).

 

(f)            Upon the Issuer's receipt of a request of a Holder of a Secured Note or written request of a Person certifying that it is an owner of a beneficial interest in a Secured Note (including, in each case, Holders and beneficial owners of any Additional Notes issued hereunder) for the information described in Treasury Regulations Section 1.1275-3(b)(1)(i) that is applicable to such Note, the Issuer will cause its Independent certified public accountants to provide promptly to the Trustee and such requesting Holder or owner of a beneficial interest in such a Note all of such information. Any additional issuance of Notes shall be accomplished in a manner that will allow the Independent certified public accountants of the Issuer to accurately calculate original issue discount income to holders of the Additional Notes. Upon request by the Independent accountants, the Trustee shall provide to the Independent accountants information reasonably available to it as reasonably requested by the Independent accountants to comply with this Section 7.17, including information contained in the Register.

 

(g)            If required to prevent the withholding and imposition of United States income tax on payments made to the Issuer, the Issuer shall deliver or cause to be delivered an IRS Form W-9 or applicable successor form certifying as to the United States Tax Person status of the Issuer (or its sole owner) to each issuer or Obligor of or counterparty with respect to an Asset at the time such Asset is purchased or entered into by the Issuer and thereafter prior to the obsolescence or expiration of such form.

 

(h)            Upon reasonable request, the Issuer shall provide any information necessary to satisfy such Holder's or beneficial owner's U.S. tax information and reporting obligations, including a Schedule K-1.

 

 

(i)            If so requested by a Majority of the Subordinated Notes, and if such Holders agree to reimburse the Issuer for all costs associated with such election, the Issuer is authorized to make (or hire accountants to make) an election under Section 754 of the Code.

 

(j)      (i)      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).

 

(ii)           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 provisions of this Indenture. Any special allocations provided for in Section 7.17(j)(iv)-(vii) shall be taken into account for capital account purposes. 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(j), 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 and Treasury Regulations Section 1.704-1(b)(4)(i).

 

(iii)          The provisions of this Section 7.17(j) relating to the maintenance of capital accounts are intended to comply with Treasury Regulations 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(j) if necessary in order to comply with Section 704 of the Code or the appropriate provisions of Treasury Regulations.

 

(iv)          Notwithstanding any other provision set forth in this Section 7.17(j), 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(j)(iv) 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 Regulations 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(j)(ii).

 

 

(v)           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(j)(iv) created by such adjustments, allocations or distributions. Any special allocations of items of income or gain pursuant to this Section 7.17(j)(v) shall be taken into account in computing subsequent allocations pursuant to this Section 7.17(j)(v) so that the net amount of any items so allocated and all other items allocated to each Partner pursuant to this Section 7.17(j)(v) 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 Section 7.17(j) if such unexpected adjustments, allocations or distributions had not occurred.

 

(vi)          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.

 

(vii)         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).

 

(k)            The U.S. Retention Provider shall be the "partnership representative" for purposes of Section 6223 of the Code, as amended by the Bipartisan Budget Act of 2015 (the "Partnership Representative") (or, if not eligible to be the Partnership Representative, as agent-in-fact of the Partnership Representative). and may designate the Partnership Representative from time to time from among any willing Holder of Subordinated Notes (including itself and any of its Affiliates) with respect to any taxable year of the Issuer during which the U.S. Retention Provider or any of its Affiliates holds or has held any Subordinated Notes (and if such designee is not eligible under the Code to be the Partnership Representative, it shall be the agent and attorney-in-fact of the Partnership Representative); provided, that during any other period or if the U.S. Retention Provider declines to so designate a Partnership Representative, the Issuer (after consultation with the Collateral Manager) shall designate the Partnership Representative from among any Holder of Subordinated Notes (excluding the U.S. Retention Provider and its Affiliates) (and if such designee is not eligible under the Code to be the Partnership Representative, it shall be the agent and attorney-in-fact of the Partnership Representative). The Partnership Representative (or, if applicable, its agent and attorney-in- fact) shall sign the Issuer's tax returns and is authorized to make tax elections on behalf of the Issuer in its reasonable discretion, to determine the amount and characterization of any allocations or tax items described in this Section 7.17 in its reasonable discretion, and to take all actions and do such things as required or as it shall deem appropriate under the Code, at the Issuer's sole expense, including representing the Issuer before taxing authorities and courts in tax matters affecting the Issuer and the Partners. Any action taken by the Partnership Representative in connection with audits of the Issuer under the Code will, to the extent permitted by law, be binding upon the Partners. Each such Partner agrees that it will treat any Issuer item on such Partner's income tax returns consistently with the treatment of the item on the Issuer's tax return and that such Partner will not independently act with respect to tax audits or tax litigation affecting the Issuer, unless previously authorized to do so in writing by the Partnership Representative (or, if applicable, its agent and attorney-in-fact), which authorization may be withheld in the complete discretion of the Partnership Representative (or, if applicable, its agent and attorney-in fact). The Issuer will, to the fullest extent permitted by law, reimburse and indemnify the Partnership Representative and any agent and attorney-in-fact of such Partnership Representative in connection with any expenses reasonably incurred in connection with its performance of its duties as or on behalf of the Partnership Representative. For the avoidance of doubt, any indemnity or reimbursement provided pursuant to the immediately foregoing sentence shall be treated as an Administrative Expense pursuant to the definition thereof.

 

 

(l)            If the IRS, in connection with an audit governed by the tax audit rules that apply to partnerships that are contemplated by the Bipartisan Budget Act of 2015 (the "Partnership Tax Audit Rules"), proposes an adjustment greater than $25,000 in the amount of any item of income, gain, loss, deduction or credit of the Issuer, or any Partner's distributive share thereof, and such adjustment results in an "imputed underpayment" as described in Section 6225(b) of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions (a "Covered Audit Adjustment"), the Partnership Representative will use commercially reasonable efforts (taking into account whether the Partnership Representative has received any needed information on a timely basis from the Partners), to apply the alternative method provided by Section 6226 of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions (the "Alternative Method"). In the event the proposed adjustment is equal to or less than $25,000, the Partnership Representative may in its sole discretion elect to have the Issuer pay such adjustment. To the extent that the Partnership Representative does not (or is unable to) elect the Alternative Method with respect to a Covered Audit Adjustment and such Covered Audit Adjustment is material as to the Issuer (determined in the Partnership Representative's sole discretion), the Partnership Representative shall use commercially reasonable efforts to (i) to the extent not economically or administratively burdensome or onerous, make reasonable modifications available under Sections 6225(c)(3), (4) and (5) of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions, to the extent that such modifications are available (taking into account whether the Partnership Representative has received any needed information on a timely basis from the Partners) and would reduce any taxes payable by the Issuer with respect to the Covered Audit Adjustment, and (ii) if reasonably requested by a Partner, provide to such Partner available information allowing such Partner to file an amended U.S. federal income tax return, as described in Section 6225(c)(2) of the Code, as amended by the Bipartisan Budget Act of 2015, together with any guidance issued thereunder or successor provisions, to the extent that such amended return and payment of any related U.S. federal income taxes would reduce any taxes payable by the Issuer with respect to the Covered Audit Adjustment (after taking into account any modifications described in clause (i)). Similar procedures shall be followed in connection with any state or local income tax audit governed by the Partnership Tax Audit Rules. Any U.S. federal income taxes (and any related interest and penalties) paid by the Issuer (or any diminution in distributable proceeds resulting from an adjustment under Partnership Tax Audit Rules) may be allocated in the reasonable discretion of the Issuer to those Partners to whom such amounts are specifically attributable (whether as a result of their status, actions, inactions or otherwise), as determined in the reasonable discretion of the Issuer. The Issuer shall not elect or cause any election to be made to apply the Partnership Tax Audit Rules to the Issuer prior to the generally applicable effective date of such legislation, unless the Issuer, in good faith, reasonably determines that such an election would be in the best interests of the Issuer and all Holders of the Notes.

 

 

Section 7.18      Effective Date; Purchase of Additional Collateral Obligations. (a) The Issuer will use commercially reasonable efforts to purchase, on or before the Effective Date, 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 Tests and the Coverage Tests.

 

(b)            During the period from the Refinancing Date to and including the Effective Date, the Issuer will use the following funds to purchase additional Collateral Obligations in the following order: (i) to pay for the principal portion of any Collateral Obligation, first, any amounts on deposit in the Ramp-Up Account, and second, any Principal Proceeds on deposit in the Collection Account and (ii) to pay for accrued interest on any such Collateral Obligation, first, any amounts on deposit in the Ramp-Up Account and second, any Principal Proceeds on deposit in the Collection Account. In addition, the Issuer will use commercially reasonable efforts to acquire such Collateral Obligations that will satisfy, on the Effective Date, the Concentration Limitations, the Collateral Quality Tests and each Overcollateralization Ratio Test.

 

(c)            Within 30 calendar days after the Effective Date (but in any event, prior to the Determination Date relating to the first Payment Date), the Issuer shall provide, or (at the Issuer's expense) cause the Collateral Manager to provide, the following documents:

 

(i)            to each Rating Agency (in the case of delivery to S&P, via email to CDOEffectiveDatePortfolios@spglobal.com, and in the case of delivery to Fitch, via email to cdo.surveillance@fitchratings.com), a report identifying Collateral Obligations and a Microsoft Excel file ("Excel Default Model Input File") that provides all of the inputs required to determine whether the S&P CDO Monitor Test has been satisfied and the Collateral Manager shall provide a Microsoft Excel file including, at a minimum, the following data with respect to each Collateral Obligation: LoanX identification number, CUSIP number (if any), name of Obligor, coupon, spread (if applicable), Floating Rate Obligation Floor (if any), legal final maturity date, average life, outstanding principal balance, Principal Balance, identification as a Cov-Lite Loan or otherwise, identification as a First-Lien Last-Out Loan or otherwise, identification as a Senior Syndicated Secured Loan or otherwise, settlement date, the purchase price with respect to any Collateral Obligation the purchase of which has not settled, S&P Industry Classification and S&P Recovery Rate, and requesting that S&P reaffirm its Initial Ratings of the Secured Notes rated by it;

 

 

(ii)           to the Trustee and each Rating Agency (in the case of delivery to S&P, via email to CDOEffectiveDatePortfolios@spglobal.com, and in the case of delivery to Fitch, via email to cdo.surveillance@fitchratings.com) a report, prepared by the Collateral Administrator (the "Effective Date Report"), (A) setting forth the issuer, 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 (B) calculating as of the Effective Date the level of compliance with, or satisfaction or non-satisfaction of (1) each Overcollateralization Ratio Test, (2) the Collateral Quality Tests (excluding the S&P CDO Monitor Test), (3) the Concentration Limitations and (4) the Target Initial Par Condition;

 

(iii)          to the Trustee and the Collateral Manager, (A) an Accountants' Report comparing, as of the Effective Date, the issuer, Principal Balance, coupon/spread, stated maturity, S&P Rating and country of Domicile with respect to each Collateral Obligation by reference to such sources as shall be specified therein (such report, the "Accountants' Effective Date Comparison AUP Report") and (B) an Accountants' Report performing agreed upon procedures as of the Effective Date including recalculating and comparing the following items in the Effective Date Report: (1) each Overcollateralization Ratio Test, the Collateral Quality Tests (excluding the S&P CDO Monitor Test) and the Concentration Limitations, and (2) whether the Target Initial Par Condition is satisfied (such report, the "Accountants' Effective Date Recalculation AUP Report" and together with the Accountants' Effective Date Comparison AUP Report, the "Accountants' Effective Date AUP Reports"), with both Accountants' Effective Date AUP Reports containing a statement specifying the procedures undertaken by them to review data and computations relating to such Accountants' Effective Date AUP Reports; and

 

(iv)           to the Trustee and each Rating Agency (in the case of delivery to S&P, via email to CDOEffectiveDatePortfolios@spglobal.com, and in the case of delivery to Fitch, via email to cdo.surveillance@fitchratings.com) an Officer's certificate of the Issuer (the "Effective Date Certificate") certifying as to the level of compliance with, or satisfaction or non-satisfaction of, (1) each Overcollateralization Ratio Test, (2) the Collateral Quality Tests (excluding the S&P CDO Monitor Test), (3) the Concentration Limitations, and (4) the Target Initial Par Condition, in each case, as of the Effective Date.

 

 

If (v) the Issuer or the Collateral Manager, as the case may be, provides the foregoing Accountants' Effective Date AUP Reports to the Trustee with the results of the items set forth in subclause (iii)(B) above, and such results do not indicate any failure of any such tested item, (w) the Issuer delivers the Effective Date Certificate to the Trustee and the Rating Agencies and causes the Collateral Administrator to make available to the Rating Agencies (i) a report identifying the Collateral Obligations and (ii) the Effective Date Report, and such Effective Date Certificate and Effective Date Report indicates satisfaction of the S&P CDO Monitor Test as of the Effective Date, (x) the Collateral Manager certifies to S&P (which may be in the form of an e-mail) that as of the Effective Date the S&P CDO Monitor Test is satisfied (testing as though an S&P CDO Formula Election Period were in effect and taking into account the S&P CDO Monitor Non-Model Adjustments), (y) the Collateral Manager provides to S&P an electronic copy of the Current Portfolio used to generate the passing test result and (z) the Collateral Manager certifies that the Refinancing Date Participation Condition is satisfied, a written confirmation from S&P of its Initial Ratings of the Secured Notes rated by it shall be deemed to have been provided (the "Effective Date Condition"). For the avoidance of doubt, the Effective Date Certificate and the Effective Date Report shall not include or refer to the Accountants' Effective Date AUP Reports. 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, will be provided by the Independent accountants to the Issuer and Information Agent who will forward for posting such Form 15-E on the Issuer's Website. Copies of the Accountants' Effective Date Recalculation AUP Report or any other agreed upon procedures report provided by the Independent accountants to the Issuer will not be provided to any other party including the Rating Agencies or posted on the Issuer's Website (other than as provided in any access letter between such Person and the accountants).

 

(d)            If, by the Determination Date relating to the first Payment Date after the Refinancing Date (unless the Effective Date Condition is satisfied) S&P has not provided written confirmation of its Initial Ratings of the Secured Notes rated by it then the Collateral Manager, on behalf of the Issuer, shall instruct the Trustee in writing to transfer amounts from the Interest Collection Subaccount to the Principal Collection Subaccount (and with such funds the Issuer shall purchase additional Collateral Obligations) in an amount sufficient to obtain from S&P a confirmation of its Initial Ratings of the Secured Notes rated by it (provided that the amount of such transfer would not result in default in the payment of interest with respect to the Class A-1 Notes, the Class A-2 Notes or the Class B Notes); provided that, in the alternative, the Collateral Manager on behalf of the Issuer may take such other 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 obtain from S&P a confirmation of its Initial Ratings of the Secured Notes rated by it.

 

(e)            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. Of the proceeds of the issuance of the Notes which are not applied to pay for the purchase of Collateral Obligations acquired by the Issuer on the Refinancing Date an amount equal to U.S.$379,421,959.83 will be deposited in the Ramp-Up Account on the Refinancing Date. At the direction of the Issuer (or the Collateral Manager on behalf of the Issuer), the Trustee shall apply amounts held in the Ramp-Up Account to purchase additional Collateral Obligations from the Refinancing 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).

 

 

(f)            Weighted Average S&P Recovery Rate. The Collateral Manager may, at any time after the Refinancing Date upon at least five Business Days' prior written notice to S&P, the Trustee and the Collateral Administrator, elect to utilize the S&P CDO Monitor in determining compliance with the S&P CDO Monitor Test (the effective date specified by the Collateral Manager for such election, the "S&P CDO Monitor Election Date"). On or prior to the later of (x) the S&P CDO Monitor Election Date and (y) the Effective Date, the Collateral Manager shall elect the Weighted Average S&P Recovery Rate that shall 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 Trustee and the Collateral Administrator. Thereafter, at any time during any S&P CDO Monitor Election Period on written notice to the 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 4. If the Collateral Manager does not notify the Trustee and the Collateral Administrator that it will alter the Weighted Average S&P Recovery Rate in the manner set forth above, 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.

 

Section 7.19      Representations Relating to Security Interests in the Assets. (a) The Issuer hereby represents and warrants that, as of the Original Closing Date (which representations and warranties shall survive the execution of this Indenture and be deemed to be repeated on each date on which an Asset is Granted to the Trustee hereunder):

 

(i)            The Issuer owns each Asset free and clear of any lien, claim or encumbrance of any Person, other than such as are created under, or permitted by, this Indenture and any other Permitted Liens.

 

(ii)           Other than the security interest Granted to the Trustee pursuant to this Indenture, except as permitted by this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Assets. The Issuer has not authorized the filing of and is not aware of any Financing Statements against the Issuer that include a description of collateral covering the Assets other than any Financing Statement relating to the security interest granted to the Trustee hereunder or that has been terminated; the Issuer is not aware of any judgment, PBGC liens or tax lien filings against the Issuer.

 

 

(iii)          All Assets constitute Cash, accounts (as defined in Section 9-102(a)(2) of the UCC), Instruments, general intangibles (as defined in Section 9-102(a)(42) of the UCC), uncertificated securities (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.

 

(v)           This Indenture creates a valid and continuing security interest (as defined in Section 1 - 201(37) of the UCC) in such Assets in favor of the Trustee, for the benefit and security of the Secured Parties, which security interest is prior to all other liens, claims and encumbrances (except as permitted otherwise 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 Original Closing Date (which representations and warranties shall survive the execution of this Indenture and be deemed to be repeated on each date on which an Asset is Granted to the Trustee hereunder), with respect to Assets that constitute Instruments:

 

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

 

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

 

 

(i)            All of such Assets have been and will have been credited to one of the Accounts which are securities accounts within the meaning of Section 8-501(a) of the UCC. The Securities Intermediary for each Account has agreed to treat all assets credited to such Accounts 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 Trustee of its interest and rights in the Assets.

 

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

 

(iv)          The Accounts are not in the name of any Person other than the Issuer or the Trustee. The Issuer has not consented to the Custodian to comply with the entitlement order (as defined in Section 8-102(a)(8) of the UCC) of any Person other than the Trustee (and the Issuer prior to a notice of exclusive control being provided by the Trustee).

 

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

 

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

 

(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 Trustee of its interest and rights in the Assets.

 

(e)            The Issuer agrees to notify the Collateral Manager and each 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 Global Rating Agency Condition, waive any of the representations and warranties in this Section 7.19 or any breach thereof.

 

 

Section 7.20      Representations of the Issuer.

 

(a)            The Issuer covenants and represents that neither it nor any of its respective affiliates, subsidiaries, directors or officers are the target or subject of any sanctions enforced by the U.S. government, (including, the Office of Foreign Assets Control of the US Department of the Treasury), the United Nations Security Council, the European Union, HM Treasury (collectively "Sanctions").

 

(b)            The Issuer covenants and represents that neither it nor any of its respective affiliates, subsidiaries, directors or officers will use any payments made pursuant to this Indenture, (i) to fund or facilitate any activities of or business with any person who, at the time of such funding or facilitation, is the subject or target of Sanctions, (ii) to fund or facilitate any activities of or business with any country or territory that is the target or subject of Sanctions, or (iii) in any other manner that will result in a violation of Sanctions by any person.

 

ARTICLE VIII

 

Supplemental Indentures

 

Section 8.1      Supplemental Indentures Without Consent of Holders of Notes. (a) Without the consent of the Holders of any Notes (except any consent explicitly required below) but with the written consent of the Collateral Manager, at any time and from time to time subject to Section 8.3 and without an Opinion of Counsel being provided to the Issuer or the Trustee as to whether any Class of Notes would be materially and adversely affected thereby (except as may be explicitly required below), the Issuer and the Trustee may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

 

(i)            to evidence the succession of another Person to the Issuer and the assumption by any such successor Person of the covenants of the Issuer herein and in the Notes;

 

(ii)           to add to the covenants of the Issuer or the Trustee for the benefit of the Secured Parties, or to surrender any right or power herein conferred upon the Issuer;

 

(iii)           to convey, transfer, assign, mortgage or pledge any property to or with the Trustee or add to the conditions, limitations or restrictions on the authorized amount, terms and purposes of the issue, authentication and delivery of the Notes;

 

(iv)           to evidence and provide for the acceptance of appointment hereunder by a successor Trustee and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Sections 6.9, 6.10 and 6.12 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 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 Notes to reflect any changes in ERISA or other applicable law or regulation (or the interpretation thereof) or to enable the Issuer 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 Notes to the extent not required under clause (vi) above;

 

(viii)         to make any modification or amendment determined by the Issuer or the Collateral Manager (in consultation with legal counsel of national reputation experienced in such matters) as necessary or advisable to enable the Issuer to rely upon the exemption from registration as an investment company provided by Rule 3a-7 under the 1940 Act or another exemption or exclusion from registration as an investment company under the 1940 Act (other than Section 3(c)(1) or Section 3(c)(7) thereof), in each case so long as any such modification or amendment would not have a material adverse effect on any Class of Notes;

 

(ix)            to correct or supplement any inconsistent or defective provisions herein, to cure any ambiguity, omission or errors herein; provided that, notwithstanding anything herein to the contrary and without regard to any other consent requirement specified herein, any supplemental indenture to be entered into pursuant to this clause (ix) may also provide for any corrective measures or ancillary amendments to this Indenture to give effect to such supplemental indenture as if it had been effective as of the Refinancing Date;

 

(x)            to conform the provisions of this Indenture to the Offering Circular; provided that, notwithstanding anything herein to the contrary and without regard to any other consent requirement specified herein, any supplemental indenture to be entered into pursuant to this clause (x) may also provide for any corrective measures or ancillary amendments to this Indenture to give effect to such supplemental indenture as if it had been effective as of the Refinancing Date;

 

(xi)            to take any action necessary, advisable, or helpful to prevent the Issuer, the Trustee or the holders of any Notes from being subject to (or to otherwise reduce) withholding or other taxes, fees or assessments;

 

(xii)           (A) with the consent or at the direction of a Supermajority of the Subordinated Notes (and, in the case of an additional issuance of Secured Notes, other than in connection with a Risk Retention Issuance or the issuance of Junior Mezzanine Notes, a Majority of the Controlling Class), to permit the Issuer to issue Additional Notes of any one or more existing Classes of Notes and/or Junior Mezzanine Notes; or (B) with the consent or at the direction of a Majority of the Subordinated Notes to permit the Issuer (1) to issue a replacement loan or securities or other indebtedness in connection with a Refinancing, including any modification necessary to (I) reflect the Refinancing of Fixed Rate Notes with Floating Rate Notes or vice versa, (II) establish a non-call period and, if applicable, prohibit future Refinancing and Re-Pricing of any class of refinancing obligations, (III) amend the base rate component and any adjustment thereto used to determine the interest rate on the refinancing obligations or (IV) in the case of a Refinancing of all Classes of Secured Notes (a) modify the Weighted Average Life Test or (b) extend the Reinvestment Period, and to make such other changes as shall be necessary to facilitate a Refinancing or (2) to make such changes as shall be necessary to facilitate the Issuer to effect a Re-Pricing;

 

 

(xiii)          to modify the procedures herein relating to compliance with Rule 17g-5 of the Exchange Act;

 

(xiv)          to accommodate the issuance of the Notes in book-entry form through the facilities of the depository or otherwise;

 

(xv)           to take any action necessary or advisable to prevent the Issuer or the pool of Assets from being required to register under the 1940 Act, or to avoid any requirement that the Collateral Manager or any Affiliate consolidate the Issuer on its financial statements for financial reporting purposes (provided that no Holders are materially adversely affected thereby);

 

(xvi)          to reduce the permitted minimum denomination of the Secured Notes;

 

(xvii)         with the consent of a Majority of the Controlling Class, to change the date on which reports are required to be delivered under this Indenture;

 

(xviii)        to modify Section 3.3 or Section 7.19 to conform with applicable law;

 

(xix)           to evidence any waiver or elimination by any Rating Agency of any requirement or condition of such Rating Agency set forth herein;

 

(xx)            to conform to ratings criteria and other guidelines (including, without limitation, any alternative methodology published by either of the Rating Agencies) relating to collateral debt obligations in general published by either of the Rating Agencies;

 

(xxi)           to modify any defined term in Section 1.1 or any Schedule to this Indenture that begins with or includes the word "Fitch" or "S&P" (other than the defined terms "Global Rating Agency Condition" and "S&P Rating Condition") so long as the Global Rating Agency Condition is satisfied;

 

 

(xxii)          to change the name of the Issuer in connection with the change in name or identity of the Collateral Manager or as otherwise required pursuant to a contractual obligation or to avoid the use of a trade name or trademark in respect of which the Issuer does not have a license;

 

(xxiii)         to amend, modify or otherwise accommodate changes to this Indenture to comply with any rule or regulation enacted by regulatory agencies of the United States federal government, Relevant Member State of the European Economic Area, stock exchange authority, listing agent, transfer agent or additional registrar after the Refinancing Date that are applicable to the Notes; provided that, other than in connection with an amendment solely to comply with the U.S. Risk Retention Rules to permit a Refinancing, if a Majority of any Class of Notes notifies the Trustee in accordance with this Indenture that such supplemental indenture materially and adversely affects such Holders, the Trustee shall not execute any such supplemental indenture without the consent of a Majority of such Class of Notes;

 

(xxiv)         to amend, modify or otherwise change the provisions of this Indenture so that (A) the Issuer is not a "covered fund" under the Volcker Rule, (B) the Secured Notes are not considered to constitute "ownership interests" under the Volcker Rule or (C) ownership of the Secured Notes will otherwise be exempt from the Volcker Rule;

 

(xxv)          to permit the Issuer to enter into any additional agreements not expressly prohibited by this Indenture as well as any amendment, modification or waiver thereof if the Issuer determines that such additional agreement, amendment, modification or waiver would not, upon or after becoming effective, materially and adversely affect the rights or interests of holders of any Class of Notes; provided that (A) any such additional agreement shall include customary limited recourse and non-petition provisions; (B) the consent to such supplemental indenture has been obtained from a Majority of the Controlling Class and (C) the Trustee receives an opinion of counsel with respect to whether the interests of holders of any Class of Notes would be materially and adversely affected (which opinion 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);

 

(xxvi)         to modify (A) the Collateral Quality Tests or the definitions related thereto, (B) any of the Investment Criteria, (C) the requirements regarding the Issuer (or the Collateral Manager on the Issuer's behalf) voting in favor of a Maturity Amendment or (D) the Coverage Tests or the definitions related thereto or the calculation thereof, so long as (I) the Collateral Manager certifies that no Class of Secured Notes would be materially and adversely affected thereby and (II) a Majority of the Controlling Class consents to such modification;

 

(xxvii)        to modify any provision to facilitate an exchange of one obligation for another obligation of the same Obligor that has substantially identical terms except transfer restrictions, including to effect any serial designation relating to the exchange; provided that no such supplemental indenture shall be required to facilitate any exchange of one obligation for another obligation in accordance with Article XII hereof;

 

 

(xxviii)       to modify or amend any component of the Concentration Limitations and the definitions related thereto which affect the calculation thereof so long as the Collateral Manager certifies that no Class of Secured Notes would be materially and adversely affected thereby, a Majority of the Controlling Class consents to such modification and the Global Rating Agency Condition is satisfied;

 

(xxix)          to make any necessary or advisable changes to this Indenture in connection with the adoption of an Alternative Rate or Fallback Rate or to make Benchmark Conforming Changes;

 

(xxx)           to make any modification determined by the Collateral Manager necessary or advisable to comply with U.S. Risk Retention Rules, the E.U. Securitization Laws or the U.K. Securitization Laws, including (without limitation) in connection with a Refinancing, Optional Redemption, Re-Pricing, additional issuance of Notes or material amendment to any of the Transaction Documents; or

 

(xxxi)          with the consent of a Majority of the Controlling Class, as determined by the Collateral Manager, to make such changes as are necessary, helpful or appropriate to permit the Issuer to acquire, receive or retain, as applicable, Permitted Non-Loan Assets; provided that, notwithstanding the foregoing, the Collateral Manager shall not be permitted to make any changes to clause (xviii) of the definition of "Concentration Limitations".

 

Section 8.2      Supplemental Indentures With Consent of Holders of Notes. Subject to the provisions of Section 8.1, Section 8.3 and the provisions in this Section 8.2, with the consent of a Majority of the Secured Notes of each Class materially and adversely affected thereby, if any, and if the Subordinated Notes are materially and adversely affected thereby, a Majority of the Subordinated Notes, the Trustee and the Issuer, with the written consent of the Collateral Manager, may execute one or more supplemental indentures to add provisions to, or change in any manner or eliminate any provisions of, this Indenture or modify in any manner the rights of the Holders of the Notes of any Class under this Indenture; provided that without the consent of each Holder of each Outstanding Note of each Class materially and adversely affected thereby, no such supplemental indenture described above may:

 

(i)             change the Stated Maturity of the principal of or the due date of any installment of interest on any Secured Note, reduce the principal amount thereof or the rate of interest thereon, other than in connection with a Re-Pricing or in connection with the adoption of an Alternative Rate or Fallback Rate, or, except as otherwise expressly permitted by this Indenture, the Redemption Price with respect to any Note, or change the earliest date on which Notes of any Class may be redeemed, change the provisions of this Indenture relating to the application of proceeds of any Assets to the payment of principal of or interest on the Secured Notes or distributions on the Subordinated Notes or change any place where, or the coin or currency in which, Notes 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);

 

 

(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)           impair or 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 Note 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 Notes whose consent is required to request the Trustee to preserve the Assets or rescind the 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-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes or Subordinated Notes the consent of the Holders of which is required for any such action or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Class A-1 Note Outstanding, Class A-2 Note Outstanding, Class B Note Outstanding, Class C Note Outstanding or Subordinated Note Outstanding and affected thereby or (y) Section 8.1 or Section 8.3;

 

(vii)          modify the definition of the term "Outstanding", "Majority" or "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 Note or any amount available for distribution to the Subordinated Notes, or to affect the rights of the Holders of any Secured Notes to the benefit of any provisions for the redemption of such Secured Notes contained herein.

 

Notwithstanding any other provision relating to supplemental indentures herein, at any time after the expiration of the Non-Call Period, if any Class of Notes 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 Note of such Class will not be required with respect to such supplemental indenture.

 

 

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)            [Reserved].

 

(c)            [Reserved].

 

(d)            The Trustee may conclusively rely on an Opinion of Counsel (which may be supported as to factual (including financial and capital markets) matters by any relevant certificates and other documents necessary or advisable in the judgment of counsel delivering the opinion) or a Responsible Officer's certificate of the Collateral Manager as to whether the interests of any holder of Notes would be materially and adversely affected by the modifications set forth in any supplemental indenture, it being expressly understood and agreed that the Trustee shall have no obligation to make any determination as to the satisfaction of the requirements related to any supplemental indenture which may form the basis of such Opinion of Counsel or such Responsible Officer's certificate; provided that if a Majority of any Class of Notes has provided written notice to the Trustee at least one Business Day prior to the execution of such supplemental indenture that such Class would be materially and adversely affected thereby, the Trustee shall not be entitled to rely on an Opinion of Counsel or a Responsible Officer's certificate of the Collateral Manager as to whether or not the Holders of such Class would be materially and adversely affected by such supplemental indenture and shall not enter into such supplemental indenture without the consent of a Majority (or Supermajority or each Holder, as applicable) of such Class. Such determination with respect to such Class as to whether the interests of any Holder have been materially and adversely affected shall be conclusive and binding on all present and future Holders. The Trustee shall not be liable for any determination made in good faith and in reliance upon an Opinion of Counsel or such a Responsible Officer's certificate delivered to the Trustee as described herein.

 

(e)            The Trustee shall join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations which may be therein contained, but the Trustee shall not be obligated to enter into any such supplemental indenture which affects the Trustee's own rights, duties, liabilities or immunities under this Indenture or otherwise.

 

(f)            In executing or accepting the additional trusts created by any supplemental indenture permitted by this Article VIII or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to 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 Trustee shall not be liable for any reliance made in good faith upon such an Opinion of Counsel. Such determination shall, in each case, be conclusive and binding on all present and future Holders and beneficial owners.

 

 

(g)            At the cost of the Issuer, for so long as any Notes shall remain Outstanding, not later than 10 days prior to the execution of any proposed supplemental indenture pursuant to Section 8.1 and not later than seven days prior to the execution of any proposed supplemental indenture pursuant to Section 8.2, the Trustee shall deliver to the Collateral Manager, the Collateral Administrator and the Noteholders a copy of such proposed supplemental indenture; provided that, for any party entitled to receive notice, this provision will be deemed satisfied (1) upon the written waiver of such party to receipt of such notice and (2) in the case of the holders, the simultaneous payment in full of the Notes held by such holders pursuant to the proposed supplemental indenture. At the cost of the Issuer, for so long as any Class of Secured Notes shall remain Outstanding and such Class is rated by a Rating Agency, the Trustee shall provide to such Rating Agency a copy of any proposed supplemental indenture at least seven days prior to the execution thereof by the Trustee (unless such period is waived by the applicable Rating Agency). Following such deliveries by the Trustee, if any changes are made to such proposed supplemental indenture other than to correct typographical errors or to adjust formatting, then at the cost of the Issuer, for so long as any Notes shall remain Outstanding, not later than three days prior to the execution of such proposed supplemental indenture (provided that the execution of such proposed supplemental indenture shall not in any case occur earlier than the date 10 days or seven days, as applicable, after the initial distribution of such proposed supplemental indenture pursuant to the first sentence of this Section 8.3(g)), the Trustee shall deliver to the Collateral Manager, the Collateral Administrator, the Noteholders and the Rating Agencies a copy of such supplemental indenture as revised, indicating the changes that were made. Any failure of the Trustee to publish or deliver such notices, or any defect therein, shall not in any way impair or affect the validity of any such supplemental indenture. In the case of a supplemental indenture to be entered into pursuant to Section 8.1(a)(xii)(B), the foregoing notice periods shall not apply and a copy of the proposed supplemental indenture shall be included in the notice of Optional Redemption given to each holder of Secured Notes under Section 9.2; and, upon execution of the supplemental indenture, at the cost of the Issuer, a copy thereof shall be delivered to each Rating Agency and each Holder of Notes.

 

(h)            Without limiting the rights of any Class to consent to any supplemental indenture as set forth herein, it shall not be necessary for any Act of the 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.

 

(i)            At any time during or after the Reinvestment Period, at the written direction of any Holder or Holders of Subordinated Notes, substantially in the form of Exhibit F (solely for Contributions of Cash or Eligible Investments), but without any amendment to this Indenture, satisfaction of the Global Rating Agency Condition or the consent of any other holder of Notes (i) such Holder may make a Contribution of Cash, Eligible Investments or Collateral Obligations or (ii) solely with respect to Holders of Certificated Subordinated Notes, such Holder may designate (prior to the Determination Date) all or a specified portion of amounts that would otherwise be distributed on such Payment Date to such Holder or Holders of Subordinated Notes be retained by the Trustee in the Supplemental Reserve Account as a Contribution and be available for reinvestment in additional Collateral Obligations and other Permitted Uses as directed by the applicable Contributor, so long as the Collateral Manager consents to such Permitted Use(s) (or, if no direction is given by the Contributor, at the Collateral Manager's reasonable discretion).

 

 

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 of 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 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 Issuer and authenticated and delivered by the Trustee in exchange for Outstanding Notes.

 

Section 8.6      Hedge Agreements. The Issuer and the Trustee shall not enter into any supplemental indenture that permits the Issuer to enter into a hedge agreement unless the Global Rating Agency Condition is satisfied with respect thereto and the Issuer obtains (a) a certification from the Collateral Manager that (i) the written terms of the derivative directly relate to the Collateral Obligations and the Notes and (ii) such derivative reduces the interest rate and/or foreign exchange risks related to the Collateral Obligations and the Notes, (b) written advice of counsel that such hedge agreement will not cause any Person to be required to register as a "commodity pool operator" (within the meaning of the Commodity Exchange Act) with the Commodity Futures Trading Commission in connection with the Issuer and (c) the consent of a Majority of the Controlling Class. The Issuer shall provide Fitch with written notice of any supplemental indenture that permits the Issuer to enter into a hedge agreement, and the Issuer shall only enter into such hedge agreement with a counterparty that has the minimum ratings required by Fitch at the time the Issuer enters into such hedge agreement, unless Fitch provides written confirmation that such counterparty is not required to have such minimum ratings.

 

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 Notes pursuant to the Priority of Payments.

 

 

Section 9.2      Optional Redemption. (a) The Secured Notes shall be redeemable by the Issuer at the written direction of a Majority of the Subordinated Notes (and in the case of a Refinancing, with the consent of the Collateral Manager and the U.S. Retention Provider) as follows: (i) the Secured Notes shall be redeemed in whole in order of seniority (with respect to all Classes of Secured Notes) but not in part on any Business Day after the end of the Non-Call Period from Sale Proceeds, Contributions of Cash and/or Refinancing Proceeds and all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that are otherwise payable pursuant to Section 11.1(a)(i)(M) or (ii) the Secured Notes shall be redeemed in part by Class from Refinancing Proceeds, Contributions of Cash and/or Partial Refinancing Interest Proceeds and all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that are otherwise payable pursuant to Section 11.1(a)(i)(M) on any Business Day after the end of the Non-Call Period as long as the Class of Secured Notes to be redeemed represents not less than the entire Class of such Secured Notes. In connection with any such redemption, the Secured Notes shall be redeemed at the applicable Redemption Prices and a Majority of the Subordinated Notes must provide the above described written direction (and the Collateral Manager and the U.S. Retention Provider must provide the above described consent in the case of a Refinancing) to the Issuer and the Trustee not later than 10 days (or such shorter period of time as the Trustee and the Collateral Manager find reasonably acceptable) prior to the Business Day on which such redemption is to be made; provided that all Secured Notes to be redeemed must be redeemed simultaneously.

 

(b)            Upon receipt of a notice of any redemption of Secured Notes in whole 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 Collateral Obligations and other Assets 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 Notes to be redeemed and to pay all Administrative Expenses (regardless of the Administrative Expense Cap) and Aggregate Collateral Management Fees 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 Notes and to pay such fees and expenses, the Secured Notes may not be redeemed. The Collateral Manager, in its sole discretion, may effect the sale of all or any part of the Collateral Obligations or other Assets through the direct sale of such Collateral Obligations or other Assets or by participation, merger or other arrangement.

 

(c)            The Subordinated Notes may be redeemed, in whole but not in part, for the relevant Redemption Price, on any Business Day on or after the redemption (including in connection with a Refinancing of all Classes of Secured Notes) or repayment of all of the Secured Notes, at the written direction of a Majority of the Subordinated Notes delivered to the Trustee and the Collateral Manager on behalf of the Issuer at least five Business Days prior to the designated Business Day on which the Subordinated Notes are to be redeemed (which direction may be given in connection with a direction to redeem the Secured Notes or at any time after the Secured Notes have been redeemed or repaid in full).

 

 

(d)            In addition to (or in lieu of) a sale of Collateral Obligations and/or Eligible Investments in the manner provided in Section 9.2(b), the Secured Notes may be redeemed on any Business Day after the expiration of the Non-Call Period in whole from Refinancing Proceeds, Contributions of Cash and/or Sale Proceeds or in part by Class from Refinancing Proceeds, Contributions of Cash and/or Partial Refinancing Interest Proceeds as provided in Section 9.2(a)(ii) by a Refinancing; 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, the U.S. Retention Provider and a Majority of the Subordinated Notes and such Refinancing otherwise satisfies the conditions described below.

 

(e)            In the case of a Refinancing upon a redemption of the Secured Notes in whole but not in part pursuant to Section 9.2(a)(i), such Refinancing will be effective only if (i) the Refinancing Proceeds, any amounts in the Supplemental Reserve Account, all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that are otherwise payable pursuant to Section 11.1(a)(i)(M), all Sale Proceeds, if any, from the sale of Collateral Obligations and Eligible Investments in accordance with the procedures set forth herein, Contributions of Cash and all other available funds will be at least sufficient to redeem simultaneously the Secured Notes then required to be redeemed, in whole but not in part (subject to any election to receive less than 100% of Redemption Price as noted below), and to pay all accrued and unpaid Administrative Expenses (regardless of the Administrative Expense Cap), including, without limitation, the reasonable fees, costs, charges and expenses incurred by the Trustee and the Collateral Administrator (including reasonable attorneys' fees and expenses) in connection with such Refinancing, (ii) the Refinancing Proceeds, any amounts in the Supplemental Reserve Account, all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that is otherwise payable pursuant to Section 11.1(a)(i)(M), all Sale Proceeds, if any, Contributions of Cash and other available funds are used (to the extent necessary) to make such redemption, (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 2.7(i) and (iv) the Collateral Manager and the U.S. Retention Provider each consents to such Refinancing.

 

(f)            In connection with a Refinancing pursuant to which all Classes of Secured Notes are being refinanced, the Collateral Manager may, without the consent of any Person, including any Holder, designate Principal Proceeds up to the Excess Par Amount as of the related Determination Date as Interest Proceeds for payment on the Redemption Date. Notice of any such designation will be provided to the Trustee (with copies to the Collateral Administrator and the Rating Agencies) on or before the related Determination Date.

 

 

(g)            In the case of a Refinancing upon a redemption of the Secured Notes in part by Class pursuant to Section 9.2(a)(ii), such Refinancing will be effective only if: (i) notice is provided to S&P and Fitch, (ii) the Refinancing Proceeds, the Partial Refinancing Interest Proceeds, Contributions of Cash, any amounts in the Supplemental Reserve Account and all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that are otherwise payable pursuant to Section 11.1(a)(i)(M) will be at least sufficient to pay in full the aggregate Redemption Prices of the entire Class or Classes of Secured Notes subject to Refinancing, (iii) the Refinancing Proceeds, the Partial Refinancing Interest Proceeds, Contributions of Cash, any amounts in the Supplemental Reserve Account and all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that is otherwise payable pursuant to Section 11.1(a)(i)(M) 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 2.7(i), (v) the aggregate principal amount of any obligations providing the Refinancing is equal to the aggregate principal amount of the Secured Notes being redeemed with the proceeds of the issuance 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 the same as the corresponding Stated Maturity of each Class of Secured Notes being refinanced; provided that, the stated maturity of a class of obligations providing the Refinancing may be later (but in no case earlier) than the corresponding Stated Maturity of a Class of Notes being refinanced if the Global Rating Agency Condition is satisfied with respect to each Class of Secured Notes not subject to the Refinancing, (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, the Partial Refinancing Interest Proceeds, Contributions of Cash, any amounts in the Supplemental Reserve Account and all or a specified (as directed by Holders of Certificated Subordinated Notes entitled to receive such Interest Proceeds and as determined by the Issuer, or the Collateral Manager on behalf of the Issuer) portion of Interest Proceeds that are otherwise payable pursuant to Section 11.1(a)(i)(M)(except for expenses owed to Persons that the Collateral Manager informs the Trustee will be paid solely as Administrative Expenses payable in accordance with this Indenture; provided that any such fees and expenses due to the 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 Refinancing Rate Condition is satisfied, (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 Class of Secured Notes 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 Notes being refinanced (except that, at the Issuer's election, the non-call period with respect to the obligations providing the Refinancing may be extended or decreased as it applies to a subsequent Refinancing or redemption of any such class), (xi) the Collateral Manager and the U.S. Retention Provider each consents to such Refinancing, (xii) the Issuer has received written advice from Dechert LLP or Cadwalader, Wickersham & Taft LLP or an opinion of counsel of nationally recognized standing to the effect that the Refinancing will not cause the Issuer to 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 income tax on a net basis, and (xiii) the Issuer (or the Collateral Manager on behalf of the Issuer) has provided an Officer's certificate to the Trustee certifying that the conditions to such Refinancing have been satisfied.

 

 

(h)            The Holders of the Subordinated Notes will not have any cause of action against the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee for any failure to obtain a Refinancing. If a Refinancing is obtained meeting the requirements specified above as certified by the Collateral Manager, the Issuer and the Trustee (at the direction of the Issuer) shall amend this Indenture to the extent necessary to reflect the terms of the Refinancing and no further consent for such amendments shall be required from the Holders of Notes other than a Majority of the Subordinated Notes directing the redemption. The 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 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).

 

(i)            In the event of any redemption pursuant to this Section 9.2, the Issuer shall, at least 10 days (in the case of an Optional Redemption of the Secured Notes) (or such shorter period of time as the Trustee and the Collateral Manager find reasonably acceptable) or five Business Days (in the case of an Optional Redemption of the Subordinated Notes) (or such shorter period of time as the Trustee and the Collateral Manager find reasonably acceptable) prior to the Redemption Date, notify the Trustee in writing of such Redemption Date, the applicable Record Date, the principal amount of Notes to be redeemed on such Redemption Date and the applicable Redemption Prices (which Redemption Price shall be the Redemption Price to be paid in the event no Redemption Distribution Date occurs and which may be decreased as a result of payments on Redemption Distribution Dates to the extent that such payment reduces the amount of interest that accrues on one or more Classes of Notes); provided that failure to effect any Optional Redemption which is withdrawn by the Issuer in accordance with this Indenture or with respect to which a Refinancing fails to occur shall not constitute an Event of Default.

 

(j)            In connection with any Optional Redemption of the Secured Notes in whole, Holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Notes.

 

(k)            In connection with an Optional Redemption of all Classes of Secured Notes, a Majority of the Subordinated Notes may direct the Issuer (who shall give written notice to the Trustee no less than four Business Days prior to such date) to distribute amounts on deposit in the Collection Account to pay a portion of the Redemption Price pursuant to the Priority of Payments on one or more Business Days prior to the Redemption Date (any such date a "Redemption Distribution Date"). The Collateral Manager may elect to distribute Interest Proceeds, Principal Proceeds or both on such Redemption Distribution Date pursuant to the applicable Priority of Payments. To the extent the Collateral Manager does not elect to distribute amounts pursuant to Section 11.1(a)(i), holders of Notes shall not be entitled to receive any amounts on account of accrued and unpaid interest on such date. No Distribution Report shall be required to be prepared in connection with any such Redemption Distribution Date.

 

 

Section 9.3      Tax Redemption. (a) The Notes shall be redeemed in whole but not in part on any Business Day (any such redemption, a "Tax Redemption") at their applicable Redemption Prices at the written direction (delivered to the Trustee) of (x) a Majority of any Affected Class or (y) a Majority of the Subordinated Notes, 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 Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Notes.

 

(c)            Upon its receipt of such written direction directing a Tax Redemption, the Trustee shall promptly notify the Collateral Manager, the Holders and each Rating Agency thereof.

 

(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 Trustee thereof, and upon receipt of such notice the Trustee shall promptly notify the Holders of the Notes and each 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 Holders of the Subordinated Notes (and in the case of a Refinancing, the consent of the Collateral Manager and the U.S. Retention Provider) required thereby shall be provided to the Issuer, the Trustee and the Collateral Manager not later than 10 days (or such shorter period of time as the 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 Trustee pursuant to the terms hereof including through the applicable procedures of DTC not later than four Business Days prior to the applicable Redemption Date, to each Holder of Notes, at such Holder's address in the Register.

 

(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 Notes to be redeemed;

 

(iii)           all of the Secured Notes that are to be redeemed are to be redeemed in full and that interest on such Secured Notes shall cease to accrue on the Business Day specified in the notice;

 

 

(iv)           the place or places where Notes are to be surrendered for payment of the Redemption Prices, which shall be the office or agency of the Issuer to be maintained as provided in Section 7.2; and

 

(v)            if all Secured Notes are being redeemed, whether the Subordinated Notes are to be redeemed in full on such Redemption Date and, if so, the place or places where the Subordinated Notes are to be surrendered for payment of the Redemption Prices, which shall be the office or agency of the Issuer to be maintained as provided in Section 7.2.

 

(c)            The Issuer may withdraw any such notice of redemption delivered pursuant to Section 9.2 up to the Business Day prior to the proposed Redemption Date by written notice to the Trustee. The Issuer shall provide Fitch notice of any withdrawal.

 

(d)            Notice of redemption pursuant to Section 9.2 or 9.3 shall be given by the Issuer or, upon an Issuer Order, by the Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Holder of any Note selected for redemption shall not impair or affect the validity of the redemption of any other Notes.

 

(e)            Unless Refinancing Proceeds are being used to redeem the Secured Notes in whole or in part, in the event of any redemption pursuant to Section 9.2 or 9.3, no Secured Notes may be optionally redeemed unless (i) at least five Business Days before the scheduled Redemption Date the Collateral Manager shall have furnished to the Trustee evidence, in a form reasonably satisfactory to the Trustee (which may be in the form of a certificate of a Responsible Officer of the Collateral Manager), 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 to purchase (directly or by participation, merger 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 (regardless of the Administrative Expense Cap) and Aggregate Collateral Management Fees 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 Notes on the scheduled Redemption Date (and after giving effect to payment on any applicable Redemption Distribution Date) at the applicable Redemption Prices (or, such other 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 Trustee that, in its judgment, the aggregate sum of (A) expected proceeds from the sale of Eligible Investments, (B) the Market Value of each Collateral Obligation, (C) any Contributions in Cash and (D) other amounts available for redemption shall exceed the sum of (x) the aggregate Redemption Prices (or in the case of any Class of Secured Notes, such other 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) of the applicable Class of Secured Notes and (y) all Administrative Expenses (regardless of the Administrative Expense Cap) and Aggregate Collateral Management Fees payable in connection with such Optional Redemption or Tax Redemption, in each case, as applicable and in accordance with the Priority of Payments (after giving effect to payments on any Redemption Distribution Date). Any certification delivered by the 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, merger 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 Notes, the Collateral Manager or any of their Affiliates or accounts managed thereby or by their respective Affiliates shall have the right, subject to the same terms and conditions afforded to other bidders, to bid on Assets to be sold as part of an Optional Redemption or Tax Redemption.

 

 

(f)            If a Class or Classes of Secured Notes is redeemed in connection with a Refinancing in part by Class, Refinancing Proceeds, together with Partial Refinancing Interest Proceeds, and/or Contributions of Cash, shall be used to pay the Redemption Price(s) of such Class or Classes of Secured Notes without regard to the Priority of Payments. In addition, in connection with a Refinancing pursuant to which all Classes of Secured Notes are being refinanced, the Collateral Manager may, without the consent of any Person, including any Holder, designate Principal Proceeds up to the Excess Par Amount as of the related Determination Date as Interest Proceeds for payment to the Holders of the Subordinated Notes on the Redemption Date. Notice of any such designation will be provided to the Trustee (with copies to the Collateral Administrator and each Rating Agency) on or before the related Determination Date.

 

Section 9.5      Notes Payable on Redemption Date. (a) Notice of redemption pursuant to Section 9.4 having been given as aforesaid, the Notes to be redeemed 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 Notes that are Secured Notes shall cease to bear interest on the Redemption Date. Upon final payment on a Note to be so redeemed, the Holder shall present and surrender such Note at the place specified in the notice of redemption on or prior to such Redemption Date; provided that if there is delivered to the Issuer and the Trustee such security or indemnity as may be required by them to save such party harmless and an undertaking thereafter to surrender such Note, then, in the absence of notice to the Issuer or the Trustee that the applicable Note has been acquired by a protected purchaser, such final payment shall be made without presentation or surrender. Payments of interest on Secured Notes so to be redeemed which are payable on or prior to the Redemption Date shall be payable to the Holders of such Secured Notes, or one or more predecessor Notes, registered as such at the close of business on the relevant Record Date according to the terms and provisions of Section 2.7(e).

 

(b)            If any Secured Note called for redemption shall not be paid upon surrender thereof for redemption, the principal thereof shall, until paid, bear interest from the Redemption Date at the applicable Interest Rate for each successive Interest Accrual Period such Secured Note remains Outstanding; provided that the reason for such non-payment is not the fault of such Noteholder.

 

 

Section 9.6      Special Redemption. Principal payments on the Secured Notes 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 at its sole discretion notifies the Trustee at least five Business Days prior to the applicable Special Redemption Date that it has been unable, for a period of at least 20 consecutive Business Days, to identify additional Collateral Obligations that are deemed appropriate by the Collateral Manager in its sole discretion and 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 unless the Effective Date Condition is satisfied, if the Collateral Manager notifies the Trustee that a redemption is required pursuant to Section 7.18 in order to obtain from S&P written confirmation of its Initial Ratings of the Secured Notes rated by it (in each case, a "Special Redemption"). On the first Payment Date after the Refinancing Date (and all subsequent Payment Dates) identified by the Collateral Manager for the Special Redemption (in the case of a Special Redemption described in clause (i) above) or Payment Date (and all subsequent Payment Dates) following the Collection Period in which such notice is given (in the case of a Special Redemption described in clause (ii) above) (any such initial date a "Special Redemption Date"), the amount in the Collection Account representing as applicable either (1) Principal Proceeds which the Collateral Manager has determined cannot be reinvested in additional Collateral Obligations or (2) Interest Proceeds and Principal Proceeds available therefor in accordance with the Priority of Payments on each Payment Date until the Issuer obtains confirmation from S&P of its Initial Ratings of the Secured Notes rated by it (such amount, a "Special Redemption Amount") will be available to be applied in accordance with the Priority of Payments. Notice of payments pursuant to this Section 9.6 shall be given not less than (x) in the case of a Special Redemption described in clause (i) above, three Business Days prior to the applicable Special Redemption Date and (y) in the case of a Special Redemption described in clause (ii) above, one Business Day prior to the initial applicable Special Redemption Date, in each case by email transmission or first class mail, postage prepaid, to each Holder of Secured Notes affected thereby at such Holder's email address or mailing address in the Register and to each Rating Agency.

 

Section 9.7      Issuer Purchases of Secured Notes. Notwithstanding anything to the contrary in this Indenture, the Issuer may conduct purchases of the Secured Notes, in whole or in part, in accordance with, and subject to, the terms and conditions of this Section 9.7. Notwithstanding the provisions of Section 10.2 (or any other terms hereof to the contrary), amounts in the Principal Collection Subaccount and/or the Supplemental Reserve Account may be disbursed for purchases of Secured Notes in accordance with the provisions described in this Section 9.7. Upon written instruction by the Issuer, the Trustee shall cancel any such purchased Secured Notes surrendered to it for cancellation or, in the case of any Global Secured Notes, the Trustee shall decrease the aggregate outstanding principal amount of such Global Secured Notes in its records by the full par amount of the purchased Secured Notes, and instruct DTC or its nominee, as the case may be, to conform its records. In connection with any such cancellation of an interest in a Global Secured Note, the Issuer (or other beneficial owner of such interest) shall reasonably cooperate with the Trustee in connection with such cancellation, including without limitation, surrendering such interest and providing any necessary instructions to DTC. The cancellation (and/or decrease, as applicable) of any such surrendered Secured Notes shall be taken into account for purposes of all relevant calculations thereafter made pursuant to the terms of this Indenture.

 

 

No purchases (for the avoidance of doubt, not including an Optional Redemption) of the Secured Notes by the Issuer may occur unless each of the following conditions is satisfied:

 

(i)             such purchases of Secured Notes shall occur in the following sequential order of priority: first, the Class A-1 Notes, until the Class A-1 Notes are retired in full; second, the Class A-2 Notes, until the Class A-2 Notes are retired in full; third, the Class B Notes, until the Class B Notes are retired in full; and fourth, the Class C Notes, until the Class C Notes are retired in full;

 

(ii)            (A) each such purchase of Secured Notes of any Class shall be made pursuant to an offer made to all Holders and beneficial owners of the Secured Notes of such Class, by notice to such Holders and beneficial owners, which notice shall specify the purchase price (as a percentage of par) at which such purchase will be effected, the maximum amount of Principal Proceeds that will be used to effect such purchase and the length of the period during which such offer will be open for acceptance, (B) each such Holder or beneficial owner of a Secured Note shall have the right, but not the obligation, to accept such offer in accordance with its terms and (C) if the aggregate outstanding principal amount of Notes of the relevant Class held by the Holders or beneficial owners who accept such offer exceeds the amount of Principal Proceeds specified in such offer, a portion of the Notes of each accepting Holder and beneficial owner shall be purchased (subject to the minimum denominations and the applicable procedures of DTC) pro rata based on the respective principal amount held by each such Holder or beneficial owner;

 

(iii)           each such purchase shall be effected only at prices discounted from par;

 

(iv)           each such purchase of Secured Notes shall occur during the Reinvestment Period and shall be effected with Principal Proceeds;

 

(v)            each Coverage Test is satisfied immediately prior to each such purchase and will be satisfied, maintained or improved after giving effect to such purchase;

 

(vi)           to the extent that Sale Proceeds are used to consummate any such purchase, either (I) each requirement or test, as the case may be, of the Concentration Limitations and the Collateral Quality Tests (except the S&P CDO Monitor Test) will be satisfied after giving effect to such purchase or (II) if any such requirement or test was not satisfied immediately prior to such purchase, such requirement or test will be maintained or improved after giving effect to such purchase;

 

(vii)          no Event of Default shall have occurred and be continuing;

 

 

(viii)         each such purchase will otherwise be conducted in accordance with applicable law;

 

(ix)            the Trustee shall have received an Officer's certificate of the Collateral Manager to the effect that the conditions in the foregoing clauses (i) through (viii) have been satisfied; and

 

(x)            notice of each such purchase shall be provided to the Rating Agencies.

 

Any Secured Notes to be purchased shall be surrendered to the Trustee for cancellation in accordance with Section 2.9. Upon receipt of the Officer's certificate described in preceding sub-clause (ix), the Trustee shall disburse any available amount in the Principal Collection Subaccount on any Business Day pursuant to Issuer instruction (or the Collateral Manager acting on behalf of the Issuer), which instruction shall identify that such disbursement is for the purchase of Secured Notes pursuant to and in accordance with this Section 9.7.

 

Section 9.8      Optional Re-Pricing. On any Business Day after the Non-Call Period, at the direction of a Majority of the Subordinated Notes and with the consent of the Collateral Manager and the U.S. Retention Provider, the Issuer shall reduce the spread over the Benchmark or the fixed interest rate applicable with respect to any Class of Re-Pricing Eligible Notes (such reduction with respect to any such Class of Notes, a "Re-Pricing" and any Class of Secured Notes to be subject to a Re-Pricing, a "Re-Priced Class"); provided that the Issuer shall not effect any Re-Pricing unless each condition specified below is satisfied with respect thereto. For the avoidance of doubt, no terms of any Secured Notes other than the Interest Rate applicable thereto 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 a Majority of the Subordinated Notes and such Re-Pricing Intermediary shall assist the Issuer in effecting the Re-Pricing.

 

At least 20 days (or such shorter period reasonably acceptable to the Trustee and the Collateral Manager) prior to the Business Day fixed by a Majority of the Subordinated Notes 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 (with a copy to the Collateral Manager, the Trustee and each Rating Agency) to each Holder of the proposed Re-Priced Class, which notice shall:

 

(a)            specify the proposed Re-Pricing Date and the revised spread over the Benchmark or the fixed interest rate to be applied with respect to such Class (the "Re-Pricing Rate");

 

(b)            request each Holder of the Re-Priced Class to approve the proposed Re-Pricing; and

 

(c)            specify the price at which Notes of any Holder of the Re-Priced Class which does not approve the Re-Pricing may be sold and transferred pursuant to the following paragraph, which, for purposes of such Re-Pricing, shall be the 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.

 

 

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 not more than 5 Business Days after such notice, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall deliver written notice thereof to the consenting Holders of the Re-Priced Class, specifying the aggregate principal amount of the Notes of the Re-Priced Class held by such non-consenting Holders, and shall request each such consenting Holder provide written notice to the Issuer, the Trustee, the Collateral Manager and the Re-Pricing Intermediary if such Holder would like to purchase all or any portion of the Notes of the Re-Priced Class held by the non-consenting Holders (each such notice, an "Exercise Notice") within five Business Days after receipt of such notice (subject to the minimum denomination and applicable procedures of DTC). In the event the Issuer shall receive Exercise Notices with respect to more than the aggregate principal amount of the Notes 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 Notes, 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 principal amount of the Notes such Holders indicated an interest in purchasing pursuant to their Exercise Notices (subject to the minimum denomination and applicable procedures of DTC). In the event the Issuer shall receive Exercise Notices with respect to less than the aggregate principal amount of the Notes of the Re-Priced Class held by non-consenting Holders, the Issuer, or the Re-Pricing Intermediary on behalf of the Issuer (subject to the minimum denomination and applicable procedures of DTC), shall cause the sale and transfer of such Notes, 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 Notes of the Re-Priced Class held by non-consenting Holders shall be sold (for settlement on the Re-Pricing Date) to a transferee designated by the Re-Pricing Intermediary on behalf of the Issuer. All sales of Notes to be effected pursuant to this paragraph shall be made at a price equal to the aggregate principal amount of such Notes together with any accrued and unpaid interest thereon, including any Deferred Interest and any accrued and unpaid interest on such Deferred Interest, in each case 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, and shall be effected only if the related Re-Pricing is effected in accordance with the provisions of this Indenture described in this Section 9.8. The Holder of each Secured Note, by its acceptance of an interest in the Secured Notes, agrees to sell and transfer its Secured Notes in accordance with the provisions of this Indenture described in this Section 9.8 and agrees to cooperate with the Issuer, the Re-Pricing Intermediary and the Trustee to effect such sales and transfers. The Issuer, or the Re-Pricing Intermediary on behalf of the Issuer, shall deliver written notice to the Trustee and the Collateral Manager not later than five Business Days prior to the proposed Re-Pricing Date confirming that the Issuer has received written commitments to purchase all Notes of the Re-Priced Class held by non-consenting Holders. For the avoidance of doubt, such Re-Pricing will apply to all the Notes of the Re-Priced Class, including the Notes of the Re-Priced Class held by non-consenting Holders.

 

The Issuer shall not effect any proposed Re-Pricing unless: (i) with the consent of the Majority of the Subordinated Notes, the Collateral Manager and the U.S. Retention Provider, the Issuer and the Trustee shall have entered into a supplemental indenture dated as of the Re-Pricing Date solely to decrease the spread over the Benchmark or the fixed interest rate applicable to the Re-Priced Class; (ii) the Issuer (or the Re-Pricing Intermediary on behalf of the Issuer) confirms in writing that all Notes of the Re-Priced Class held by non-consenting Holders have been sold and transferred pursuant to clause (c) above; (iii) each Rating Agency shall have been notified of such Re-Pricing; (iv) all expenses of the Issuer and the 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 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 Notes, unless such expenses shall have been paid (including from proceeds of the additional issuance of Subordinated Notes) or shall be adequately provided for by an entity other than the Issuer; and (v) the Issuer has received written advice from Dechert LLP or Cadwalader, Wickersham & Taft LLP or an opinion of counsel of nationally recognized standing to the effect that the Re-Pricing will not cause the Issuer to 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 income tax on a net basis.

 

 

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 based upon such failure or defect. Any notice of a Re-Pricing may be withdrawn by a Majority of the Subordinated Notes on or prior to the Business Day prior to the scheduled Re-Pricing Date by written notice to the Issuer, the Trustee, and the Collateral Manager for any reason. Upon receipt of such notice of withdrawal, the Trustee shall send such notice to the Holders of Notes and each Rating Agency.

 

The Issuer shall direct the Trustee to segregate payments and take other reasonable steps to effect the Re-Pricing and the 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 shall, to the extent necessary, obtain and assign a separate CUSIP or CUSIPs to the Notes of each Class held by such consenting or non-consenting Holder(s). The 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 Trustee may request and rely on an Issuer Order providing direction and any additional information requested by the Trustee in order to effect a Re-Pricing.

 

Section 9.9      Clean-Up Call Redemption.

 

(a)            At the written direction of either a Majority of the Subordinated Notes or the Collateral Manager in its sole discretion (which direction shall be given so as to be received by the Issuer, the Trustee, each Rating Agency and, in the case of such direction delivered by a Majority of the Subordinated Notes, the Collateral Manager not later than 30 days prior to the proposed Redemption Date specified in such direction), the Secured Notes will be subject to redemption by the Issuer, in whole but not in part (a "Clean-Up Call Redemption"), at the Redemption Price therefor, on any Business Day after the Non-Call Period if the Collateral Principal Amount is less than 20.0% of the Target Initial Par Amount.

 

 

(b)            Upon receipt of notice directing the Issuer to effect a Clean-Up Call Redemption and subject to any transfer restriction, the Issuer (or, at the written direction and expense of the Issuer, the Trustee on behalf of the Issuer) will offer to the Collateral Manager, the holders of the Subordinated Notes and any other Person identified by the Issuer or the Collateral Manager the right to bid to purchase the Collateral Obligations at a price not less than the Clean-Up Call Purchase Price. Any Clean-Up Call Redemption is subject to (i) the sale of the Collateral Obligations by the Issuer to the highest bidder therefor (it being understood that any such sale of Collateral Obligations may consist of multiple transactions in which Collateral Obligations are sold in groups or on an individual basis, or any combination of the two, or as an entire pool, as determined by the Collateral Manager) on or prior to the third Business Day immediately preceding the related Redemption Date, for a purchase price in cash (the "Clean-Up Call Purchase Price") payable prior to or on the Redemption Date at least equal to the greater of (1) the sum of (a) the sum of the Redemption Prices of the Secured Notes, plus (b) the aggregate of all other amounts owing by the Issuer on the date of such redemption that are payable in accordance with the Priority of Payments prior to distributions in respect of the Subordinated Notes, minus (c) all other Assets available for application in accordance with the Priority of Payments on the Redemption Date and (2) the Market Value of such Assets being purchased, and (ii) the receipt by the Trustee from the Collateral Manager, prior to such purchase, of certification from the Collateral Manager that the sum so received satisfies clause (i). Upon receipt by the Trustee of the certification referred to in the preceding sentence, the Trustee (pursuant to written direction from, and at the expense of, the Issuer) and the Issuer shall take all actions necessary to sell, assign and transfer the Assets to the applicable holder of Subordinated Notes, the Collateral Manager or such other Person upon payment in immediately available funds of the Clean-Up Call Purchase Price. The Trustee shall deposit such payment into the applicable sub-account of the Collection Account in accordance with the instructions of the Collateral Manager.

 

(c)            Upon receipt from a Majority of the Subordinated Notes or the Collateral Manager of a direction in writing to effect a Clean-Up Call Redemption, the Issuer shall set the related Redemption Date (as specified in the direction delivered pursuant to clause (a) above) and the Record Date for any redemption pursuant to this Section 9.9 and give written notice thereof to the Trustee (which shall forward such notice to the Holders), the Collateral Administrator, the Collateral Manager and each Rating Agency not later than 15 Business Days prior to the proposed Redemption Date.

 

(d)            Any notice of Clean-Up Call Redemption may be withdrawn by the Issuer up to two Business Days prior to the related scheduled Redemption Date by written notice to the Trustee, each Rating Agency and the Collateral Manager only if amounts equal to the Clean-Up Call Purchase Price are not received in full in immediately available funds by the third Business Day immediately preceding such Redemption Date. Notice of any such withdrawal of a notice of Clean-Up Call Redemption shall be given by the Trustee at the expense of the Issuer to each Holder of Notes to be redeemed at such Holder's address in the Register, by overnight courier guaranteeing next day delivery not later than the second Business Day prior to the related scheduled Redemption Date.

 

 

(e)            On the Redemption Date related to any Clean-Up Call Redemption, the Clean-Up Call Purchase Price shall be distributed pursuant to the Priority of Payments.

 

ARTICLE X

 

Accounts, Accountings And Releases

 

Section 10.1      Collection of Money. (a) Except as otherwise expressly provided herein, the Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all Money and other property payable to or receivable by the Trustee pursuant to this Indenture, including all payments due on the Assets, in accordance with the terms and conditions of such Assets. The Trustee shall segregate and hold all such Money and property received by it in trust for the Holders of the Notes and shall apply it as provided herein. Each Account shall be established and maintained (I) with a federal or state-chartered depository institution (x) which has a long-term issuer rating of at least "A" and a short-term issuer rating of at least "A-1" by S&P (or a long-term issuer rating of at least "A+" by S&P if such institution has no short-term rating) and (y) which has a short-term credit rating of at least "F1" or a long term credit rating of at least "A" by Fitch or (II) in segregated trust accounts with the corporate trust department of a federal or state-chartered depository institution rated at least "BBB" by S&P and which has a short-term credit rating of at least "F1" or a long-term credit rating of at least "A" by Fitch and is subject to regulations regarding fiduciary funds on deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b). Such institution shall have a combined capital and surplus of at least U.S.$200,000,000. Each of the Accounts shall be "securities accounts" under Section 8-501(a) of the UCC and all Cash deposited in the Accounts shall be capable of being invested at the direction of the Issuer, or the Collateral Manager on its behalf; provided that all Cash deposited in the Accounts shall be invested only in Eligible Investments or Collateral Obligations in accordance with the terms of this Indenture. To avoid the consolidation of the Assets of the Issuer with the general assets of the Bank under any circumstances, the Trustee shall comply, and, if the Custodian is the Bank, shall cause the Custodian to comply, with all law applicable to it as a national bank with trust powers holding segregated trust assets in a fiduciary capacity.

 

(b)            If any institution described in Section 10.1(a) above falls below the requirements specified in Section 10.1(a)(I) or (II), the assets held in such Account shall be moved by the Issuer within 30 calendar days to another institution that has ratings that satisfy such requirements.

 

Section 10.2      Collection Account. (a) In accordance with this Indenture and the Securities Account Control Agreement, the Issuer has established at the Custodian two segregated trust subaccounts, 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 the Trustee, for the benefit of the Secured Parties and each of which shall be maintained by the Custodian in accordance with the Securities Account Control Agreement. The Trustee shall from time to time deposit into the Interest Collection Subaccount, in addition to the deposits required pursuant to Section 10.6(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 or in Eligible Investments). The Trustee shall deposit immediately upon receipt thereof or upon transfer from the Expense Reserve 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 Contributions and 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 Trustee as part of the Assets and shall be applied to the purposes herein provided. Subject to Section 10.2(d), amounts in the Collection Account shall be reinvested pursuant to Section 10.6(a).

 

 

 

(b)            The 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 Business Days after receipt of such notice from the Trustee (or as soon as practicable thereafter), sell such distribution or other proceeds for Cash in an arm's length transaction and deposit the proceeds thereof in the Collection Account; provided that the Issuer (i) need not sell such distributions or other proceeds if it delivers an Issuer Order or an Officer's certificate to the 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 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 Trustee to, and upon receipt of such Issuer Order the 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 and the purchase price for such Collateral Obligations (including accrued interest and other accrued amounts for such additional Collateral Obligations) may be paid on or following the settlement thereof as directed in an Issuer Order. At any time, the Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the 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 direct the Trustee to, and upon receipt of such direction the Trustee shall, pay from amounts on deposit in the Collection Account on any Business Day during any Interest Accrual Period (i) from Interest Proceeds only, any amount required to exercise a warrant held in the Assets or right to acquire equity securities; provided that, so long as any Notes Outstanding are rated by S&P and (solely with respect to the Class A-1 Notes) Fitch, in the reasonable judgment of the Collateral Manager, such payment will not cause a default or deferral in the payment, when due and payable, of any interest on any Class of Notes, (ii) any amount required to acquire loan assets or debt securities in connection with the insolvency, bankruptcy, reorganization, restructuring or workout of a Collateral Obligation or the Obligor thereof (including, for the avoidance of doubt, any Permitted Collateral Obligation (which Permitted Collateral Obligation shall be treated as a Collateral Obligation, subject to treatment as a Defaulted Obligation in accordance with Section 12.2(i))) in accordance with such direction; provided that, so long as any Notes Outstanding are rated by S&P and (solely with respect to the Class A-1 Notes) Fitch, (A) if such payment is made from Interest Proceeds, in the reasonable judgment of the Collateral Manager, such payment will not cause a default or deferral in the payment, when due and payable, of any interest on any Class of Notes, (B) if such payment is made from Principal Proceeds, unless such Principal Proceeds were designated as such pursuant to a Contribution, (x) after giving effect to such payment, the aggregate amount of all payments made pursuant to this clause (ii) shall not exceed 5.0% of the Target Initial Par Amount and (y) the Adjusted Collateral Principal Amount is greater than or equal to the Reinvestment Target Par Balance after giving effect to such payment and (C) notice thereof is provided to each Rating Agency, (iii) any amount required to make customary protective advances or provide customary indemnities to the agent of the Collateral Obligation (for which the Issuer may receive a participation interest or other right of repayment) as may be required by the Issuer as a lender under the Underlying Instruments and (iv) 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 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 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 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 and on any Redemption Date or Redemption Distribution Date and, in the case of proceeds received in connection with a Refinancing of the Secured Notes in whole, on the date of receipt thereof, the amount set forth to be so transferred in the Distribution Report for such Payment Date or the Redemption Distribution Direction for such Redemption Distribution Date.

 

 

(f)            The Collateral Manager on behalf of the Issuer may by Issuer Order direct the Trustee to, and upon receipt of such Issuer Order the Trustee shall, (i) transfer from amounts on deposit in the Interest Collection Subaccount to the Principal Collection Subaccount, amounts necessary for application pursuant to Section 7.18(d) and/or (ii) apply amounts in the Principal Collection Subaccount to the purchase of Secured Notes pursuant to Section 9.7.

 

(g)            In connection with a Refinancing in part by Class of one or more Classes of Secured Notes, the Collateral Manager on behalf of the Issuer may direct the 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 Notes to the payment of the Redemption Price(s) of the Class or Classes of Secured Notes subject to Refinancing, as applicable, and the fees and expenses related to such Refinancing or Re-Pricing, in each case, without regard to the Priority of Payments.

 

(h)            From time to time on or prior to the Determination Date related to the first Payment Date after the Refinancing Date, the Collateral Manager may (with notice to the Trustee and the Collateral Administrator), designate Principal Proceeds received by the Issuer as Interest Proceeds (Principal Proceeds so designated as Interest Proceeds, "Designated Principal Proceeds"), so long as, after giving effect to such designation (together with the designation of Designated Unused Proceeds as Interest Proceeds), the Effective Date Interest Deposit Restriction will be satisfied.

 

Section 10.3           Transaction Accounts.

 

(a)            Payment Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer has established at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the Payment Account, which shall be maintained by the Custodian in accordance with the Securities Account Control Agreement. Except as provided in Section 11.1(a), the only permitted withdrawal from or application of funds on deposit in, or otherwise to the credit of, the Payment Account shall be to pay amounts due and payable on the Notes in accordance with their terms and the provisions of this Indenture and, 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. The Issuer shall direct, and hereby directs, that all amounts in the Payment Account shall remain uninvested.

 

(b)            Custodial Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer has established at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the "Custodial Account," which shall be maintained by 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 Trustee agrees to give the Issuer immediate notice if (to the actual knowledge of a Bank Officer of the 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. The Issuer shall direct, and hereby directs, that all amounts in the Custodial Account shall remain uninvested.

 

 

(c)            Ramp-Up Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Refinancing Date, cause the 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 the Trustee, for the benefit of the Secured Parties, which shall be designated as the Ramp-Up Account, which shall be maintained by the Custodian in accordance with the Securities Account Control Agreement. The Issuer shall direct the Trustee to deposit U.S.$379,421,959.83 to the Ramp-Up Account on the Refinancing Date. In connection with any purchase of an additional Collateral Obligation, the Trustee will apply amounts held in the Ramp-Up Account as provided by Section 7.18(b). On the Determination Date related to the first Payment Date after the Refinancing Date after giving effect to any designation pursuant to the following sentence, or upon the occurrence of an Event of Default (and excluding any proceeds that will be used to settle binding commitments entered into prior to such date), the Trustee will deposit any remaining amounts in the Ramp-Up Account into the Principal Collection Subaccount as Principal Proceeds. After the Effective Date and on or prior to the Determination Date related to the first Payment Date after the Refinancing Date (so long as the Target Initial Par Condition has been satisfied, and with respect to any distribution in connection with clause (b) below, is satisfied on a pro forma basis after giving effect to such distribution, and a Special Redemption was not required and excluding any proceeds that will be used to settle binding commitments entered into prior to that date), (a) at the direction of the Collateral Manager the Trustee will deposit any remaining amounts in the Ramp-Up Account into the Principal Collection Subaccount as Principal Proceeds (except as provided in clause (b) below) and (b) the Collateral Manager may designate any remaining amounts in the Ramp-Up Account as Interest Proceeds to be deposited into the Interest Collection Subaccount (amounts so designated as Interest Proceeds, "Designated Unused Proceeds"), so long as, after giving effect to such designation, (i) the aggregate amount of Designated Principal Proceeds and Designated Unused Proceeds does not exceed 1.0% of the Target Initial Par Amount, (ii) the Adjusted Collateral Principal Amount is greater than the Target Initial Par Amount, (iii) each Coverage Test is satisfied, (iv) each Collateral Quality Test is satisfied and (v) each Concentration Limitation is satisfied (such requirements, the "Effective Date Interest Deposit Restriction"). Any income earned on amounts deposited in the Ramp-Up Account will be deposited in the Interest Collection Subaccount as Interest Proceeds.

 

 

(d)            Expense Reserve Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Refinancing Date, cause the 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 the Trustee, for the benefit of the Secured Parties, which shall be designated as the Expense Reserve Account, which shall be maintained by the Custodian in accordance with the Securities Account Control Agreement. The Issuer shall direct the Trustee to deposit $2,308,770.00 to the Expense Reserve Account. On any Business Day from the Refinancing Date to and including the Determination Date relating to the first Payment Date after the Refinancing Date, the Trustee shall apply funds from the Expense Reserve Account, as directed by the Collateral Manager, to pay expenses of the Issuer incurred in connection with the change of the name of the Issuer, the structuring and consummation of the Offering and the issuance of the Notes or to the Collection Account as Interest Proceeds or Principal Proceeds. By the Determination Date relating to the first Payment Date after the Refinancing Date, all funds in the Expense Reserve Account (after deducting any expenses paid on such Determination Date) will be deposited in the Collection Account as Interest Proceeds or Principal Proceeds, as designated by the Collateral Manager, and the Expense Reserve Account will be closed. Any income earned on amounts deposited in the Expense Reserve Account will be deposited in the Interest Collection Subaccount as Interest Proceeds as it is received.

 

(e)            Supplemental Reserve Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer has established at the Custodian a single, segregated non-interest bearing trust account held in the name of the Issuer subject to the lien of the Trustee, for the benefit of the Secured Parties, which shall be designated as the "Supplemental Reserve Account," which shall be held by the Custodian in accordance with the Securities Account Control Agreement. Contributions of Cash or Eligible Investments, any amounts in connection with an additional issuance of Subordinated Notes only and amounts designated for deposit into the Supplemental Reserve Account pursuant to Section 11.1(a)(i)(L) will be deposited into the Supplemental Reserve Account and, as applicable, transferred to the Collection Account at the written direction of the Collateral Manager to the Trustee, in each case for a Permitted Use designated by the applicable Contributor or the Collateral Manager, as applicable, in such written direction.

 

(f)            Interest Reserve Account. In accordance with this Indenture and the Securities Account Control Agreement, the Issuer shall, prior to the Refinancing Date, cause the Trustee to establish at the Custodian a single, segregated non-interest bearing trust account in the name of the Issuer subject to the lien of the Trustee for the benefit of the Secured Parties which shall be designated as the "Interest Reserve Account." On the Refinancing Date, the Issuer shall direct the Trustee to deposit an amount equal to the Interest Reserve Amount into the Interest Reserve Account. On the Determination Date relating to the first Payment Date following the Refinancing Date, the Issuer, at the direction of the Collateral Manager, may direct that any remaining amounts in the Interest Reserve Account be transferred to the Collection Account and included as Interest Proceeds or Principal Proceeds on such Payment Date. On the Business Day immediately preceding the first Payment Date after the Refinancing Date, all amounts on deposit in the Interest Reserve Account will be transferred to the Payment Account and applied as Interest Proceeds or Principal Proceeds (as directed by the Collateral Manager) in accordance with the Priority of Payments on such Payment Date, and the Trustee will close the Interest Reserve Account. Prior to the closing of the Interest Reserve Account, any income earned on amounts deposited in the Interest Reserve Account will be deposited in the Interest Collection Subaccount as Interest Proceeds as it is paid.

 

 

Section 10.4           The Revolver Funding Account. Upon the purchase or acquisition of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation or upon the acquisition of an Equity Security that requires future funding commitments, in each case, identified by written notice to the Trustee, funds in an amount equal to the undrawn portion of such obligation shall be withdrawn at the direction of the Collateral Manager first from the Ramp-Up Account and, if necessary, from the Principal Collection Subaccount and deposited by the 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 the Trustee, for the benefit of the Secured Parties (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, Revolving Collateral Obligation or Equity Security 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.

 

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 at least equal to the sum of the unfunded funding obligations under all such Delayed Drawdown Collateral Obligations, Revolving Collateral Obligations and Equity Securities then included in the Assets. Funds shall be deposited in the Revolver Funding Account upon the purchase of any Delayed Drawdown Collateral Obligation, Revolving Collateral Obligation or Equity Security that requires future funding commitments 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 Trustee to, and the 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 at the direction of the Collateral Manager solely to cover any drawdowns on the Delayed Drawdown Collateral Obligations, Revolving Collateral Obligations and Equity Securities; 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, Revolving Collateral Obligations and Equity Securities 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, Revolving Collateral Obligation or Equity Security, (ii) the occurrence of an event of default with respect to any such Delayed Drawdown Collateral Obligation, Revolving Collateral Obligation or Equity Security or (iii) any other event or circumstance which results in the irrevocable reduction of the undrawn commitments under such Delayed Drawdown Collateral Obligation, Revolving Collateral Obligation or Equity Security) may be transferred by the Trustee (at the written direction of the Collateral Manager on behalf of the Issuer) from time to time as Principal Proceeds to the Principal Collection Subaccount.

 

 

Section 10.5         Ownership of the Accounts. For the avoidance of doubt, the Accounts (including income, if any, earned on the investments of funds in such account) will be owned by the Issuer, for federal income tax purposes. The Issuer is required to provide to the Trustee (i) an IRS Form W-9 or appropriate IRS Form W-8 no later than the Refinancing Date, and (ii) any additional IRS forms (or updated versions of any previously submitted IRS forms) or other documentation upon the reasonable request of the Trustee as may be necessary (i) to reduce or eliminate the imposition of U.S. withholding taxes and (ii) to permit the Trustee to fulfill its tax reporting obligations under applicable law with respect to the Accounts or any amounts paid to the Issuer. If any IRS form or other documentation previously delivered becomes inaccurate in any respect, the Issuer shall timely provide to the Trustee accurately updated and complete versions of such IRS forms or other documentation. The Bank, both in its individual capacity and in its capacity as Trustee, shall have no liability to the Issuer or any other person in connection with any tax withholding amounts paid or withheld from the Accounts pursuant to applicable law arising from the Issuer's failure to timely provide an accurate, correct and complete IRS Form W-9, an appropriate IRS Form 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 Trustee having first received (i) the requisite written investment direction with respect to the investment of such funds, and (ii) the IRS forms and other documentation required by this paragraph.

 

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 Trustee to, and, upon receipt of such Issuer Order, the Trustee shall, invest all funds on deposit in the Collection Account, the Ramp-Up Account, the Interest Reserve Account, the Revolver Funding Account, the Expense Reserve Account and the Supplemental Reserve Account, as so directed in Eligible Investments having stated maturities no later than the Business Day preceding the next Payment Date (or such other maturities expressly provided herein). If prior to the occurrence of an Event of Default, the Issuer shall not have given any such investment directions, the Trustee shall seek instructions from the Collateral Manager within three Business Days after transfer of any funds to such accounts. If the Trustee does not thereafter receive written instructions from the Collateral Manager within five Business Days after transfer of such funds to such accounts, it shall invest and reinvest the funds held in such accounts, as fully as practicable, in the Standby Directed Investment. If after the occurrence of an Event of Default, the Issuer shall not have given such investment directions to the Trustee for three consecutive days, the Trustee shall invest and reinvest such Cash as fully as practicable in 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 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.

 

(b)            The Trustee agrees to give the Issuer immediate notice if (to the actual knowledge of a Bank Officer of the Trustee) 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 Trustee shall supply, in a timely fashion, to the Issuer, each Rating Agency and the Collateral Manager any information regularly maintained by the Trustee that the Issuer, the Rating Agencies 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 Trustee by reason of its acting as 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 Trustee shall 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 20^th calendar day (or, if such day is not a Business Day, on the next succeeding Business Day) of each calendar month (other than January, April, July and October in each year) and commencing in April 2025, the Issuer shall compile and make available (or cause to be compiled and made available) to each Rating Agency, the Trustee, the Collateral Manager, the Initial Purchaser, any Holder shown on the Register of a Note and any beneficial owner of a Note who has delivered a Beneficial Ownership Certificate to the 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 tenth Business Day prior to the 20^th calendar day of such calendar month. 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 Monthly Report Determination Date for such calendar month:

 

(i)            Aggregate Principal Balance of Collateral Obligations, the aggregate outstanding 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 CUSIP, LoanX-ID (if any) or security identifier thereof;

 

(C)            The Principal Balance thereof, the outstanding principal balance thereof (in each case, other than any accrued interest that was purchased with Principal Proceeds (but excluding any capitalized interest)) and any unfunded commitment pertaining thereto;

 

(D)            The percentage of the aggregate Collateral Principal Amount represented by such Collateral Obligation;

 

(E)            (x) The related interest rate or spread (in the case of a Floating Rate Floor Obligation, calculated both with and without regard to the applicable specified "floor" rate per annum), (y) if such Collateral Obligation is a Floating Rate Floor Obligation, the related benchmark floor or other applicable index floor and (z) the identity of any Collateral Obligation that is not a Floating Rate Floor Obligation and for which interest is calculated with respect to any index other than the Benchmark;

 

(F)            The stated maturity thereof;

 

(G)            The related S&P Industry Classification;

 

(H)            The S&P Rating;

 

(I)            The Fitch Rating;

 

(J)            The country of Domicile;

 

(K)            An indication as to whether each such Collateral Obligation is (1) a Senior Secured Loan, (2) a Second Lien Loan, (3) a Defaulted Obligation, (4) a Delayed Drawdown Collateral Obligation, (5) a Revolving Collateral Obligation, (6) a Participation Interest (indicating the related Selling Institution, if applicable, and its ratings by each Rating Agency), (7) a Permitted Deferrable Obligation, (8) a Fixed Rate Obligation, (9) a Current Pay Obligation, (10) a DIP Collateral Obligation, (11) a Discount Obligation, (12) a Discount Obligation purchased in the manner described in clause (y) of the proviso to the definition "Discount Obligation", (13) a Cov-Lite Loan, (14) a First-Lien Last-Out Loan, (15) a Long-Dated Obligation, (16) a Broadly Syndicated Loan or, if not a Broadly Syndicated Loan, a Middle Market Loan, (17) a Permitted Non-Loan Asset, (18) a Permitted Collateral Obligation or (19) a Senior Syndicated Secured Loan;

 

 

(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; and

 

(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 Fitch Recovery Rate;

 

(O)            The S&P Recovery Rate;

 

(P)            The date of the credit estimate of such Collateral Obligation; and

 

(Q)            The Fitch Rating Reporting Items.

 

(v)            If the Monthly Report Determination Date occurs on or after the Effective Date and prior to the last day of the Reinvestment Period, for each of the limitations and tests specified in the definitions of Concentration Limitations (including the limitations specified in the proviso of the definition of "Deferrable Obligation") and Collateral Quality Tests, (1) the result (including, during any S&P CDO Formula Election Period, calculation of each of the S&P CDO Monitor Benchmarks), (2) the related minimum or maximum test level and (3) a determination as to whether such result satisfies the related test.

 

(vi)            The calculation of each of the following:

 

(A)            Each Interest Coverage Ratio (and setting forth the percentage required to satisfy each Interest Coverage Test);

 

 

(B)            Each Overcollateralization Ratio (and setting forth the percentage required to satisfy each Overcollateralization Ratio Test);

 

(C)            The Weighted Average Coupon; and

 

(D)            The Weighted Average Floating Spread.

 

(vii)            The calculation specified in Section 5.1(g).

 

(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, payments, and sales:

 

(A)            The identity, Principal Balance and outstanding principal balance (in each case other than any accrued interest that was purchased with Principal Proceeds (but excluding any capitalized interest)), unfunded commitment (if any), capitalized interest (if any), Principal Proceeds and Interest Proceeds received, 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, and whether the sale of such Collateral Obligation was a discretionary sale and;

 

(B)            The identity, Principal Balance and outstanding principal balance (in each case other than any accrued interest that was purchased with Principal Proceeds (but excluding any capitalized interest)), unfunded commitment (if any), Principal Proceeds and Interest Proceeds received, and date for each Collateral Obligation that was substituted or repurchased pursuant to Section 12.3 since the last Monthly Report Determination Date, all as reported to the Trustee by the Collateral Manager at the time of such repurchase or substitution; and

 

(C)            The identity, Principal Balance and outstanding principal balance (in each case other than any accrued interest that was purchased with Principal Proceeds (but excluding any capitalized interest)), unfunded commitment (if any), capitalized interest (if any) and Principal Proceeds and Interest Proceeds expended to acquire each Collateral Obligation acquired pursuant to Section 12.2 since the last Monthly Report Determination Date.

 

 

(xi)            The identity of each Defaulted Obligation, the Fitch Collateral Value, 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/or the Fitch Rating of "CCC+" or below and the Market Value of each such Collateral Obligation.

 

(xiii)            The identity of each Deferring Obligation, the Fitch Collateral Value, S&P Collateral Value 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 amount of Principal Proceeds designated as Designated Principal Proceeds or Designated Unused Proceeds.

 

(xvi)            The Aggregate Principal Balance, measured cumulatively from the Refinancing Date onward, of all Collateral Obligations that would have been acquired through a Distressed Exchange but for the operation of the proviso in the definition of "Distressed Exchange", all as reported to the Trustee by the Collateral Manager.

 

(xvii)            The percentage of the Collateral Principal Amount comprised of Broadly Syndicated Loans (which percentage shall be reflected on the summary page of the Monthly Report).

 

(xviii)            A copy of the notice provided by the Collateral Manager pursuant to Section 12.2(b) hereof setting forth the details of any Trading Plan (including, the proposed amendments and/or proposed investments identified by the Collateral Manager for acquisition or entry, as applicable, as part of such Trading Plan (which details shall be reported on a dedicated page of the Monthly Report)) and the occurrence of the event, if any, described in Section 12.2(b)(iv).

 

(xix)            Based solely on the confirmation given by the Issuer, or the Collateral Manager on behalf of the Issuer, to the Collateral Administrator and the Trustee (for the benefit of the Holders), on which the Collateral Administrator and the Trustee may conclusively rely, a statement as to whether the E.U./U.K. Retention Provider has confirmed it is in compliance with the requirements set forth in paragraph 1 of the Risk Retention Letter.

 

(xx)            The S&P Equivalent Weighted Average Rating Factor and S&P Equivalent Diversity Score.

 

 

(xxi)            For each Account, (i) the name of the financial institution that holds such Account; and (ii) the applicable ratings by S&P and Fitch required under Section 10.1(a) for such institution.

 

(xxii)            The identity of each Equity Security.

 

(xxiii)            The identity of any Refinancing Date Participation Interest which has not been elevated to an assignment 90 days following the Refinancing Date.

 

(xxiv)            Such other information as any Rating Agency or the Collateral Manager may reasonably request.

 

For each instance in which the Market Value is reported pursuant to the foregoing, the Monthly Report shall also indicate the manner in which such Market Value was determined and the source(s) (if applicable) used in such determination, as provided by the Collateral Manager.

 

Upon receipt of each Monthly Report, the 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 Business Days after receipt of such Monthly Report, notify the Issuer, the Collateral Administrator, the Rating Agencies and the Collateral Manager if the information contained in the Monthly Report does not conform to the information maintained by the 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 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 perform agreed upon procedures on such Monthly Report and the Trustee's records to determine the cause of such discrepancy. If such review reveals an error in the Monthly Report or the Trustee's records, the Monthly Report or the Trustee's records shall be revised accordingly and, as so revised, shall be utilized in making all calculations pursuant to this Indenture and notice of any error in the Monthly Report shall be sent as soon as practicable by the Issuer to all recipients of such report which may be accomplished by making a notation of such error in the subsequent Monthly Report.

 

(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 Trustee, the Collateral Manager, the Initial Purchaser, each Rating Agency, any Holder shown on the Register of a Note and any beneficial owner of a Note who has delivered a Beneficial Ownership Certificate to the 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), provided that such Payment Date is not also a Re-Pricing Date or Redemption Date for an Optional Redemption, Tax Redemption, Clean-Up Call Redemption or Refinancing in each case in whole but not in part;

 

(ii)            (a) the Aggregate Outstanding Amount of the Secured Notes of each Class at the beginning of the Interest Accrual Period and such amount as a percentage of the original Aggregate Outstanding Amount of the Secured Notes of such Class, (b) the amount of principal payments to be made on the Secured Notes of each Class on the next Payment Date, the amount of any Deferred Interest on the Class C Notes and the Aggregate Outstanding Amount of the Secured Notes of each Class after giving effect to the principal payments, if any, on the next Payment Date and such amount as a percentage of the original Aggregate Outstanding Amount of the Secured Notes of such Class and (c) the Aggregate Outstanding Amount of the Subordinated Notes at the beginning of the Interest Accrual Period and such amount as a percentage of the original Aggregate Outstanding Amount of the Subordinated Notes, the amount of payments, if any, to be made on the Subordinated Notes on the next Payment Date, and the Aggregate Outstanding Amount of the Subordinated Notes after giving effect to such payments, if any, on the next Payment Date and such amount as a percentage of the original Aggregate Outstanding Amount of the Subordinated Notes;

 

(iii)            the Interest Rate and accrued interest for each applicable Class of Secured Notes for such Payment Date;

 

(iv)            the amounts payable pursuant to each clause of Section 11.1(a)(i) and each clause of Section 11.1(a)(ii) 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 (or, with respect to the Interest Collection Subaccount, the next Business Day);

 

(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)            [reserved];

 

 

(vii)            such other information as the Collateral Manager may reasonably request.

 

Each Distribution Report shall constitute instructions to the Trustee to withdraw funds from the Payment Account and pay or transfer such amounts set forth in 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 Issuer (or the Collateral Administrator on behalf of the Issuer) shall include in the Monthly Report a notice setting forth the Interest Rate for each Class of Secured Notes for the Interest Accrual Period preceding the next Payment Date.

 

(d)            Failure to Provide Accounting. If the 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 Trustee, the 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 Note shall contain, or be accompanied by, the following notices:

 

The Notes may be beneficially owned only by Persons that (a) in the case of the Secured Notes (i) are Qualified Purchasers that are not U.S. persons (within the meaning of Regulation S under the United States Securities Act of 1933, as amended) and are purchasing their beneficial interest in an offshore transaction (as defined in Regulation S) or (ii) are Qualified Institutional Buyers or Institutional Accredited Investors and 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 either a Qualified Purchaser) or (b) in the case of the Subordinated Notes are Qualified Institutional Buyers or Accredited Investors and either Qualified Purchasers, Knowledgeable Employees with respect to the Issuer, Collateral Manager or corporations, partnerships, limited liability companies or other entities (other than trusts) each shareholder, partner, member or other equity owner of which is either a Qualified Purchaser or a Knowledgeable Employee with respect to the Issuer or Collateral Manager and (c) in the case of clauses (a) and (b), can make the representations set forth in Section 2.5 of this Indenture or the appropriate Exhibit to this Indenture. The Issuer has the right to compel any beneficial owner of an interest in Rule 144A Global Secured 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 2.11.

 

 

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)            Initial Purchaser Information. The Issuer and the Initial Purchaser, or any successor to the Initial Purchaser, may post the information contained in a Monthly Report or Distribution Report to a password-protected internet site accessible only to the Holders of the Notes and to the Collateral Manager.

 

(g)            Distribution of Reports. The Trustee will make the Monthly Report, the Distribution Report, any Redemption Distribution Direction and any notices or communications required to be delivered to the Holders in accordance with this Indenture available via its internet website. The Trustee's internet website shall initially be located at https://gctinvestorreporting.bnymellon.com. The Trustee shall have the right to change the way such statements are distributed in order to make such distribution more convenient and/or more accessible to the above parties and the Trustee shall provide timely and adequate notification to all above parties regarding any such changes. As a condition to access to the Trustee's internet website, the Trustee may require registration and the acceptance of a disclaimer. The Trustee shall be entitled to rely on but shall not be responsible for the content or accuracy of any information provided in the Monthly Report and the Distribution Report which the Trustee disseminates in accordance with this Indenture and may affix thereto any disclaimer it deems appropriate in its reasonable discretion.

 

(h)            In the event that the Trustee receives instructions 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 notification from the Trustee after the completion of such transaction as contemplated in 12 CFR 12.4(a) or (b), the Issuer agrees that, absent a specific request, such notification shall not be provided by the Trustee hereof and, in lieu of such notifications, the Trustee shall make available each Monthly Report and Distribution Report in the manner required by this Indenture.

 

(i)            The Trustee is authorized to make available to Intex Solutions, Inc. and Moody's Analytics each Monthly Report and Distribution Report.

 

(j)            "Fair Value" Report. The Issuer authorizes and directs the Trustee to make available to Holders via the Trustee's internet website any "fair value" report provided to the Trustee by the Issuer for posting in connection with the U.S. Risk Retention Rules and provided to the Trustee for posting to the website. Notwithstanding anything herein to the contrary, it is understood and agreed that the Trustee (i) has not participated in the preparation of any such report or the information contained therein and (ii) is not responsible for, and is not making any representation concerning, the accuracy or completeness of such report or the information contained therein, including, without limitation, in respect of the fair value of any Notes identified therein or any assumptions, discount factors or other variables used to determine any such fair value.

 

 

(k)            Redemption Distribution Direction. The Issuer shall render an accounting (each a "Redemption Distribution Direction"), determined as of the close of business on each Determination Date preceding a Redemption Distribution Date, and shall make available such Redemption Distribution Direction available to the Collateral Manager and the Trustee setting forth the amounts payable pursuant to each applicable clause of Section 11.1(a)(i) and Section 11.1(a)(ii), as applicable, on the related Redemption Distribution Date. Each Redemption Distribution Direction shall constitute instructions to the Trustee to withdraw funds from the Payment Account and pay or transfer such amounts set forth in such Redemption Distribution Direction in the manner specified and in accordance with the priorities established in Section 11.1 and Article XIII. No Redemption Distribution Direction will be required to be reviewed by the Independent accountants appointed pursuant to 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 Trustee at least one Business Day prior to the settlement date for any sale of an Asset certifying that the sale, repurchase or substitution of such Asset is being made in accordance with Section 12.1 hereof and such sale, repurchase or substitution complies with all applicable requirements of Section 12.1 (which certification shall be deemed to be made upon delivery of such Issuer Order or trade continuation in respect of such sale) (provided that if an Enforcement Event has occurred and is continuing, neither the Issuer nor the Collateral Manager (on behalf of the Issuer) may direct the 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 12.3(c)), direct the Trustee to release or cause to be released such Asset from the lien of this Indenture and, upon receipt of such Issuer Order, the 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 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 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, 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 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 Notes have been accelerated following an Event of Default, the Collateral Manager may, by Issuer Order, direct (x) the Trustee to accept or participate in or decline or refuse to participate in such Offer and, in the case of acceptance or participation, to release from the lien of this Indenture such Asset in accordance with the terms of the Offer against receipt of payment therefor, or (y) the Issuer or the Trustee to agree to or otherwise act with respect to such consent, direction, waiver, amendment, modification or action; provided that in the absence of any such direction, the Trustee shall not respond or react to such Offer or request.

 

 

(d)            As provided in Section 10.2(a), the 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 Trustee shall, upon receipt of an Issuer Order at such time as there are no Secured Notes 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 Notes in accordance with the Priority of Payments shall be released from the lien of this Indenture.

 

(h)            In connection with the Permitted Mergers, on the Refinancing Date, the Trustee shall release from the lien of this Indenture the cash amount specified in accordance with Section 3.1(b)(iii) of this Indenture.

 

Section 10.9          Reports by Independent Accountants. (a) At the Refinancing 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 Notes. Upon any resignation by such firm or removal of such firm by the Issuer, the Issuer (or the Collateral Manager on behalf of the Issuer) shall promptly appoint by Issuer Order delivered to the Trustee and each 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 Trustee of such failure in writing. If the Issuer shall not have appointed a successor within ten days thereafter, the Trustee shall promptly notify the Collateral Manager, who shall appoint a successor firm of Independent certified public accountants of recognized international reputation. The fees of such Independent certified public accountants and its successor shall be payable by the Issuer. In the event such firm requires the Trustee and/or the Collateral Administrator to agree to the procedures performed by such firm, the Issuer hereby directs the Trustee and/or the Collateral Administrator to so agree, which acknowledgment or agreement may include, among other things, (i) acknowledgment of the responsibility for the sufficiency of the procedures to be performed by the Independent accountants for its purposes, (ii) releases by the Trustee and/or Collateral Administrator (on behalf of itself and the Holders) of claims against the Independent accountants and acknowledgement of other limitations of liability in favor of the Independent accountants and (iii) restrictions or prohibitions on the disclosure of information or documents provided to it by such firm of Independent accountants (including to the Holders). It is understood and agreed that the Trustee and/or the Collateral Administrator will deliver such letter of agreement in conclusive reliance on the foregoing direction of the Issuer, and neither the Trustee nor the Collateral Administrator shall make any inquiry or investigation as to, and shall have no obligation in respect of, the sufficiency, validity or correctness of such procedures. The Trustee and the Collateral Administrator shall not be required to make any such agreements that adversely affect the Bank in its individual capacity.

 

 

(b)            On or before December 31^st of each year commencing in 2025, the Issuer shall cause to be delivered to the Trustee, the Collateral Manager and each Holder of the Notes upon written request therefor and subject to the execution of an agreement with the Independent certified public accountants, a report from a firm of Independent certified public accountants for each Distribution Report occurring in April and October of each year (i) indicating that such firm has performed agreed-upon procedures to recalculate certain of the calculations within those Distribution Reports (excluding the S&P CDO Monitor Test) have been performed in accordance with the applicable provisions of this Indenture and (ii) listing the Aggregate Principal Balance of the Assets and the Aggregate Principal Balance of the Collateral Obligations securing the Secured Notes 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 Trustee, or any Holder of a Subordinated Note (and subject to the execution of an agreement with the firm of Independent certified public accountants), the Issuer will cause the firm of Independent certified public accountants appointed pursuant to Section 10.9(a) to provide any Holder of Subordinated Notes 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 the Rating Agencies and Additional Recipients. In addition to the information and reports specifically required to be provided to each Rating Agency pursuant to the terms of this Indenture, the Issuer shall provide each Rating Agency with all information or reports delivered to the Trustee hereunder (with the exception of any accountants' reports or any Accountants' Report) and such additional information as either Rating Agency may from time to time reasonably request (including notification to the Rating Agencies of any modification of any loan document relating to a DIP Collateral Obligation or any release of collateral thereunder not permitted by such loan documentation but excluding any accountants' reports or any Accountants' Report). With respect to credit estimates, the Issuer shall provide notification to S&P of any material modification that would result in substantial changes to the terms of any loan document relating to a Collateral Obligation or any release of collateral thereunder not permitted by such loan documentation if the Collateral Manager reasonably determines that such notice is required in accordance with S&P's publication on credit estimates titled "Credit FAQ: Anatomy Of A Credit Estimate: What It Means And How We Do It?" dated January 14, 2021 (as the same may be amended or updated from time to time); provided that the Issuer (or the Collateral Manager on behalf of the Issuer) shall also provide Fitch with a copy of any amendment documenting any such material modification. Within 10 Business Days after the Effective Date, together with each Monthly Report and on each Payment Date, the Issuer shall provide to the Rating Agencies, via e-mail in accordance with Section 14.3(a), 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. 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, will be provided by the Independent accountants to the Issuer and the Information Agent who will forward for posting such Form 15-E, except for the redaction of any sensitive information by the Issuer, on the Issuer's Website. Copies of the Accountants' Effective Date Recalculation AUP Report or any other agreed-upon procedures report provided by the Independent accountants to the Issuer will not be provided to any other party including the Rating Agencies or posted on the Issuer's Website (other than as provided in any access letter between such Person and the accountants).

 

 

Section 10.11          Procedures Relating to the Establishment of Accounts Controlled by the Trustee. Notwithstanding anything else contained herein, the Trustee agrees that with respect to each of the Accounts, it will, if the Securities Intermediary is the Bank, 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 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 Notes are Outstanding, the Issuer shall do the following:

 

(a)            Notification. Each Monthly Report sent or caused to be sent by the Issuer to the Noteholders will include a notice to the following effect:

 

"The 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 Secured Note in the United States who is a "U.S. person" (as defined in Regulation S) (such Note a "Restricted Secured 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 either (x) an institutional accredited investor ("IAI") within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act") or (y) 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/IAI (as applicable); (iii) the purchaser is not formed for the purpose of investing in the Issuer; (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, to any subsequent transferees. The Restricted Secured Notes may only be transferred to another Qualified Purchaser and QIB/IAI (as applicable) and all subsequent transferees are deemed to have made representations (i) through (vi) above. Each purchaser of a Subordinated Note in the United States who is a "U.S. person" (as defined in Regulation S) (such Note a "Restricted Subordinated Note") will be required to represent at the time of purchase that: (a) the purchaser is a Qualified Purchaser who is either (x) an accredited investor ("AI") within the meaning of Rule 501 under the Securities Act or (y) a QIB; (b) the purchaser is acting for its own account or the account of another Qualified Purchaser and QIB/AI (as applicable); (c) the purchaser is not formed for the purpose of investing in the Issuer; (d) the purchaser, and each account for which it is purchasing, will hold and transfer at least the minimum denominations of the Notes specified herein; (e) the purchaser understands that the Issuer may receive a list of participants holding positions in securities from one or more book-entry depositories; and (f) the purchaser will provide written notice of the foregoing, and of any applicable restrictions on transfer, to any subsequent transferees. The Restricted Subordinated Notes may only be transferred to another Qualified Purchaser and QIB/AI (as applicable) and all subsequent transferees are deemed to have made representations (a) through (f) 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 Secured Note or a Restricted Subordinated 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 Secured Note or Restricted Subordinated Note, as applicable, 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 Secured Note or a Restricted Subordinated Note, as applicable, (or any interest therein) to a Person that is either (x) in the case of the Secured Notes, not a "U.S. person" (as defined in Regulation S) or (y) a Qualified Purchaser who is either an IAI (or, in the case of the Subordinated Notes, another AI) or a QIB (as applicable), 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 Secured Note or Restricted Subordinated Note, as applicable, 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 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 Secured Note or Restricted Subordinated Note, as applicable, 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 Secured 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 Secured 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).

 

(iii)            On or prior to the Refinancing 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 Secured Notes.

 

(iv)            In addition to the obligations of the Registrar set forth in Section 2.5, the Issuer will from time to time (upon the request of the Trustee) make a request to DTC to deliver to the Issuer a list of all DTC participants holding an interest in the Global Secured 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 Secured Notes. Without limiting the foregoing, the Initial Purchaser 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 Secured 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 Secured 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 Secured 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 Secured 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

 

(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."

 

Section 10.13      No Further Reporting Following the Redemption of the Secured Notes. Notwithstanding any other provision of this Indenture to the contrary, except with respect to (i) Section 4.1 or the satisfaction and discharge of this Indenture and (ii) if at such time 100% of the Aggregate Outstanding Amount of the Subordinated Notes are not owned by the BDC or any Affiliate thereof, Article VIII, from and after the date on which no Secured Notes are deemed or considered Outstanding, all requirements herein that the Issuer, Collateral Manager or Trustee deliver or cause to be delivered any reports, compliance certificates or opinions to any party shall be deemed deleted and have no further force or effect.

 

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 and, if elected by the Collateral Manager, on each Redemption Distribution Date, the 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 other than any Stated Maturity, unless an Enforcement Event has occurred and is continuing and, if elected by the Collateral Manager, on each Redemption Distribution Date, 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, registered office fees and governmental fees owing by the Issuer, 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 (i) any accrued and unpaid Collateral Management Fee due on such Payment Date (including any interest accrued on any Collateral Management Fee Shortfall Amount) minus the amount of any Current Deferred Management Fee, if any, and (ii) any Cumulative Deferred Management Fee requested to be paid at the option of the Collateral Manager; provided that Interest Proceeds shall only be used to make payments with respect to the Cumulative Deferred Management Fee pursuant to this clause (B) to the extent such Interest Proceeds are not needed to pay the amounts referred to in any of clauses (C) through (L) below (on a pro forma basis after giving effect to such proposed payment of the Cumulative Deferred Management Fee);

 

(C)            to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-1 Notes;

 

(D)            to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-2 Notes;

 

(E)            to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class B Notes;

 

(F)            if either of the Class A/B Coverage Tests is not satisfied on the related Determination Date, to make payments in accordance with the Note Payment 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 (F);

 

 

(G)            to the payment of accrued and unpaid interest on the Class C Notes (excluding Deferred Interest but including interest thereon);

 

(H)            if either of the Class C Coverage Tests is not satisfied on the related Determination Date, to make payments in accordance with the Note Payment Sequence to the extent necessary to cause all Class C 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 (H);

 

(I)            to the payment of any Deferred Interest on the Class C Notes;

 

(J)            if, with respect to any Payment Date following the Effective Date, S&P has not yet confirmed its Initial Ratings of the Secured Notes rated by it and the Effective Date Condition is not satisfied, amounts available for distribution pursuant to this clause (J) shall be used for application in accordance with the Note Payment Sequence on such Payment Date in an amount sufficient to obtain from S&P confirmation of its Initial Ratings of the Secured Notes rated by it;

 

(K)            to the payment of (1) first, any Administrative Expenses not paid pursuant to clause (A)(2) above due to the limitation contained therein (in the same manner and order of priority stated therein) and (2) second, any Cumulative Deferred Management Fee not paid pursuant to clause (B)(ii) above due to the limitations contained therein (in the same manner and order of priority stated therein);

 

(L)            during the Reinvestment Period, at the direction of the Collateral Manager, to the Supplemental Reserve Account; and

 

(M)            any remaining Interest Proceeds to be paid to the Holders of the Subordinated Notes.

 

(ii)            On each Payment Date other than any Stated Maturity, unless an Enforcement Event has occurred and is continuing and, if elected by the Collateral Manager, on each Redemption Distribution Date, 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) during the Reinvestment Period, Principal Proceeds that have previously been reinvested in Collateral Obligations or Principal Proceeds which the Issuer has entered into any commitment to reinvest in Collateral Obligations) shall be applied in the following order of priority:

 

 

(A)            to pay the amounts referred to in clauses (A) through (E) 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; provided that Principal Proceeds shall only be used to make payments with respect to the Cumulative Deferred Management Fee pursuant to Section 11.1(a)(i)(B) to the extent such Principal Proceeds are not needed to pay the amounts referred to in clause (B) below;

 

(B)            to pay the amounts referred to in clause (F) of Section 11.1(a)(i), but only to the extent not paid in full thereunder and to the extent necessary to cause the Coverage Tests that are applicable on such Payment Date with respect to the Class A Notes and the Class B Notes 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)            to pay the amounts referred to in clause (G) of Section 11.1(a)(i) above (and in the same manner and order of priority stated therein) to the extent not paid in full thereunder, only to the extent that the Class C Notes are the Controlling Class;

 

(D)            to pay the amounts referred to in clause (H) of Section 11.1(a)(i), but only to the extent not paid in full thereunder and to the extent necessary to cause the Coverage Tests that are applicable on such Payment Date with respect to the Class C Notes to be met as of the related Determination Date;

 

(E)            to pay the amounts referred to in clause (I) of Section 11.1(a)(i) above (and in the same manner and order of priority stated therein) to the extent not paid in full thereunder, only to the extent that the Class C Notes are the Controlling Class;

 

(F)            if, with respect to any Payment Date following the Effective Date, S&P has not yet confirmed its Initial Ratings of the Secured Notes rated by it and the Effective Date Condition is not satisfied, amounts available for distribution pursuant to this clause (F) shall be used for application in accordance with the Note Payment Sequence on such Payment Date in an amount sufficient to obtain from S&P confirmation of its Initial Ratings of the Secured Notes rated by it;

 

(G)            if such Payment Date is a Redemption Date (other than a Special Redemption Date) or a Redemption Distribution Date, to make payments in accordance with the Note Payment Sequence;

 

(H)            if such Payment Date is a Special Redemption Date occurring in connection with a Special Redemption described in clause (i) of the first sentence of Section 9.6, to make payments in the amount of the Special Redemption Amount at the election of the Collateral Manager, in accordance with the Note Payment Sequence;

 

 

(I)            during the Reinvestment Period, at the discretion of the Collateral Manager either (x) to the Collection Account as Principal Proceeds to invest in Eligible Investments (pending the purchase of additional Collateral Obligations) and/or to purchase additional Collateral Obligations or (y) if the reinvestment of such Principal Proceeds would, in the sole determination of the Collateral Manager, cause (or would be likely to cause) an E.U./U.K. Retention Deficiency, to make payments in accordance with the Note Payment Sequence in an amount determined by the Collateral Manager in its sole discretion (and for the avoidance of doubt such payment shall not result in a termination of the Reinvestment Period);

 

(J)            after the Reinvestment Period, to make payments in accordance with the Note Payment Sequence;

 

(K)            after the Reinvestment Period, to pay the amounts referred to in clause (K) of Section 11.1(a)(i), only to the extent not already paid (in the same manner and order of priority stated therein); and

 

(L)            any remaining proceeds to be paid to the Holders of the Subordinated Notes.

 

On any Stated Maturity, the 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), Aggregate Collateral Management Fees, and interest and principal on the Secured Notes, to the Holders of the Subordinated Notes in final payment of such Subordinated Notes (such payments to be made in accordance with the priority set forth in Section 11.1(a)(iii)).

 

For the avoidance of doubt, to the extent that on any Redemption Distribution Date the Collateral Manager does not direct any payments to be made pursuant to Section 11.1(a)(i), no payments will be required to be made pursuant to Section 11.1(a)(ii)(A)-(F).

 

(iii)            Notwithstanding the provisions of the foregoing Sections 11.1(a)(i) and 11.1(a)(ii) (other than the last paragraph thereof), on (x) any Stated Maturity, (y) on a Redemption Date occurring with respect to a Failed Optional Redemption, or (z) if the maturity of the Secured Notes has been accelerated following an Event of Default and has not been rescinded in accordance with the terms herein (clause (z), an "Enforcement Event"), pursuant to Section 5.7, proceeds in respect of the Assets will be applied at the date or dates fixed by the Trustee in the following order of priority:

 

(A)            to the payment of (1) first, taxes, registered office fees and governmental fees owing by the Issuer, 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 (provided that if a liquidation of the Assets has commenced, the Administrative Expense Cap shall not apply);

 

 

(B)            to the payment of the Aggregate Collateral Management Fee due and payable (including any accrued and unpaid interest thereon) to the Collateral Manager until such amount has been paid in full, other than any Cumulative Deferred Management Fee, to the extent not already paid;

 

(C)            to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-1 Notes;

 

(D)            to the payment of principal of the Class A-1 Notes, until the Class A-1 Notes have been paid in full;

 

(E)            to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class A-2 Notes;

 

(F)            to the payment of principal of the Class A-2 Notes, until the Class A-2 Notes have been paid in full;

 

(G)            to the payment of accrued and unpaid interest (including defaulted interest and interest thereon) on the Class B Notes;

 

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

 

(I)            to the payment of accrued and unpaid interest (excluding Deferred Interest but including interest on Deferred Interest) on the Class C Notes;

 

(J)            to the payment of any Deferred Interest on the Class C Notes;

 

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

 

(L)            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;

 

(M)            any Cumulative Deferred Management Fee to the extent not already paid; and

 

(N)            to pay the balance to the Holders of the Subordinated Notes.

 

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 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 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 Trustee no later than the Business Day prior to each Payment Date.

 

(d)            The Collateral Manager may, in its sole discretion, elect to irrevocably waive payment of any or all of any Collateral Management Fee otherwise due on any Payment Date by notice to the Issuer, the Collateral Administrator and the Trustee no later than the Determination Date immediately prior to such Payment Date in accordance with the terms of Section 8(c) 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.

 

(e)            At any time during or after the Reinvestment Period, any Holder of Subordinated Notes may (i) make a Contribution of Cash, Eligible Investments or Collateral Obligations or (ii) solely in the case of Certificated Subordinated Notes, in accordance with Section 8.3(i), designate any portion of Interest Proceeds or Principal Proceeds that would otherwise be distributed on its Subordinated Notes in accordance with Section 11.1(a)(i)(M) or Section 11.1(a)(ii)(L), to be a contribution to the Issuer (a "Contribution" and each such Person, a "Contributor"); provided that a Notice of Contribution in the form of Exhibit F (solely for Contributions of Cash or Eligible Investments) is provided. The Collateral Manager, on behalf of the Issuer, may accept or reject any Contribution in its sole discretion and shall notify the Trustee and the Collateral Administrator of any such acceptance. Each accepted Contribution of Cash or Eligible Investments shall be deposited into the Supplemental Reserve Account and may be withdrawn at the written direction of the Collateral Manager. Contributions of Cash or Eligible Investments may only be used for a Permitted Use or Permitted Uses as directed by the applicable Contributor at the time such Contribution is made, so long as the Collateral Manager consents to such Permitted Use(s) (or, if no direction is given by the Contributor, at the Collateral Manager's reasonable discretion). No Contribution of Cash or Eligible Investments or portion thereof will be returned to any applicable holder of Subordinated Notes at any time. Furthermore, in connection with the purchase of the Subordinated Notes by the U.S. Retention Provider on the Refinancing Date and from time to time thereafter, the U.S. Retention Provider may make Contributions or transfers of Cash, Eligible Investments or Collateral Obligations, or any combination thereof, either directly or through one or more intermediate related entities or Affiliates, to the Issuer. For administrative convenience any Contributions or transfers of Cash, Eligible Investments or Collateral Obligations made through one or more intermediate related entities or Affiliates of the U.S. Retention Provider may instead be made on a net basis directly into the Issuer, and by bypassing such intermediate related entity or Affiliate. The value received by the Issuer in Cash, Eligible Investments and/or in the form of Collateral Obligations will not be affected by the elimination of such intermediate steps. In the case of any such payment made to the Issuer in the form of a combination of Cash and Collateral Obligations, the Cash portion of such payment shall be an amount equal to the total payment required to be made to the Issuer reduced by an amount equal to the fair market value as determined by the Collateral Manager as of the date of Contribution of the Collateral Obligations and Eligible Investments Contributed or transferred to the Issuer in respect of such payment. For the avoidance of doubt, any acquisition of a Collateral Obligation by the Issuer pursuant to an "in-kind" Contribution from any holder of Subordinated Notes shall be subject to satisfaction of the Investment Criteria in connection therewith.

 

 

(f)            Notwithstanding any other provision of this Indenture to the contrary, from and after the date on which no Secured Notes are deemed or considered to be Outstanding, (i) by 12:00 PM New York time, upon three Business Days prior notice to the Trustee, the Collateral Manager may designate any Business Day as a "Payment Date" for purposes of this Section 11.1 and distribute any Interest Proceeds or Principal Proceeds in accordance with the Priority of Payments and (ii) no further Monthly Reports or Distribution Reports shall be required to be prepared.

 

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 12.3, the Collateral Manager on behalf of the Issuer may (except as otherwise specified in this Section 12.1) direct the Trustee to sell and the 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 (which certification shall be deemed to be provided upon delivery of an Issuer Order or trade confirmation in respect of such sale), such sale meets the requirements of any one of paragraphs (a) through (l) of this Section 12.1 (subject in each case to any applicable requirement of disposition under Section 12.1(h) and provided that if an Enforcement Event has occurred and is continuing, the Collateral Manager may not direct the Trustee to sell any Collateral Obligation or Equity Security pursuant to Section 12.1(e), Section 12.1(f) or Section 12.1(g)), except as authorized by Section 12.1(h). 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 Trustee to sell any Credit Risk Obligation at any time without restriction.

 

(b)            Credit Improved Obligations. The Collateral Manager may direct the Trustee to sell any Credit Improved Obligation at any time without restriction.

 

 

(c)            Defaulted Obligations. The Collateral Manager may direct the Trustee to sell any Defaulted Obligation at any time without restriction.

 

(d)            Equity Securities. The Collateral Manager may direct the Trustee to sell any Equity Security at any time without restriction, and shall use its commercially reasonable efforts to effect the sale of any Equity Security, regardless of price within 45 days after receipt, if such Equity Security constitutes Margin Stock, unless such sale is prohibited by applicable law, in which case such Equity Security shall be sold as soon as such sale is permitted by applicable law.

 

(e)            Optional Redemption. After the Issuer has notified the Trustee of an Optional Redemption of the Notes in accordance with Section 9.2, if necessary to effect such Optional Redemption, the Collateral Manager shall direct the 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. 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 Notes has directed (by a written direction delivered to the Trustee) a Tax Redemption, the Collateral Manager shall, if necessary to effect such Tax Redemption, direct the Trustee to sell (which sale may be through participation or other arrangement) of 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. 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. During the Reinvestment Period, the Collateral Manager may direct the Trustee to sell any Collateral Obligation at any time other than during a Restricted Trading Period if, commencing with the first calendar year after the Refinancing Date, total sales pursuant to this Section 12.1(g) (measured by the par amount of all Collateral Obligations disposed of) during the preceding 12-month period do not exceed 30% of the Collateral Principal Amount (measured as of the first day of such 12-month period); provided that for purposes of determining the percentage of Collateral Obligations sold pursuant to this Section 12.1(g) during any such period, the amount of Collateral Obligations so sold shall be reduced to the extent of any purchases of (or irrevocable commitments to purchase) Collateral Obligations of the same Obligor (which are pari passu or senior to such sold Collateral Obligations) occurring within 45 Business Days of such sale, so long as any such sale pursuant to this Section 12.1(g) of a Collateral Obligation was entered into with the intention of purchasing such Collateral Obligations of the same Obligor.

 

(h)            Mandatory Sales. The Collateral Manager on behalf of the Issuer shall use its commercially reasonable efforts to effect the sale of any Collateral Obligation that (i) no longer meets the criteria described in clause (ix) of the definition of "Collateral Obligation", within 18 months after the failure of such Collateral Obligation to meet any such criteria and (ii) no longer meets the criteria described in clause (viii) of the definition of "Collateral Obligation" within 45 days after the failure of such Collateral Obligation to meet either such criteria.

 

 

(i)            Unsaleable Assets. After the Reinvestment Period:

 

(i)            Notwithstanding any other restriction in this Section 12.1, at the direction of the Collateral Manager, the Trustee, at the expense of the Issuer, shall conduct an auction of Unsaleable Assets in accordance with the procedures described in clause (ii). The Trustee may retain an agent to perform the obligations set forth in this Section 12.1(i).

 

(ii)            Promptly after receipt of written notice from the Collateral Manager of an auction of Unsaleable Assets, the Trustee will forward a notice in the Issuer's name (prepared by the Collateral Manager) to the Holders and each Rating Agency, setting forth in reasonable detail a description of each Unsaleable Asset and the following auction procedures:

 

(A)            Any Holder may submit a written bid to purchase one or more Unsaleable Assets no later than the date specified in the auction notice (which shall be at least 15 Business Days after the date of such notice).

 

(B)            Each bid must include an offer to purchase for a specified amount of cash on a proposed settlement date no later than 20 Business Days after the date of the auction notice.

 

(C)            If no Holder submits such a bid, unless delivery in kind is not legally or commercially practicable and subject to any transfer restrictions (including minimum denominations), the Trustee shall provide notice thereof to each Holder and offer to deliver (at no cost to the Trustee or Holder) a pro rata portion of each unsold Unsaleable Asset to the Holders of the Class with the highest priority that provide delivery instructions to the Trustee on or before the date specified in such notice. To the extent that minimum denominations do not permit a pro rata distribution, the Trustee shall distribute the Unsaleable Assets on a pro rata basis to the extent possible and the Issuer or the Collateral Manager shall select by lottery the Holder to whom the remaining amount will be delivered. The Issuer and the Trustee (at the direction of the Issuer or the Collateral Manager on behalf of the Issuer) shall use commercially reasonable efforts to effect delivery of such interests.

 

(D)            If no such Holder provides delivery instructions to the Trustee, the Trustee shall promptly notify the Collateral Manager and offer to deliver (at no cost to the Trustee) the Unsaleable Asset to the Collateral Manager. If the Collateral Manager declines such offer, the Collateral Manager (on behalf of the Issuer) shall direct action to dispose of the Unsaleable Asset, which may be by donation to a charity, abandonment or other means, and the Trustee (at no expense to the Trustee) shall take such action as so directed.

 

 

(E)            The Trustee shall have no duty, obligation or responsibility with respect to the sale of any Unsaleable Asset other than upon the instruction of the Collateral Manager.

 

(j)            The Collateral Manager may direct the Trustee at any time without restriction to sell any Collateral Obligation that (i) has a Material Covenant Default or (ii) becomes subject to a proposed Maturity Amendment that fails to satisfy the criteria required hereunder to allow the Issuer (or the Collateral Manager on the Issuer's behalf) to vote in favor of such Maturity Amendment.

 

(k)            After the Collateral Manager has notified the Issuer and the Trustee of a Clean-Up Call Redemption in accordance with Section ‎9.9, the Collateral Obligations may be sold in accordance with the provisions of Section ‎9.9 without regard to the limitations in this Section ‎12.1 by directing the Trustee to effect such sale; provided that the Sale Proceeds therefrom are used for the purposes specified in Section ‎9.9 (and applied pursuant to the Priority of Payments).

 

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 Trustee to invest Principal Proceeds, proceeds of Additional Notes issued pursuant to Sections 2.13 and 3.2, amounts on deposit in the Ramp-Up Account and the Supplemental Reserve Account and Principal Financed Accrued Interest, and the 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 Trustee to invest any amounts on behalf of the Issuer; provided that cash on deposit in any Account (other than the Payment Account) may be invested in Eligible Investments following the Reinvestment Period.

 

(a)            Investment during the Reinvestment Period. During the Reinvestment Period, no obligation may be purchased by the Issuer unless each of the following criteria 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 (such criteria collectively, the "Investment Criteria"); provided that the criteria set forth in clauses (ii) and (iv) below need only be satisfied with respect to purchases of Collateral Obligations occurring on or after the Effective Date:

 

(i)            such obligation is a Collateral Obligation;

 

(ii)            each Coverage Test will be satisfied, or if not satisfied, such Coverage Test will be 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 or (2) the Reinvestment Balance Criteria will be satisfied, (B) in the case of the use of Sale Proceeds of Credit Improved Obligations, either (1) the Investment Criteria Adjusted Balance of all Collateral Obligations purchased with such Sale Proceeds will be greater than or equal to the Investment Criteria Adjusted Balance of the disposed Collateral Obligations, (2) after giving effect to such purchase, the Adjusted Collateral Principal Amount will be maintained or increased (when compared to the Adjusted Collateral Principal Amount immediately prior to such sale) or (3) after giving effect to such reinvestment of such Sale Proceeds, the Adjusted Collateral Principal Amount will be greater than (or equal to) the Reinvestment Target Par Balance and (C) in the case of any other purchase of additional Collateral Obligations purchased with the proceeds from the sale of any other Collateral Obligation, the Collateral Manager shall use commercially reasonable efforts to ensure that after giving effect to such purchase, the Reinvestment Balance Criteria will be satisfied;

 

 

(iv)            either (A) each requirement or test, as the case may be, of the Concentration Limitations and the Collateral Quality Tests (except, in the case of an additional Collateral Obligation purchased with the proceeds from the sale of a Credit Risk Obligation, a Defaulted Obligation or an Equity Security, 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 after giving effect to the investment; and

 

(v)            the date on which the Issuer (or the Collateral Manager on behalf of the Issuer) commits to purchase such Collateral Obligation occurs during the Reinvestment Period.

 

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 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. Not later than the Business Day immediately preceding the end of the Reinvestment Period, the Collateral Manager shall deliver to the 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 Trustee (which certification will be deemed to be made upon delivery of such schedule) that sufficient Principal Proceeds are available (including for this purpose, cash on deposit in the Principal Collection Subaccount as well as any Principal Proceeds that will be 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 Obligations.

 

 

(b)            Trading Plan Period. During the Reinvestment Period and 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 ten Business Days following the date of determination of such compliance (such period, the "Trading Plan Period"); provided that (i) no Trading Plan may result in the purchase of Collateral Obligations having an Aggregate Principal Balance that exceeds 5.0% 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 and (iv) if, on two occasions, 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, the Investment Criteria shall not at any time thereafter be evaluated by giving effect to a Trading Plan unless either (i) the Global Rating Agency Condition is satisfied with respect to such Trading Plan or (ii) a Majority of the Controlling Class waives the requirement that the Global Rating Agency Condition be satisfied with respect to such Trading Plan. For the avoidance of doubt, following the satisfaction of the Global Rating Agency Condition or the waiver thereof pursuant to clause (iv) of the proviso in the previous sentence, further satisfaction of the Global Rating Agency Condition shall only be required if, on two additional occasions, 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. The Collateral Manager shall provide prior written notice to each Rating Agency of any Trading Plan, which notice shall specify the proposed investments identified by the Collateral Manager for acquisition as part of such Trading Plan, and shall notify the Trustee, the Collateral Administrator and the Rating Agencies of any Trading Plan failure.

 

(c)            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 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 12.3 (which certification shall be deemed to be provided upon delivery of an Issuer Order or trade confirmation in respect of such purchase).

 

The Investment Criteria will not be required to be satisfied in connection with any commitment to purchase a Collateral Obligation which purchase is scheduled to settle following the Redemption Date in connection with a Refinancing of the Secured Notes in whole with respect to which notice of redemption has been given as set forth in Section 9.4 (and will instead be required to comply with the terms of this Indenture as amended in connection with such Refinancing).

 

(d)            Investment in Eligible Investments. Cash on deposit in any Account (other than the Payment Account and the Custodial Account) may be invested at any time (including following the Reinvestment Period) in Eligible Investments in accordance with Article X.

 

 

(e)            Maturity Amendments. The Issuer (or the Collateral Manager on the Issuer's behalf) may not vote in favor of a Maturity Amendment unless, as determined by the Collateral Manager:

 

(i)            (A) the Weighted Average Life Test will be satisfied after giving effect to such Maturity Amendment or (B) if the Weighted Average Life Test was not satisfied immediately prior to giving effect to such Maturity Amendment, the level of compliance with the Weighted Average Life Test will be improved or maintained after giving effect to such Maturity Amendment, in each case after giving effect to any Trading Plan in effect during the applicable Trading Plan Period and

 

(ii)            the following conditions are met: (A) the extended maturity date of such Collateral Obligation would not be later than the earliest Stated Maturity of the Secured Notes and (B) after giving effect to such Maturity Amendment not more than 7.5% of the Collateral Principal Amount may consist of Collateral Obligations that have been subject to a Maturity Amendment with respect to which the Weighted Average Life Test was not satisfied after giving effect to such Maturity Amendment.

 

(f)            Notwithstanding anything in this Indenture to the contrary, but, for the avoidance of doubt, without limitation on any right of the Collateral Manager or the Issuer to participate in an Offer in accordance with this Indenture, the Collateral Manager may instruct the Trustee to exchange (i) a Credit Risk Obligation for any other Credit Risk Obligations and any related Permitted Collateral Obligations or related Equity Securities (if any) (provided that (v) any Credit Risk Obligation to be received by the Issuer in such exchange (1) shall be treated as a Collateral Obligation so long as it is a Permitted Collateral Obligation and does not have a stated maturity later than the stated maturity of the Credit Risk Obligation to be exchanged, (2) shall not have a lower S&P Rating than the S&P Rating of the Credit Risk Obligation to be exchanged and (3) shall not have a lower Fitch Rating than the Fitch Rating of the Credit Risk Obligation to be exchanged, (w) after giving effect to such exchange, the Collateral Principal Amount of assets acquired in exchanges pursuant to this clause (i), measured cumulatively from the Refinancing Date onward, is not more than 10.0% of the Target Initial Par Amount, (x) after giving effect to such exchange, each Overcollateralization Ratio Test shall be satisfied, (y) such exchange may only occur if, in the Collateral Manager's reasonable business judgment, at the time of such exchange, any Credit Risk Obligation to be received by the Issuer has a better likelihood of recovery than the Credit Risk Obligation to be exchanged and (z) a Credit Risk Obligation may only be exchanged for related Equity Securities in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout), (ii) a Defaulted Obligation at any time for any other Defaulted Obligations, any Credit Risk Obligations, any Permitted Collateral Obligations and/or any Equity Securities (provided that, such exchange may only occur if, in the Collateral Manager's reasonable business judgment, at the time of such exchange, any Defaulted Obligation, Credit Risk Obligation, Permitted Collateral Obligation and/or Equity Security to be received by the Issuer has a better likelihood of recovery than the Defaulted Obligation to be exchanged) or (iii) an Equity Security for any other Equity Securities, any Credit Risk Obligations, any Permitted Collateral Obligations and/or any Defaulted Obligations, in each case, regardless of whether such debt obligation satisfies the definition of "Collateral Obligation" (which debt obligation shall be treated as a Collateral Obligation, subject to treatment as a Defaulted Obligation as described in paragraph (i) of this section below so long as it is a Permitted Collateral Obligation); provided that in the case of any exchange pursuant to clauses (ii) or (iii) above, after giving effect to such exchange, the Overcollateralization Ratio Test must be satisfied.

 

 

(g)            At any time, at the direction of the Collateral Manager, the Issuer may direct the payment from amounts on deposit in the Principal Collection Subaccount or the Interest Collection Subaccount to acquire any debt obligation or security in accordance with the requirements of Section 10.2(d).

 

(h)            If an Equity Security meets the definition of "Permitted Collateral Obligation", it shall be treated as a Permitted Collateral Obligation and shall no longer be treated as an Equity Security for all purposes of this Indenture.

 

(i)            A Permitted Collateral Obligation (other than a Permitted Collateral Obligation that satisfies all of the definition of "Collateral Obligation" apart from the introductory clause, clause (i) (only with respect to whether such debt obligation is a Bond that is not a Permitted Non-Loan Asset; provided that any such debt obligation shall be an unsecured bond or subordinated bond issued by a corporation, limited liability company, partnership, trust or similar business entity), clause (xxvi) or clause (xxxi) thereof) shall be treated as a Defaulted Obligation for all purposes of this Indenture, unless and until such Permitted Collateral Obligation meets the definition of "Collateral Obligation" (as tested on such date and without giving effect to the proviso to the definition of "Collateral Obligation"), after which it shall no longer be treated as a Defaulted Obligation.

 

Section 12.3          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 on terms no less favorable to the Issuer than would be the case if such Person were not so Affiliated; provided that in the case of any Collateral Obligation sold or otherwise transferred to a Person so Affiliated, the value thereof shall be the mid-point between the "bid" and "ask" prices to the extent such prices are obtained from a nationally recognized independent pricing service or, if unavailable or determined by the Collateral Manager to be unreliable, the fair market value of such Collateral Obligation as reasonably determined by the Collateral Manager (so long as the Collateral Manager is a Registered Investment Adviser) consistent with the Collateral Manager Standard, and such Affiliate shall acquire such Collateral Obligation for a price equal to the value so determined; provided further that an aggregate amount of Collateral Obligations (measured since the Refinancing Date) not exceeding 15% of the Net Purchased Loan Balance may be sold or otherwise transferred to the U.S. Retention Provider or its Affiliates pursuant to this Indenture at a price greater than the value determined pursuant to the immediately preceding proviso, but no greater than the Transfer Deposit Amount of any such Collateral Obligation (and to the extent such price exceeds the fair market value of any such Collateral Obligation, such excess shall be deemed to be a capital contribution from the U.S. Retention Provider to the Issuer); provided further that, the Trustee shall have no responsibility to oversee compliance with this paragraph by the other parties. Notwithstanding anything contained in this Article XII to the contrary, after the Refinancing Date, the Issuer shall not acquire any Collateral Obligation from an Affiliate of the Collateral Manager unless (i) such transfer is from the BDC (including subsidiaries of the BDC) pursuant to the Master Loan Sale Agreement, (ii) such transfer is from an Affiliate of the BDC or the Collateral Manager that is a bankruptcy-remote special purpose vehicle or (iii) such transfer is made in accordance with the first proviso of this paragraph and other terms that the Collateral Manager determines, based upon advice of counsel, would not adversely impact the conclusions set forth in the Opinion of Counsel relating to bankruptcy matters delivered by Dechert LLP on the Original Closing Date or the Refinancing Date, as applicable.

 

 

(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 Trustee pursuant to this Indenture, such Asset or Assets shall be Delivered to the Custodian or the Trustee, and, if applicable, the Custodian or the Trustee shall receive such Asset or Assets. The Trustee shall also receive, not later than the Cut-Off Date, an Officer's certificate of the Issuer containing the statements set forth in a Delivery Certificate; 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 Trustee of a trade ticket pursuant to Section 1.3(u).

 

(c)            Notwithstanding anything contained in this Article XII or Article V to the contrary, the Issuer shall have the right to effect any sale of any Asset or purchase of any Collateral Obligation (1) with the consent of Noteholders evidencing at least (i) with respect to purchases or optional repurchases or substitutions during the Reinvestment Period and sales during or after the Reinvestment Period, 75% of the Aggregate Outstanding Amount of each Class of Notes and (ii) with respect to purchases or optional repurchases or substitutions after the Reinvestment Period, 100% of the Aggregate Outstanding Amount of each Class of Notes and (2) of which each Rating Agency and the Trustee have been notified.

 

(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 without the consent of a Majority of the Controlling Class.

 

ARTICLE XIII

 

Noteholders' Relations

 

Section 13.1          Subordination. (a) Anything in this Indenture or the Notes to the contrary notwithstanding, the Holders of each Class of Notes that constitute a Junior Class agree for the benefit of the Holders of the Notes of each Priority Class with respect to such Junior Class that such Junior Class shall be subordinate and junior to the Notes of each such Priority Class to the extent and in the manner expressly set forth in the Priority of Payments. In the event one or more Holder(s) cause(s) the filing of a petition in bankruptcy against the Issuer prior to the expiration of the period set forth in clause (b) of this Section 13.1, any claim(s) that such Holder(s) have against the Issuer (including under all Notes of any Class held by such Holder(s)) or with respect to any Assets (including any proceeds thereof) shall, notwithstanding anything to the contrary in the Priority of Payments and notwithstanding any objection to, or rescission of, such filing, be fully subordinate in right of payment to the claims of each Holder (and each other secured creditor of the Issuer) that does not seek to cause any such filing, with such subordination being effective until all Notes (and each claim of each other secured creditor) held by each Holder of any Note that does not seek to cause any such filing are paid in full in accordance with the Priority of Payments set forth herein (after giving effect to such subordination). The foregoing sentence shall constitute a "subordination agreement" within the meaning of Section 510(a) of the U.S. Bankruptcy Code.

 

 

(b)            The Holders of each Class of Notes and beneficial owners of each Class of Notes agree, for the benefit of all Holders of each Class of Notes and beneficial owners of each Class of Notes, not to cause the filing of a petition in bankruptcy, insolvency or a similar proceeding in the United States or any other jurisdiction against the Issuer until the payment in full of all Notes 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.

 

(c)            The Issuer shall timely file an answer and any other appropriate pleading objecting to (i) the institution of any Proceeding in bankruptcy, insolvency or other similar proceeding in the United States or any other jurisdiction to have the Issuer adjudicated as bankrupt or insolvent or (ii) the filing of any petition seeking relief, reorganization, arrangement, adjustment or composition of or in respect of the Issuer under the Bankruptcy Code or other applicable law.  The reasonable fees, costs, charges and expenses incurred by the Issuer (including reasonable attorneys' fees and expenses) in connection with taking any such action shall be payable as "Administrative Expenses."

 

Section 13.2          Standard of Conduct. In exercising any of its or their voting rights, rights to direct and consent or any other rights as a Holder under this Indenture, a Holder or Holders shall not have any obligation or duty to any Person or to consider or take into account the interests of any Person and shall not be liable to any Person for any action taken by it or them or at its or their direction or any failure by it or them to act or to direct that an action be taken, without regard to whether such action or inaction benefits or adversely affects any Holder, the Issuer, or any other Person, except for any liability to which such Holder may be subject to the extent the same results from such Holder's taking or directing an action, or failing to take or direct an action, in bad faith or in violation of the express terms of this Indenture.

 

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 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 or the Collateral Manager or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, the Issuer, the Collateral Manager or any other Person (on which the Trustee shall be entitled to rely), stating that the information with respect to such factual matters is in the possession of the Issuer, the Collateral Manager or such other Person, unless such Officer of the 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 the Issuer, stating that the information with respect to such matters is in the possession of the Collateral Manager or 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 Trustee at the request or direction of the Issuer, then notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer's right to make such request or direction, the Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.1(d).

 

The Bank, (in all of its capacities), shall have the right to accept and act upon instructions, including funds transfer instructions ("Instructions") given pursuant to this Indenture or any other Transaction Document and delivered using Electronic Means; provided, however, that the Issuer and the Collateral Manager, as applicable, shall provide to the Bank an incumbency certificate listing Authorized Officers and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Issuer and the Collateral Manager, as applicable, whenever a person is to be added or deleted from the listing.  If the Issuer and the Collateral Manager, as applicable, elects to give the Bank Instructions using Electronic Means and the Bank in its discretion elects to act upon such Instructions, the Bank's understanding of such Instructions shall be deemed controlling.  The Issuer and the Collateral Manager understand and agree that the Bank cannot determine the identity of the actual sender of such Instructions and that the Bank shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Bank have been sent by such Authorized Officer.  The Issuer and the Collateral Manager shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Bank and that the Issuer, the Collateral Manager and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Issuer and the Collateral Manager, as applicable.  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 directions conflict or are inconsistent with a subsequent written instruction.  The Issuer and the Collateral Manager agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions 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; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Bank and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Issuer and the Collateral Manager, as applicable; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Bank immediately upon learning of any compromise or unauthorized use of the security procedures. "Electronic Means" shall mean the following communications methods: e-mail, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Bank, or another method or system specified by the Bank as available for use in connection with its services hereunder.

 

 

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 Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action or actions embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and conclusive in favor of the Trustee and the Issuer, if made in the manner provided in this Section 14.2.

 

(b)            The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Trustee 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 Notes shall bind the Holder (and any transferee thereof) of such and of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.

 

 

(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 Trustee's website and will be entitled to exercise rights to vote, give consents and directions which holders of the related Class of Notes are entitled to give under this Indenture upon delivery of a beneficial ownership certificate in the form of Exhibit D hereto (a "Beneficial Ownership Certificate") to the Trustee which certifies (i) that such Person is a beneficial owner of an interest in a Global Note, (ii) the amount and Class of Notes so owned, and (iii) that such Person will notify the Trustee when it sells all or a portion of its beneficial interest in such Class of Notes. A separate Beneficial Ownership Certificate must be delivered each time any such vote, consent or direction is given; provided that, nothing shall prevent the Trustee from requesting additional information and documentation with respect to any such beneficial owner; provided further that the Trustee shall be entitled to conclusively rely on the accuracy and the currency of each Beneficial Ownership Certificate and shall not be required to obtain any further information in this regard.

 

Section 14.3          Notices, etc., to Trustee, the Issuer, the Collateral Manager, the Initial Purchaser, the Collateral Administrator, the Paying Agent and each Rating Agency. (a) Any request, demand, authorization, direction, instruction, order, notice, consent, waiver or Act of Noteholders 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 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, to the 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 Trustee, and executed by a Responsible Officer of the entity 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 The Bank of New York Mellon Trust Company, National Association (in any capacity hereunder) will be deemed effective only upon receipt thereof by The Bank of New York Mellon Trust Company, National Association;

 

(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, to the Issuer addressed to it at c/o Golub Capital BDC, Inc., 200 Park Avenue, 25th Floor, New York, New York 10166, 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 Initial Purchaser shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, addressed to Deutsche Bank Securities Inc., One Columbus Circle, New York, NY 10019, Attention: Global Markets, or at any other address previously furnished in writing to the Issuer and the Trustee by the Initial Purchaser;

 

 

(iv)            the Collateral Administrator shall be sufficient for every purpose hereunder if in writing and mailed, first class postage prepaid, hand delivered, sent by overnight courier service, to the Collateral Administrator addressed to it at the Corporate Trust Office or at any other address previously furnished in writing to the other parties hereto;

 

(v)            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, to the Collateral Manager addressed to it at 200 Park Avenue, 25th Floor, New York, New York 10166 or at any other address previously furnished in writing to the parties hereto; and

 

(vi)            the Rating Agencies shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and emailed to each Rating Agency addressed to it at, in the case of Fitch, by email to cdo.surveillance@fitchratings.com and in the case of any reports pursuant to Section 10.10 by email to uscor.modelbasedco@fitchratings.com, and in the case of S&P, Standard & Poor's, by electronic copy to CDO_Surveillance@spglobal.com; provided that (x) in respect of any application for a credit estimate by S&P in respect of a Collateral Obligation, Information must be submitted to creditestimates@spglobal.com, (y) in respect of any document or notice sent to S&P pursuant to Section 7.18(c), such document or notice must be submitted to CDOEffectiveDatePortfolios@spglobal.com and (z) in respect of any request to S&P relating to the S&P CDO Monitor, such request must be submitted to CDOMonitor@spglobal.com.

 

(b)            If any provision herein calls for any notice or document to be delivered simultaneously to the Trustee and any other Person, the Trustee's receipt of such notice or document shall entitle the Trustee to assume that such notice or document was delivered to such other Person or entity unless otherwise expressly specified herein.

 

(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 Trustee may be provided by providing access to a website containing such information.

 

Section 14.4           Notices to Holders; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of any event,

 

(a)            such notice shall be sufficiently given to Holders if in writing and mailed, first class postage prepaid, or by overnight delivery service (or, in the case of Holders of Global Secured 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

 

 

(b)            such notice shall be in the English language.

 

Such notices will be deemed to have been given on the date of such mailing.

 

Notwithstanding clause (a) above, a Holder may give the Trustee a written notice that it is requesting that notices to it be given by electronic mail and stating the electronic mail address for such transmission. Thereafter, the Trustee shall give notices to such Holder by electronic mail, 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 Trustee's internet website.

 

Subject to the requirements of Section 14.15, the 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 Notes (by Aggregate Outstanding Amount), at the expense of the Issuer; provided that the 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 Trustee may have hereunder or (iii) applicable law. The Trustee may require the requesting Holders to comply with its standard verification policies in order to confirm Noteholder status.

 

Neither the failure to provide any notice, nor any defect in any notice so made available, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. In case by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity or by reason of any other cause it shall be impracticable to give such notice by mail of any event to Holders when such notice is required to be given pursuant to any provision of this Indenture, then such notification to Holders as shall be made with the approval of the Trustee shall constitute a sufficient notification to such Holders for every purpose hereunder.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

 

Section 14.5          Effect of Headings and Table of Contents. The Article and Section headings herein (including those used in cross-references herein) and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 14.6          Successors and Assigns. All covenants and agreements herein by the Issuer shall bind their respective successors and assigns, whether so expressed or not.

 

Section 14.7          Severability. If any term, provision, covenant or condition of this Indenture 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 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 or the Notes, as the case may be, so long as this Indenture 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 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 Notes and the other Secured Parties any benefit or any legal or equitable right, remedy or claim under this Indenture.

 

Section 14.9           Legal Holidays. If the date of any Payment Date, Redemption Date or Stated Maturity shall not be a Business Day, then notwithstanding any other provision of the Notes or this Indenture, payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the nominal date of any such Payment Date, Redemption Date or Stated Maturity date.

 

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 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 ISSUER, 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.

 

 

Section 14.13          Counterparts. This Indenture shall be valid, binding, and enforceable against a party when executed and delivered by an authorized individual on behalf of the party by means of (i) an original manual signature; (ii) a scanned, or photocopied manual signature, or (iii) any other electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the UCC (collectively, "Signature Law"), in each case to the extent applicable. Each scanned, or photocopied manual signature, or other electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any scanned, or photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings.

 

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 a Rating Agency and to comply with the provisions of this Section 14.14 and Section 14.17, unless otherwise agreed to in writing by the Collateral Manager.

 

 

Section 14.15          Confidential Information. (a) The Trustee, the Collateral Administrator and each Holder or beneficial owner of Notes 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 the administration of this Indenture, the matters contemplated hereby or the investment represented by the Notes; (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 Notes; (iii) any other Holder or beneficial owner of Notes, 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 Notes in accordance with the requirements of Section 2.5 hereof to which such Person sells or offers to sell any such Note or any part thereof; (v) except for Specified Obligor Information, any other Person from which such former Person offers to purchase any security of the Issuer; (vi) any federal or state or other regulatory, governmental or judicial authority having jurisdiction over such Person; (vii) the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about the investment portfolio of such Person, reinsurers and liquidity and credit providers that agree to hold confidential the Confidential Information substantially in accordance with this Section 14.15; (viii)  Fitch or S&P (subject to Section 14.17); (ix) any other Person with the consent of the Issuer and the Collateral Manager; or (x) 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 the Notes or this Indenture or (E) in the Trustee's or Collateral Administrator's performance of its obligations under this Indenture, the Collateral Administration Agreement or other transaction document related thereto; and provided that delivery to the Holders or beneficial owners of Notes or to the accountants by the Trustee or the Collateral Administrator of any report of information required by the terms of this Indenture to be provided to Holders or beneficial owners of Notes or to the accountants shall not be a violation of this Section 14.15. Each Holder or beneficial owner of Notes will, by its acceptance of its Note, be deemed to have agreed, except as set forth in clauses (vi), (vii) and (x) above, that it shall use the Confidential Information for the sole purpose of making an investment in the Notes or administering its investment in the Notes; and that the Trustee and the Collateral Administrator shall neither be required nor authorized to disclose to Holders or beneficial owners of Notes 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 Note, be deemed to have agreed to use reasonable efforts to protect the confidentiality of the Confidential Information. Each Holder or beneficial owner of a Note, by its acceptance of a Note, 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)).

 

(b)            For the purposes of this Section 14.15, (A) "Confidential Information" means information delivered to the Trustee, the Collateral Administrator or any Holder or beneficial owner of Notes 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 Trustee, the Collateral Administrator or such Holder or beneficial owner prior to the time of such disclosure; (ii) subsequently becomes publicly known through no act or omission by the Trustee, the Collateral Administrator, any Holder or beneficial owner of Notes or any Person acting on behalf of the Trustee, the Collateral Administrator or any Holder or beneficial owner of Notes; (iii) otherwise is known or becomes known to the Trustee, the Collateral Administrator or any Holder or beneficial owner of Notes other than (x) through disclosure by the Issuer or (y) to the knowledge of the Trustee, the Collateral Administrator, a Holder or a beneficial owner of Notes, 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.

 

 

(c)            Notwithstanding the foregoing, the 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 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.

 

(d)            For the avoidance of doubt, any Person may disclose Confidential Information to report possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the United States Congress, and any agency inspector general, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. There is no prior authorization necessary hereunder to make any such reports or disclosures and there is no notification requirement that any such reports or disclosures have been made.

 

Section 14.16          Communications with the Rating Agencies. If the Issuer shall receive any written or oral communication from any Rating Agency (or any of its respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Transaction Documents or in any way relating to the Notes, the Issuer agrees to refrain from communicating with such Rating Agency and to promptly (and, in any event, within one Business Day) notify the Collateral Manager of such communication. The Issuer agrees that in no event shall it engage in any oral or written communication with respect to the transactions contemplated hereby or under the Transaction Documents or in any way relating to the Notes with any Rating Agency (or any of its respective officers, directors or employees) without the participation of the Collateral Manager, unless otherwise agreed to in writing by the Collateral Manager. For the avoidance of doubt, nothing in this Section 14.17 shall prohibit the Trustee from making available on its internet website the Monthly Reports, Distribution Reports and other notices or documentation relating to the Notes or this Indenture. For the avoidance of doubt, the Accountants' Reports or reports prepared by the Independent accountants pursuant to this Indenture (or information received, orally or in writing, about the contents of such reports) shall not be disclosed or distributed to the Rating Agencies. 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, will be provided by the Independent accountants to the Issuer who will post such Form 15-E on the Issuer's Website.

 

Section 14.17          Notices to S&P; Rule 17g-5 Procedures. (a) To enable the Rating Agencies to comply with their obligations under Rule 17g-5, the Issuer shall post on a password-protected internet website, at the same time such information is provided to the Rating Agencies, all information (which shall not include any Effective Date Report, Accountants' Report or report prepared by the Independent accountants pursuant to this Indenture) the Issuer provides to the Rating Agencies for the purposes of determining the initial credit rating of the Notes or undertaking credit rating surveillance of the Notes. In the case of information provided for the purposes of undertaking credit rating surveillance of the Notes, such information shall be posted on a password protected internet website in accordance with the procedures set forth in Section 14.18(b).

 

 

(b)            To the extent that a Rating Agency makes an inquiry or initiates communications with the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee that is relevant to such Rating Agency's credit rating surveillance of the Secured Notes, all responses to such inquiries or communications from such Rating Agency shall be formulated in writing by the responding party or its representative or advisor and shall be provided to the Information Agent who shall promptly forward such written response to the Issuer's Website in accordance with the procedures set forth in Section 14.18(d) and the Collateral Administration Agreement and such responding party or its representative or advisor may provide such response to such Rating Agency and to the extent that any of the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee is required to provide any information to, or communicate with, any Rating Agency in accordance with its obligations under this Indenture or the Collateral Management Agreement, the Issuer, the Collateral Manager, the Collateral Administrator or the Trustee, as applicable (or their respective representatives or advisors), shall provide such information or communication to the Information Agent by e-mail at GCBDC8@bny.com, which the Information Agent shall promptly forward to the Issuer's Website in accordance with the procedures set forth in Section 14.18(d) and the Collateral Administration Agreement.

 

(c)            Subject to Section 14.17 hereof, the Issuer, the Collateral Manager, the Collateral Administrator and the Trustee (and their respective representatives and advisors) shall be permitted (but shall not be required) to orally communicate with the Rating Agencies regarding any Collateral Obligation or the Notes; provided, that such party summarizes the information provided to the Rating Agencies in such communication and provides the Information Agent with such summary in accordance with the procedures set forth in this Section 14.18 and the Collateral Administration Agreement within one Business Day of such communication taking place. The Information Agent shall forward such summary to the Issuer's Website in accordance with the procedures set forth in Section 14.18(d).

 

(d)            All information to be made available to the Rating Agencies pursuant to this Section 14.18 shall be forwarded by the Information Agent for posting on the Issuer's Website pursuant to the Collateral Administration Agreement. Information will be posted on the same Business Day of receipt provided that such information is received by 12:00 p.m. (Eastern time) or, if received after 12:00 p.m. (Eastern time), on the next Business Day. The Information Agent shall have no obligation or duty to verify, confirm or otherwise determine whether the information being delivered is accurate, complete, conforms to the transaction or otherwise is or is not anything other than what it purports to be. In the event that any information is delivered or posted in error, the Issuer may remove it from the Issuer's Website. None of the 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 Issuer's Website. Access to the Issuer's Website will be provided by the Issuer to (A) any NRSRO (other than the Rating Agencies) upon receipt by the Issuer and the Information Agent of an NRSRO Certification in the form of Exhibit E hereto (which may be submitted electronically via the Issuer's Website) and (B) the Rating Agencies, without submission of an NRSRO Certification.

 

 

(e)            None of the Issuer, the Trustee, the Collateral Administrator or the Collateral Manager shall be responsible or liable for any delays caused by the failure of the Information Agent to forward the applicable response to the Issuer's Website.

 

(f)            Notwithstanding the requirements of this Section 14.18, neither the Trustee nor the Collateral Administrator shall have any obligation to engage in, or respond to, any inquiry or oral communications from any Rating Agency. Neither the Trustee nor the Collateral Administrator shall be responsible for maintaining the Issuer's Website, posting information on the Issuer's Website or assuring that the Issuer's Website complies with the requirements of this Indenture, Rule 17g-5, or any other law or regulation. In no event shall the Trustee, the Information Agent or the Collateral Administrator be deemed to make any representation as to the content of the Issuer's Website (other than with respect to the Information Agent, to the extent such content was prepared by the Information Agent) or with respect to compliance by the Issuer's Website with this Indenture, Rule 17g-5 or any other law or regulation.

 

(g)            In connection with providing access to the Issuer's Website, the Issuer may require registration and the acceptance of a disclaimer. The Information Agent shall not be liable for the dissemination of information in accordance with the terms of this Indenture and the Collateral Administration Agreement and makes no representations or warranties as to the accuracy or completeness of such information being made available, and assumes no responsibility for such information. The Information Agent shall not be liable for its failure to make any information available to the Rating Agencies or NRSROs unless such information was delivered to the Information Agent at the email address set forth herein, with a subject heading of "Golub Capital BDC CLO 8 LLC" and sufficient detail to indicate that such information is required to be posted on the Issuer's Website.

 

(h)            Notwithstanding anything therein to the contrary, the maintenance by the Trustee 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 other law or regulation related thereto.

 

(i)            Notwithstanding anything to the contrary in this Indenture (including, without limitation, Section 5.1), any failure by the Issuer or any other Person to comply with the provisions of this Section 14.18 shall not constitute an Event of Default or breach of this Indenture, the Collateral Management Agreement or any other agreement, and the Holders and the holders of any beneficial interests in the Notes shall have no rights with respect thereto or under this Section 14.18. This Section 14.18 may be amended or modified by agreement of the Collateral Manager, the Issuer, the Trustee, the Information Agent and the Rating Agencies, without the consent of any Noteholders or any other Person.

 

(j)            In accordance with SEC Release No. 34-72936, Form 15-E, only in its complete and unedited form, will be provided by the Independent accountants to the Issuer who will post such Form 15-E on the 17g-5 website.

 

 

 

Section 14.18          Proceedings. Each purchaser, beneficial owner and subsequent transferee of a Note will be deemed by its purchase to acknowledge and agree as follows: (i) (a) the express terms of this Indenture govern the rights of the Noteholders to direct the commencement of a Proceeding against any person, (b) this Indenture contains limitations on the rights of the Noteholders to direct the commencement of any such Proceeding, and (c) each Noteholder shall comply with such express terms if it seeks to direct the commencement of any such Proceeding; (ii) there are no implied rights under this Indenture to direct the commencement of any such Proceeding; and (iii) notwithstanding any provision of this Indenture, or any provision of the Notes, or of the Collateral Administration Agreement or of any other agreement, the Issuer shall be under no duty or obligation of any kind to the Noteholders, or any of them, to institute any legal or other proceedings of any kind, against any person or entity, including, without limitation, the Trustee, the Collateral Manager, the Collateral Administrator or the Calculation Agent.

 

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 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. 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 Trustee at any time, including following the resignation or removal of the Collateral Manager.

 

(c)            Upon the retirement of the Notes, the payment of all amounts required to be paid pursuant to the Priority of Payments and the release of the Assets from the lien of this Indenture, this assignment and all rights herein assigned to the Trustee for the benefit of the Noteholders shall cease and terminate and all the estate, right, title and interest of the Trustee in, to and under the Collateral Management Agreement shall revert to the Issuer and no further instrument or act shall be necessary to evidence such termination and reversion.

 

 

(d)            The Issuer represents that, 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 Trustee as representative of the Noteholders 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 Trustee.

 

(iii)           The Collateral Manager shall deliver to the 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)          Except as otherwise set forth herein and therein (including pursuant to Section 9 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 Notes issued under this Indenture and the expiration of a period equal to one year and a day, or, if longer, the applicable preference period and one day, following such payment. 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.

 

 

(v)            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 Note 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 Trustee, who shall promptly forward such notice to the relevant Holder. The provisions of this clause (v) shall not apply to any transaction permitted by the terms of the Collateral Management Agreement.

 

(vi)            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 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 Bank Officer of the Trustee receiving written notice from the Collateral Manager that an event constituting “Cause” as defined in the Collateral Management Agreement has occurred, the Trustee shall, not later than two Business Days thereafter, forward such notice to the Noteholders (as their names appear in the Register).

 

[Signature Pages Follow]

 

 

IN WITNESS WHEREOF, we have set our hands as of the day and year first written above.

 

	GOLUB CAPITAL BDC CLO 8 LLC,
	as Issuer
	By: Golub Capital BDC, Inc., its designated manager
	By:	/s/ Christopher Ericson
		Name:	Christopher Ericson
		Title:	Chief Financial Officer

 

 

	THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION,
	as Trustee
	By:	/s/ Robertson Abraham
		Name:	Robertson Abraham
		Title:	Vice President

 

 

Schedule 1

 

List of Collateral Obligations

 

[On file]

 

 

Schedule 2
S&P Industry Classifications

 

Asset Type Code	Description
1020000	Energy Equipment and Services
1030000	Oil, Gas and Consumable Fuels
1033403	Mortgage Real Estate Investment Trusts (REITs)
2020000	Chemicals
2030000	Construction Materials
2040000	Containers and Packaging
2050000	Metals and Mining
2060000	Paper and Forest Products
3020000	Aerospace and Defense
3030000	Building Products
3040000	Construction & Engineering
3050000	Electrical Equipment
3060000	Industrial Conglomerates
3070000	Machinery
3080000	Trading Companies and Distributors
3110000	Commercial Services and Supplies
3210000	Air Freight and Logistics
3220000	Passenger Airlines
3230000	Marine Transportation
3240000	Ground Transportation
3250000	Transportation Infrastructure
4011000	Automobile Components
4020000	Automobiles
4110000	Household Durables
4120000	Leisure Products
4130000	Textiles, Apparel and Luxury Goods
4210000	Hotels, Restaurants and Leisure
4300001	Entertainment
4300002	Interactive Media and Services
4310000	Media
4410000	Distributors
4430000	Broadline Retail
4440000	Specialty Retail
5020000	Consumer Staples Distribution and Retail
5110000	Beverages
5120000	Food Products
5130000	Tobacco

 

 

Asset Type Code	Description
5210000	Household Products
5220000	Personal Care Products
6020000	Healthcare Equipment and Supplies
6030000	Healthcare Providers and Services
6110000	Biotechnology
6120000	Pharmaceuticals
7011000	Banks
7110000	Financial Services
7120000	Consumer Finance
7130000	Capital Markets
7210000	Insurance
7310000	Real Estate Management and Development
7311000	Diversified REITs
8030000	IT Services
8040000	Software
8110000	Communications Equipment
8120000	Technology Hardware, Storage and Peripherals
8130000	Electronic Equipment, Instruments and Components
8210000	Semiconductors and Semiconductor Equipment
9020000	Diversified Telecommunication Services
9030000	Wireless Telecommunication Services
9520000	Electric Utilities
9530000	Gas Utilities
9540000	Multi-Utilities
9550000	Water Utilities
9551701	Diversified Consumer Services
9551702	Independent Power and Renewable Electricity Producers
9551727	Life Sciences Tools & Services
9551729	Health Care Technology
9612010	Professional Services
9622292	Residential REITs
9622294	Industrial REITs
9622295	Hotel and Resort REITs
9622296	Office REITs
9622297	Health Care REITs
9622298	Retail REITs
9622299	Specialized REITs
1000-1099	Reserved

 

  

PROJECT FINANCE
Asset Type	Description
PF1	Project finance:  Industrial equipment
PF2	Project finance:  Leisure and gaming
PF3	Project finance:  Natural resources and mining
PF4	Project finance:  Oil and gas
PF5	Project finance:  Power
PF6	Project finance:  Public finance and real estate
PF7	Project finance:  Telecommunications
PF8	Project finance: Transport
PF1000-PF1099	Reserved

 

 

Schedule 3

 

Moody’s Rating Definitions

 

For purposes of this Schedule 3 and this Indenture, the terms “Assigned Moody’s Rating” and “CFR” mean:

 

Assigned Moody’s Rating

 

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

 

CFR

 

With respect to an obligor of a Collateral Obligation, if such obligor has a corporate family rating by Moody’s, then such corporate family rating; provided that if such obligor does not have a corporate family rating by Moody’s but any entity in the obligor’s corporate family does have a corporate family rating, then the CFR is such corporate family rating.

 

For purposes of this Indenture, the terms Moody’s Rating and Moody’s Derived Rating, have the meanings under the respective headings below.

 

MOODY’S RATING

 

(i)            With respect to a Collateral Obligation that is a Senior Secured Loan:

 

(A)            if such Collateral Obligation has an Assigned Moody’s Rating, such Assigned Moody’s Rating;

 

(B)            if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has a CFR, then the Moody’s rating that is one subcategory higher than such CFR;

 

(C)            if neither clause (A) nor (B) above apply, if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has one or more senior unsecured obligations with an Assigned Moody’s Rating, then the Moody’s rating that is two subcategories higher than the Assigned Moody’s Rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(D)            if none of clauses (A) through (C) above apply, at the election of the Collateral Manager, the Moody’s Derived Rating; and

 

(E)            if none of clauses (A) through (D) above apply, the Collateral Obligation will be deemed to have a Moody’s Rating of “Caa3”; and

 

 

(ii)            With respect to a Collateral Obligation other than a Senior Secured Loan:

 

(A)            if such Collateral Obligation has an Assigned Moody’s Rating, such Assigned Moody’s Rating;

 

(B)            if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has one or more senior unsecured obligations with an Assigned Moody’s Rating, then the Assigned Moody’s Rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(C)            if neither clause (A) nor (B) above apply, if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has a CFR, then the Moody’s rating that is one subcategory lower than such CFR;

 

(D)            if none of clauses (A), (B) or (C) above apply, if such Collateral Obligation does not have an Assigned Moody’s Rating but the obligor of such Collateral Obligation has one or more subordinated debt obligations with an Assigned Moody’s Rating, then the Moody’s rating that is one subcategory higher than the Assigned Moody’s Rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(E)            if none of clauses (A) through (D) above apply, at the election of the Collateral Manager, the Moody’s Derived Rating; and

 

(F)            if none of clauses (A) through (E) above apply, the Collateral Obligation will be deemed to have a Moody’s Rating of “B3.”

 

MOODY’S DERIVED RATING

 

With respect to a Collateral Obligation whose Moody’s Rating cannot otherwise be determined pursuant to the definitions thereof, such Moody’s Rating shall be determined as set forth below:

 

(A)            if such Collateral Obligation is rated by S&P, then the Moody’s Rating of such Collateral Obligation will be determined, at the election of the Collateral Manager, in accordance with the methodology set forth in the following table below:

 

Type of Collateral Obligation	S&P Rating (Public and Monitored)	Collateral Obligation Rated by S&P	Number of Subcategories Relative to Moody’s Equivalent of S&P Rating
Not Structured Finance Obligation	> “BBB-”	Not a Loan or Participation Interest in Loan	-1

 

 

Type of Collateral Obligation	S&P Rating (Public and Monitored)	Collateral Obligation Rated by S&P	Number of Subcategories Relative to Moody’s Equivalent of S&P Rating
Not Structured Finance Obligation	<“BB+”	Not a Loan or Participation Interest in Loan	-2
Not Structured Finance Obligation		Loan or Participation Interest in Loan	-2

 

(B)            if such Collateral Obligation is not rated by S&P but another security or obligation of the obligor has a public and monitored rating by S&P (a “parallel security”), then the rating of such parallel security will at the election of the Collateral Manager be determined in accordance with the table set forth in subclause (i)(A) above, and the Moody’s Derived Rating for purposes of the definitions of Moody’s Rating of such Collateral Obligation will be determined in accordance with the methodology set forth in the following table (for such purposes treating the parallel security as if it were rated by Moody’s at the rating determined pursuant to this subclause (i)(B)):

 

Obligation Category of Rated Obligation	Rating of Rated Obligation	Number of Subcategories Relative to Rated Obligation Rating
Senior secured obligation	greater than or equal to B2	-1
Senior secured obligation	less than B2	-2
Subordinated obligation	greater than or equal to B3	+1
Subordinated obligation	less than B3	0

 

or

 

(C)            if such Collateral Obligation is a DIP Collateral Obligation, no Moody’s Derived Rating may be determined based on a rating by S&P or any other rating agency.

 

For purposes of the definitions of “Moody’s Derived Rating” and “Moody’s Rating”, 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 60 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 and (2) after 60 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.”

 

 

Schedule 4

 

S&P RECOVERY RATE TABLES

 

1.

 

(a)            (i)            If a Collateral Obligation has an S&P Recovery Rating, the S&P Recovery Rate for such Collateral Obligation shall be determined as follows (taking into account, for any Collateral Obligation with an S&P Recovery Rating of “1” through “6”, the recovery estimate indicated in the S&P published report therefor):

 

S&P Recovery Rating of a Collateral Obligation			Recovery Estimate (%)* from S&P published reports**			Initial Liability Rating
						“AAA”				“AA”				“A”				“BBB”				“BB”				“B” and below
1+			100				75.00	%			85.00	%			88.00	%			90.00	%			92.00	%			95.00	%
1			95				70.00	%			80.00	%			84.00	%			87.50	%			91.00	%			95.00	%
1			90				65.00	%			75.00	%			80.00	%			85.00	%			90.00	%			95.00	%
2			85				62.50	%			72.50	%			77.50	%			83.00	%			88.00	%			92.00	%
2			80				60.00	%			70.00	%			75.00	%			81.00	%			86.00	%			89.00	%
2			75				55.00	%			65.00	%			70.50	%			77.00	%			82.50	%			84.00	%
2			70				50.00	%			60.00	%			66.00	%			73.00	%			79.00	%			79.00	%
3			65				45.00	%			55.00	%			61.00	%			68.00	%			73.00	%			74.00	%
3			60				40.00	%			50.00	%			56.00	%			63.00	%			67.00	%			69.00	%
3			55				35.00	%			45.00	%			51.00	%			58.00	%			63.00	%			64.00	%
3			50				30.00	%			40.00	%			46.00	%			53.00	%			59.00	%			59.00	%
4			45				28.50	%			37.50	%			44.00	%			49.50	%			53.50	%			54.00	%
4			40				27.00	%			35.00	%			42.00	%			46.00	%			48.00	%			49.00	%
4			35				23.50	%			30.50	%			37.50	%			42.50	%			43.50	%			44.00	%
4			30				20.00	%			26.00	%			33.00	%			39.00	%			39.00	%			39.00	%
5			25				17.50	%			23.00	%			28.50	%			32.50	%			33.50	%			34.00	%
5			20				15.00	%			20.00	%			24.00	%			26.00	%			28.00	%			29.00	%
5			15				10.00	%			15.00	%			19.50	%			22.50	%			23.50	%			24.00	%
5			10				5.00	%			10.00	%			15.00	%			19.00	%			19.00	%			19.00	%
6			5				3.50	%			7.00	%			10.50	%			13.50	%			14.00	%			14.00	%
6			0				2.00	%			4.00	%			6.00	%			8.00	%			9.00	%			9.00	%
							Recovery Rate

 

*            The recovery estimate from S&P’s published reports for a given Collateral Obligation is rounded down to the nearest 5%.

 

 

**            If a recovery estimate is not available from S&P’s published reports for a given Collateral Obligation with an S&P Recovery Rating of ’1’ through ’6’, the lower estimate for the applicable recovery rating will be assumed.

 

(ii)            If (x) a Collateral Obligation does not have an S&P Recovery Rating and such Collateral Obligation is senior unsecured debt and (y) the issuer of such Collateral Obligation has issued another debt instrument that is outstanding and senior to such Collateral Obligation (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 Secured Debt Instrument			Initial Liability Rating
			“AAA”			“AA”				“A”				“BBB”				“BB”				“B” and below
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			-	%			-	%			-	%			-	%			-	%			-	%
			Recovery rate

 

For Collateral Obligations Domiciled in Group B

 

S&P Recovery Rating of the Senior Secured Debt Instrument			Initial Liability Rating
			“AAA”			“AA”				“A”				“BBB”				“BB”				“B” and below
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			-	%			-	%			-	%			-	%			-	%			-	%
			Recovery rate

 

 

For Collateral Obligations Domiciled in Group C

 

S&P Recovery Rating of the Senior Secured Debt Instrument			Initial Liability Rating
			“AAA”			“AA”				“A”				“BBB”				“BB”				“B” and below
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			-	%			-	%			-	%			-	%			-	%			-	%
6			-	%			-	%			-	%			-	%			-	%			-	%
			Recovery rate

 

(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 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 Secured Debt Instrument			Initial Liability Rating
			“AAA”			“AA”				“A”				“BBB”				“BB”				“B” and below
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			-	%			-	%			-	%			-	%			-	%			-	%
6			-	%			-	%			-	%			-	%			-	%			-	%
			Recovery rate

 

For Collateral Obligations Domiciled in Group C

 

S&P Recovery Rating of the Senior Secured Debt Instrument			Initial Liability Rating
			“AAA”			“AA”				“A”				“BBB”				“BB”				“B” and below
1+			5	%			5	%			5	%			5	%			5	%			5	%
1			5	%			5	%			5	%			5	%			5	%			5	%

 

 

S&P Recovery Rating of the Senior Secured Debt Instrument			Initial Liability Rating
2			5	%			5	%			5	%			5	%			5	%			5	%
3			2	%			2	%			2	%			2	%			2	%			2	%
4			-	%			-	%			-	%			-	%			-	%			-	%
5			-	%			-	%			-	%			-	%			-	%			-	%
6			-	%			-	%			-	%			-	%			-	%			-	%
			Recovery rate

 

(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:

 

Priority Category		Initial Liability Rating
		“AAA”				“AA”				“A”				“BBB”				“BB”				“B” and “CCC”
Senior Secured Loans (other than First-Lien Last-Out 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 other than First-Lien Last Out Loans), Senior Secured Bonds**
Group A			41	%			46	%			49	%			53	%			63	%			67	%
Group B			32	%			35	%			39	%			41	%			50	%			53	%
Group C			17	%			19	%			27	%			29	%			31	%			34	%
Senior Syndicated Secured Loans***
Group A			33.3	%			40	%			45.3	%			50.7	%			66.7	%			72	%
Group B			18.7	%			22.7	%			28	%			32	%			46.7	%			50.7	%
Group C			10	%			12	%			14	%			16	%			18	%			20	%
Second Lien Loans, First-Lien Last-Out Loans, Unsecured Loans, Senior Secured Notes, senior unsecured Bonds****
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, subordinated Bonds
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, Italy, Japan, Luxembourg, The Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, U.K. and United States of America
Group B:	Brazil, Czech Republic, Mexico,     Poland and South Africa
Group C:	Greece, India, Indonesia, Kazakhstan, Russia, Turkey, Ukraine, United Arab Emirates, Vietnam and any other country not included in Group A or Group B.

 

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), a Senior Secured Bond or a Senior Secured Note secured solely or primarily by common stock or other equity interest, such Collateral Obligation shall be deemed to be an Unsecured Loan.

 

*

For purposes of determining the S&P Recovery Rate, a Senior Secured Note shall be deemed to be a Senior Secured Loan if such Senior Secured Note, if it were a loan, would satisfy the definition of Senior Secured Loan.

 

**

Solely for the purpose of determining S&P Recovery Rate: (a) “senior unsecured Bond” shall mean an unsecured debt security (that is not a loan) that (i) is issued by a corporation, limited liability company, partnership, trust or similar business entity and (ii) if it is subordinated by its terms, is subordinated only with respect to liquidation, trade claims, capitalized leases or similar obligations and (b) “subordinated bond” shall mean a debt security (that is not a loan) that (i) is issued by a corporation, limited liability company, partnership, trust or similar business entity and (ii)  is subordinated by its terms other than with respect to liquidation, trade claims, capitalized leases or similar obligations.

 

***

The S&P Recovery Rate for Senior Syndicated Secured Loans shall apply only to Senior Syndicated Secured Loans for which the Syndicated Tranche exceeds 20% of the sum of (x) the outstanding principal balance of the loan, plus (y) the outstanding principal balance and unfunded commitments of such revolving facility, plus (z) the outstanding principal balance of any other debt for borrowed money incurred by such Obligor that is pari passu with such loan.

 

****

Solely for the purpose of determining the S&P Recovery Rate for such loan, the aggregate principal balance of all First-Lien Last-Out Loans, Unsecured Loans, Second Lien Loans and senior unsecured Bonds that, in the aggregate, represent up to 15% of the Collateral Principal Amount shall have the S&P Recovery Rate specified for First-Lien Last-Out Loans, Unsecured Loans, Second Lien Loans and senior unsecured Bonds in the table above and the aggregate outstanding principal balance of all First-Lien Last-Out Loans, Unsecured Loans, Second Lien Loans and senior unsecured Bonds in excess of 15% of the Collateral Principal Amount shall have the S&P Recovery Rate specified for subordinated loans in the table above.

 

 

2.            S&P CDO Monitor

 

Liability Rating of		Weighted Average S&P Recovery Rate (in increments of 0.01%):
S&P Highest Ranking Class		Not Less Than (%)				Not Greater Than (%)
“AAA”			2.00				75.00
“AA”			4.00				85.00
“A”			6.00				88.00
“BBB-”			8.00				90.00

 

For purposes of calculating the Collateral Quality Tests, DIP Collateral Obligations will be treated as having an S&P Recovery Rate equal to the S&P Recovery Rate for Senior Secured Loan.

 

The applicable weighted average spread will be the spread between 2.0% and 8.0% (in increments of .01%) without exceeding the Weighted Average Floating Spread (determined for purposes of this definition as if all Discount Obligations instead constituted Collateral Obligations that are not Discount Obligations) as of such Measurement Date.

 

 

Schedule 5

 

[Reserved]

 

 

Schedule 6

 

S&P EQUIVALENT DIVERSITY SCORE CALCULATION

 

The S&P Equivalent 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 of the S&P’s industry classification groups, shown on Schedule 2, 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 group, shown on Schedule 2, 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
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

 

 

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
1.9500				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 S&P Equivalent Diversity Score is then calculated by summing each of the Industry Diversity Scores for each S&P’s industry classification group shown on Schedule 2.

 

(g)            For purposes of calculating the S&P Equivalent Diversity Score, affiliated issuers in the same Industry are deemed to be a single issuer except as otherwise agreed to by S&P.

 

 

Schedule 7

 

FITCH RATING DEFINITIONS

 

“Fitch Rating” means, with respect to any Collateral Obligation, as of any date of determination, the rating determined in accordance with the following methodology:

 

(a)

if Fitch has issued a long-term issuer default rating or assigned a long-term issuer default credit opinion with respect to the Obligor of such Collateral Obligation, then the Fitch Rating will be such issuer default rating (regardless of whether there is a published rating by Fitch on the Collateral Obligations of such Obligor held by the Issuer) or assigned credit opinion;

 

(b)

if Fitch has not issued a long-term issuer default rating or a long- term issuer default credit opinion with respect to the Obligor or guarantor of such Collateral Obligation but Fitch has issued an outstanding long-term insurer financial strength rating with respect to such Obligor, the Fitch Rating of such Collateral Obligation will be one subcategory below such rating;

 

(c)

if a Fitch Rating cannot be determined pursuant to clause (a) or (b), but

 

(i)

Fitch has issued a senior unsecured rating on any obligation or security of the Obligor of such Collateral Obligation, then the Fitch Rating of such Collateral Obligation will equal such rating; or

 

(ii)

Fitch has not issued a senior unsecured rating on any obligation or security of the Obligor of such Collateral Obligation but Fitch has issued a senior secured rating or a subordinated secured rating on any obligation or security of the Obligor of such Collateral Obligation, then the Fitch Rating of such Collateral Obligation will (x) equal such rating if such rating is ‘BBB–’ or higher and (y) be one subcategory below such rating if such rating is ‘BB+’ or lower; or

 

(iii)

Fitch has not issued a senior unsecured rating or a senior secured rating or a subordinated secured rating on any obligation or security of the Obligor of such Collateral Obligation, but Fitch has issued a junior subordinated or senior subordinated rating on any obligation or security of the Obligor of such Collateral Obligation, then the Fitch Rating of such Collateral Obligation will be (x) one sub category above such rating if such rating is ‘B+’ or higher and (y) two subcategories above such rating if such rating is ‘B’ or lower;

 

(d)

if a Fitch Rating cannot be determined pursuant to clause (a), (b) or (c) and

 

(i)

Moody’s has issued a publicly available corporate family rating for the Obligor of such Collateral Obligation, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be the Fitch equivalent of such Moody’s rating

 

(ii)

Moody’s has not issued a publicly available corporate family rating for the Obligor of such Collateral Obligation but has issued a publicly available long-term issuer rating for such Obligor, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be the Fitch equivalent of such Moody’s rating;

 

 

(iii)

Moody’s has not issued a publicly available corporate family rating or long-term issuer rating for the Obligor of such Collateral Obligation, but Moody’s has issued a publicly available outstanding insurance financial strength rating for such Obligor, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be one subcategory below the Fitch equivalent of such Moody’s rating;

 

(iv)

Moody’s has not issued a publicly available corporate family rating, long-term issuer rating or insurance financial strength rating for the Obligor of such Collateral Obligation but has issued publicly available outstanding corporate issue ratings for such Obligor, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be (x) if such corporate issue rating relates to senior unsecured obligations of such Obligor, the Fitch equivalent of the Moody’s rating for such issue, or if there is no such corporate issue ratings relating to senior unsecured obligations of the Obligor then (y) if such corporate issue rating relates to senior secured or subordinated secured obligations of such Obligor, (1) one subcategory below the Fitch equivalent of such Moody’s rating if such obligations are rated ‘Ba1’ or above or ‘Ca’ by Moody’s or (2) two subcategories below the Fitch equivalent of such Moody’s rating if such obligations are rated ‘Ba2’ or below but above ‘Ca’ by Moody’s, or if there is no such publicly available corporate issue rating relating to senior unsecured, senior secured or subordinated secured obligations of the Obligor then (z) if such corporate issue rating relates to junior subordinated or senior subordinated obligations of such Obligor, (1) one sub category above the Fitch equivalent of such Moody’s rating if such obligations are rated ‘B1’ or above by Moody’s or (2) two subcategories above the Fitch equivalent of such Moody’s rating if such obligations are rated ‘B2’ or below by Moody’s;

 

(v)

S&P has issued a publicly available issuer credit rating for the Obligor of such Collateral Obligation, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be the Fitch equivalent of such S&P rating;

 

(vi)

S&P has not issued a publicly available issuer credit rating for the Obligor of such Collateral Obligation but S&P has issued a publicly available outstanding insurance financial strength rating for such Obligor, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be one subcategory below the Fitch equivalent of such S&P rating;

 

(vii)

S&P has not issued a publicly available issuer credit rating or insurance financial strength rating for the Obligor of such Collateral Obligation but has issued publicly available outstanding corporate issue ratings for such Obligor, then, subject to subclause (viii) below, the Fitch Rating of such Collateral Obligation will be (x) if such corporate issue rating relates to senior unsecured obligations of such Obligor, the Fitch equivalent of the S&P rating for such issue, or if there is no such corporate issue ratings relating to senior unsecured obligations of the Obligor then (y) if such corporate issue rating relates to senior secured or subordinated secured obligations of such Obligor, (1) the Fitch equivalent of such S&P rating if such obligations are rated ‘BBB–’ or above by S&P or (2) one sub category below the Fitch equivalent of such S&P rating if such obligations are rated ‘BB+’ or below by S&P, or if there is no such publicly available corporate issue rating relating to senior unsecured, senior secured or subordinated secured obligations of the Obligor then (z) if such corporate issue rating relates to junior subordinated or senior subordinated obligations of such Obligor, (1) one sub category above the Fitch equivalent of such S&P rating if such obligations are rated ‘B+’ or above by S&P or (2) two sub categories above the Fitch equivalent of such S&P rating if such obligations are rated ‘B’ or below by S&P; and

 

 

(viii)

both Moody’s and S&P provide a public rating of the Obligor of such Collateral Obligation or a corporate issue of such Obligor, then the Fitch Rating will be the lowest of the Fitch Ratings determined pursuant to any of the subclauses of this clause (d); and

 

(e)

(x) if a rating cannot be determined pursuant to clauses (a) through (c) and (y)(1) if a rating cannot be determined pursuant to clause (d) or (2) the Collateral Manager makes a commercially reasonable determination that the rating determined pursuant to clause (d) does not reflect the appropriate rating applicable to such Collateral Obligation, then, (i) at the discretion of the Collateral Manager, the Fitch Rating may be based on a credit opinion provided by Fitch and in connection therewith, the Issuer, the Collateral Manager on behalf of the Issuer or the Obligor of such Collateral Obligation will, prior to or within thirty (30) days after the acquisition of such Collateral Obligation, apply to Fitch for a credit opinion, which shall be the Fitch Rating of such Collateral Obligation; provided that, until the receipt from Fitch of such credit opinion, such Collateral Obligation will have a Fitch Rating of (x) ‘B–’ if the Collateral Manager certifies to the Trustee that it believes that the credit opinion will be at least equal to such rating, or (y) otherwise, the rating specified as applicable thereto by Fitch pending receipt of such credit opinion; provided further that such credit opinion shall expire 12 months after the acquisition of such credit opinion, following which such Collateral Obligation shall have a Fitch 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, so long as the Issuer has provided to Fitch each of items 1 through 4 under “Information for Assignment of Issuer Credit Opinions” in Appendix 12 of Fitch’s “CLOs and Corporate CDOs Rating Criteria” dated July 24, 2023 (other than any such item that Fitch has expressly indicated is not required to be provided) in connection with such renewal at least 21 days prior to the expiration of such credit opinion and has used commercially reasonable efforts to provide a timely response to any further reasonable information requests by Fitch with respect to such renewal, such credit opinion will continue to be the Fitch Rating of such Collateral Obligation until Fitch has confirmed or revised such credit opinion, upon which such confirmed or revised credit opinion will be the Fitch Rating of such Collateral Obligation; or (ii) the Issuer may assign a Fitch Rating of ‘CCC’ to such Collateral Obligation, which is not in default;

 

provided that, if any rating described above is (i) on rating watch negative or negative credit watch, the rating will be the Fitch Rating as determined above adjusted down by one subcategory, unless the Fitch Rating is “CCC-” or below, in which case the rating will not be adjusted or (ii) on outlook negative, the rating will not be adjusted; provided further that, the Fitch Rating may be updated by Fitch from time to time as indicated in the “CLOs and Corporate CDOs Rating Criteria” report issued by Fitch and available at www.fitchratings.com. For the avoidance of doubt, the Fitch Rating takes into account adjustments for assets that are on rating watch negative or negative credit watch prior to determining the rating or in the determination of the lower of the Moody’s and S&P public ratings.

 

 

Fitch Equivalent Ratings

 

Fitch Rating		Moody’s rating		S&P rating
AAA		Aaa		AAA
AA+		Aa1		AA+
AA		Aa2		AA
AA-		Aa3		AA-
A+		A1		A+
A		A2		A
A-		A3		A-
BBB+		Baa1		BBB+
BBB		Baa2		BBB
BBB-		Baa3		BBB-
BB+		Ba1		BB+
BB		Ba2		BB
BB-		Ba3		BB-
B+		B1		B+
B		B2		B
B-		B3		B-
CCC+		Caa1		CCC+
CCC		Caa2		CCC
CCC-		Caa3		CCC-
CC		Ca		CC
C		C		C

 

Fitch IDR Equivalency Map from Corporate Ratings

 

Rating Type Hierarchy	Rating Agency(s)	Issue Rating	Mapping Rule
Corporate Family Rating, LT Issuer Rating	Moody’s	NA	0
Issuer Credit Rating	S&P	NA	0
Senior Unsecured	Fitch, Moody’s, S&P	Any	0
Senior Debt: Senior Secured or Subordinated Secured	Fitch, S&P	“BBB-” or above	0
	Fitch, S&P	“BB+” or below	-1
	Moody’s	“Ba1” or above	-1
	Moody’s	“Ba2” or below	-2
	Moody’s	“Ca”	-1
Subordinated Debt: Junior Subordinated or Senior Subordinated	Fitch, Moody’s, S&P	“B+” / “B1” or above	1
	Fitch, Moody’s, S&P	“B” / “B2” or below	2

 

 

“Fitch Recovery Rate” means, with respect to a Collateral Obligation, the recovery rate determined in accordance with paragraphs (a) to (c) below or (in any case) such other recovery rate as Fitch may notify the Collateral Manager from time to time:

 

(a)            if such Collateral Obligation has either a public Fitch recovery rating or a private Fitch recovery rating, the recovery rate corresponding to such recovery rating in the table below, unless a recovery estimate (expressed as a percentage) is provided by Fitch in which case such recovery estimate shall be used:

 

Asset-Specific Recovery Rate Assumptions — Group 1 and 2
Fitch Recovery Rating		Fitch Recovery Rate (%)
RR1			95
RR2			80
RR3			60
RR4			40
RR5			20
RR6			5

 

RR – Recovery rate.

Source: Fitch Ratings.

 

Asset-Specific Recovery Rate Assumptions — Group 3
Fitch Recovery Rating		Fitch Recovery Rate (%)
RR1			70
RR2			50
RR3			35
RR4			20
RR5			5
RR6			0

 

RR – Recovery rate.

Source: Fitch Ratings.

 

(b)            if such Collateral Obligation is a DIP Collateral Obligation, the asset specific recovery rate assumptions applicable to such DIP Collateral Obligation shall correspond to the Fitch recovery rating of the ‘RR1’ rating in the table above; and

 

(c)            if such Collateral Obligation has no public Fitch recovery rating or recovery rating associated with a private Fitch rating, the recovery rate applicable will be the rate determined in accordance with the applicable table below, for purposes of which the Collateral Obligation will be categorized as ’Strong Recovery’ if it is a Senior Secured Loan from an issuer with a public rating from Fitch, Moody’s or S&P (a non-middle market issuer); (ii) ’Strong Recovery MML’ if it is a Senior Secured Loan from a Group 1 issuer without a public rating from Fitch, Moody’s or S&P; (iii) ’Senior Secured Bonds’ if it is a senior secured bond; (iv) ‘Moderate Recovery’ if it is a senior unsecured bond; and (v) ‘Weak Recovery’ if it is any other debt instrument not listed above, unless otherwise specified by Fitch:

 

 

Recovery Rate Assumptions

 

Generic Recovery Rate Assumptions
		Group 1				Group 2				Group 3
Strong Recovery (%)			75				65				30
Strong Recovery MML (%)			65				65				N.A.
Senior Secured Bonds (%)			60				60				N.A.
Moderate Recovery (%)			40				40				20
Weak Recovery (%)			15				15				5

 

N.A. – Not applicable. Recovery assumptions for non-Fitch covered asset. MML – Middle market loan. Source: Fitch Ratings.

 

Group 1: Australia, Bermuda, Canada, Cayman Islands, New Zealand, Puerto Rico, United States.

 

Group 2: Austria, Barbados, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Hong Kong, Iceland, Ireland, Israel, Italy, Japan, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Taiwan, United Kingdom.

 

Group 3: Albania, Argentina, Asia Others, Bahamas, Bosnia and Herzegovina, Brazil, Bulgaria, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Dominican Republic, Eastern Europe Others, Ecuador, Egypt, El Salvador, Greece, Guatemala, Hungary, India, Indonesia, Iran, Jamaica, Kazakhstan, Liberia, Macedonia, Malaysia, Malta, Marshall Islands, Mauritius, Mexico, Middle East and North Africa Others, Moldova, Morocco, Other Central America, Other South America, Other Sub Saharan Africa, Pakistan, Panama, Peru, Philippines, Qatar, Romania, Russia, Saudi Arabia, Serbia and Montenegro, South Africa, Thailand, Tunisia, Turkey, Ukraine, Uruguay, Venezuela, Vietnam.

 

Fitch Test Matrix

 

Subject to the provisions provided below, on or after the Effective Date, the Collateral Manager will have the option to elect which of the cases set forth in the matrix below (the “Fitch Test Matrix”) shall be applicable for purposes of the Maximum Fitch Rating Factor Test, the Minimum Weighted Average Fitch Recovery Rate Test and the Minimum Fitch Floating Spread Test. For any given case:

 

(a)            the applicable value for determining satisfaction of the Maximum Fitch Rating Factor Test will be the value set forth in the column header (or linear interpolation between two adjacent columns, as applicable) of the row-column combination in the Fitch Test Matrix selected by the Collateral Manager;

 

(b)            the applicable value for determining satisfaction of the Minimum Fitch Floating Spread Test will be the percentage set forth in the row header (or linear interpolation between two adjacent rows as applicable) of the row-column combination in the Fitch Test Matrix selected by the Collateral Manager; and

 

 

(c)            the applicable value for determining satisfaction of the Minimum Weighted Average Fitch Recovery Rate Test will be the value in the intersection cell (or linear interpolation between two adjacent rows and/or two adjacent columns, as applicable) of the row-column combination in the Fitch Test Matrix selected by the Collateral Manager in relation to (a) and (b) above.

 

On the Effective Date, the Collateral Manager will be required to elect which case shall apply initially by written notice to the Issuer and Fitch. Thereafter, on two Business Days’ notice to the Issuer and Fitch, the Collateral Manager may elect to have a different case apply, provided that the Maximum Fitch Rating Factor Test, the Minimum Weighted Average Fitch Recovery Rate Test and the Minimum Fitch Floating Spread Test applicable to the case to which the Collateral Manager desires to change are satisfied after giving effect to such change or, in the case of any tests that are not satisfied, the Issuer’s level of compliance with such tests is improved after giving effect to the application of the different case.

 

Minimum Fitch Floating Spread				26				27				28				29				30				31				32				33				34				35				36				37				38				39				40
	3.50	%			59.40	%			60.90	%			62.50	%			64.10	%			65.80	%			67.80	%			69.80	%			71.50	%			73.10	%			74.60	%			76.00	%			77.30	%			78.50	%			79.70	%		80.70	%
	3.60	%			58.90	%			60.30	%			61.90	%			63.50	%			65.00	%			67.10	%			69.10	%			70.90	%			72.50	%			74.10	%			75.50	%			76.80	%			78.00	%			79.20	%		80.30	%
	3.70	%			58.40	%			59.80	%			61.40	%			63.00	%			64.50	%			66.40	%			68.40	%			70.30	%			72.00	%			73.50	%			75.10	%			76.30	%			77.60	%			78.80	%		80.00	%
	3.80	%			57.90	%			59.30	%			60.80	%			62.40	%			64.00	%			65.60	%			67.70	%			69.70	%			71.40	%			73.00	%			74.50	%			75.90	%			77.20	%			78.40	%		79.60	%
	3.90	%			57.50	%			58.90	%			60.20	%			61.80	%			63.40	%			64.90	%			67.00	%			69.00	%			70.80	%			72.40	%			74.00	%			75.40	%			76.70	%			78.00	%		79.20	%
	4.00	%			57.00	%			58.40	%			59.70	%			61.30	%			62.90	%			64.40	%			66.30	%			68.30	%			70.30	%			71.90	%			73.40	%			75.00	%			76.30	%			77.50	%		78.70	%
	4.10	%			56.50	%			57.90	%			59.30	%			60.70	%			62.30	%			63.90	%			65.60	%			67.60	%			69.60	%			71.30	%			72.90	%			74.50	%			75.80	%			77.10	%		78.30	%
	4.20	%			56.10	%			57.50	%			58.80	%			60.20	%			61.80	%			63.40	%			64.90	%			66.90	%			68.90	%			70.80	%			72.40	%			73.90	%			75.40	%			76.70	%		77.90	%
	4.30	%			55.60	%			57.00	%			58.40	%			59.70	%			61.30	%			62.90	%			64.40	%			66.20	%			68.30	%			70.20	%			71.80	%			73.40	%			74.90	%			76.20	%		77.50	%
	4.40	%			55.10	%			56.60	%			57.90	%			59.30	%			60.70	%			62.30	%			63.90	%			65.50	%			67.60	%			69.60	%			71.30	%			72.90	%			74.40	%			75.80	%		77.10	%
	4.50	%			54.50	%			56.10	%			57.50	%			58.90	%			60.20	%			61.80	%			63.40	%			64.90	%			66.90	%			68.90	%			70.80	%			72.40	%			73.90	%			75.40	%		76.70	%
	4.60	%			53.90	%			55.60	%			57.00	%			58.40	%			59.70	%			61.30	%			62.90	%			64.40	%			66.20	%			68.30	%			70.20	%			71.80	%			73.40	%			74.90	%		76.20	%
	4.70	%			53.20	%			55.20	%			56.60	%			58.00	%			59.30	%			60.80	%			62.40	%			63.90	%			65.60	%			67.60	%			69.60	%			71.30	%			72.90	%			74.50	%		75.80	%
	4.80	%			52.60	%			54.60	%			56.20	%			57.50	%			58.90	%			60.20	%			61.90	%			63.40	%			64.90	%			67.00	%			69.00	%			70.80	%			72.40	%			74.00	%		75.40	%
	4.90	%			52.00	%			54.00	%			55.70	%			57.10	%			58.50	%			59.80	%			61.30	%			62.90	%			64.50	%			66.30	%			68.30	%			70.30	%			71.90	%			73.50	%		75.00	%
	5.00	%			51.30	%			53.40	%			55.20	%			56.70	%			58.00	%			59.40	%			60.80	%			62.40	%			64.00	%			65.60	%			67.70	%			69.70	%			71.40	%			72.90	%		74.50	%
	5.10	%			50.70	%			52.70	%			54.70	%			56.20	%			57.60	%			58.90	%			60.30	%			61.90	%			63.40	%			65.00	%			67.00	%			69.00	%			70.80	%			72.40	%		74.00	%
	5.20	%			50.00	%			52.10	%			54.00	%			55.70	%			57.10	%			58.50	%			59.80	%			61.40	%			62.90	%			64.50	%			66.30	%			68.30	%			70.30	%			71.90	%		73.40	%
	5.30	%			49.40	%			51.40	%			53.40	%			55.30	%			56.70	%			58.00	%			59.40	%			60.80	%			62.40	%			64.00	%			65.60	%			67.70	%			69.60	%			71.30	%		72.90	%
	5.40	%			48.70	%			50.80	%			52.80	%			54.70	%			56.20	%			57.60	%			58.90	%			60.30	%			61.90	%			63.40	%			65.00	%			67.00	%			69.00	%			70.80	%		72.40	%
	5.50	%			48.10	%			50.10	%			52.10	%			54.10	%			55.80	%			57.20	%			58.50	%			59.80	%			61.40	%			62.90	%			64.50	%			66.30	%			68.30	%			70.30	%		71.90	%
	5.60	%			47.50	%			49.50	%			51.50	%			53.50	%			55.30	%			56.70	%			58.10	%			59.40	%			60.90	%			62.40	%			64.00	%			65.60	%			67.70	%			69.70	%		71.40	%
	5.70	%			46.80	%			48.90	%			50.90	%			52.90	%			54.80	%			56.30	%			57.70	%			59.00	%			60.30	%			61.90	%			63.50	%			65.00	%			67.00	%			69.00	%		70.80	%
	5.80	%			46.20	%			48.30	%			50.20	%			52.20	%			54.20	%			55.80	%			57.20	%			58.60	%			59.90	%			61.40	%			63.00	%			64.50	%			66.40	%			68.40	%		70.30	%
	5.90	%			45.60	%			47.70	%			49.60	%			51.60	%			53.60	%			55.40	%			56.80	%			58.10	%			59.50	%			60.90	%			62.50	%			64.00	%			65.70	%			67.80	%		69.70	%
	6.00	%			45.00	%			47.00	%			49.00	%			51.00	%			53.00	%			54.90	%			56.40	%			57.70	%			59.10	%			60.40	%			62.00	%			63.60	%			65.10	%			67.10	%		69.10	%
	6.10	%			44.30	%			46.40	%			48.40	%			50.40	%			52.40	%			54.30	%			55.90	%			57.30	%			58.70	%			60.00	%			61.50	%			63.10	%			64.60	%			66.50	%		68.50	%
	6.20	%			43.70	%			45.80	%			47.80	%			49.80	%			51.80	%			53.70	%			55.50	%			56.90	%			58.20	%			59.60	%			61.00	%			62.60	%			64.10	%			65.90	%		67.90	%
	6.30	%			43.10	%			45.20	%			47.20	%			49.20	%			51.20	%			53.20	%			55.10	%			56.50	%			57.80	%			59.20	%			60.50	%			62.10	%			63.70	%			65.20	%		67.30	%
	6.40	%			42.50	%			44.60	%			46.70	%			48.60	%			50.60	%			52.60	%			54.50	%			56.10	%			57.40	%			58.80	%			60.10	%			61.70	%			63.20	%			64.70	%		66.60	%
	6.50	%			41.90	%			44.00	%			46.10	%			48.10	%			50.00	%			52.00	%			53.90	%			55.60	%			57.00	%			58.40	%			59.70	%			61.20	%			62.70	%			64.30	%		66.00	%
	6.60	%			41.30	%			43.40	%			45.50	%			47.50	%			49.40	%			51.40	%			53.40	%			55.20	%			56.60	%			58.00	%			59.30	%			60.70	%			62.30	%			63.80	%		65.40	%
	6.70	%			40.60	%			42.80	%			44.90	%			46.90	%			48.90	%			50.80	%			52.80	%			54.70	%			56.20	%			57.60	%			58.90	%			60.20	%			61.80	%			63.40	%		64.90	%
	6.80	%			40.00	%			42.20	%			44.30	%			46.30	%			48.30	%			50.20	%			52.20	%			54.20	%			55.80	%			57.20	%			58.50	%			59.80	%			61.30	%			62.90	%		64.40	%
	6.90	%			38.40	%			41.60	%			43.70	%			45.70	%			47.70	%			49.70	%			51.70	%			53.60	%			55.40	%			56.80	%			58.10	%			59.40	%			60.90	%			62.50	%		64.00	%
	7.00	%			36.80	%			41.00	%			43.10	%			45.20	%			47.20	%			49.10	%			51.10	%			53.00	%			55.00	%			56.40	%			57.70	%			59.10	%			60.40	%			62.00	%		63.50	%
	7.10	%			35.20	%			40.40	%			42.60	%			44.60	%			46.60	%			48.60	%			50.50	%			52.50	%			54.40	%			56.00	%			57.30	%			58.70	%			60.00	%			61.50	%		63.10	%
	7.20	%			33.50	%			39.40	%			42.00	%			44.00	%			46.10	%			48.00	%			50.00	%			51.90	%			53.90	%			55.60	%			57.00	%			58.30	%			59.60	%			61.10	%		62.70	%
	7.30	%			31.90	%			37.90	%			41.40	%			43.50	%			45.50	%			47.50	%			49.40	%			51.40	%			53.30	%			55.20	%			56.60	%			57.90	%			59.20	%			60.60	%		62.20	%
	7.40	%			30.30	%			36.30	%			40.80	%			42.90	%			44.90	%			46.90	%			48.90	%			50.80	%			52.80	%			54.70	%			56.20	%			57.50	%			58.90	%			60.20	%		61.80	%
	7.50	%			28.70	%			34.70	%			40.20	%			42.30	%			44.40	%			46.40	%			48.40	%			50.30	%			52.30	%			54.20	%			55.80	%			57.20	%			58.50	%			59.80	%		61.30	%

 

 

Schedule 8

 

S&P REGION CLASSIFICATION TABLE

 

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

 

 

Region Code	Region Name	Country Code	Country Name
13	Africa: Sub-Saharan	256	Uganda
13	Africa: Sub-Saharan	260	Zambia
13	Africa: Sub-Saharan	263	Zimbabwe
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

 

 

Region Code	Region Name	Country Code	Country Name
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
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

 

 

Region Code	Region Name	Country Code	Country Name
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
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

 

 

Region Code	Region Name	Country Code	Country Name
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
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

 

 

Exhibit 10.2

 

EXECUTION VERSION

 

STRICTLY PRIVATE
AND CONFIDENTIAL

 

Dated as of November 18, 2024

 

U.S.$1,192,400,000 Class A-1-R Senior Secured Floating Rate Notes due 2036

 

U.S.$171,600,000 Class A-2RR Senior Secured Floating Rate Notes due 2036

 

U.S.$165,000,000 Class B-R Senior Secured Floating Rate Notes due 2036

 

U.S.$154,000,000 Class C-R Secured Deferrable Floating Rate Notes due 2036

 

U.S.$517,500,000 Subordinated Notes due 2124

 

Golub Capital BDC CLO 8 LLC

 

 

NOTE PURCHASE AGREEMENT

 

 

 

GOLUB CAPITAL BDC CLO 8 LLC

 

NOTE PURCHASE AGREEMENT

 

November 18, 2024

 

Deutsche Bank Securities Inc.
One Columbus Circle
New York, NY 10019-8735

 

Ladies and Gentlemen:

 

GOLUB CAPITAL BDC CLO 8 LLC, a limited liability company formed under the laws of the State of Delaware (the “Issuer”), plan to issue U.S.$1,192,400,000 Class A-1-R Senior Secured Floating Rate Notes due 2036 (the “Class A-1-R Notes”), U.S.$171,600,000 Class A-2-RR Senior Secured Floating Rate Notes due 2036 (the “Class A-2-RR Notes”), U.S.$165,000,000 Class B-R Senior Secured Floating Rate Notes due 2036 (the “Class B-R Notes”), U.S.$154,000,000 Class C-R Secured Deferrable Floating Rate Notes due 2036 (the “Class C-R Notes” and, together with the Class A-1-R Notes, the Class A-2-RR Notes and the Class B-R Notes, collectively, the “Secured Notes”) and U.S.$517,500,000 Subordinated Notes due 2124 (the “Subordinated Notes” and, together with the Secured Notes, the “Notes”), pursuant to an amended and restated indenture to be dated as of November 18, 2024 (the “Indenture”), by and between the Issuer and The Bank of New York Mellon Trust Company, National Association, as trustee (the “Trustee”). Capitalized terms used herein but otherwise not defined herein shall have the respective meanings given to them in the Indenture.

 

Pursuant to this Note Purchase Agreement (this “Agreement”), the Issuer proposes to issue and sell to Deutsche Bank Securities Inc. (the “Initial Purchaser”), subject to the terms and conditions contained herein, the Secured Notes issued by it, in the principal amount with respect to each such Class specified on Schedule I hereto (the “Purchased Notes”).

 

Section 1.       Preliminary Offering Circular and Final Offering Circular. The sale of the Notes by the Issuer will be made without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on exemptions from the registration requirements of the Securities Act, and the Issuer will not be registered under the Investment Company Act of 1940, as amended (the “Investment Company Act”). You have advised the Issuer that you will offer and sell the Purchased Notes (the “Offering”) in accordance with Sections 2 and 3 hereof as soon as you deem advisable.

 

In connection with the Offering, the Issuer has prepared a first preliminary Offering Circular dated September 25, 2024 and a second preliminary Offering Circular dated October 28, 2024 (collectively, including any and all exhibits thereto and the information incorporated by reference therein, the “Preliminary Offering Circulars”), and a final Offering Circular dated November 7, 2024 (including any supplement thereto and including any and all exhibits thereto and the information incorporated by reference therein, the “Final Offering Circular”). Each of the Preliminary Offering Circulars and the Final Offering Circular sets forth certain information regarding the Issuer and the Notes. The Issuer confirms as to itself that it has authorized the use of the Preliminary Offering Circulars and the Final Offering Circular, and any amendment or supplement thereto, in connection with the Offering by the Initial Purchaser.

 

 

Section 2.       Purchase by Initial Purchaser. On the basis of the representations, warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Issuer agrees to issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the Issuer the Purchased Notes issued by the Issuer in the amount and for the respective purchase proceeds set forth in Schedule I attached to this Agreement (the “Purchase Price”). On November 18, 2024 (the “Refinancing Date” and the implementation of all the actions described in this Section 2, the “Closing”), the Initial Purchaser shall pay an amount equal to the Purchase Price, less any amount withheld pursuant to Section 5(b) below, to the order of the Issuer by wire transfer of immediately available funds. Delivery of the Purchased Notes to the Initial Purchaser shall be made on the Refinancing Date. The Purchased Notes sold to the Initial Purchaser shall be issued and sold free from all liens, charges and encumbrances, equities and other third party rights of any nature whatsoever, together with all rights of any nature whatsoever attaching or accruing to them now or after the date of this Agreement. It is understood and agreed that the Initial Purchaser is not acquiring, and has no obligation to acquire, the Class B-R Notes, the Class C-R Notes and the Subordinated Notes (the “Non-Purchased Notes”), which Non-Purchased Notes will be acquired by Golub Capital BDC CLO 8 Depositor LLC on the Refinancing Date. It is further understood and agree that the Initial Purchaser may retain certain of the Purchased Notes, purchase certain of the Purchased Notes for its own account, place certain of the Purchased Notes directly with its affiliates, or sell certain of the Purchased Notes to its affiliates or to any other investor in accordance with the applicable provisions hereof and of the Indenture.

 

Section 3.       Offering of Purchased Notes; Restrictions on Transfer. The Initial Purchaser represents and warrants to and agrees with the Issuer (it being expressly understood by the Issuer that the representations set forth in clause (a) below relate only to the Initial Purchaser’s acquisition of the Purchased Notes and the period of time that the Initial Purchaser owns any of the Purchased Notes) that:

 

(a)

(i) The Initial Purchaser is (x) both a Qualified Institutional Buyer (as defined in Rule 144A under the Securities Act) and an “institutional” Accredited Investor (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) (an “Institutional Accredited Investor”) and (y) a Qualified Purchaser and (ii) the Purchased Notes have not been and will not be registered under the Securities Act.

 

(b)

(i) With respect to offers and sales outside the United States, it has complied and will comply with all applicable laws and regulations in each jurisdiction in which it acquires, offers, sells or delivers Purchased Notes or has in its possession or distributes the Offering Documents; (ii) the Purchased Notes have not been and will not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from the registration requirements of the Securities Act; (iii) offers and sales in the United States will only be made through a U.S. broker dealer that is registered under the Exchange Act in each case in accordance with the restrictions on transfer set forth in such Purchased Notes, the Indenture and the Final Offering Circular; and (iv) except as set forth in clause (ii) above, it has offered the Purchased Notes and will offer and sell the Purchased Notes (A) as part of its distribution at any time and (B) otherwise until 40 days after the later of the commencement of the offering and the Refinancing Date, only in accordance with Rule 903 of Regulation S and, accordingly, neither it nor any persons acting on its behalf have engaged or will engage in any directed selling efforts (within the meaning of Regulation S) with respect to the Purchased Notes, and any such persons have complied and will comply with the offering restrictions requirement of Regulation S and in each case in accordance with the restrictions on transfer set forth in such Purchased Notes, the Indenture and the Final Offering Circular.

 

 

(c)

It agrees that neither it nor any of its affiliates will offer or sell the Purchased Notes by means of any form of general solicitation or general advertising, within the meaning of Rule 502(c) under the Securities Act, including, but not limited to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

 

(d)

(i)    It has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Purchased Notes to any EEA Retail Investor in the European Economic Area. For the purposes of this provision:

 

(1)           the expression “EEA Retail Investor” means a person who is one (or more) of the following:

 

(A) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or

 

(B) a customer within the meaning of Directive (EU) 2016/97, where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or

 

(C) not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129; and

 

(2)           the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Purchased Notes to be offered so as to enable an investor to decide to purchase or subscribe for the Purchased Notes.

 

(ii)   It has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Purchased Notes to any UK Retail Investor in the United Kingdom (the “UK”). For the purposes of this provision:

 

 

(1)           the expression “UK Retail Investor” means a person who is one (or more) of the following:

 

(A)           a retail client as defined in point (8) of Article 2 of Regulation (EU) 2017/565 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended, the “EUWA”); or

 

(B)            a customer within the meaning of the provisions of the Financial Services and Markets Act 2000 (as amended, the “FSMA”) and any rules or regulations made under the FSMA to implement Directive (EU) 2016/97, where that customer would not qualify as a professional client, as defined in point (8) of Article 2(1) of Regulation (EU) No 600/2014 as it forms part of UK domestic law by virtue of the EUWA; or

 

(C)            not a qualified investor as defined in Article 2 of Regulation (EU) 2017/1129 as it forms part of UK domestic law by virtue of the EUWA; and

 

(2)           the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Purchased Notes to be offered so as to enable an investor to decide to purchase or subscribe for the Purchased Notes.

 

(iii)   It has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of the Purchased Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer.

 

(iv)  It has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Purchased Notes in, from or otherwise involving the United Kingdom.

 

(e)

It shall ensure that, with respect to the CUSIP Number assigned to each Class of Purchased Notes, the “fixed field” attachment contains a 3(c)(7) indicator.

 

(f)

In the event any Notes are listed with Bloomberg Financial Markets (Bloomberg), the Initial Purchaser agrees and covenants to cause any such listing to contain Bloomberg’s customary “Section 3(c)(7)” indicators appearing on the Bloomberg screen clearly showing that such Purchased Notes are restricted to Qualified Institutional Buyers that are Qualified Purchasers, including the following: (a) the bottom of the “Security Description” page describing the security should state “144A/3c7 ‘ok’”; (b) the “Security Description” page should have a red indicator stating “PRVT PLACEMENT;” and (c) the “Comments” page should state that “These Securities are being offered in the United States 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) of the Investment Company Act of 1940).”

 

 

(g)

After the Refinancing Date, if the Initial Purchaser shall receive any written or oral communication from the Rating Agencies (or any of their respective officers, directors or employees, as applicable) with respect to the issuance of the initial credit rating or any on-going surveillance of the credit ratings on the Secured Notes, the Initial Purchaser agrees to refrain from communicating with the Rating Agencies and to promptly (and, in any event, within one Business Day) notify the Issuer and the Collateral Manager of such communication. The Initial Purchaser agrees to coordinate with the Collateral Manager (on behalf of the Issuer) with respect to any communication to the Rating Agencies and further agrees that, after the Refinancing Date, in no event shall it engage in any oral communication with respect to the issuance of the initial credit rating or any on-going surveillance of the credit ratings on the Secured Notes with the Rating Agencies (or any of their respective officers, directors or employees, as applicable) without the participation of the Collateral Manager (on behalf of the Issuer), unless otherwise agreed to in writing by the Collateral Manager.

 

Section 4.       Covenants of the Issuer. The Issuer covenants and agrees with the Initial Purchaser that:

 

(a)

It shall obtain on or prior to the Refinancing Date all government authorizations required in connection with the issuance, offering and sale of the Notes to be issued on such date and the performance of its respective obligations hereunder and under the Transaction Documents except for such authorizations, consents, approvals, orders, filings, registrations or qualifications as may be required under state securities or Blue Sky laws, and to cause such authorizations to be continued in effect so long as any of the Notes remain Outstanding; provided that in no event shall the Issuer be obligated in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process or to subject itself to taxation or other burdensome requirements in a jurisdiction in which it is not already so subject.

 

(b)

It shall furnish to the Initial Purchaser, without charge, as soon as practicable and thereafter from time to time prior to the completion of the distribution of the Purchased Notes, as many copies of the Final Offering Circular and of any amendments or supplements thereto as the Initial Purchaser may reasonably request.

 

(c)

If at any time prior to the earlier of (a) the completion of the distribution of the Purchased Notes (as determined by the Initial Purchaser); and (b) the 60th day following the Refinancing Date (the “Offering Period”), any event occurs or condition exists as a result of which the Final Offering Circular as then amended or supplemented would contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it shall be necessary at any time to amend or supplement the Final Offering Circular to comply with applicable law, it shall promptly so notify the Initial Purchaser. In addition, at any time during the Offering Period, the Issuer shall provide to the Initial Purchaser, upon request, any information regarding the Issuer and/or the Collateral reasonably available to the Issuer and deemed reasonably necessary by the Initial Purchaser or its legal counsel to complete the distribution of the Purchased Notes. In either case, upon the request of the Initial Purchaser, the Issuer shall at its own expense, (i) prepare and furnish to the Initial Purchaser, subject to prior review by the Initial Purchaser as provided by the following Section 4(d), an amendment or supplement to the Final Offering Circular that will correct such statement or omission or effect such compliance; and (ii) supply any amended or supplemented Final Offering Circular to the Initial Purchaser in such quantities as the Initial Purchaser may reasonably request, and the Initial Purchaser agrees not to use any prior version of the Final Offering Circular in connection with the offer or sale of the Purchased Notes following receipt of such notice.

 

 

(d)

During the Offering Period, it shall not publish any amendment or supplement to the Final Offering Circular unless the Initial Purchaser has been previously advised of, and furnished with a copy for review of, any such proposed amendment or supplement, and it shall not publish any such proposed amendment or supplement to which the Initial Purchaser reasonably objects unless counsel to the Issuer advises it, in a written opinion, with a copy to the Initial Purchaser, that (i) without such proposed amendment or supplement the Final Offering Circular, as then amended or supplemented, contains an untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (ii) such proposed amendment or supplement is required pursuant to an order of a regulatory authority having jurisdiction over the Issuer.

 

(e)

Subject to the foregoing requirements set forth in Section 4(c) above, during the Offering Period, it shall prepare promptly, upon the reasonable request of the Initial Purchaser, any amendments of or supplements to the Final Offering Circular that in the opinion of the Initial Purchaser may be reasonably necessary to enable the Initial Purchaser (in its role as Initial Purchaser) to continue to resell the Purchased Notes, subject to the approval of the Initial Purchaser’s counsel.

 

(f)

The Issuer shall use the proceeds from the sale of the Notes in the manner described in the Final Offering Circular under the caption “Use of Proceeds”.

 

(g)

Except as permitted by the Securities Act, prior to notice to and review by the Initial Purchaser, it will not publish or distribute any offering material in connection with the offering of the Purchased Notes, unless the Initial Purchaser shall have consented to the publication or use thereof.

 

(h)

None of the Issuer, any of its Affiliates or any Person authorized to act on their behalf (except for the Initial Purchaser, as to whom no representation is made) shall engage in any directed selling efforts (as that term is defined in Regulation S) with respect to the Purchased Notes to any U.S. Person (as that term is defined in Regulation S).

 

 

(i)

It shall advise the Initial Purchaser, promptly after it receives notice or obtains knowledge thereof, of the suspension of the qualification of the Purchased Notes for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and, in the event of the issuance of any order suspending any such qualification, to use promptly its best efforts to obtain its withdrawal.

 

(j)

It shall promptly and from time to time take such action as the Initial Purchaser (in its capacity as Initial Purchaser) may reasonably request to qualify the Purchased Notes for offering and sale in a manner not involving any public offering under the securities laws of such jurisdictions as the Initial Purchaser may reasonably request.

 

(k)

It shall at all times during the Offering Period extend, and use its reasonable efforts to cause the Collateral Manager to extend, to each prospective investor the opportunity to ask questions of, and receive answers from, the Issuer and the Collateral Manager concerning their respective businesses, managements and financial affairs, and the Purchased Notes and the terms and conditions of the offering thereof, and to obtain any information such prospective investors may consider necessary in making an informed investment decision or in order to verify the accuracy of the information set forth in the Offering Documents, to the extent the Issuer or the Collateral Manager possesses the same or can acquire without unreasonable effort or expense; provided that the Issuer shall permit, and shall use their reasonable efforts to cause the Collateral Manager to permit, representatives of the Initial Purchaser to be present at, or participate in, any meeting or telephone conference among the Issuer and/or the Collateral Manager and any prospective investor, and shall give the Initial Purchaser reasonable notice thereof, and the Issuer shall not furnish, and shall use its reasonable efforts to cause the Collateral Manager not to furnish, any such information to any such prospective investor without first giving the Initial Purchaser a reasonable opportunity to review and comment on such information.

 

(l)

It shall not solicit any offer to buy from or offer to sell to any Person any Purchased Notes, except through the Initial Purchaser.

 

(m)

The Issuer will comply (or cause its agents and advisors to comply) with the representations, certifications and covenants made by it in each engagement letter and all other agreements with the Rating Agencies, including any representation, certification or covenant provided to the Rating Agencies in connection with Rule 17g-5 under the Exchange Act, and will make accessible (or cause to be made accessible) to any non-hired nationally recognized statistical rating organization all information provided to each Rating Agency in connection with the issuance of the initial credit rating and on-going surveillance of the credit ratings on the Secured Notes in accordance with Rule 17g-5 under the Exchange Act.

 

 

Section 5.       Expenses.

 

(a)

The Issuer shall bear and pay all costs and expenses incurred incident to the performance of the obligations of the Issuer under this Agreement, but only if the transactions contemplated herein are consummated, including any structuring and placement fees owed to the Initial Purchaser pursuant to any separate agreement regarding the Offering, and including (i) the fees and expenses of preparation, printing, issuance, sale and delivery of the Notes, including any documentary stamp or similar issue tax incidental to the issue, sale and delivery of the Purchased Notes to the Initial Purchaser; (ii) the fees and expenses of the Issuer’s counsel, accountants and any other experts or advisors; (iii) the fees and expenses incurred in connection with the preparation of the Preliminary Offering Circulars, the Final Offering Circular and all amendments and supplements thereto; (iv) the fees and expenses of the printing and distribution of the Transaction Documents; (v)  the fees and expenses of the Trustee, the Paying Agent, the Collateral Manager, the Collateral Administrator and each of their counsel; (vi) all fees and expenses incurred in connection with the rating of the Secured Notes by Fitch and S&P, as applicable; (vii)  Deutsche Bank Securities Inc.’s legal and other costs and expenses incurred in connection with the issuance of the Notes and the preparation and execution of this Agreement; and (viii) miscellaneous expenses incurred by Deutsche Bank Securities Inc. in connection with this transaction, as agreed to by the Collateral Manager.

 

(b)

In order to provide for the payment on the Refinancing Date, or promptly thereafter, of the costs and expenses payable pursuant to Section 5(a) above, the Issuer authorizes the Initial Purchaser to withhold from the Purchase Price payable by the Initial Purchaser pursuant to Section 2 above an amount sufficient to pay such costs, expenses and amounts owed (including, without limitation, all structuring and placement fees and expenses), as estimated on the Refinancing Date by the Initial Purchaser and on the Refinancing Date, or as promptly thereafter as practicable, to pay all such costs, expenses and amounts owed from such withheld funds. The Initial Purchaser agrees to pay to the Trustee for the account of the Issuer any funds withheld under this Section 5(b) that are in excess of the actual expenses incurred by the Issuer (or the Initial Purchaser on its behalf). The Issuer agrees to pay to the Initial Purchaser the amount, if any, by which the actual expenses incurred by the Issuer, and not otherwise paid by the Issuer, exceed the amount withheld under this Section 5(b). The Initial Purchaser will provide the Issuer with an itemization of the use of such withheld amounts in reasonable detail, and with receipts or statements for the related expenditures to the extent available, upon request from the Issuer.

 

Section 6.       Representations and Warranties. As a condition of the obligation of the Initial Purchaser to purchase the Purchased Notes, the Issuer represents and warrants (with respect to itself) to, and agrees with, the Initial Purchaser as follows:

 

(a)

The Final Offering Circular as of the date thereof does not, and at the Refinancing Date will not (and any amendment or supplement thereto as of the date thereof and at the Refinancing Date will not), contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and the Final Offering Circular contains or will contain all information with regard to the Issuer and the Notes that is material in the context of the issuance of the Notes; provided, that the Issuer makes no representation or warranty as to statements or omissions made in the Preliminary Offering Circulars or the Final Offering Circular in the sections entitled “Risk Factors—Relating to Certain Conflicts of Interest—Certain Conflicts of Interest Relating to the Initial Purchaser and Its Affiliates” and “Plan of Distribution” (the “Initial Purchaser Information”).

 

 

(b)

No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Final Offering Circular has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

 

(c)

It has authorized (through its counsel’s provision of final versions thereof to the Initial Purchaser) the Initial Purchaser to use the Final Offering Circular in connection with the offer and resale of the Purchased Notes.

 

(d)

Subsequent to the date of the Final Offering Circular and except as disclosed in the Final Offering Circular, (x) the Issuer has not incurred any material liability or obligation, direct or contingent, or entered into any material transaction not in the ordinary course of business; and (y) there has not been any material change in its share capital, capital stock, partnership interests, limited liability company interests or membership interests, as applicable, or in its short-term or long-term debt.

 

(e)

The issuance and sale of the Notes to be issued by the Issuer has been duly authorized by it and when executed, authenticated and delivered to and paid for in accordance with the terms of this Agreement and the Indenture, the Notes will be valid and binding obligations of the Issuer, enforceable in accordance with their terms, except as such obligations may be limited by bankruptcy, insolvency, reorganization and other similar laws affecting the rights of creditors generally and the application of general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law).

 

(f)

The Issuer has been duly formed and is validly existing under the laws of the State of Delaware; it has full power and authority to own, lease and operate its properties and assets and conduct its business as described in the Final Offering Circular; it is duly qualified to transact business and is in good standing in each jurisdiction in which its ownership, leasing or operation of its properties or assets or the conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not have a material adverse effect on the business or financial condition, and would not otherwise be material in the context of the issuance of the Notes; and it has full power and authority to execute, deliver and perform its obligations under this Agreement and the other Transaction Documents.

 

 

(g)

The execution and delivery of this Agreement has been duly authorized by the Issuer, and this Agreement has been duly executed and delivered by the Issuer; and each of the other Transaction Documents to which it is a party has been duly authorized by the Issuer, and when duly executed and delivered on the Refinancing Date, will be its valid and binding agreement, enforceable against it in accordance with its terms, except as such obligations may be limited by bankruptcy, insolvency, reorganization and other similar laws affecting the rights of creditors generally and the application of general equitable principles (regardless of whether the issue of enforceability is considered in a proceeding in equity or at law).

 

(h)

The execution and delivery of, and the performance by it of its obligations under, this Agreement and the other Transaction Documents, the issuance and sale of the Notes by the Issuer pursuant to this Agreement, the compliance by the Issuer with the other provisions of this Agreement and the consummation of the other transactions herein contemplated will not (x) cause a Default under the Indenture, (y) require any consent, approval, authorization, registration or qualification of or with any governmental authority, except such as have been obtained or made, or (z) conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other agreement or instrument to which it is a party or by which it is bound, or its organizational documents, or any statute or any judgment, decree, order, role or regulation of any court or other governmental authority or any arbitrator applicable to it, except for such conflicts, breaches, violations or defaults as would not have a material adverse effect on its business or financial condition and would not be material in the context of the issuance of the Notes.

 

(i)

Its authorized and issued share capital, partnership interests, limited liability company interests or membership interests, as applicable, is as described in the Final Offering Circular and all of its issued share capital, partnership interests, limited liability company interests or membership interests, as applicable, has been validly issued and is fully paid, to the extent applicable.

 

(j)

It is not, and will conduct its respective operations in a manner so that it continues not to be, an “investment company” and, after giving effect to the Offering and the application of the proceeds therefrom, will not be an “investment company,” as such term is defined in the Investment Company Act.

 

(k)

Sanctions and Anti-Money Laundering Laws:

 

(i)

Neither it, nor any of its subsidiaries, nor, to its knowledge, after reasonable inquiry, any of its directors or officers, any director or officer of any of its subsidiaries or any employee, agent, Affiliate, representative or Person associated with or acting on its behalf or on behalf any of its subsidiaries, nor any Person benefiting in any capacity in connection with this Agreement and/or the Offering is: (A) the subject or target of any sanctions administered or enforced by the United States Government (including, without limitation, by the U.S. Department of the Treasury's Office of Foreign Assets Control (“OFAC”), the U.S. Department of State, the U.S. Department of Commerce), the United Nations Security Council (“UNSC”), the European Union (“EU”), His Majesty’s Treasury (“HMT”), or any similar sanctions imposed by any governmental body to which it or any of its subsidiaries is subject to or a target of (collectively, the “Sanctions”), (B) located, organized or resident in a country or territory that is, or whose government is, the subject or target of Sanctions (including without limitation, Afghanistan, Crimean region of Ukraine, Cuba, Democratic People’s Republic of Korea (North Korea), Iran, occupied territories in “Donetsk People’s Republic” region of Ukraine, occupied territories in “Kherson” region of Ukraine, occupied territories in “Luhansk People’s Republic” region of Ukraine, occupied territories in “Zaporizhzhia” region of Ukraine, and Syria (the “Sanctioned Countries”)), or (C) is owned by or otherwise controlled, directly or indirectly, in whole or in part, by any individual or entity that is currently the subject or target of Sanctions;

 

 

(ii)

Neither it nor any of its subsidiaries will, directly or, to its actual knowledge, indirectly, use the proceeds of the Purchased Notes, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person (i) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject or target of Sanctions; (ii) to fund or facilitate any activities of or business in any Sanctioned Country in violation of Sanctions or (iii) in any other manner that would result in violation of any Sanctions (including by any Person participating in the Offering, whether as Initial Purchaser, Issuer, investor or otherwise);

 

(iii)

During the past five years, neither it nor any of its subsidiaries has engaged, is now engaged, or will engage, in any business operations, dealings or transactions with any Person, or in any country or territory, that at the time of the dealing or transaction is or was, or whose government is or was, the subject or target of Sanctions, in violation of Sanctions;

 

(iv)

The representations contained in this clause (k) shall not be deemed to apply to owners of shares of common stock in any indirect owner of the Issuer whose shares are listed on a publicly traded exchange and acquired such shares through such exchange; and

 

(v)

Its operations and the operations of its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements, including without limitation, those of Title 18 U.S. Code section 1956 and 1957, the Bank Secrecy Act of 1970, otherwise known as the Currency and Foreign Transactions Reporting Act, as amended, the applicable money laundering statutes of all jurisdictions where it or any of its subsidiaries conducts business, the rules and regulations thereunder, and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency having jurisdiction over it or any of its subsidiaries, and any international anti-money laundering guidelines, principles or procedures issued by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur, and any Executive Order, directive, or regulation pursuant to the authority or to the enforcement of any of the foregoing, or any orders or licenses issued thereunder (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving it or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to its knowledge, threatened. Neither it nor or any its subsidiaries will, directly or indirectly, use the proceeds of the Purchased Notes, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person in any manner that would result in violation of the Anti-Money Laundering Laws.

 

 

(l)

Neither it, nor any of its subsidiaries, nor any of its directors or officers, nor any director or officer of any of its subsidiaries or, to its knowledge, after due inquiry, neither any employee, agent, Affiliate, representative or Person associated with or acting on its behalf or on behalf any of its subsidiaries, nor any Person benefiting in any capacity in connection with this Agreement and/or the Offering has (A) made any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (B) made any direct or, to its knowledge, indirect unlawful payment to any domestic governmental official or “foreign official” (as defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”)) or domestic government or foreign government employee; (C) violated or is in violation of any provision of the FCPA, the Bribery Act of 2010 of the United Kingdom or any applicable non-U.S. anti-bribery statute or regulation; (D) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment; or (E) received notice of any investigation, proceeding or inquiry by any governmental agency, authority or body regarding any of the matters in clauses (A) through (D) above; and, to its knowledge, it and its respective affiliates, have conducted their respective businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.

 

(m)

No legal or governmental proceedings are pending to which it is a party or to which its property is subject, and, to the best of its knowledge, no such proceedings are threatened or contemplated.

 

(n)

None of the Issuer or any person acting on its behalf (other than the Initial Purchaser), has, directly or indirectly, made offers or sales of any security (as defined in the Securities Act), or solicited offers to buy any security, under circumstances that would require the registration of the Notes under the Securities Act.

 

 

(o)

Assuming that (A) the representations, warranties and covenants made by the Initial Purchaser herein are true and correct and have been and will be complied with, (B) the representations, warranties and covenants deemed to be made by the purchasers of the Notes and required to be made by the purchasers of the Notes in the related representation or subscription letters are true and correct and will be complied with and (C) the Notes are offered and sold in accordance with the Final Offering Circular, no registration of the Notes under the Securities Act, and no qualification of the Indenture under the United States Trust Indenture Act of 1939, as amended, with respect thereto, is required for the offer, sale and initial resale of the Notes in the manner contemplated by this Agreement or the Final Offering Circular.

 

(p)

As of the Refinancing Date, the Notes will satisfy the eligibility requirements of Section 4(a)(2), Rule 144A(d)(3) or Regulation S under the Securities Act, as applicable, and no securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Notes are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

 

(q)

It has not taken, directly or indirectly, any action prohibited by Regulation M under the Exchange Act (to the extent that Regulation M is applicable to the offering, issuance and sale of the Notes).

 

(r)

[Reserved]

 

(s)

The Purchased Notes conform in all material respects to the descriptions thereof contained in the Final Offering Circular.

 

(t)

It has not offered and shall not offer the Purchased Notes except pursuant to this Agreement and the terms of the Indenture and it has not offered and shall not offer the Notes (other than the Purchased Notes) except pursuant to the terms of the Indenture.

 

(u)

It agrees that it shall not make any offer or sale of Purchased Notes of any class if, as a result of the doctrine of “integration” referred to in Rule 502 promulgated under the Securities Act, such offer or sale could be deemed to render invalid (for the purpose of (i) the sale of the Purchased Notes to the Initial Purchaser or (ii) the resale of the Purchased Notes by the initial investors to others) the exemption from the registration requirements of the Securities Act provided by Section 4(a)(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise.

 

(v)

None of the Issuer, any of its affiliates (as that term is defined in Rule 501(b) of Regulation D under the Securities Act, each, an “Affiliate”), or any Person authorized to act on its behalf (other than the Initial Purchaser, as to whom no representation is made) has engaged or will engage in any directed selling efforts (as that term is defined in Regulation S) in connection with the offering or sale of the Notes, and the Issuer and its Affiliates and any Person acting on their behalf (other than the Initial Purchaser, as to whom no representation is made) has complied and will comply with the offering restrictions requirement of Rule 903 of Regulation S. It has not entered into any contractual agreement with respect to the distribution of the Purchased Notes except for the arrangements with the Initial Purchaser hereunder.

 

 

(w)

None of the Issuer nor any of its Affiliates nor any Person authorized to act on its behalf (other than the Initial Purchaser, as to whom no representation is made) has engaged or will engage in any form of general solicitation or general advertising (as those terms are used in Regulation D under the Securities Act) in connection with the offering or sale of the Notes in the United States or in any manner involving a public offering within the meaning of Section 4(a)(2) of the Securities Act. Accordingly, it acknowledges that the Notes may not be offered or sold, directly or indirectly, and no offering circular or any advertisements in connection with the Notes may be distributed or published, in or from any country or jurisdiction except under circumstances that shall result in compliance with any applicable rules and regulations of any such country or jurisdiction.

 

(x)

On and as of the date hereof, no event has occurred or is continuing which, had the Notes already been issued, would constitute a Default under the Indenture.

 

Section 7.       Indemnity.

 

(a)

The Issuer agrees to indemnify and hold harmless the Initial Purchaser and/or any of its affiliates, the directors, officers, partners, agents or employees of the Initial Purchaser or any of its affiliates, and each other person, if any, who controls the Initial Purchaser or any of its affiliates within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) against any and all losses, claims, damages or liabilities, joint or several, to which such Person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are connected with (i) (x) any untrue statement or alleged untrue statement of a material fact made in the Preliminary Offering Circulars, the Final Offering Circular or any amendment or supplement thereto or (y) the omission or the alleged omission to state in the Preliminary Offering Circulars, the Final Offering Circular or any amendment or supplement thereto a material fact required to be stated therein necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or (ii) the breach by the Issuer of any of its representations, warranties, covenants or agreements under this Agreement or any other Transaction Document to which it is a party (in each case, after giving effect to any materiality qualifications set forth therein). The Issuer will reimburse, as incurred, each such indemnified party for any legal or other costs or expenses reasonably incurred, by it in connection with investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, that the Issuer will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon (1) (x) any untrue statement or alleged untrue statement of a material fact made in the Preliminary Offering Circulars, the Final Offering Circular or any amendment or supplement thereto in reliance upon and in conformity with information provided by the Initial Purchaser specifically for inclusion in the Initial Purchaser Information, or (y) the omission or the alleged omission by the Initial Purchaser to state in the Initial Purchaser Information a material fact required to be stated therein necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or (2) the gross negligence or willful misconduct of the Initial Purchaser, as finally determined by a court of competent jurisdiction. The indemnity provided for in this Section 7 shall be in addition to any liability which either the Issuer may otherwise have. The Issuer will not, without the prior written consent of the Initial Purchaser, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not the Initial Purchaser or any person who controls the Initial Purchaser is a party to such claim, action, suit or proceeding), unless such settlement, compromise or consent includes an unconditional release of the Initial Purchaser and such indemnified persons from all liability arising out of such claim, action, suit or proceeding.

 

 

(b)

The Initial Purchaser agrees to indemnify and hold harmless the Issuer, its members, managers, partners, officers, authorized persons and each person, if any, who controls the Issuer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which the Issuer or any such member, manager, partner, officer, authorized person or controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are connected with (i) any untrue statement or alleged untrue statement of a material fact made in the Preliminary Offering Circulars, the Final Offering Circular or any amendment or supplement thereto in reliance upon and in conformity with information provided by the Initial Purchaser specifically for inclusion in the Initial Purchaser Information, or (ii) the omission or the alleged omission by the Initial Purchaser to state in the Initial Purchaser Information a material fact required to be stated therein necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that, the Initial Purchaser shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon the gross negligence or willful misconduct of the Issuer as finally determined by a court of competent jurisdiction.

 

(c)

In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to paragraphs (a) or (b) of this Section 7, such person (for purposes of this paragraph (c), the “indemnified party”) shall, promptly after receipt by such party of notice of the commencement of such action, notify the person against whom such indemnity may be sought (for purposes of this paragraph (c), the “indemnifying party”), but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise under this Section 7, unless such omission and/or delay caused actual prejudice to the indemnifying party. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, to the extent agreed by the indemnified party (not to be unreasonably withheld, conditioned or delayed), and with counsel reasonably satisfactory to such indemnified party; provided, however, that, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be one or more legal defenses available to it and/or other indemnified parties which are different from or additional to, those available to the indemnifying party, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties, and such indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such indemnified party of its election so to assume the defense of any such action and approval by such indemnified party of such assumption of defense and of counsel appointed to defend such action, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the immediately prior sentence (it being understood, however, that in connection with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar actions in the same jurisdiction arising out of the same general allegations or circumstances, designated in writing by the indemnified parties who are parties to such action or actions), (ii) the indemnifying party does not promptly retain counsel reasonably satisfactory to the indemnified party or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. All fees and expenses reimbursed pursuant to this paragraph (c) shall be reimbursed as they are incurred. After such notice from the indemnifying party to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the consent of the indemnifying party.

 

 

(d)

In circumstances in which the indemnity agreement provided for in the preceding paragraph of this Section 7 is unavailable or insufficient, for any reason, to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the Offering or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Issuer on the one hand and the Initial Purchaser on the other shall be deemed to be in the same proportion as the total proceeds from the Offering (before deducting expenses) received by the Issuer bear to the total discounts and commissions received by the Initial Purchaser from the Issuer in connection with the purchase of the Purchased Notes hereunder. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or the Initial Purchaser, the parties’ relative intents, knowledge, access to information and opportunity to correct or prevent such statement or omission and any other equitable considerations appropriate in the circumstances. The Issuer and Initial Purchaser agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation or by any other method of allocation that does not take into account the equitable considerations referred to above in this paragraph (d). Notwithstanding any other provision of this paragraph (d), the Initial Purchaser shall not be obligated to make contributions hereunder that in the aggregate exceed the amount by which (i) the total discounts and commissions received by it in respect of the Purchased Notes exceeds (ii) the aggregate amount of any damages that it has otherwise been required to pay pursuant hereto, and no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls an Initial Purchaser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and each director, officer, employee and agent of an Initial Purchaser, shall have the same rights to contribution as the Initial Purchaser, subject to the applicable terms and conditions of this paragraph (d).

 

 

Section 8.       Conditions Precedent. The obligations of the Initial Purchaser to purchase and pay for the Purchased Notes shall be subject, in the Initial Purchaser’s sole discretion, to the accuracy of the representations and warranties of the Issuer contained herein as of the date hereof, to the accuracy of the statements of the Issuer made in any certificates delivered pursuant to the provisions hereof, to the performance by the Issuer of its covenants and agreements hereunder and to the following additional conditions:

 

(a)

The Issuer shall have obtained all governmental authorizations required in connection with the issuance, offering and sale of the Notes and the performance of its obligations hereunder and under the Transaction Documents.

 

(b)

The Issuer shall have furnished to the Initial Purchaser a certificate, signed by a Responsible Officer of the Issuer dated the Refinancing Date, to the effect that such Responsible Officer has examined the Final Offering Circular and this Agreement and that the representations and warranties of the Issuer in this Agreement are true and correct in all material respects on and as of the Refinancing Date with the same effect as if made on the Refinancing Date, and the Issuer has performed all of its obligations and satisfied all the conditions on its part to be satisfied at or prior to the Refinancing Date.

 

 

(c)

The Secured Notes shall have received the following ratings as of the Refinancing Date: (i) the Class A-1-R Notes shall have been rated “AAA(sf)” by S&P and “AAA(sf)” by Fitch, (ii) the Class A-2-RR Notes have been rated “AAA(sf)” by S&P, (iii) the Class B-R Notes shall have been rated at least “AA(sf)” by S&P and (iv) the Class C-R Notes shall have been rated at least “A(sf)” by S&P. The Subordinated Notes shall not have been rated.

 

(d)

The Issuer shall have furnished to the Initial Purchaser the opinions of Dechert LLP, special counsel to the Issuer, and a written letter from Dechert LLP with respect to the Final Offering Circular in relation to Rule 10b-5 under the Securities Act, each addressed to the Initial Purchaser, dated the Refinancing Date and in form and substance satisfactory to the Initial Purchaser.

 

(e)

The Issuer shall have furnished to the Initial Purchaser the opinion of Clark Hill PLC, counsel to the Issuer, dated the Refinancing Date and in form and substance satisfactory to the Initial Purchaser.

 

(f)

The Trustee shall have furnished to the Initial Purchaser the opinion of Locke Lord LLP, counsel to the Trustee and the Collateral Administrator, dated the Refinancing Date and in form and substance satisfactory to the Initial Purchaser.

 

(g)

The Collateral Manager shall have furnished to the Initial Purchaser the opinion of Dechert LLP as counsel to the Collateral Manager, dated the Refinancing Date and in form and substance satisfactory to the Initial Purchaser.

 

(h)

The conditions precedent to the issuance of the Notes under the Indenture and the conditions precedent to the performance by the Issuer of its obligations under the Indenture shall have been satisfied.

 

(i)

Subsequent to the date as of which information is given in the Final Offering Circular, there shall not have been any change, or any development involving a prospective change, the effect of which, in any case, is, in the judgment of the Initial Purchaser, so material and adverse as to make it impractical or inadvisable to proceed with the offering or the delivery of the Purchased Notes as contemplated by the Final Offering Circular.

 

(j)

On or before the Refinancing Date, the Initial Purchaser shall have received such further certificates, documents or other information as they may have reasonably requested from the Issuer.

 

 

All opinions, certificates, letters and documents delivered pursuant to this Agreement will comply with the provisions hereof only if they are satisfactory in all material respects to the Initial Purchaser. The Issuer shall furnish to the Initial Purchaser such conformed copies of such opinions, certificates, letters and documents in such quantities as the Initial Purchaser shall reasonably request.

 

Section 9.       Termination. This Agreement shall be subject to termination in the sole discretion of the Initial Purchaser by notice to the Issuer given prior to the Refinancing Date in the event that the Issuer shall have failed, refused or been unable to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder at or prior thereto or, if at or prior to the Refinancing Date, (a) trading in securities generally shall have been suspended or materially limited on or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (b) any securities of the Issuer shall have been downgraded by any nationally recognized statistical rating organization or any such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its ratings of any securities of the Issuer (other than an announcement with positive implications of a possible upgrading); (c) a general moratorium on commercial banking activities shall have been declared by New York or United States authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; or (d) there shall have occurred (i) an outbreak or escalation of hostilities between the United States and any foreign power, (ii) an outbreak or escalation of any other insurrection or armed conflict involving the United States, or (iii) any other calamity, crisis or material adverse change in general economic, political or financial conditions having an effect on the U.S. financial markets that, in the sole judgment of the Initial Purchaser, makes it impractical or inadvisable to proceed with the offering or the delivery of the Purchased Notes as contemplated by the Final Offering Circular. Termination of this Agreement pursuant to this Section 9 shall be without liability of any party to any other party except for any liability arising before or in relation to such termination.

 

Section 10.     Miscellaneous.

 

(a)

Time shall be of the essence of this Agreement.

 

(b)

The headings herein are inserted for convenience of reference only and are not intended to be part of, or to, affect, the meaning or interpretation of this Agreement.

 

(c)

This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same Agreement, and any party may enter into this Agreement by executing a counterpart. Delivery of an executed counterpart signature page of this Agreement by e-mail (PDF) or telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

 

(d)

This Agreement shall inure to the benefit of and shall be binding upon the Initial Purchaser, the Issuer and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to, give any other person any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person, except as set forth in Section 7. No purchaser of Purchased Notes from the Initial Purchaser shall be deemed a successor because of such purchase.

 

 

(e)

The respective representations, warranties, agreements, covenants, indemnities and other statements of the Issuer and Deutsche Bank Securities Inc. set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full force and effect, regardless of (i) any investigation made by or on behalf of the Issuer, any of its officers, directors, partners, managers, employees or agents, any Initial Purchaser or any controlling person referred to in Section 7 hereof and (ii) delivery of and payment for the Notes. The respective agreements, covenants, indemnities and other statements set forth in Sections 5, 7, 10 and 16 hereof shall remain in full force and effect, regardless of any termination or cancellation of this Agreement.

 

Section 11.     Severability. It is the desire and intent of the parties that the provisions of this Agreement be enforced to the fullest extent permissible under the law and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, in the event that any provision of this Agreement would be held in any jurisdiction to be invalid, prohibited or unenforceable for any reason, such provision, as to such jurisdiction, shall, to the fullest extent permitted by applicable law, be ineffective without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

 

Section 12.     Governing Law. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, AND ANY DISPUTE, SUIT, ACTION OR PROCEEDING, WHETHER IN CONTRACT, TORT OR OTHERWISE AND WHETHER AT LAW OR IN EQUITY, RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.

 

Section 13.     Jurisdiction. Each of the parties hereto hereby irrevocably submits to the exclusive jurisdiction of any New York State or United States federal court sitting in the City and County of New York over any suit, action or proceeding, whether in contract, tort or otherwise and whether at law or in equity, arising out of or relating to this Agreement or the transactions contemplated hereby which is brought by any party hereto and irrevocably waives, to the fullest extent it may effectively do so, any objection which it may now or hereafter have to the laying of venue of any such proceeding. To the extent that the Issuer has or hereafter may acquire any immunity from jurisdiction of any such court referred to above, or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, such entity hereby irrevocably waives, to the extent permitted by applicable law, such immunity in respect of its obligations under this Agreement. The Issuer hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection, including, without limitation, any objection to the laying of venue or based on the grounds of forum non conveniens, that it may now or hereafter have to the bringing of any such action or proceeding in such respective courts referred above.

 

 

Section 14.     Waiver of Jury Trial Right. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING, WHETHER IN CONTRACT, TORT OR OTHERWISE AND WHETHER AT LAW OR IN EQUITY. Each of the parties hereby (i) certifies that no representative, agent or attorney of any other parties has represented, expressly or otherwise, that such other parties 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 Agreement by, among other things, the mutual waivers and certifications in this paragraph.

 

Section 15.     No Advisory or Fiduciary Responsibility. The Issuer acknowledges and agrees that (i) the purchase and sale of the Purchased Notes pursuant to this Agreement is an arm’s-length commercial transaction between the Issuer and the Initial Purchaser, (ii) in connection therewith and with the process leading to such transaction the Initial Purchaser is acting solely as a principal and not the agent or fiduciary of the Issuer, (iii) the Initial Purchaser has not assumed an advisory or fiduciary responsibility in favor of the Issuer with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether the Initial Purchaser has advised or is currently advising the Issuer on other matters) or any other obligation to the Issuer except the obligations expressly set forth in this Agreement and (iv) the Issuer has consulted its own legal and financial advisors to the extent they deemed appropriate. The Issuer agrees that it will not claim that the Initial Purchaser has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to it in connection with such transaction or the process leading thereto.

 

Section 16.     No Bankruptcy Petition/Limited Recourse. The Initial Purchaser covenants and agrees that, prior to the date which is one year and one day (or, if longer, the applicable preference period then in effect plus one day) after the payment in full of all of the Notes issued by the Issuer, it will not institute against, or join any other Person in instituting against, the Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy, insolvency, reorganization or similar law in any jurisdiction.

 

Notwithstanding any other provision of this Agreement, the obligations of the Issuer hereunder are limited-recourse obligations, payable solely from the Assets in accordance with the terms of the Indenture and following realization thereof and reduction thereof to zero, all obligations of and all claims against the Issuer hereunder or arising in connection herewith shall be extinguished and shall not thereafter revive. No recourse may be had under this Agreement against any employee, agent, officer, partner, member, incorporator, manager, shareholder, director or authorized person of any party hereto or their respective successors or assigns (collectively, the “Associated Persons”), in respect of the transactions contemplated by this Agreement, it being expressly agreed and understood that this Agreement is solely an obligation of each of the parties hereto and that no personal liability whatever shall attach to or be incurred by any Associated Person under or by reason of the obligations, representations and agreements of the parties contained in this Agreement, or implied therefrom.

 

 

This Section 16 shall survive the termination or expiration of this Agreement.

 

Section 17.     Recognition of the U.S. Special Resolution Regimes.

 

(a)

In the event that the Initial Purchaser is a Covered Entity and becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from the Initial Purchaser of this Agreement, and any interest and obligation in or under this Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

 

(b)

In the event that the Initial Purchaser is a Covered Entity or a BHC Act Affiliate of the Initial Purchaser becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Agreement that may be exercised against the Initial Purchaser are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Agreement were governed by the laws of the United States or a state of the United States.

 

For purposes of this Section 17, a “BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k). “Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b). “Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable. “U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

 

Section 18.     Electronic Signatures. The parties agree that this Agreement may be executed and delivered by electronic signatures and that the electronic signatures appearing on this Agreement are the same as handwritten signatures for the purposes of validity, enforceability and admissibility.

 

[Signature Page Follows]

 

 

If the foregoing is in accordance with your understanding, please sign below and return to us, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement between the Initial Purchaser and the Issuer.

 

	Very truly yours,
	GOLUB CAPITAL BDC CLO 8 LLC
	By:	Golub Capital BDC, Inc., its designated manager
	By:	/s/ Christopher Ericson
		Name:	Christopher Ericson
		Title:	Chief Financial Officer

 

Golub Capital BDC CLO 8 LLC

Note Purchase Agreement

 

 

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

 

DEUTSCHE BANK SECURITIES INC.

 

By:	/s/ Hsiang Lim
	Name:	Hsiang Lim
	Title:	Managing Director

 

By:	/s/ Sunil-A Rohra
	Name:	Sunil-A Rohra
	Title:	Director

 

Golub Capital BDC CLO 8 LLC

Note Purchase Agreement

 

 

Schedule I

 

Purchased Notes		Deutsche Bank Securities Inc.				Purchase Price
Principal Amount of Class A-1-R Notes to be Purchased:		$	1,192,400,000			$	1,192,400,000
Principal Amount of Class A-2-RR Notes to be Purchased:		$	171,600,000			$	171,600,000

 

Golub Capital BDC CLO 8 LLC

Note Purchase Agreement

 

 

 

Exhibit 10.3

 

EXECUTION VERSION

 

AMENDED AND RESTATED COLLATERAL MANAGEMENT AGREEMENT

 

dated as of November 18, 2024

 

by and between

 

GOLUB CAPITAL BDC CLO 8 LLC,
as Issuer

 

and

 

GC ADVISORS LLC,
as Collateral Manager

 

 

Table of Contents

 

		Page
Section 1.	Definitions.	2
Section 2.	General Duties and Authority of the Collateral Manager.	5
Section 3.	Purchase and Sale Transactions; Brokerage.	11
Section 4.	Additional Activities of the Collateral Manager.	13
Section 5.	Conflicts of Interest.	16
Section 6.	Records; Confidentiality.	17
Section 7.	Obligations of Collateral Manager.	18
Section 8.	Compensation	18
Section 9.	Benefit of the Agreement.	20
Section 10.	Limits of Collateral Manager Responsibility.	21
Section 11.	No Joint Venture.	22
Section 12.	Term; Termination.	22
Section 13.	Assignments.	24
Section 14.	Removal for Cause.	25
Section 15.	Obligations of Resigning or Removed Collateral Manager.	28
Section 16.	Representations and Warranties.	28
Section 17.	Limited Recourse; No Petition.	31
Section 18.	Notices.	32
Section 19.	Binding Nature of Agreement; Successors and Assigns.	33
Section 20.	Entire Agreement; Amendment.	33
Section 21.	Governing Law.	34
Section 22.	Submission to Jurisdiction.	34
Section 23.	Waiver of Jury Trial.	34
Section 24.	Conflict with the Indenture.	35
Section 25.	Subordination; Assignment of Agreement.	35
Section 26.	Indulgences Not Waivers.	35
Section 27.	Costs and Expenses.	36
Section 28.	Third Party Beneficiary.	36
Section 29.	Titles Not to Affect Interpretation.	37
Section 30.	Execution in Counterparts.	37
Section 31.	Provisions Separable.	37
Section 32.	Interpretive Matters.	37
Section 33.	Communications with the Rating Agencies.	37
Section 34.	Existing Agreement.	37

 

 

AMENDED AND RESTATED COLLATERAL MANAGEMENT AGREEMENT

 

This AMENDED AND RESTATED Collateral Management Agreement (as amended, supplemented or otherwise modified from time to time, this “Agreement”), dated as of November 18, 2024 is entered into by and between GOLUB CAPITAL BDC CLO 8 LLC, a limited liability company formed under the laws of the State of Delaware (f/k/a GCIC CLO II LLC) (the “Issuer”), and GC ADVISORS llc, a limited liability company organized under the laws of the State of Delaware, as collateral manager (together with its successors and permitted assigns, “GC Advisors” and the “Collateral Manager”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer and the Collateral Manager entered into that certain collateral management agreement, dated as of December 13, 2018 (such agreement, as amended, modified or waived prior to the date hereof, the “Existing Agreement”);

 

WHEREAS, the Issuer and the Collateral Manager desire to amend and restate the Existing Agreement in its entirety in order to make certain additional changes agreed to by the parties hereto;

 

WHEREAS, the Notes (as defined in the Indenture) will be issued pursuant to an amended and restated indenture dated as of November 18, 2024 between the Issuer and The Bank of New York Mellon Trust Company, National Association, as trustee (as amended, supplemented or otherwise modified from time to time, the “Indenture”);

 

WHEREAS, the Issuer has pledged all Collateral Obligations and the other Assets, all as set forth in the Indenture, to the Trustee as security for the Issuer’s obligations under the Indenture;

 

WHEREAS, the Issuer desires to appoint GC Advisors as the Collateral Manager to provide the services described herein and GC Advisors desires to accept such appointment;

 

WHEREAS, the Indenture authorizes the Issuer to enter into this Agreement, pursuant to which the Collateral Manager agrees to perform, on behalf of the Issuer, certain investment management duties with respect to the acquisition, administration and disposition of Assets in the manner and on the terms set forth herein and to perform such additional duties as are consistent with the terms of this Agreement and the Indenture as the Issuer may from time to time reasonably request; and

 

WHEREAS, the Collateral Manager has the capacity to provide the services required hereby and is prepared to perform such services upon the terms and subject to the conditions set forth herein.

 

 

NOW, THEREFORE, in consideration of the mutual agreements herein set forth and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Existing Agreement in its entirety as follows:

 

Section 1.       Definitions.

 

(a)            As used in this Agreement:

 

“Advisers Act” shall mean the U.S. Investment Advisers Act of 1940, as amended.

 

“Affiliate Transaction” shall have the meaning set forth in Section 5.

 

“Aggregate Collateral Management Fee” shall have the meaning set forth in Section 8(a).

 

“Agreement” shall have the meaning set forth in the preamble.

 

“BDC” shall mean Golub Capital BDC, Inc., a Delaware corporation.

 

“Cause” shall have the meaning set forth in Section 14(a).

 

“Client” shall mean, with respect to any specified Person, any Person or account for which the specified Person provides investment management services or investment advice.

 

“CM Information” shall mean the CM Offering Circular Information and any amendment or supplement approved by the Collateral Manager to the Final Offering Circular that supplements or amends any of the CM Offering Circular Information (including any offering circular approved in writing by the Collateral Manager for additional Notes issued pursuant to Section 2.13 of the Indenture, or for replacement securities issued in connection with a Refinancing in part by Class of one or more Classes of Secured Notes, or any offering circular in connection with a Re-Pricing).

 

“CM Offering Circular Information” shall mean the information in the Final Offering Circular set forth under the headings “Risk Factors—Relating to Certain Conflicts of Interest—Certain Conflicts of Interest Relating to the Collateral Manager and its Affiliates,” “Risk Factors—Relating to Certain Conflicts of Interest—Conflicts related to obligations of the Collateral Manager’s investment committee, the Collateral Manager, or its affiliates to other clients,” “Risk Factors—Relating to Certain Conflicts of Interest—No Ethical Screens or Information Barriers” and “The Collateral Manager and the E.U./U.K. Retention Provider”.

 

“Collateral Management Fee” shall have the meaning set forth in Section 8(a).

 

“Collateral Management Fee Shortfall Amount” shall have the meaning set forth in Section 8(a).

 

“Collateral Manager” shall have the meaning set forth in the preamble.

 

“Collateral Manager Breaches” shall have the meaning set forth in Section 10(a).

 

“Collateral Manager Notes” shall mean any Notes owned by the Collateral Manager, an Affiliate thereof, or any account, fund, client or portfolio established and controlled by the Collateral Manager or an Affiliate thereof or for which the Collateral Manager or an Affiliate thereof acts as the investment adviser or with respect to which the Collateral Manager or an Affiliate thereof exercises discretionary control.

 

 

“Cumulative Deferred Management Fee” shall have the meaning set forth in Section 8(a).

 

“Current Deferred Management Fee” shall have the meaning set forth in Section 8(a).

 

“Expenses” shall have the meaning set forth in Section 10(b).

 

“Fee Basis Amount” shall mean, as of any date of determination, the sum of (a) the Collateral Principal Amount, (b) the aggregate outstanding principal balance of all Defaulted Obligations and (c) the aggregate amount of all Principal Financed Accrued Interest.

 

“Final Offering Circular” shall mean the final offering circular, dated as of November 7, 2024, with respect to the Notes.

 

“Indemnified Party” shall have the meaning set forth in Section 10(b).

 

“Indenture” shall have the meaning set forth in the recitals hereto.

 

“Independent Review Party” shall have the meaning set forth in Section 5.

 

“Instrument of Acceptance” shall have the meaning set forth in Section 12(c).

 

“Internal Policies” shall have the meaning set forth in Section 3(b).

 

“Issuer” shall have the meaning set forth in the preamble.

 

“Losses” shall have the meaning set forth in Section 10(b).

 

“Material Adverse Effect” shall mean, with respect to any event or circumstance, a material adverse effect on (a) the business, financial condition (other than the performance of the Assets) or operations of the Issuer, taken as a whole, (b) the validity or enforceability of the Indenture or this Agreement or (c) the existence, perfection, priority or enforceability of the Trustee’s lien on the Assets.

 

“Offering Circulars” shall mean, collectively, the Final Offering Circular, the Second Preliminary Offering Circular and the Preliminary Offering Circular.

 

“Organization Costs” shall mean all out-of-pocket costs and expenses incurred directly by the Issuer, the Collateral Manager or their Affiliates in connection with the formation and capitalization of the Issuer, the offering of Issuer limited liability company interests and Notes, and the preparation by the Issuer to commence its business operations, including, without limitation, (i) expenses for legal services rendered to or for the benefit of the Issuer or the Collateral Manager; (ii) expenses incurred in connection with the preparation, documentation, and negotiation, as applicable, of offering circulars (including any supplement thereto or amendment and restated thereof) and governing documents, including the Transaction Documents and any constitutive documents of the Issuer; (iii) expenses incurred in preparing and making securities filings and any required registration of the Issuer and responding to queries from actual or prospective investors; (iv) accountant fees and other fees for professional services; and (v) travel costs and other out-of-pocket expenses.

 

 

“Organizational Instruments” shall mean the memorandum and articles of association or certificate of incorporation and bylaws (or the comparable documents for the applicable jurisdiction), in the case of a corporation, or the certificate of partnership and partnership agreement (or the comparable documents for the applicable jurisdiction), in the case of a partnership, or the certificate of formation and limited liability company agreement (or the comparable documents for the applicable jurisdiction), in the case of a limited liability company, or the certificate of trust and trust agreement (or the comparable documents for the applicable jurisdiction), in the case of a statutory trust.

 

“Owner” shall mean, with respect to any Person, any direct or indirect shareholder, member, partner or other equity or beneficial owner thereof.

 

“Preliminary Offering Circular” shall mean the preliminary offering circular, dated September 25, 2024, with respect to the Notes.

 

“Prime Rate” shall mean, as of any date of determination, that certain rate quoted in the Wall Street Journal as the U.S. “prime rate” on such date (or, if not quoted on such date, on the preceding date on which it is so quoted).

 

“Proceedings” shall have the meaning set forth in Section 22.

 

“Related Person” shall mean, with respect to any Person, the owners of the equity interests therein, directors, officers, employees, managers, agents and professional advisors thereof.

 

“Responsible Officer” shall mean, with respect to any Person, any duly authorized director, officer, trustee 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, trustee or manager of such Person to whom such matter is referred because of such director’s, officer’s, trustee’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 (which may contain contact information including an email address) 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.

 

“Second Preliminary Offering Circular” shall mean the second preliminary offering circular, dated October 28, 2024, with respect to the Notes.

 

“Section 28(e)” shall have the meaning set forth in Section 3(b).

 

“Statement of Cause” shall have the meaning set forth in Section 14(a).

 

“Termination Notice” shall have the meaning set forth in Section 14(a).

 

 

“Transaction” shall mean any action taken by the Collateral Manager on behalf of the Issuer with respect to the Assets, including, without limitation, (i) selecting the Collateral Obligations and Eligible Investments to be acquired by the Issuer, (ii) investing and reinvesting the Assets, (iii) amending, waiving and/or taking any other action commensurate with managing the Assets and (iv) instructing the Trustee with respect to any acquisition, disposition or tender of a Collateral Obligation, Equity Security, Eligible Investment or other assets received in respect thereof in the open market or otherwise by the Issuer.

 

“Trustee” shall have the meaning set forth in the recitals hereto.

 

(b)            Capitalized terms used but not otherwise defined herein shall have the respective meanings assigned thereto in the Indenture. Unless the context requires otherwise, references to “Section” mean a section of this Agreement.

 

Section 2.       General Duties and Authority of the Collateral Manager.

 

(a)            GC Advisors is hereby appointed as Collateral Manager of the Issuer for the purpose of performing certain investment management functions including, without limitation, supervising and directing the investment and reinvestment of the Collateral Obligations and Eligible Investments and performing certain administrative and advisory functions on behalf of the Issuer in accordance with the applicable provisions of this Agreement, the Collateral Administration Agreement and the Indenture, and GC Advisors hereby accepts such appointment. Except as may otherwise be expressly provided in this Agreement or the Indenture, the Collateral Manager will perform its obligations hereunder and under the Indenture with reasonable care and in good faith, (i) using a degree of skill and attention no less than that which the Collateral Manager exercises with respect to comparable assets that it may manage for itself and its other clients and (ii) in accordance with the Collateral Manager’s existing practices and procedures with respect to investing in assets of the nature and character of the Assets. To the extent not inconsistent with the foregoing, the Collateral Manager will follow its customary standards, policies and procedures in performing its duties under this Agreement and the Indenture; provided that the Collateral Manager shall not be liable for any loss or damages resulting from any failure to satisfy the standard of care set forth in this Section 2(a) except to the extent such failure would result in liability pursuant to Section 10(a).

 

(b)            Subject to Section 2(a), Section 2(c)(i), Section 2(e), Section 2(f), Section 5, Section 7 and Section 10 and to the applicable provisions of the Indenture and of this Agreement, the Collateral Manager shall, and is hereby authorized to:

 

 (i)            select the Collateral Obligations and Eligible Investments to be acquired, sold, terminated or otherwise disposed of by the Issuer;

 

 (ii)            invest and reinvest the Assets (provided that investments and reinvestments in Collateral Obligations are subject to certain conditions and are not to be permitted after the Reinvestment Period);

 

 

 (iii)            instruct the Trustee with respect to any acquisition, disposition or tender of, or Offer with respect to, a Collateral Obligation, Equity Security, Eligible Investment or other assets received in respect thereof in the open market or otherwise by the Issuer; and

 

 (iv)            perform all other tasks and may, in the Collateral Manager’s sole discretion, take all other actions that are specified, or not inconsistent with, the duties of the Collateral Manager set forth in the Indenture, the Collateral Administration Agreement or this Agreement.

 

The Collateral Manager shall, and is hereby authorized to, perform its obligations hereunder and under the Indenture and the Collateral Administration Agreement in a manner which is consistent with the terms hereof and of the Indenture and the Collateral Administration Agreement. The Collateral Manager will not be bound to comply with any supplement to the Indenture, however, until it has received a copy of any such supplement from the Issuer or the Trustee and unless the Collateral Manager has consented thereto, as provided in the Indenture.

 

Notwithstanding anything to the contrary in this Section 2(b), none of the services performed by the Collateral Manager shall result in or be construed as resulting in an obligation to perform any of the following: (i) the Collateral Manager acting repeatedly or continuously as an intermediary in securities or loans for the Issuer; (ii) the Collateral Manager providing investment banking services to the Issuer; (iii) the Collateral Manager having direct contact with, or actively soliciting or finding, outside investors to invest in the Issuer or (iv) the Collateral Manager authorizing or causing the disbursement of money or other assets of the Issuer, except in accordance with this Agreement, the Indenture, or any other Transaction Documents or in connection with the acquisition, sale or disposal of the Issuer’s Assets, it being understood that it is the intention of the parties that the Collateral Manager not take any action through the power of attorney granted hereby that would cause the Collateral Manager to have custody of the Issuer’s funds or securities within the meaning of Rule 206(4)-2 under the Advisers Act. Without limitation to the foregoing, in no event shall the Collateral Manager have authority to cause a disbursement (except in connection with the acquisition, sale or disposal of the Issuer’s Assets) by the Issuer except upon the approval of the Issuer’s designated manager.

 

 

(c)            Subject to the provisions concerning its general duties and obligations as set forth in paragraphs (a) and (b) above and the terms of the Indenture, the Collateral Manager shall provide, and is hereby authorized to provide, the following services to the Issuer:

 

 (i)            The Collateral Manager shall perform the investment-related duties and functions (including, without limitation, the furnishing of Issuer Orders and Responsible Officer’s certificates) as are expressly required hereunder and under the Indenture with regard to acquisitions, sales or other dispositions of Collateral Obligations, Equity Securities, Eligible Investments and other assets permitted to be acquired or sold under, and subject to, the Indenture (including any proceeds received by way of Offers, workouts and restructurings on assets owned by the Issuer) and shall comply with the Investment Criteria and the other requirements in the Indenture. The Collateral Manager shall have no obligation to perform any other duties other than as expressly specified herein or in the Indenture and the Collateral Manager shall be subject to no implicit obligations of any kind. The Issuer hereby irrevocably (except as provided below) appoints the Collateral Manager 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 the performance of the Issuer’s duties provided for in this Agreement or in the Indenture, but subject in all cases to Section 2(f) herein, including, without limitation, the following powers: (A) to give or cause to be given any necessary receipts or acquittance for amounts collected or received hereunder, (B) to make or cause to be made all necessary transfers of the Collateral Obligations, Equity Securities and Eligible Investments in connection with any acquisition, sale or other disposition made pursuant hereto and the Indenture, (C) to execute (under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf of the Issuer all necessary or appropriate bills of sale, assignments, agreements and other instruments in connection with any such acquisition, sale or other disposition and (D) to execute (under hand, under seal or as a deed) and deliver or cause to be executed and delivered on behalf of the Issuer any consents, votes, proxies, waivers, notices, amendments, modifications, agreements, instruments, orders or other documents in connection with or pursuant to this Agreement or the Indenture and relating to any Collateral Obligation, Equity Security or Eligible Investment. Notwithstanding the foregoing, it is understood that the power of attorney granted herein is in all cases and for all purposes qualified and limited by the Indenture and other Transaction Documents and, as such, the power of attorney granted hereby is limited rather than general. The Issuer hereby ratifies and confirms all that such attorney-in-fact (or any substitute) shall lawfully do hereunder and pursuant hereto and authorizes such attorney-in-fact to exercise full discretion and act for the Issuer in the same manner and with the same force and effect as the managers or officers of the Issuer might or could do in respect of the performance of such services, as well as in respect of all other things the Collateral Manager deems necessary or incidental to the furtherance or conduct of such services, subject in each case to the other terms of this Agreement. The Issuer hereby authorizes such attorney-in-fact, in its sole discretion (but subject to applicable law and the provisions of this Agreement and the Indenture), to take all actions that it considers reasonably necessary and appropriate in respect of the Assets, this Agreement, the Indenture and the other Transaction Documents. Nevertheless, if so requested by the Collateral Manager or by a purchaser of any Collateral Obligation, Equity Security or Eligible Investment, the Issuer shall ratify and confirm, any such sale or other disposition by executing and delivering to the Collateral Manager or such purchaser all proper bills of sale, assignments, releases, powers of attorney, proxies, dividends, other orders and other instruments as may reasonably be designated in any such request. Except as otherwise set forth and provided for herein, this grant of power of attorney is coupled with an interest, and it shall survive and not be affected by the subsequent dissolution or bankruptcy of the Issuer. Notwithstanding anything herein to the contrary, the appointment herein of the Collateral Manager as the Issuer’s agent and attorney-in-fact shall automatically cease and terminate upon the effective date of any termination of this Agreement, the resignation of the Collateral Manager pursuant to Section 12 or any removal of the Collateral Manager pursuant to Section 14. Each of the Collateral Manager and the Issuer shall take such other actions, and furnish such certificates, opinions and other documents, as may be reasonably requested by the other party hereto in order to effectuate the purposes of this Agreement and to facilitate compliance with applicable laws and regulations and the terms of this Agreement and the Indenture.

 

 

 (ii)            The Collateral Manager shall instruct the Issuer with respect to the acquisition of Collateral Obligations by the Issuer in accordance with the Indenture.

 

 (iii)            The Collateral Manager shall monitor the Assets on behalf of the Issuer on an ongoing basis and shall provide or cause to be provided to the Issuer all reports, schedules and other data reasonably available to the Collateral Manager that the Issuer is required to prepare and deliver or cause to be prepared and delivered under the Indenture, in such forms and containing such information required thereby, in reasonably sufficient time for such required reports, schedules and data to be reviewed and delivered by or on behalf of the Issuer to the parties entitled thereto under the Indenture. Pursuant to the terms of the Collateral Administration Agreement, the Collateral Administrator shall provide certain reports, schedules and calculations to the Collateral Manager regarding the Collateral Obligations. The obligation of the Collateral Manager to furnish such information is subject to the Collateral Manager’s timely receipt of necessary reports and the appropriate information from the Person responsible for the delivery of or preparation of such reports and such information (including without limitation, Obligors of the Collateral Obligations, the Rating Agencies, the Trustee and the Collateral Administrator) and to any confidentiality restrictions with respect thereto. The Collateral Manager shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing reasonably believed by it to be genuine and to have been signed or sent by a Person that the Collateral Manager has no reason to believe is not duly authorized. The Collateral Manager also may rely upon any statement made to it orally or by telephone and made by a Person the Collateral Manager has no reason to believe is not duly authorized, and shall not incur any liability for relying thereon. The Collateral Manager is entitled to rely on any other information furnished to it by third parties that it reasonably believes in good faith to be genuine.

 

 (iv)            The Collateral Manager, on behalf of the Issuer, shall be responsible for obtaining, to the extent reasonably practicable and to the extent such information is readily available to it, any information concerning whether a Collateral Obligation is a Discount Obligation or has become a Defaulted Obligation, a Credit Risk Obligation, a Deferring Obligation, a Current Pay Obligation or a Credit Improved Obligation.

 

 (v)            The Collateral Manager may, subject to and in accordance with the Indenture, as agent of the Issuer and on behalf of the Issuer, take or, if applicable, direct the Trustee to take any of the following actions with respect to a Collateral Obligation, Equity Security or Eligible Investment, as applicable:

 

(A)            purchase or otherwise acquire such Collateral Obligation or Eligible Investment;

 

 

(B)             retain such Collateral Obligation, Equity Security or Eligible Investment;

 

(C)             sell or otherwise dispose of such Collateral Obligation, Equity Security or Eligible Investment (including any assets received by way of Offers, workouts and restructurings on assets owned by the Issuer) in the open market or otherwise;

 

(D)            if applicable, tender such Collateral Obligation, Equity Security or Eligible Investment;

 

(E)             if applicable, consent to or refuse to consent to any proposed amendment, modification, restructuring, exchange, waiver or Offer;

 

(F)             retain or dispose of any securities or other property (if other than cash) received by the Issuer;

 

(G)             waive any default with respect to any Defaulted Obligation;

 

(H)            vote to accelerate the maturity of any Defaulted Obligation;

 

(I)              participate in a committee or group formed by creditors of an issuer or a borrower under a Collateral Obligation, Eligible Investment or Equity Security;

 

(J)              after or in connection with the payment in full of all amounts owed under the Secured Notes and the termination without replacement of the Indenture or in connection with any redemption of the Notes (other than a Refinancing), advise the Issuer as to when, in the view of the Collateral Manager, it would be in the best interest of the Issuer to liquidate all or a portion of the Issuer’s investment portfolio (and, if applicable, after discharge of the Indenture) and render such assistance as may be necessary or required by the Issuer in connection with such liquidation or any actions necessary to effectuate a redemption of the Notes (other than a Refinancing);

 

(K)            advise and assist the Issuer with respect to the valuation of the Assets, to the extent required or permitted by the Indenture;

 

(L)             provide strategic and financial planning (including advice on utilization of assets), financial statements and other similar reports;

 

(M)            negotiate, modify or amend any loan for the Issuer as authorized by the Indenture in accordance with a Refinancing; and

 

(N)            exercise any other rights or remedies with respect to such Collateral Obligation, Equity Security or Eligible Investment as provided in the Underlying Instruments of the obligor under such Assets or the other documents governing the terms of such Assets or take any other action consistent with the terms of this Agreement or the Indenture which the Collateral Manager reasonably determines to be in the best interests of the Holders.

 

 

 (vi)         The Collateral Manager may, upon request of the Issuer, retain accounting, tax, counsel and other professional services on behalf of the Issuer as may be needed by the Issuer.

 

 (vii)        In connection with the acquisition of any loan or Participation Interest by the Issuer, the Collateral Manager shall prepare, on behalf of the Issuer, the information required to be delivered to the Trustee pursuant to the Indenture.

 

 (viii)       Where the Collateral Manager executes on behalf of the Issuer an agreement or instrument pursuant to which any security interest over any assets of the Issuer is created or released, the Collateral Manager shall promptly give written notice thereof to the Issuer and shall provide the Issuer with such information and/or copy documentation in respect thereof as the Issuer may reasonably require.

 

(d)            In performing its duties hereunder and when exercising its discretion and judgment in connection with any transactions involving the Assets, the Collateral Manager shall carry out any reasonable written directions of the Issuer for the purpose of the Issuer’s compliance with its Organizational Instruments and the Indenture; provided that such directions are not inconsistent with any provision of this Agreement or the Indenture by which the Collateral Manager is bound or prohibited by applicable law.

 

(e)            In providing services hereunder, the Collateral Manager may, without the consent of any party, delegate to third parties (including without limitation its Affiliates) the duties assigned to the Collateral Manager under this Agreement, and employ third parties (including without limitation its Affiliates) to render advice (including investment advice), to provide services to arrange for trade execution and otherwise provide assistance to the Issuer, and to perform any of the Collateral Manager’s duties under this Agreement; provided that the Collateral Manager shall not (i) delegate investment decision-making responsibilities to non-Affiliates or (ii) be relieved of any of its duties hereunder regardless of the performance of any services by third parties, including Affiliates.

 

(f)             Notwithstanding anything herein or any other Transaction Document to the contrary, the Collateral Manager shall have no authority to hold (directly or indirectly), or otherwise obtain possession of, any funds or securities of the Issuer (including Collateral Obligations or Eligible Investments). The Collateral Manager agrees that any requests regarding the disbursement of any funds in any Account must be made in accordance with the Indenture or other Transaction Documents and must be sent to the Trustee and such request shall be made by the Collateral Manager in connection with any acquisition, sale or disposition of the Assets or otherwise upon the approval of the Issuer.

 

Without limiting the foregoing, the Collateral Manager shall have no authority to (i) sign checks on the Issuer’s behalf, (ii) deduct fees from any Account, (iii) withdraw funds or securities from any Account, or (iv) dispose of funds in any Account for any purpose other than pursuant to transactions authorized by the Indenture. The Collateral Manager agrees that any requests regarding the disbursement of any funds in any Account must be made in accordance with the Indenture and must be sent to the Trustee. Nothing in this Section 2(f) shall prohibit the Collateral Manager from issuing instructions to the Trustee or Custodian to effect or to settle any bills of sale, assignments, agreements and other instruments in connection with any acquisition, sale or other disposition of any Asset of the Issuer as permitted by the Indenture.

 

 

(g)            To the fullest extent permitted by applicable law and notwithstanding anything to the contrary contained in this Agreement or the Indenture, whenever in this Agreement the Collateral Manager is permitted or required to make a decision in its “sole discretion,” “reasonable discretion” or “discretion” or under a grant of similar authority or latitude, the Collateral Manager shall be entitled to consider only such interests and factors as it desires, including its own interests, and shall have no duty or obligation to give any consideration to any interest of or factors affecting the Issuer, Holders or any other Person. The intent of granting authority to act in its “discretion” to the Collateral Manager is that no other express consent of another party is required to be obtained by the Collateral Manager when acting pursuant to such grant of authority under this Agreement or the Indenture; provided that any action taken pursuant to such grant of discretion is consistent with the legal, contractual and fiduciary duties owed by the Collateral Manager. If any questions should arise with respect to the operation of the Issuer that are not specifically provided for in the Indenture, or with respect to the interpretation of the Indenture, the Collateral Manager is authorized to make a final determination in its sole discretion with respect to any such question, and its determination and interpretation so made shall be final and binding on all parties.

 

Section 3.       Purchase and Sale Transactions; Brokerage.

 

(a)            The Collateral Manager, subject to and in accordance with the Indenture, hereby agrees that it shall cause any Transaction to be conducted on terms and conditions negotiated on an arm’s-length basis and in accordance with applicable law. Except as expressly permitted under the Indenture, no Assets (other than any Delayed Drawdown Collateral Obligations or Revolving Collateral Obligations) shall be purchased if such Assets may give rise to any obligation or liability on the Issuer’s part to take any action or make any payment other than at the Issuer’s option. Further, the Collateral Manager will not cause or allow the Issuer to acquire any obligation of a Portfolio Company.

 

(b)            The Collateral Manager will seek to obtain the best execution (but shall have no obligation to obtain the lowest price available) for all orders placed with respect to any Transaction, in a manner permitted by law and in a manner it believes to be in the best interests of the Issuer. Subject to the preceding sentence, the Collateral Manager may, in the allocation of business, select brokers and/or dealers with whom to effect trades on behalf of the Issuer and may open cash trading accounts with such brokers and dealers; provided that none of the Assets may be credited to, held in or subject to the lien of the broker or dealer with respect to any such account. In addition, subject to the first sentence of this paragraph, the Collateral Manager may, in the allocation of business, take into consideration research and other brokerage services furnished to the Collateral Manager or its Affiliates by brokers and dealers which are not Affiliates of the Collateral Manager; provided that the Collateral Manager in good faith believes that the compensation for such services rendered by such brokers and dealers complies with the requirements of Section 28(e) of the Securities Exchange Act of 1934, as amended (“Section 28(e)”), or in the case of principal or fixed income transactions for which the “safe harbor” of Section 28(e) is not available, the amount of the spread charged is reasonable in relation to the value of the research and other brokerage services provided. Such services may be used by the Collateral Manager in connection with its other advisory activities or investment operations. The Collateral Manager may aggregate sales and purchase orders placed with respect to the Assets with similar orders being made simultaneously for other accounts managed by the Collateral Manager or with accounts of the Affiliates of the Collateral Manager, if in the Collateral Manager’s reasonable judgment such aggregation can be expected to result in an overall economic benefit to the Issuer, taking into consideration the advantageous selling or purchase price, brokerage commission or other expenses, as well as the availability of such Assets on any other basis. In accounting for such aggregated order price, commissions and other expenses may be apportioned on a weighted average basis. When a Transaction occurs as part of any aggregate sales or purchase orders, the objective of the Collateral Manager will be to use commercially reasonable efforts to allocate the executions among the accounts in a manner that is fair and equitable and over time the Collateral Manager believes, in its reasonable business judgment, to be appropriate and in accordance with its internal policies and procedures (as such may be amended from time to time, the “Internal Policies”) and applicable law.

 

 

(c)            The Issuer acknowledges and agrees that (i) the determination by the Collateral Manager of any benefit to the Issuer will be subjective and will represent the Collateral Manager’s evaluation at the time that the Issuer can be expected to be benefited by relatively better purchase or sales prices, lower brokerage commissions, lower transaction costs and expenses and beneficial timing of transactions or any combination of any of these and/or other factors and (ii) the Collateral Manager shall be fully protected with respect to any such determination to the extent the Collateral Manager acts in accordance with Section 2(a). The Issuer acknowledges and agrees that one or more Affiliates of the Collateral Manager will hold or beneficially own all of the Outstanding Subordinated Notes on and potentially after the Refinancing Date and that accounts advised or sub-advised by the Collateral Manager or its Affiliates may acquire other Notes and that such investments may give rise to conflicts of interest between the Collateral Manager’s duties to the Issuer under this Agreement and the interests of the Collateral Manager, its Affiliates or its Related Persons. The Issuer hereby acknowledges that various potential and actual conflicts of interest do or may exist with respect to the Collateral Manager, including in its capacity as investment adviser for both the Issuer and the BDC, as described in this Agreement and in the Final Offering Circular.

 

(d)            Subject to compliance with applicable laws and regulations and subject to the Indenture and the Collateral Manager’s execution obligations described in Sections 3(a), 3(b) and 3(e) and the covenants set forth in Section 5, the Collateral Manager is hereby authorized to effect client cross-transactions where the Collateral Manager causes a Transaction to be effected between the Issuer and another account advised by it or any of its Affiliates; provided that, if and to the extent required by the Advisers Act, such authorization is terminable prior to the initiation of such cross-transaction at the Issuer’s option without penalty. Such termination shall be effective upon receipt by the Collateral Manager of written notice from the Issuer. Subject to the Collateral Manager’s execution obligations described in Sections 3(a), 3(b) and 3(e) and the covenants set forth in Section 5, the Collateral Manager is hereby authorized to effect principal transactions and transactions where the Issuer may invest in securities of issuers in which the Collateral Manager and/or its Affiliates have a debt, equity or participation interest, in each case in accordance with applicable law.

 

 

(e)            The Issuer acknowledges and agrees that the Collateral Manager or any of its Affiliates may acquire or sell obligations or securities, for its own account or for the accounts of its customers, without either requiring or precluding the acquisition or sale of such obligations or securities for the account of the Issuer. Such investments may be the same or different from those made on behalf of the Issuer as to direction, amount, timing or other terms. The Issuer acknowledges that the Collateral Manager and its Affiliates may enter into, for their own accounts or for the accounts of others, credit default swaps relating to obligors with respect to the Collateral Obligations included in the Assets.

 

Section 4.       Additional Activities of the Collateral Manager.

 

Nothing herein shall prevent the Collateral Manager or any of its Affiliates from engaging in other businesses, or from rendering services of any kind to the Issuer, the Trustee, the Initial Purchaser, any holder or beneficial owner of Notes or their respective Affiliates or any other Person or entity regardless of whether such business is in competition with the Issuer or otherwise. Without prejudice to the generality of the foregoing, partners, members, shareholders, directors, managers, officers, employees and agents of the Collateral Manager, Affiliates of the Collateral Manager, and the Collateral Manager may:

 

(a)            serve as managers or directors (whether supervisory or managing), officers, employees, partners, agents, nominees or signatories for the Issuer or any Affiliate thereof, or for any obligor in respect of any of the Collateral Obligations, Equity Securities or Eligible Investments or any Affiliate thereof, to the extent permitted by their respective Organizational Instruments and Underlying Instruments, as from time to time amended, or by any resolutions duly adopted by the Issuer, its Affiliates or any obligor in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities (or any Affiliate thereof) pursuant to their respective Organizational Instruments;

 

(b)            receive fees for services of whatever nature rendered to the obligor in respect of any of the Collateral Obligations, Eligible Investments or Equity Securities or any Affiliate thereof;

 

(c)            be retained to provide services unrelated to this Agreement to the Issuer or its Affiliates, and be paid therefor, on an arm’s-length basis;

 

(d)            be a secured or unsecured creditor of, or hold a debt obligation of or equity interest in, the Issuer or any Affiliate thereof or any obligor of any Collateral Obligation, Eligible Investment or Equity Security or any Affiliate thereof;

 

(e)            subject to Section 3(b), Section 5 and applicable law sell any Collateral Obligation or Eligible Investment to, or purchase or acquire any Collateral Obligation, Equity Security or Eligible Investment from, the Issuer while acting in the capacity of principal or agent;

 

(f)             underwrite, arrange, structure, originate, syndicate, act as a distributor of or make a market in any Collateral Obligation, Equity Security or Eligible Investment;

 

 

(g)            serve as a member of any “creditors’ board”, “creditors’ committee” or similar creditor group with respect to any Collateral Obligation, Defaulted Obligation, Eligible Investment or Equity Security; or

 

(h)            act as collateral manager, portfolio manager, investment manager and/or investment adviser or sub-adviser in collateralized bond obligation vehicles, collateralized loan obligation vehicles and other similar warehousing or financing vehicles or other investment vehicles.

 

As a result, such individuals may possess information relating to obligors of Collateral Obligations that is (a) not known to or (b) known but restricted as to its use by the individuals at the Collateral Manager responsible for monitoring the Collateral Obligations and performing the other obligations of the Collateral Manager under this Agreement. Each of such ownership and other relationships may result in securities laws restrictions on transactions in such securities by the Issuer and otherwise create conflicts of interest for the Issuer. The Issuer acknowledges and agrees that, in all such instances, the Collateral Manager and its Affiliates may in their discretion make investment recommendations and decisions that may be the same as or different from those made with respect to the Issuer’s investments and they have no duty, in making or managing such other investments, to act in a way that is favorable to the Issuer.

 

The Issuer acknowledges that there are generally no ethical screens or information barriers among the Collateral Manager and certain of its Affiliates of the type that many firms implement to separate Persons who make investment decisions from others who might possess material, non-public information that could influence such decisions. The officers or Affiliates of the Collateral Manager may possess information relating to obligors of Collateral Obligations that is not known to the individuals at the Collateral Manager responsible for monitoring the Collateral Obligations and performing the other obligations under this Agreement. The Collateral Manager may from time to time come into possession of material nonpublic information that limits the ability of the Collateral Manager to effect a transaction for the Issuer, and the Issuer’s investments may be constrained as a consequence of the Collateral Manager’s inability to use such information for advisory purposes or otherwise to effect transactions that otherwise may have been initiated on behalf of its clients, including the Issuer.

 

Unless the Collateral Manager determines in its sole discretion that a Transaction complies with the provisions of Section 5, the Collateral Manager will not direct the Trustee to acquire or sell securities issued by (i) Persons of which the Collateral Manager, any of its Affiliates or any of its officers, directors or employees are directors or officers, (ii) Persons of which the Collateral Manager, or any of its respective Affiliates act as principal or (iii) Persons about which the Collateral Manager or any of its Affiliates have material non-public information which the Collateral Manager deems would prohibit it from advising as to the trading of such securities in accordance with applicable law. For the avoidance of doubt, the Trustee will have no obligation or duty to ensure compliance with the foregoing.

 

 

It is understood that the Collateral Manager and any of its Affiliates may engage in any other business and furnish investment management and advisory services to others, including Persons which may have investment policies similar to or different from those followed by the Collateral Manager with respect to the Assets and which may own securities or debt obligations of the same class, or which are of the same type, as the Collateral Obligations or the Eligible Investments or other securities or debt obligations of the obligors of the Collateral Obligations or the Eligible Investments as well as other assets that are the same or similar to other assets owned by the Issuer. The Collateral Manager will be free, in its sole discretion, to make recommendations to others, or effect transactions on behalf of itself or for others, which may be the same as or different from those effected with respect to the Assets. Nothing in the Indenture or this Agreement shall prevent the Collateral Manager or any of its Affiliates, acting either as principal or agent on behalf of others, from buying or selling, or from recommending to or directing any other account to buy or sell, at any time, securities or obligations of the same kind or class, or securities or obligations of a different kind or class of the same obligor, as those directed by the Collateral Manager to be purchased or sold on behalf of the Issuer. It is understood that, to the extent permitted by applicable law, the Collateral Manager, its Owners, their Affiliates or their respective Related Persons or any member of their families or a Person or entity advised by the Collateral Manager may have an interest in a particular transaction or in securities or obligations of the same kind or class, or securities or obligations of a different kind or class of the same obligor, as those whose acquisition or sale the Collateral Manager may direct hereunder. If, in light of market conditions and investment objectives, the Collateral Manager determines that it would be advisable to purchase the same item of Collateral Obligation both for the Issuer, and either the proprietary account of the Collateral Manager or any Affiliate of the Collateral Manager or another client of the Collateral Manager, the Collateral Manager will allocate such investment opportunities across such entities for which such opportunities are appropriate consistent with (i) its Internal Policies, as the same may be amended from time to time, (ii) any applicable requirements of the Advisers Act and (iii) any allocation and/or co-investment policy or agreement entered into with any such entity. The Collateral Manager shall use commercially reasonable efforts to allocate such investment opportunities in a manner that will be fair and equitable over time. The Issuer agrees that, in the course of managing the Collateral Obligations held by the Issuer, the Collateral Manager may consider its relationships with other Clients (including obligors and issuers) and its Affiliates. The Collateral Manager may decline to make a particular investment for the Issuer in view of such relationships.

 

The Issuer acknowledges that the Collateral Manager and its Affiliates or their other clients may make and/or hold investments in an obligor’s obligations or securities that may be pari passu, senior or junior in ranking to an investment in such obligor’s obligations or securities made and/or held by the Issuer, or otherwise have interests different from or adverse to those of the Issuer.

 

 

Section 5.       Conflicts of Interest.

 

Subject to compliance with applicable laws and regulations and subject to this Agreement and the Indenture, the Collateral Manager is hereby authorized to effect client cross-transactions where the Collateral Manager may cause the Issuer and direct the Trustee to acquire a Collateral Obligation or Eligible Investment from, or sell a Collateral Obligation, Equity Security or Eligible Investment to, any client advised by the Collateral Manager or any of its Affiliates for market value (or, in the case of a sale to any such client or its Affiliate, for at least market value) or, in the absence of a readily ascertainable market value, at an amount that is equal to “fair value” (or, in the case of a sale to any such client or its Affiliate, for an amount that is at least equal to “fair value”) as reasonably determined by the Collateral Manager in accordance with its relevant policies and procedures. Subject to compliance with applicable laws and regulations and subject to this Agreement and the Indenture, the Collateral Manager may effect principal transactions where the Collateral Manager may cause the Issuer and direct the Trustee to acquire a Collateral Obligation or Eligible Investment from, or sell a Collateral Obligation, Equity Security or Eligible Investment to, the Collateral Manager or any of its Affiliates for market value (or, in the case of a sale to the Collateral Manager or its Affiliates, for at least market value) or, in the absence of a readily ascertainable market value, at an amount that is equal to “fair value” (or, in the case of a sale to the Collateral Manager or its Affiliates, for an amount that is at least equal to “fair value”) as reasonably determined by the Collateral Manager in accordance with its relevant policies and procedures; provided that the Collateral Manager shall obtain consent to such transaction from the Independent Review Party following written disclosure thereto prior to settlement of such transaction which shall constitute the consent of the Issuer required under Section 206(3) of the Advisers Act (an “Affiliate Transaction”). Subject to compliance with applicable laws and regulations and subject to this Agreement and the Indenture, the Collateral Manager is hereby authorized to effect agency cross-transactions where the Collateral Manager or any of its Affiliates may act as broker for the Issuer or for the other party in connection with the acquisition of a Collateral Obligation or Eligible Investment or disposition or exchange of a Collateral Obligation, Equity Security or Eligible Investment and receive compensation therefor; provided that, if and to the extent required by the Advisers Act, such authorization is terminable prior to the completion of such agency cross-transaction at the Issuer’s option without penalty, such termination to be effective upon receipt by the Collateral Manager of written notice from the board of directors of the BDC, as designated manager of the Issuer. The Collateral Manager and its Affiliates so acting have a potentially conflicting division of loyalties and responsibilities to both parties to such transactions. The Issuer understands and expects that the Collateral Manager will engage in a significant amount of client cross-transactions. The Issuer understands that Collateral Obligations or Equity Securities that are fair valued in accordance with the Collateral Manager’s valuation policies generally will not have readily ascertainable market values and that the fair value assigned to such Collateral Obligations or Equity Securities, as determined in good faith by the Collateral Manager in accordance with its policies and procedures, may not match the next available and reliable market price or, in retrospect, have been the price at which the Collateral Obligation or Equity Security could have been purchased or sold. The Issuer acknowledges that the Collateral Manager or an Affiliate thereof may hold or beneficially own a portion of the outstanding Notes. In certain circumstances, the interests of the Issuer and/or the holders with respect to matters as to which the Collateral Manager is advising the Issuer may conflict with the interests of the Collateral Manager and its Affiliates. The Issuer hereby acknowledges that various potential and actual conflicts of interest may exist with respect to the Collateral Manager as described in this Agreement, the Indenture, the Offering Circulars provided by the Issuer for the Notes or the Form ADV of the Collateral Manager; provided that nothing in this Section 5 shall be construed as altering the duties of the Collateral Manager as set forth herein, in the Indenture or under applicable law. With respect to the approval of Affiliate Transactions, the Issuer hereby appoints the independent directors of the BDC, the Issuer’s designated manager, to act on the Issuer’s behalf by majority vote (a majority of such directors, the “Independent Review Party”).

 

 

Section 6.       Records; Confidentiality.

 

The Collateral Manager shall maintain or cause to be maintained appropriate books of account and records relating to its services performed hereunder, and such books of account and records shall be accessible for inspection by representatives of the Issuer, the Trustee, the Holders, and the Independent accountants appointed by the Collateral Manager on behalf of the Issuer pursuant to Article X of the Indenture at any time during normal business hours and upon not less than three Business Days’ prior notice. The Collateral Manager shall keep confidential any and all information obtained in connection with the services rendered hereunder and shall not disclose any such information to non-affiliated third parties (excluding any Holders and beneficial owners of Notes) except (a) with the prior written consent of the Issuer, (b) such information as the Rating Agencies shall reasonably request in connection with its rating of the Secured Notes or supplying credit estimates on any obligation included in the Assets, (c) in connection with establishing trading or investment accounts or otherwise in connection with effecting Transactions on behalf of the Issuer, (d) as required by (i) applicable law, regulation, court order, or a request by a governmental regulatory agency with jurisdiction over the Collateral Manager or any of its Affiliates or (ii) the rules or regulations of any self-regulating organization, body or official having jurisdiction over the Collateral Manager or any of its Affiliates, (e) to its professional advisors (including, without limitation, legal, tax and accounting advisors), (f) such information as shall have been publicly disclosed other than in known violation of this Agreement or the provisions of the Indenture or shall have been obtained by the Collateral Manager on a non-confidential basis, (g) such information as is necessary or appropriate to disclose so that the Collateral Manager may perform its duties hereunder, under the Indenture or any other Transaction Document or (h) general performance information which may be used by the Collateral Manager, its Affiliates or Owners in connection with their marketing activities. Notwithstanding the foregoing, it is agreed that the Collateral Manager may disclose (a) that it is serving as collateral manager of the Issuer, (b) the nature, aggregate principal amount and overall performance of the Issuer’s assets, (c) the amount of earnings on the Assets, (d) such other information about the Issuer, the Assets and the Notes as is customarily disclosed by managers of collateralized loan obligations and (e) each of its respective employees, representatives or other agents may disclose to any and all Persons, without limitation of any kind, the U.S. federal income tax treatment and U.S. federal income tax structure of the transactions contemplated by the Indenture, this Agreement and the related documents and all materials of any kind (including opinions and other tax analyses) that are provided to them relating to such U.S. federal income tax treatment and U.S. income tax structure. For purposes of this Section 6, the Holders shall not be considered “non-affiliated third parties.”

 

Nothing in this Section 6 prohibits any Person from reporting possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the United States Congress, and any agency inspector general, or making other disclosures that are protected under the whistleblower provisions of federal law or regulation. There is no prior authorization necessary hereunder to make any such reports or disclosures and there is no requirement hereunder to notify the Collateral Manager that any such reports or disclosures have been made.

 

 

Section 7.       Obligations of Collateral Manager.

 

In accordance with the performance standard set forth in Section 2(a), the Collateral Manager shall take care to avoid taking any action that would (a) materially adversely affect the status of the Issuer for purposes of United States federal or state law, or other law applicable to the Issuer, (b) not be permitted by the Issuer’s Organizational Instruments, copies of which the Collateral Manager acknowledges the Issuer has provided to the Collateral Manager, (c) violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer, including, without limitation, actions which would violate any United States federal, state or other applicable securities law that is known by the Collateral Manager to be applicable to it and, in each case, the violation of which would have a Material Adverse Effect on the Issuer or have a material adverse effect on the ability of the Collateral Manager to perform its obligations hereunder, (d) require registration of the Issuer or the pool of Assets as an “investment company” under Section 8 of the 1940 Act or (e) knowingly and willfully adversely affect the interests of the Holders in the Assets in any material respect (other than (i) as expressly permitted hereunder or under the Indenture or (ii) in connection with any action taken in the ordinary course of business of the Collateral Manager in accordance with its fiduciary duties to its clients). If the Collateral Manager is ordered by the designated manager of the Issuer or the requisite Holders or beneficial owners of Notes to take any action which would, or could reasonably be expected to, in each case in its reasonable business judgment, have any such consequences, the Collateral Manager shall promptly notify the Issuer that such action would, or could reasonably be expected to, in each case in its reasonable business judgment, have one or more of the consequences set forth above and shall not take such action unless the designated manager of the Issuer then request the Collateral Manager to do so and both a Majority of the Controlling Class and a Majority of the Subordinated Notes have consented thereto in writing. Notwithstanding any such request, the Collateral Manager shall not take such action unless (1) arrangements satisfactory to it are made to insure or indemnify the Collateral Manager, Affiliates of the Collateral Manager and shareholders, partners, directors, members, managers, officers or employees of the Collateral Manager or such Affiliates from any liability and expense it may incur as a result of such action and (2) if the Collateral Manager so requests in respect of a question of law, the Issuer delivers to the Collateral Manager an Opinion of Counsel (from outside counsel satisfactory to the Collateral Manager) that the action so requested does not violate any law, rule or regulation of any governmental body or agency having jurisdiction over the Issuer or over the Collateral Manager. Neither the Collateral Manager nor its Affiliates, shareholders, partners, directors, members, managers, officers or employees shall be liable to the Issuer or any other Person, except as provided in Section 10. Notwithstanding anything contained in this Agreement to the contrary, any indemnification or insurance by the Issuer provided for in this Section 7 or Section 10 shall be payable out of the Assets in accordance with the Priority of Payments, and the Collateral Manager may take into account such Priority of Payments in determining whether any proposed indemnity arrangements contemplated by this Section 7 are satisfactory.

 

Section 8.       Compensation.

 

(a)            As compensation for its performance of its obligations as Collateral Manager under this Agreement, the Collateral Manager will be entitled to receive on each Payment Date (in accordance with the Priority of Payments) a fee (the “Collateral Management Fee”). The Collateral Management Fee shall be payable on each Payment Date to the extent of the funds available for such purpose in accordance with the Priority of Payments.

 

 

The Collateral Management Fee is payable to the Collateral Manager in arrears, on each Payment Date (prorated for the related Interest Accrual Period) in an amount equal to 0.35%, per annum (calculated on the basis of the actual number of days in the applicable Collection Period divided by 360) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date; provided that the Collateral Management Fee payable on any Payment Date shall not include any such fee (or any portion thereof) that has been waived or deferred by the Collateral Manager pursuant to this Section 8 no later than the Determination Date immediately prior to such Payment Date.

 

The Collateral Management Fee is payable on each Payment Date only to the extent that sufficient Interest Proceeds or Principal Proceeds are available. To the extent the Collateral Management Fee is not paid on a Payment Date due to insufficient Interest Proceeds or Principal Proceeds (and such fee was not voluntarily deferred or waived by the Collateral Manager), the unpaid portion of the Collateral Management Fee due on such Payment Date (the “Collateral Management Fee Shortfall Amount”) will be automatically deferred for payment on the succeeding Payment Date, with interest, in accordance with the Priority of Payments. Interest on Collateral Management Fee Shortfall Amounts shall accrue at the Prime Rate for the period beginning on the first Payment Date after the Refinancing Date on which the related Collateral Management Fee was due (and not paid) through the Payment Date on which such Collateral Management Fee Shortfall Amount (including accrued interest) is paid.

 

At the option of the Collateral Manager, by written notice to the Trustee and the Collateral Administrator, no later than the Determination Date immediately prior to such Payment Date, on each Payment Date, (i) all or a portion of the Collateral Management Fees or the Collateral Management Fee Shortfall Amount (including accrued interest) due and owing on such Payment Date may be deferred for payment on a subsequent Payment Date, without interest (the “Current Deferred Management Fee”) and (ii) all or a portion of the previously deferred Collateral Management Fees or Collateral Management Fee Shortfall Amounts (including accrued interest prior to the Payment Date on which the payment of such Collateral Management Fee Shortfall Amount was deferred by the Collateral Manager) (collectively, the “Cumulative Deferred Management Fee”) may be declared due and payable (to the extent there are sufficient Interest Proceeds and Principal Proceeds therefor).

 

At such time as the Secured Notes are redeemed in connection with an Optional Redemption, a Tax Redemption or Clean-Up Call Redemption without duplication, all accrued and unpaid Collateral Management Fees, Current Deferred Management Fees, Collateral Management Fee Shortfall Amounts (including accrued interest) and Cumulative Deferred Management Fees (the “Aggregate Collateral Management Fee”) shall be due and payable to the Collateral Manager.

 

(b)            The Collateral Manager may, in its sole discretion (but shall not be obligated to), elect to waive all or any portion of the Collateral Management Fee payable to the Collateral Manager on any Payment Date, notwithstanding that the Collateral Manager may be entitled to such Collateral Management Fee. Any such election shall be made by the Collateral Manager delivering written notice thereof to the Issuer, the Trustee and the Collateral Administrator no later than the Determination Date immediately prior to such Payment Date. Any election to waive the Collateral Management Fee may also be made by written standing instructions to the Trustee and the Collateral Administrator; provided that such standing instructions may be rescinded by the Collateral Manager at any time.

 

 

(c)            Except as otherwise set forth herein and in the Indenture, the Collateral Manager will continue to serve as collateral manager under this Agreement notwithstanding that the Collateral Manager will not have received amounts due to it under this Agreement because sufficient funds were not then available hereunder to pay such amounts in accordance with the Priority of Payments.

 

(d)            If this Agreement is terminated for any reason, or the Collateral Manager resigns or is removed, (i) any Collateral Management Fees calculated as provided in Section 8(a) shall be prorated for any partial period elapsing from the last Payment Date on which such Collateral Manager received the Collateral Management Fee to the effective date of such termination, resignation or removal and (ii) any unpaid Cumulative Deferred Management Fees and Collateral Management Fee Shortfall Amounts (including related interest) shall be determined as of the effective date of such termination, resignation or removal and, in each case, shall be due and payable on each Payment Date following the effective date of such termination, resignation or removal in accordance with the Priority of Payments until paid in full; provided, however, that, notwithstanding the foregoing or any other provision contained herein, in the event the Collateral Manager’s services terminate other than by reason of an involuntary termination not for cause, then the terminating Collateral Manager shall not be entitled to any deferred Collateral Management Fee on any Payment Date following the date of such termination. Otherwise, such Collateral Manager shall not be entitled to any further compensation hereunder for further services but shall be entitled to receive any expense reimbursement accrued to the effective date of termination, resignation or removal and any indemnity amounts owing (or that may become owing) under Section 10. Any Aggregate Collateral Management Fee expense reimbursement and indemnities owed to such Collateral Manager or owed to any successor Collateral Manager on any Payment Date shall be paid pro rata based on the amount thereof then owing to each such Person, subject to the Priority of Payments.

 

Section 9.       Benefit of the Agreement.

 

The Collateral Manager shall perform its obligations hereunder and under the Indenture in accordance with the terms of this Agreement and the terms of the Indenture applicable to it. The Collateral Manager agrees and consents to the provisions contained in Section 15.1(f) of the Indenture. In addition, the Collateral Manager acknowledges the pledge under the granting clause of the Indenture.

 

 

Section 10.       Limits of Collateral Manager Responsibility.

 

(a)            None of the Collateral Manager, its Affiliates, its Owners or their respective Related Persons assumes any responsibility under this Agreement except that the Collateral Manager agrees to render the services required to be performed by it hereunder and under the terms of the Indenture applicable to it. The Collateral Manager shall not be responsible for any action or inaction of the Issuer or the Trustee in following or declining to follow any advice, recommendation or direction of the Collateral Manager including as set forth in Section 7. The Indemnified Parties shall not be liable to the Issuer, the Trustee, any Holder, any beneficial owner of Notes, the Initial Purchaser, any of their respective Affiliates, Owners or Related Persons or any other Persons for any act, omission, error of judgment, mistake of law, or for any claim, loss, liability, damage, judgment, assessment, settlement, cost, or other expense (including attorneys’ fees and expenses and court costs) arising out of any investment, or for any other act or omission in the performance of the Collateral Manager’s obligations under or in connection with this Agreement or the terms of any other Transaction Document applicable to the Collateral Manager, incurred as a result of actions taken or recommended or for any omissions of the Collateral Manager, or for any decrease in the value of the Assets, except for liability to which the Collateral Manager would be subject (i) by reason of acts or omissions constituting bad faith, willful misconduct or gross negligence in the performance of its duties hereunder and under the terms of the Indenture or (ii) with respect to the CM Information in each Offering Circular, as of the date made, containing any untrue statement of a material fact or omitting to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (the preceding clauses (i) and (ii) collectively referred to for purposes of this Section 10 as “Collateral Manager Breaches”). The Collateral Manager shall not be liable for any consequential, indirect, special, punitive, exemplary or treble damages or lost profits hereunder or under the Indenture. The Collateral Manager and any of its Affiliates may consult with counsel, independent accountants or any other experts selected by them and shall not be liable for any action taken or omitted to be taken by them in accordance with their advice. Nothing contained herein shall be deemed to waive any liability which cannot be waived under applicable state or federal law or any rules or regulations thereunder.

 

(b)            The Issuer shall indemnify and hold harmless the Collateral Manager, its Affiliates and Owners and their respective Related Persons (each, an “Indemnified Party”) from and against any and all losses, claims, damages, judgments, assessments, costs or other liabilities (collectively, “Losses”) and will promptly reimburse each such Indemnified Party for all reasonable fees and expenses incurred by an Indemnified Party with respect thereto (including reasonable fees and expenses of counsel) (collectively, “Expenses”) arising out of or in connection with the issuance of the Notes (including, without limitation, any untrue statement of material fact contained in each Offering Circular, or omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, other than CM Information), the transactions contemplated by the applicable Offering Circular, the Indenture, this Agreement, the other Transaction Documents, any Underlying Instruments and the performance of the Assets and any acts or omissions of any such Indemnified Party; provided that such Indemnified Party shall not be indemnified for any Losses or Expenses incurred as a result of any Collateral Manager Breach. Notwithstanding anything contained herein to the contrary, the obligations of the Issuer under Section 10 to indemnify any Indemnified Party for any Losses or Expenses are non-recourse obligations of the Issuer payable solely out of the Assets in accordance with the Priority of Payments set forth in the Indenture.

 

 

(c)            The Collateral Manager shall not be responsible or liable for any failure or delay in the performance of its duties and obligations under this Agreement and/or the Indenture arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, pandemics, epidemics, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services.

 

(d)            It is understood that certain provisions of this Agreement may serve to limit the potential liability of the Collateral Manager. The Issuer has had the opportunity to consult with the Collateral Manager as well as, if desired, its professional advisors and legal counsel as to the effect of these provisions. It is further understood that certain applicable laws, including applicable federal or state securities laws, may impose liability or allow for legal remedies even where the Collateral Manager has acted in good faith and that the rights under those laws may be non-waivable. Nothing in this Agreement shall, in any way, constitute a waiver or limitation of any rights which may not be so limited or waived in accordance with applicable law, including with respect to the breach of any fiduciary duty owed under Section 206 of the Advisers Act.

 

Section 11.       No Joint Venture.

 

The Issuer and the Collateral Manager are not partners or joint venturers with each other and nothing herein shall be construed to make them such partners or joint venturers or impose any liability as such on either of them. The Collateral Manager shall be deemed, for all purposes herein, an independent contractor and shall, except as otherwise expressly provided herein or in the Indenture or authorized by the Issuer from time to time, have no authority to act for or represent the Issuer in any way or otherwise be deemed an agent of the Issuer. It is acknowledged that neither the Collateral Manager nor any of its Affiliates has provided or shall provide any tax, accounting or legal advice or assistance to the Issuer or any other Person in connection with the transactions contemplated hereby.

 

Section 12.       Term; Termination.

 

(a)            This Agreement shall commence as of the date first set forth above and shall continue in force until the first of the following occurs: (i) the final liquidation of the Assets and the final distribution of the proceeds of such liquidation to the Holders, (ii) the payment in full of the Notes, and the satisfaction and discharge of the Indenture in accordance with the respective terms or (iii) the early termination of this Agreement in accordance with Section 12(b) or (e) or Section 14.

 

(b)            Subject only to clause (c) below, the Collateral Manager may resign, upon 90 days’ prior written notice to the Issuer (or such shorter notice as is acceptable to the Issuer), the Holders, and the Trustee; provided that the Collateral Manager shall have the right to resign immediately upon the effectiveness of any material change in applicable law or regulations which renders the performance by the Collateral Manager of its duties hereunder or under the Indenture to be a violation of such law or regulation.

 

 

(c)            Notwithstanding the provisions of clause (b) above, no resignation or removal of the Collateral Manager or termination of this Agreement pursuant to such clause shall be effective until the date as of which a successor Collateral Manager shall have been appointed and approved in accordance with Section 12(d) and has accepted all of the Collateral Manager’s duties and obligations pursuant to this Agreement in writing (an “Instrument of Acceptance”) and has assumed such duties and obligations.

 

(d)            Promptly after notice of any removal under Section 14 or any resignation of the Collateral Manager that is to take place while any of the Notes are Outstanding, the Issuer shall transmit copies of such notice to the Trustee (who shall forward a copy of such notice to the Holders of the Notes) and the Rating Agencies (provided that in the case of Fitch, only for so long as any Class A-1 Notes remain outstanding) and shall appoint an institution as Collateral Manager, at the direction of a Majority of the Subordinated Notes, which institution (i) has demonstrated an ability, whether as an entity or by its principals or employees, to professionally and competently perform duties similar to those imposed upon the Collateral Manager hereunder, (ii) is legally qualified and has the capacity to assume all of the responsibilities, duties and obligations of the Collateral Manager hereunder and under the applicable terms of the Indenture, (iii) does not cause or result in the Issuer becoming, or require the pool of Assets to be registered as, an investment company under the 1940 Act, (iv) with respect to which the Global Rating Agency Condition has been satisfied and (v) has been approved by a Majority of the Controlling Class.

 

(e)            If (i) a Majority of the Subordinated Notes fails to nominate a successor within 30 days of initial notice of the resignation or removal of the Collateral Manager or (ii) a Majority of the Controlling Class does not approve the proposed successor nominated by the Holders of the Subordinated Notes within ten days of the date of the notice of such nomination, then a Majority of the Controlling Class shall, within 60 days of the failure described in clauses (i) or (ii) of this sentence, as the case may be, nominate a successor Collateral Manager that meets the criteria set forth in Section 12(d). If a Majority of the Subordinated Notes approves such Controlling Class nominee, such nominee shall become the Collateral Manager. If no successor Collateral Manager is appointed within 90 days (or, in the event of a change in applicable law or regulation which renders the performance by the Collateral Manager of its duties under this Agreement or the Indenture to be a violation of such law or regulation, within 30 days) following the termination or resignation of the Collateral Manager, any of the Collateral Manager, a Majority of the Subordinated Notes and a Majority of the Controlling Class shall have the right to petition a court of competent jurisdiction to appoint a successor Collateral Manager, in either such case whose appointment shall become effective after such successor has accepted its appointment and without the consent of any holder or beneficial owner of any Notes.

 

(f)            The successor Collateral Manager shall be entitled to the Collateral Management Fee set forth in Section 8(a) and no compensation payable to such successor Collateral Manager shall be greater than as set forth in Section 8(a) without the prior written consent of 100% of the Holders of each Class of Notes voting separately by Class, including Collateral Manager Notes. Upon the later of the expiration of the applicable notice periods with respect to termination specified in this Section 12 or in Section 14 and the acceptance of its appointment hereunder by the successor Collateral Manager, all authority and power of the Collateral Manager hereunder, whether with respect to the Assets or otherwise, shall automatically and without action by any person or entity pass to and be vested in the successor Collateral Manager. The Issuer, the Trustee and the successor Collateral Manager shall take such action (or the Issuer shall cause the outgoing Collateral Manager to take such action) consistent with this Agreement and as shall be necessary to effect any such succession.

 

 

(g)            If this Agreement is terminated pursuant to this Section 12, such termination shall be without any further liability or obligation of either party to the other, except as provided in clause (h) below.

 

(h)            Sections 6, 7 (with respect to any indemnity or insurance provided thereunder), 10, 12(h), 15, 17, 21, 22, 23 and 25 shall survive any termination of this Agreement pursuant to this Section 12 or Section 14.

 

Section 13.       Assignments.

 

(a)            Except as otherwise provided in this Section 13, the Collateral Manager may not assign or delegate (except as provided in Section 2(e)) its rights or responsibilities under this Agreement unless (i) the Global Rating Agency Condition has been satisfied with respect thereto, (ii) the consent of the Issuer has been obtained with respect thereto and (iii) such assignment or delegation has not been disapproved in writing by (A) a Majority of the Subordinated Notes and (B) for an assignment to any person who is not an Affiliate of the Collateral Manager that is a Registered Investment Adviser, a Majority of the Controlling Class within 30 days’ notice of such assignment. The Collateral Manager shall not be required to obtain such consents or satisfy such condition with respect to a change of control transaction that is deemed to be an assignment within the meaning of Section 202(a)(1) of the Advisers Act at the time of any such transaction; provided that, if the Collateral Manager is a Registered Investment Adviser, the Collateral Manager shall obtain the consent of the Issuer to such assignment, in a manner consistent with SEC Staff interpretations of Section 205(a)(2) of the Advisers Act.

 

(b)            The Collateral Manager may without satisfaction of the Global Rating Agency Condition, without obtaining the consent of any holder or beneficial owner of any Notes and, so long as such assignment or delegation does not constitute an “assignment” for purposes of Section 205(a)(2) of the Advisers Act during such time as the Collateral Manager is a Registered Investment Adviser, without obtaining the prior consent of the Issuer, (1) assign any of its rights or obligations under this Agreement to an Affiliate; provided that such Affiliate (i) has demonstrated an ability to professionally and competently perform duties similar to those imposed upon the Collateral Manager pursuant to this Agreement, (ii) has the legal right and capacity to act as Collateral Manager under this Agreement and (iii) shall not cause the Issuer or the pool of Assets to become required to register under the provisions of the 1940 Act or (2) enter into (or have its parent enter into) any consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all of its assets to, another entity; provided further that, at the time of such consolidation, merger, amalgamation or transfer the resulting, surviving or transferee entity assumes all the obligations of the Collateral Manager under this Agreement generally and the other entity is solely a continuation of the Collateral Manager in another corporate or similar form and has substantially the same staff; provided further that such action does not cause the Issuer to be subject to tax in any jurisdiction outside of its jurisdiction of formation; provided further that the Collateral Manager shall deliver prior notice to the Rating Agencies (provided that in the case of Fitch, only for so long as any Class A-1 Notes remain outstanding) of any assignment, delegation or combination thereof made pursuant to this sentence. Upon the execution and delivery of any such assignment by the assignee, the Collateral Manager will be released from further obligations pursuant to this Agreement except with respect to its obligations and agreements arising under Sections 10, 12(g), 17, 21 through 24, and 26 in respect of acts or omissions occurring prior to such assignment and except with respect to its obligations under Section 15 after such assignment.

 

 

(c)            This Agreement shall not be assigned by the Issuer without (i) the prior written consent of (A) the Collateral Manager, (B) a Majority of the Subordinated Notes and (C) a Majority of each Class of Secured Notes (voting separately) and (ii) satisfaction of the Global Rating Agency Condition, except in the case of assignment by the Issuer (1) to an entity which is a successor to the Issuer permitted under the Indenture, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Issuer is bound thereunder or (2) to the Trustee as contemplated by the granting clause of the Indenture. The Issuer has assigned its rights, title and interest in (but not its obligations under) this Agreement to the Trustee pursuant to the Indenture; and the Collateral Manager by its signature below agrees to, and acknowledges, such assignment. Upon assignment by the Issuer, the Issuer shall use reasonable efforts to cause such assignee to execute and deliver to the Collateral Manager such documents as the Collateral Manager shall consider reasonably necessary to effect fully such assignment.

 

(d)            The Issuer shall provide the Rating Agencies and the Trustee (who shall provide a copy of such notice to the Controlling Class) with notice of any assignment pursuant to this Section 13.

 

Section 14.       Removal for Cause.

 

(a)            The Collateral Manager may be removed for Cause upon 30 Business Days’ prior written notice by the Issuer (“Termination Notice”) at the direction of a Supermajority of the Controlling Class or a Majority of the Subordinated Notes. Simultaneous with its direction to the Issuer to remove the Collateral Manager for Cause, a Majority of the Subordinated Notes or a Supermajority of the Controlling Class, as applicable, shall give to the Issuer a written statement setting forth the reason for such removal (“Statement of Cause”). The Issuer shall deliver to the Trustee (who shall deliver a copy of such notice to the Holders) a copy of the Termination Notice and the Statement of Cause within five Business Days of receipt. No such removal shall be effective (A) until the date as of which a successor Collateral Manager shall have been appointed in accordance with Sections 12(d) and (e) and delivered an Instrument of Acceptance to the Issuer and the removed Collateral Manager and the successor Collateral Manager has effectively assumed all of the Collateral Manager’s duties and obligations and (B) unless the Statement of Cause has been delivered to the Issuer as set forth in this Section 14(a). “Cause” means any of the following:

 

 (i)           the Collateral Manager shall willfully and intentionally violate, or takes any action that it actually knows breaches, any material provision of this Agreement or the Indenture applicable to it (not including a willful and intentional breach that results from a good faith dispute regarding reasonable alternative courses of action or interpretation of instructions);

 

 

 (ii)          the Collateral Manager shall breach any material provision of this Agreement or any terms of the Indenture applicable to it (other than as covered by clause (i) and it being understood that failure to meet any Concentration Limitation, Collateral Quality Test or Coverage Test is not a breach for purposes of this clause (ii), which breach would reasonably be expected to have a Material Adverse Effect on any Class of Holders and shall not cure such breach (if capable of being cured) within 30 days after the earlier to occur of a Responsible Officer of the Collateral Manager receiving notice or having actual knowledge of such breach, unless, if such breach is remediable, the Collateral Manager has taken action commencing the cure thereof within such 30 day period that the Collateral Manager believes in good faith will remedy such breach within 60 days after the earlier to occur of a Responsible Officer receiving notice or having actual knowledge thereof;

 

 (iii)         the failure of any representation, warranty, certification or statement made or delivered by the Collateral Manager in or pursuant to this Agreement or the Indenture to be correct in any material respect when made which failure (A) would reasonably be expected to have a Material Adverse Effect on any Class of Holders and (B) is not corrected by the Collateral Manager within 45 days of a Responsible Officer of the Collateral Manager receiving notice of such failure, unless, if such failure is remediable, the Collateral Manager has taken action commencing the cure thereof within such 45 day period that the Collateral Manager believes in good faith will remedy such failure within 75 days after the earlier to occur of a Responsible Officer receiving notice thereof or having actual knowledge thereof; 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 satisfy clause (a) of the Investment Criteria shall cure any breach or failure arising therefrom as of the date of such failure;

 

 (iv)         the Collateral Manager is wound up or dissolved or there is appointed over it or a substantial part of its assets a receiver, administrator, administrative receiver, trustee or similar officer; or the Collateral Manager (A) ceases to be able to, or admits in writing its inability to, pay its debts as they become due and payable, or makes a general assignment for the benefit of, or enters into any composition or arrangement with, its creditors generally; (B) applies for or consents (by admission of material allegations of a petition or otherwise) to the appointment of a receiver, trustee, assignee, custodian, liquidator or sequestrator (or other similar official) of the Collateral Manager or of any substantial part of its properties or assets in connection with any winding up, liquidation, reorganization or other relief under any bankruptcy, insolvency, receivership or similar law, or authorizes such an application or consent, or proceedings seeking such appointment are commenced without such authorization, consent or application against the Collateral Manager and continue undismissed for 60 days; (C) authorizes or files a voluntary petition in bankruptcy, or applies for or consents (by admission of material allegations of a petition or otherwise) to the application of any bankruptcy, reorganization, arrangement, readjustment of debt, insolvency, dissolution, or similar law, or authorizes such application or consent, or proceedings to such end are instituted against the Collateral Manager without such authorization, application or consent and are approved as properly instituted and remain undismissed for 60 days or result in adjudication of bankruptcy or insolvency or the issuance of an order for relief; or (D) permits or suffers all or any substantial part of its properties or assets to be sequestered or attached by court order and the order (if contested in good faith) remains undismissed for 60 days;

 

 

 (v)          the occurrence and continuation of an Event of Default pursuant to Section 5.1(a), (b) or (c) of the Indenture that results primarily from any material breach by the Collateral Manager of its duties under this Agreement or under the Indenture which breach or default is not cured within any applicable cure period; or

 

 (vi)         (A) the occurrence of an act by the Collateral Manager that constitutes fraud or criminal activity in the performance of its obligations under this Agreement (as determined pursuant to a final adjudication by a court of competent jurisdiction) or the Collateral Manager being indicted for a criminal offense materially related to its business of providing asset management services, or (B) any Responsible Officer of the Collateral Manager primarily responsible for the performance by the Collateral Manager of its obligations under this Agreement (in the performance of his or her investment management duties) is indicted for a criminal offense materially related to the business of the Collateral Manager providing asset management services and continues to have responsibility for the performance by the Collateral Manager under this Agreement for a period of 30 days after such indictment; provided that any indictment arising from practices that have become the subject of contemporaneous actions against multiple investment advisers shall not constitute “Cause” for purposes of this clause (vi) if the Collateral Manager enters into an agreement of settlement with any authority that has commenced an indictment, which agreement is entered into without prejudice within the 90 days following such indictment.

 

(b)            If any of the events specified in clauses (a)(i) through (vi) of this Section 14 shall occur, the Collateral Manager shall give prompt written notice thereof to the Issuer, the Holders, the Trustee, and each Rating Agency (provided that in the case of Fitch, only for so long as any Class A-1 Notes remain outstanding); provided that if any of the events specified in Section 14(a)(iv) shall occur, the Collateral Manager shall give written notice thereof to the Issuer, the Trustee (who shall forward a copy of such notice to the Holders) and the Rating Agencies (provided that in the case of Fitch, only for so long as any Class A-1 Notes remain outstanding) immediately upon the Collateral Manager’s becoming aware of the occurrence of such event. A Majority of each Class of Notes, voting separately by Class, may waive any event described in Section 14(a)(i), (ii), (iii), (v) or (vi) as a basis for termination of this Agreement and removal of the Collateral Manager under this Section 14. In no event will the Trustee be required to determine whether or not Cause exists for the removal of the Collateral Manager.

 

 

(c)            Unless all Notes of the applicable Class are Collateral Manager Notes, Collateral Manager Notes will be disregarded and have no voting rights with respect to any vote in respect of (i) the removal of the Collateral Manager for “cause” under this Section 14 and (ii) the waiver of any event constituting “cause” as a basis for termination of this Agreement and removal of the Collateral Manager, and such Notes will be deemed not to be Outstanding in connection with any such vote, except that only Notes that a Trust Officer of the Trustee actually knows, based solely on transfer certificates received pursuant to the Indenture, to be Collateral Manager Notes shall be so disregarded. Collateral Manager Notes will have voting rights with respect to all other matters as to which the holders of the Notes of the applicable Classes are entitled to vote.

 

(d)            If the Collateral Manager is removed pursuant to this Section 14, the Issuer shall have, in addition to the rights and remedies set forth in this Agreement, all of the rights and remedies available with respect thereto at law or equity.

 

Section 15.       Obligations of Resigning or Removed Collateral Manager.

 

(a)            On, or as soon as practicable after, the date any resignation or removal is effective, the Collateral Manager shall (at the Issuer’s expense):

 

 (i)           deliver to the Issuer or to such other Person as the Issuer shall instruct all property and documents of the Issuer or otherwise relating to the Assets then in the custody of the Collateral Manager;

 

 (ii)          deliver to the Trustee an accounting with respect to the books and records delivered to the Trustee or the successor Collateral Manager appointed pursuant to Section 12; and

  

 (iii)         agree to cooperate with all reasonable requests related to any proceedings, even after its resignation or removal, which arise in connection with this Agreement or the Indenture, assuming the Collateral Manager has received an indemnity in form reasonably satisfactory to the Collateral Manager from an entity reasonably satisfactory to the Collateral Manager, and expense reimbursement reasonably satisfactory to the Collateral Manager.

 

(b)            Notwithstanding such resignation or removal, the Collateral Manager shall remain liable for its obligations under Section 10 and its acts or omissions giving rise thereto and for any expenses, losses, damages, liabilities, demands, charges and claims of any nature whatsoever (including reasonable attorneys’ fees) in respect of or arising out of a Collateral Manager Breach, subject to the limitations of liability set forth in Section 10.

 

Section 16.       Representations and Warranties.

 

(a)            The Issuer hereby represents and warrants to the Collateral Manager as follows:

 

 (i)           The Issuer has been duly formed and is validly existing under the laws of the State of Delaware, has the full power and authority to own its assets and the securities proposed to be owned by it and included in the Assets and to transact the business in which it is presently engaged and is duly qualified under the laws of each jurisdiction where its ownership or lease of property, the conduct of its business or the performance of this Agreement, the Indenture and the Notes require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a Material Adverse Effect on the Issuer.

 

 

 (ii)          The Issuer has full power and authority to execute, deliver and perform all of its obligations under this Agreement, the Indenture and the Notes and has taken all necessary action to authorize this Agreement and the execution and delivery of this Agreement and the performance of all obligations imposed upon it hereunder, and, as of the Refinancing Date, will have taken all necessary action to authorize the Indenture and the Notes and the execution, delivery and performance of this Agreement, the Indenture and the Notes and the performance of all obligations imposed upon it hereunder or thereunder. No consent of any other Person including, without limitation, members and creditors of the Issuer, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing (other than any filings pursuant to the UCC required under the Indenture and necessary to perfect any security interest granted thereunder) or declaration with, any governmental authority is required by the Issuer in connection with the execution, delivery, performance, validity or enforceability of this Agreement, the Indenture or the Notes or the obligations imposed upon the Issuer hereunder and thereunder. This Agreement has been, and each instrument and document to which the Issuer is a party required hereunder or under the Indenture or the Notes will be, executed and delivered by a Responsible Officer of the Issuer, and this Agreement constitutes, and each instrument or document required hereunder to which the Issuer is a party, when executed and delivered hereunder, will constitute, the legally valid and binding obligation of the Issuer enforceable against the Issuer in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, receivership, insolvency, winding-up or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency, winding-up or similar event applicable to the Issuer and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

 

 (iii)         The execution, delivery and performance of this Agreement and the documents and instruments required hereunder and under the Indenture will not violate any provision of any existing law or regulation binding on the Issuer, or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Issuer, or the Organizational Instruments of, or any securities issued by, the Issuer or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Issuer is a party or by which the Issuer or any of its assets may be bound, the violation of which would have a Material Adverse Effect on the Issuer, and will not result in or require the creation or imposition of any lien on any of its property, assets or revenues pursuant to the provisions of any such mortgage, indenture, lease, contract or other agreement, instrument or undertaking (other than the lien of the Indenture).

 

 (iv)         The Issuer is not in violation of its Organizational Instruments or in breach or violation of or in default under any contract or agreement to which it is a party or by which it or any of its property may be bound, or any applicable statute or any rule, regulation or order of any court, government agency or body having jurisdiction over the Issuer or its properties, the breach or violation of which or default under which would have a material adverse effect on the validity or enforceability of this Agreement or the provisions of the Indenture applicable to the Issuer, or the performance by the Issuer of its duties hereunder or thereunder.

 

 

 (v)          The Issuer acknowledges that it has received Part 2A, and relevant Part 2B, of the Collateral Manager’s Form ADV filed with the Securities and Exchange Commission, as required by Rule 204-3 under the Advisers Act, prior to execution of this Agreement.

 

(b)            The Collateral Manager hereby represents and warrants to the Issuer, as of the date hereof, as follows:

 

 (i)           The Collateral Manager is a limited liability company duly formed and validly existing and in good standing under the laws of the State of Delaware and has full power and authority to own its assets and to transact the business in which it is currently engaged, and is duly qualified to do business and is in good standing under the laws of each jurisdiction where the performance of this Agreement would require such qualification, except for those jurisdictions in which the failure to be so qualified, authorized or licensed would not have a material adverse effect on the ability of the Collateral Manager to perform its obligations under this Agreement and the provisions of the Indenture applicable to the Collateral Manager, or on the validity or enforceability of this Agreement and the provisions of the Indenture applicable to the Collateral Manager.

 

 (ii)          The Collateral Manager has full power and authority to execute and deliver this Agreement and to perform all of its obligations required hereunder and under the provisions of the Indenture applicable to the Collateral Manager, and has taken all necessary action to authorize this Agreement on the terms and conditions hereof and the execution and delivery of this Agreement and the performance of all obligations required hereunder and under the terms of the Indenture applicable to the Collateral Manager. No consent of any other Person, including, without limitation, members and creditors of the Collateral Manager, and no license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required by the Collateral Manager or any Affiliate thereof in connection with this Agreement or the execution, delivery, performance, validity or enforceability of this Agreement or the obligations imposed on the Collateral Manager hereunder or under the terms of the Indenture applicable to the Collateral Manager other than those which have been obtained or made. No representation is made herein with respect to the requirements of state securities laws or regulations. This Agreement has been executed and delivered by a Responsible Officer of the Collateral Manager, and this Agreement constitutes the valid and legally binding obligations of the Collateral Manager enforceable against the Collateral Manager in accordance with its terms, subject, as to enforcement, (A) to the effect of bankruptcy, insolvency, winding-up or similar laws affecting generally the enforcement of creditors’ rights as such laws would apply in the event of any bankruptcy, receivership, insolvency, winding-up or similar event applicable to the Collateral Manager and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

 

 

 (iii)         The execution, delivery and performance of this Agreement and the terms of the Indenture applicable to the Collateral Manager will not violate any provision of any existing law or regulation binding on the Collateral Manager (except that no representation is made herein with respect to the requirements of state securities laws or regulations), or any order, judgment, award or decree of any court, arbitrator or governmental authority binding on the Collateral Manager, or the Organizational Instruments of, or any securities issued by, the Collateral Manager or of any mortgage, indenture, lease, contract or other agreement, instrument or undertaking to which the Collateral Manager is a party or by which the Collateral Manager or any of its assets may be bound, the violation of which would have a material adverse effect on the business, operations, assets or financial condition of the Collateral Manager or which would reasonably be expected to adversely affect in a material manner its ability to perform its obligations hereunder or under the Indenture.

 

 (iv)         There is no charge, investigation, action, suit or proceeding before or by any court pending or, to the actual knowledge of the Collateral Manager, threatened, that, if determined adversely to the Collateral Manager, would have a material adverse effect upon the performance by the Collateral Manager of its duties under this Agreement or the provisions of the Indenture applicable to the Collateral Manager.

 

(c)            The Collateral Manager makes no representation, express or implied, with respect to the Issuer or the disclosure with respect to the Issuer.

 

(d)            The Collateral Manager is a “registered investment adviser” for purposes of the Advisers Act.

 

Section 17.       Limited Recourse; No Petition.

 

The Collateral Manager hereby agrees that it shall not institute against, or join any other Person in instituting against the Issuer any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings or other proceedings under United States federal or state or other bankruptcy or similar laws until at least one year (or, if longer, the applicable preference period then in effect) plus one day after payment in full of all Notes issued under the Indenture (and any other debt obligations of the Issuer that have been rated upon issuance by the Rating Agencies at the request of the Issuer); provided that nothing in this Section 17 shall preclude the Collateral Manager from (A) taking any action prior to the expiration of such applicable preference period in (x) any case or proceeding voluntarily filed or commenced by the Issuer or (y) any insolvency proceeding filed or commenced against the Issuer by any Person other than the Collateral Manager or (B) commencing against the Issuer or any of its properties any legal action that is not a bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceeding. The Collateral Manager hereby acknowledges and agrees that the Issuer’s obligations hereunder will be solely the limited liability company obligations of the Issuer, and that the Collateral Manager will not have any recourse to any of the authorized persons, managers, officers, employees, members or Affiliates of the Issuer with respect to any claims, losses, damages, liabilities, indemnities or other obligations in connection with any Transactions contemplated hereby. Notwithstanding any other provisions hereof or of any other transaction document, recourse in respect of any obligations of the Issuer to the Collateral Manager hereunder or thereunder will be limited to the Assets as applied in accordance with the Priority of Payments pursuant to the Indenture and, on the exhaustion of the Assets, all claims against the Issuer arising from this Agreement or any Transaction Document or any Transactions contemplated hereby or thereby shall be extinguished and shall not revive. This Section 17 shall survive the termination of this Agreement for any reason whatsoever.

 

 

Section 18.       Notices.

 

Unless expressly provided otherwise herein, all notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given, made and received when delivered against receipt or upon actual receipt of registered or certified mail, postage prepaid, return receipt requested, or, in the case of telecopier notice, when received in legible form, addressed as set forth below:

 

(a)            If to the Issuer:

 

 Golub Capital BDC CLO 8 LLC

 c/o Golub Capital BDC, Inc.

 200 Park Avenue

 25th Floor

 New York, New York 10166

 

 with a copy to:

 

 GC Advisors LLC

 200 Park Avenue, 25^th Floor

 New York, New York 10166

 

(b)            If to the Collateral Manager:

 

 GC Advisors LLC

 200 Park Avenue, 25^th Floor

 New York, New York 10166

 

 with a copy to:

 

 Dechert LLP

 300 South Tryon Street

 Suite 800

 Charlotte, NC 28202

 Telephone No.: (704) 339-3100

 Telecopier No.: (704) 339-3101

 Attention: John Timperio

 

 

(c)            If to the Trustee:

 

 The Bank of New York Mellon Trust Company, National Association

 601 Travis Street, 16th Floor

 Houston, Texas 77002

 e-mail: Golub@bny.com

 Attention: Global Corporate Trust – Golub Capital BDC CLO 8 LLC

 

(d)            If to the Holders:

 

At their respective addresses set forth in the Register, as applicable.

 

Any party may change the address or telecopy number to which communications or copies directed to such party are to be sent by giving notice to the other parties of such change of address or telecopy number in conformity with the provisions of this Section 18 for the giving of notice.

 

Section 19.       Binding Nature of Agreement; Successors and Assigns.

 

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns as provided herein.

 

Section 20.       Entire Agreement; Amendment.

 

(a)            This Agreement and the Indenture contain the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersede all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof and thereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof.

 

(b)            This Agreement may not be modified or amended other than by an agreement in writing executed by each of the parties hereto. No amendment to this Agreement may, without notice to the Rating Agencies and the prior written consent of (1) in the case of clauses (a), (b) and (c) below, a Majority of the Controlling Class, (2) in the case of clauses (a) and (b) below, the Holders of the Subordinated Notes and (3) in the case of clause (b)(II) below, a Majority of each other Class of Secured Notes, (a) modify the definition of the term “Cause,” (b) modify the Collateral Management Fee, including the method for calculation of any component of the Collateral Management Fee or any definition in this Agreement directly related to the Collateral Management Fee (I) in connection with the appointment of a successor Collateral Manager or (II) in any other circumstance or (c) modify the Class or Classes or the percentage of the Aggregate Outstanding Amount of any Class that has the right to remove the Collateral Manager, consent to any assignment of this Agreement or nominate or approve any successor collateral manager. This Agreement may be amended for any other purpose upon notice to the Rating Agencies and 10 (ten) days’ prior written notice to the Controlling Class and the Subordinated Notes without the consent of the Holders of any Notes; provided that, (i) the prior written consent of a Majority of the Subordinated Notes shall be required if any such amendment would have a material adverse effect on the Subordinated Notes and (ii) the prior written consent of a Majority of the Controlling Class shall be required if any such amendment would have a material adverse effect on the Controlling Class.

 

 

Section 21.       Governing Law.

 

THIS AGREEMENT AND ANY DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT (WHETHER IN CONTRACT, TORT OR OTHERWISE) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARDS TO CONFLICT OF LAWS PRINCIPLES THEREOF (OTHER THAN AS SET FORTH IN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

Section 22.       Submission to Jurisdiction.

 

With respect to any suit, action or proceedings relating to this Agreement or any matter between the parties arising under or in connection with this Agreement (“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 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 in this Agreement 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.

 

The Collateral Manager irrevocably consents to the service of any and all process in any action or proceeding by the mailing or delivery of copies of such process to it at the office of the Collateral Manager in New York, New York. The Issuer hereby irrevocably designates and appoints CT Corporation System as the agent of the Issuer to receive on its behalf service of all process brought against it with respect to any such action or proceeding in any such court in the State of New York, such service being hereby acknowledged by the Issuer to be effective and binding on it in every respect. If for any reason such agent shall cease to be available to act as such, then the Issuer shall promptly designate a new agent in the City of New York.

 

Section 23.       Waiver of Jury Trial.

 

EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY PROCEEDING.

 

 

Section 24.       Conflict with the Indenture.

 

In respect of any conflict between the terms of this Agreement and the Indenture or actions required under the terms of the Indenture and the terms of this Agreement, the terms of the Indenture shall control.

 

Section 25.       Subordination; Assignment of Agreement.

 

The Collateral Manager agrees that the payment of all amounts to which it is entitled pursuant to this Agreement shall be subordinated to the extent set forth in, and the Collateral Manager agrees to be bound by the provisions of, Article XI of the Indenture as if the Collateral Manager were a party to the Indenture and hereby consents to the assignment of this Agreement as provided in Section 15.1 of the Indenture.

 

Section 26.       Indulgences Not Waivers.

 

Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

 

 

Section 27.       Costs and Expenses.

 

Except as otherwise agreed to by the parties hereto, the costs and expenses (including the fees and disbursements of counsel and accountants but excluding all overhead costs and employees’ salaries) of the Collateral Manager and of the Issuer incurred in connection with the negotiation and preparation of and the execution of this Agreement and any amendment hereto, and all matters incidental thereto, shall be borne by the Issuer. The Issuer shall reimburse the Collateral Manager for all fees, costs, expenses, liabilities and obligations relating to the Issuer, businesses or actual or prospective investments, including all such items in the form of or relating to the following: (i) Organization Costs; (ii) internally or externally provided legal services; accounting, auditing, tax, and other services of independent certified public accountants; consulting, administration, and other third-party professional services; (iii) banking, custodial, trustee, record keeping, registered agent, and similar services; (iv) the structuring, identifying, sourcing, negotiating, diligencing, researching, financing, purchasing, holding, monitoring, managing, valuing, obtaining credit ratings for, disposing of or exiting actual or prospective investments (including expenses related to brokerage services), and related environmental, social and governance matters; (v) filing, title, transfer, and similar charges; and administrative, compliance or regulatory filings or reports (excluding non-Issuer-related filings and reports attributable to the Collateral Manager’s ongoing registration as an investment adviser); (vi) taxes and other governmental assessments against the Issuer; tax audits and similar proceedings; and services of the partnership representative for tax matters; (vii) meetings, communications, capital calls, distribution, defaults, or reports with, to, or of Holders, including the preparation and distribution of financial statements, tax returns and reports to Holders of the Notes; (viii) any web portal, extranet tools, computer software (including accounting, compliance, administration, investor reporting and investment opportunity tracking or allocation systems), or other administrative or reporting tools; (ix) any conflicts committee or other conflicts resolution procedure; (x) actual or prospective indebtedness or guarantees, and all related fees and repayment of principal and interest; (xi) amendments and waivers of, consents under, and compliance with this Agreement, the other Transaction Documents and other constitutive documents (including in connection with any refinancing); (xii) actual or prospective transfers or other modifications of interests in the Issuer; (xiii) the termination of the Issuer; (xiv) compliance and regulatory matters, including tax information exchange privacy, data protection, know-your-customer, anti-money laundering, sanctions, or anti-Terrorism Acts and protecting confidential information; (xv) indemnification or actual or threatened litigation, other dispute resolution processes, or governmental inquiries or investigations, including any judgments, fines, penalties, amounts paid in settlement, attorneys’ fees and costs of investigation paid in connection therewith, subject to the limits on indemnification in this Agreement; (xvi) insurance, including directors and officers liability, management liability, cybersecurity, errors and omissions liability, crime coverage, and general partner liability premiums, and related costs and expenses; (xvii) any fees, expenses or other amounts payable to the Rating Agencies; (xviii) any out-of-pocket expenses incurred by the Collateral Manager, the E.U./U.K. Retention Provider or the U.S. Retention Provider in connection with complying with the U.S. Risk Retention Rules, the E.U. Securitization Laws and/or the U.K. Securitization Laws (excluding the purchase price of any Notes acquired by it to comply with the U.S. Risk Retention Rules, the E.U. Securitization Laws and/or the U.K. Securitization Laws); (xix) travel, lodging, meals or entertainment relating to any of the foregoing; (xx) fees and expenses incurred in obtaining the Market Value of Collateral Obligations (including without limitation fees payable to any nationally recognized pricing service); and (xxi) as otherwise agreed upon by the Issuer and the Collateral Manager. Expenses set forth above that are not otherwise attributable to specific advisory clients, such as expenses for transactions that are not consummated, could be charged to the Issuer based on the proportion that the fair value of the assets of the Issuer bears to the fair value of assets of all applicable advisory clients of the Collateral Manager or by using another reasonable manner in the discretion of the Collateral Manager. Allocation of such costs and expenses among the Issuer and other applicable investment funds and accounts managed by the Collateral Manager and its Affiliates may be based on the proportion that the fair value of the Issuer’s assets bears to the fair value of assets of all such applicable funds and accounts, or any other reasonable method in the discretion of the Collateral Manager. The fees and expenses payable to the Collateral Manager on any Payment Date are payable only as described under the Priority of Payments.

 

Section 28.       Third Party Beneficiary.

 

The parties hereto agree that the Trustee on behalf of the Secured Parties shall be a third party beneficiary of this Agreement, and shall be entitled to rely upon and enforce such provisions of this Agreement to the same extent as if it were a party hereto. For the avoidance of doubt, the Holders will not be third party beneficiaries of this Agreement.

 

 

Section 29.       Titles Not to Affect Interpretation.

 

The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

 

Section 30.       Execution in Counterparts.

 

This Agreement may be executed in any number of counterparts by telegraphic or other written form of communication, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. The parties agree that this Agreement may be executed and delivered by electronic signatures and that the electronic signatures appearing on this Agreement are the same as handwritten signatures for the purposes of validity, enforceability and admissibility.

 

Section 31.       Provisions Separable.

 

The provisions of this Agreement are independent of and separable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

 

Section 32.       Interpretive Matters.

 

Words used herein, regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

 

Section 33.       Communications with the Rating Agencies.

 

The Collateral Manager shall, on behalf of the Issuer, take all steps required for the Issuer to comply with its obligations under the Indenture and under the rating application letters and any related side letters, in each case in respect of Rule 17g-5 under the Exchange Act.

 

Section 34.       Existing Agreement.

 

The parties hereto acknowledge and agree that the Existing Agreement is hereby amended, restated and replaced in its entirety by this Agreement.

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

	Golub Capital BDC CLO 8 LLC, as Issuer
	By:	Golub Capital BDC, Inc., its designated manager
	By:	/s/ Christopher Ericson
		Name:	Christopher Ericson
		Title:	Chief Financial Officer

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

	GC ADVISORS LLC, as Collateral Manager
	By:	/s/ Joseph LaBaw
		Name:	Joseph LaBaw
		Title:	Authorized Signatory

 

 

Exhibit 10.4

 

EXECUTION VERSION

 

 

AMENDED AND RESTATED MASTER LOAN SALE AGREEMENT

 

by and among

 

Golub capital BDC, INC.,
as the Seller,

 

GOLUB CAPITAL BDC CLO 8 DEPOSITOR LLC,
as the Intermediate Seller,

 

and

 

GOLUB CAPITAL BDC CLO 8 LLC,
as the Buyer

 

Dated as of November 18, 2024

 

 

 

Table of Contents

 

Page

 

ARTICLE I DEFINITIONS			1
	Section 1.01	Definitions	1
	Section 1.02	Other Terms	5
	Section 1.03	Computation of Time Periods	5
	Section 1.04	Interpretation	5
	Section 1.05	References	6
	Section 1.06	Calculations	6
ARTICLE II TRANSFER OF LOAN ASSETS			6
	Section 2.01	Sale, Transfer and Assignment	6
	Section 2.02	Purchase Price	9
	Section 2.03	Payment of Purchase Price	9
	Section 2.04	Limitation on Sales to Seller and Affiliates	10
ARTICLE III CONDITIONS PRECEDENT			11
	Section 3.01	Conditions Precedent	11
	Section 3.02	Conditions Precedent to all Purchases	11
	Section 3.03	Release of Excluded Amounts	11
ARTICLE IV REPRESENTATIONS AND WARRANTIES			12
	Section 4.01	Representations and Warranties Regarding the Seller	12
	Section 4.02	Representations and Warranties of the Seller Relating to the Agreement and the Collateral	15
	Section 4.03	Representations and Warranties Regarding the Intermediate Seller	16
	Section 4.04	Representations and Warranties of the Intermediate Seller Relating to the Agreement and the Collateral	18
	Section 4.05	Representations and Warranties Regarding the Buyer	18
ARTICLE V MISCELLANEOUS			20
	Section 5.01	Amendments and Waivers	20
	Section 5.02	Notices, Etc.	20
	Section 5.03	Severability of Provisions	21
	Section 5.04	GOVERNING LAW; JURY WAIVER	21
	Section 5.05	Electronic Signatures; Counterparts	22
	Section 5.06	Bankruptcy Non-Petition and Limited Recourse; Claims	22

 

 

Table of Contents

(continued)

 

Page

 

	Section 5.07	Binding Effect; Assignability	22
	Section 5.08	Headings and Exhibits	22
	Section 5.09	Existing Agreement	22

 

 

EXHIBITS AND SCHEDULES

 

Exhibit A	Form of Assignment (Schedule 2)
Schedule 1	Collateral Obligations

 

 

AMENDED AND RESTATED MASTER LOAN SALE AGREEMENT

 

THIS AMENDED AND RESTATED MASTER LOAN SALE AGREEMENT, dated as of November 18, 2024 (as amended, modified, supplemented or restated from time to time, this “Agreement”), is among GOLUB CAPITAL BDC, INC., a Delaware corporation (in its capacity as seller hereunder, together with its successors and assigns, the “Seller”), GOLUB CAPITAL BDC CLO 8 DEPOSITOR LLC, a Delaware limited liability company (together with its successors and assigns in its capacity as the intermediate seller hereunder, the “Intermediate Seller”), and GOLUB CAPITAL bdc clo 8 llc, a Delaware limited liability company (together with its successors and assigns, the “Buyer”).

 

WHEREAS, the Seller (successor-in-interest to Golub Capital Investment Corporation by way of merger), the Intermediate Seller (f/k/a GCIC CLO II Depositor LLC) and the Buyer (f/k/a GCIC CLO II LLC) entered into that certain Master Loan Sale Agreement, dated as of December 13, 2018 (such agreement, as amended, modified or waived prior to the date hereof, the “Existing Agreement”);

 

WHEREAS, the Seller, the Intermediate Seller and the Buyer desire to amend and restate the Existing Agreement in its entirety in order to make certain additional changes agreed to by the parties hereto;

 

WHEREAS, in the regular course of its business, the Seller originates and/or otherwise acquires Collateral Obligations; and

 

WHEREAS, from time to time on and after the Refinancing Date, the Intermediate Seller may acquire from the Seller and the Buyer may acquire from the Intermediate Seller certain Collateral Obligations hereunder, together with certain related property as more fully described herein and included as part of the “Assets” in the Amended and Restated Indenture, dated as of November 18, 2024 (as amended, modified, restated or supplemented from time to time, the “Indenture”), between the Buyer, as issuer, and The Bank of New York Mellon Trust Company, National Association, as trustee (the “Trustee”).

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree to amend and restate the Existing Agreement in its entirety as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01          Definitions.

 

Capitalized terms used but not defined in this Agreement shall have the meanings attributed to such terms in the Indenture, unless the context otherwise requires. As used herein, the following defined terms shall have the following meanings:

 

“Agreement” has the meaning provided in the first paragraph of this Agreement.

 

 

“Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, public body, administrative tribunal, central bank, public office, court, arbitration or mediation panel, or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of government, including the FINRA, the SEC, the stock exchanges, any Federal, state, territorial, county, municipal or other government or governmental agency, arbitrator, board, body, branch, bureau, commission, court, department, instrumentality, master, mediator, panel, referee, system or other political unit or subdivision or other entity of any of the foregoing, whether domestic or foreign.

 

“Authorized Officer” means, with respect to the Seller or the Intermediate Seller, as applicable, any Person who is authorized to act for the Seller or the Intermediate Seller, as applicable, in matters relating thereto, and binding thereupon, in connection with the transactions contemplated by this Agreement and the other Transaction Documents to which such Person is a party.

 

“Buyer” has the meaning provided in the first paragraph of this Agreement.

 

“Collateral” The property identified in clauses (i)-(v) below and all accounts, cash and currency, chattel paper, tangible chattel paper, electronic chattel paper, copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property, letter-of-credit rights, accessions, proceeds and other property consisting of, arising out of, or related to any of the following (in each case excluding the Excluded Amounts):

 

(i)            the Collateral Obligations listed on the Loan List delivered on each Purchase Date by the Seller to the Intermediate Seller (as set forth on Schedule 1), and all monies due, to become due or paid in respect of such Collateral Obligations on and after the related Purchase Date, including but not limited to all collections on such Collateral Obligations and other recoveries thereon, in each case as they arise after the related Purchase Date;

 

(ii)           all Liens with respect to the Collateral Obligations referred to in clause (i) above;

 

(iii)          all Related Contracts with respect to the Collateral Obligations referred to in clause (i) above;

 

(iv)          all collateral security granted under any Related Contracts; and

 

(v)           all income and proceeds of the foregoing.

 

“Dodd-Frank” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

 

 

“Excluded Amounts” means (a) any amount received by, on or with respect to any Collateral Obligation in the Collateral, which amount is attributable to the payment of any tax, fee or other charge imposed by any Authority on such Collateral Obligation, (b) any amount representing escrows relating to taxes, insurance and other amounts in connection with any Collateral Obligation which is held in an escrow account for the benefit of the related Obligor and the secured party (other than the Seller in its capacity as lender with respect to such Collateral Obligation) pursuant to escrow arrangements, (c) any Retained Fee retained by the Person(s) entitled thereto in connection with the origination of any Collateral Obligation and (d) any Equity Security related to any Collateral Obligation that the Seller determines will not be transferred by the Seller in connection with the sale of any related Collateral Obligation hereunder.

 

“Governmental Authorizations” means all franchises, permits, licenses, approvals, consents, orders and other authorizations of all Authorities.

 

“Governmental Filings” means all filings, including franchise and similar tax filings, and the payment of all fees, assessments, interests and penalties associated with such fillings with all Authorities.

 

“Income Collections” has the meaning set forth in Section 2.01(c).

 

“Indenture” has the meaning provided in the Preamble to this Agreement.

 

“Intermediate Seller” has the meaning provided in the first paragraph of this Agreement.

 

“Lien” means 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).

 

“Loan List” means the list of Collateral Obligations set forth on Schedule 1, as such list may be amended, supplemented or modified from time to time in accordance with this Agreement.

 

“Material Adverse Effect” means, with respect to the Person making the related representation and warranty or agreeing to the related covenant, any event that has, or could reasonably be expected to have, a material adverse effect on (a) the business, assets, financial condition or operations of such Person (b) the ability of such Person to perform its obligations under the Transaction Documents to which it is a party or (c) the rights, interests, remedies or benefits (taken as a whole) available to the Trustee under the Transaction Documents.

 

“Net Purchased Loan Balance” means, as of any date of determination, an amount equal to (a) the sum of (i) the Aggregate Principal Balance of all Collateral Obligations sold and/or contributed by the Seller to the Buyer (directly or indirectly) hereunder prior to such date, calculated as of the respective Cut-Off Dates of such Collateral Obligations plus (ii) the Aggregate Principal Balance of all Collateral Obligations acquired by the Buyer other than from the Seller prior to such date minus (b) the Aggregate Principal Balance of all Collateral Obligations sold or repurchased or substituted by, or otherwise transferred to, the Seller prior to such date.

 

 

“Payment in Full” means payment in full of the Notes and of all other obligations then due and payable by the Buyer pursuant to and in accordance with the Indenture.

 

“Payment in Full Date” means the date on which a Payment in Full occurs or the Indenture is otherwise satisfied and discharged in accordance with its terms.

 

“Permitted Liens” means, with respect to the interest of the Seller, the Intermediate Seller and the Buyer in the Collateral Obligations, as applicable: (i) security interests, liens and other encumbrances in favor of the Intermediate Seller or of the Buyer, as applicable, pursuant to this Agreement, (ii) security interests, liens and other encumbrances in favor of the Trustee created pursuant to the Indenture and/or this Agreement, (iii) 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, (iv) 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 Buyer as the holder of equity in such Obligor and (v) security interests, liens and other encumbrances for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded (provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor).

 

“Purchase” means, as applicable, (i) a purchase or other acquisition of Collateral by the Buyer from the Intermediate Seller and by the Intermediate Seller from the Seller or (ii) a purchase or other acquisition of Collateral by the Buyer from or as directed or referred by the Seller, in each case under clause (i) or clause (ii) pursuant to Section 2.01, as applicable.

 

“Purchase Date” means any day occurring from time to time on and after the Refinancing Date on which any Collateral Obligation is acquired by the Buyer from the Intermediate Seller and by the Intermediate Seller from the Seller pursuant to the terms of this Agreement and including, for the avoidance of doubt, any date on which any Collateral Obligation is acquired by the Buyer in a secondary market transaction entered into by the Buyer as provided herein.

 

“Purchase Price” has the meaning provided in Section 2.02.

 

“Related Contracts” means all credit agreements, indentures, notes, security agreements, leases, financing statements, guaranties, and other contracts, agreements, instruments and other papers evidencing, securing, guaranteeing or otherwise relating to any Collateral Obligation or Eligible Investment or other investment with respect to any Collateral or proceeds thereof (including the related Underlying Instruments), together with all of the Seller’s or the Intermediate Seller’s, as applicable right, title and interest in, to and under all property or assets securing or otherwise relating to any Collateral Obligation or Eligible Investment or other investment with respect to any Collateral or proceeds thereof or of any Related Contract.

 

 

“Retained Fee” means any reasonable origination, structuring or similar closing fee charged by the Person originating a loan on behalf of its lenders for services it has performed in connection with such origination, which is not customarily made available to the lenders as part of their return with respect to such loan, and provided such Person is entitled to retain the same in accordance with applicable law.

 

“Seller” has the meaning provided in the first paragraph of this Agreement.

 

“Trustee” has the meaning provided in the Preamble to this Agreement.

 

Section 1.02          Other Terms.

 

All accounting terms used but not specifically defined herein shall be construed in accordance with generally accepted accounting principles in the United States. The symbol “$” shall mean the lawful currency of the United States of America. All terms used in Article 9 of the UCC in the State of New York, and not specifically defined herein, are used herein as defined in such Article 9.

 

Section 1.03          Computation of Time Periods.

 

Unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding”.

 

Section 1.04          Interpretation.

 

In this Agreement, unless a contrary intention appears:

 

(i)

the singular number includes the plural number and vice versa;

 

(ii)

reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by the Transaction Documents;

 

(iii)          references to “including” means “including, without limitation”;

 

(iv)          reference to day or days without further qualification means calendar days;

 

(v)           unless otherwise stated, reference to any time means New York, New York time;

 

(vi)          references to “writing” include printing, typing, lithography, electronic or other means of reproducing words in a visible form;

 

(vii)         reference to any agreement (including any Transaction Document), document or instrument means such agreement, document or instrument as amended, modified, supplemented, replaced, restated, waived or extended and in effect from time to time in accordance with the terms thereof and, if applicable, the terms of the other Transaction Documents, and reference to any promissory note includes any promissory note that is an extension or renewal thereof or a substitute or replacement therefore;

 

 

(viii)        reference to any applicable law means such applicable law as amended, modified, codified, replaced or reenacted, in whole or in part, and in effect from time to time, including rules and regulations promulgated thereunder and reference to any Section or other provision of any applicable law means that provision of such applicable law from time to time in effect and constituting the substantive amendment, modification, codification, replacement or reenactment of such Section or other provision; and

 

(ix)           reference to any gender includes each other gender.

 

Section 1.05          References.

 

All section references (including references to the preamble), unless otherwise indicated, shall be to Sections (and the preamble) in this Agreement.

 

Section 1.06          Calculations.

 

Except as otherwise provided herein, all interest rate and basis point calculations hereunder will be made on the basis of a 360-day year and the actual days elapsed in the relevant period and will be carried out to at least three decimal places.

 

ARTICLE II

 

TRANSFER OF LOAN ASSETS

 

Section 2.01          Sale, Transfer and Assignment.

 

(a)            Transfer from the Seller to the Intermediate Seller and from the Intermediate Seller to the Buyer on each Purchase Date.

 

(i)            Subject to and upon the terms and conditions set forth in this Agreement (including the conditions to purchase set forth in Article III), on each Purchase Date with respect to the items of Collateral conveyed on such Purchase Date by the Seller to the Intermediate Seller hereunder, the Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Intermediate Seller, and the Intermediate Seller hereby purchases and takes from the Seller all right, title and interest (whether now owned or hereafter acquired or arising and wherever located) of the Seller (including all obligations of the Seller as lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the Seller to the Intermediate Seller hereunder which obligations the Intermediate Seller hereby assumes) in such Collateral.

 

(ii)           Subject to and upon the terms and conditions set forth in this Agreement (including the conditions to purchase set forth in Article III), on each Purchase Date with respect to the items of Collateral conveyed on such Purchase Date by the Intermediate Seller to the Buyer hereunder, the Intermediate Seller hereby sells, transfers, assigns, sets over and otherwise conveys to the Buyer, and the Buyer hereby purchases and takes from the Intermediate Seller all right, title and interest (whether now owned or hereafter acquired or arising and wherever located) of the Intermediate Seller (including all obligations of the Intermediate Seller as lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the Intermediate Seller to the Buyer hereunder which obligations the Buyer hereby assumes) in such Collateral.

 

 

(b)            From and after each Purchase Date, the Collateral listed on the relevant Loan List shall be deemed to be Collateral hereunder.

 

(c)            On any Purchase Date with respect to the Collateral to be acquired by the Buyer on that date, the Seller shall be deemed to, and hereby does, certify to the Buyer and to the Trustee, on behalf of the Secured Parties, as of such Purchase Date, that each of the representations and warranties in Section 4.02 is true and correct in all material respects as of such Purchase Date.

 

(d)            Except as specifically provided in this Agreement, the sale and purchase of Collateral under this Agreement shall be without recourse to the Seller or the Intermediate Seller; it being understood that the Seller and the Intermediate Seller shall be liable (individually and not jointly) to the Buyer for all representations and warranties made by the Seller and the Intermediate Seller, respectively, pursuant to the terms of this Agreement, all of which obligations are limited so as not to constitute recourse to the Seller or the Intermediate Seller for the credit risk of the Obligors.

 

(e)            In connection with each Purchase of Collateral from the Intermediate Seller to the Buyer on each Purchase Date as contemplated by this Agreement, the Buyer hereby directs the Intermediate Seller to, and the Intermediate Seller hereby directs the Seller to, and the Seller agrees that it will, Deliver in accordance with the Indenture, or cause to be Delivered in accordance with the Indenture (on behalf of the Buyer), to the Custodian (with a copy to the Trustee), each Collateral Obligation being transferred to the Buyer on such Purchase Date in accordance with the applicable provisions of the Indenture.

 

(f)             The Seller and/or the Intermediate Seller, as applicable, shall take such action requested by the Buyer, from time to time hereafter, that may be necessary or appropriate to ensure that the Buyer has an enforceable ownership interest and its assigns under the Indenture have an enforceable and perfected security interest in the Collateral purchased by the Buyer as contemplated by this Agreement.

 

(g)            In connection with the Purchase by the Buyer of the Collateral as contemplated by this Agreement, with respect to the Collateral purchased on each Purchase Date from the Intermediate Seller by the Buyer in accordance with this Agreement, each of the Seller and the Intermediate Seller, as applicable, agrees that it will, at its own expense, indicate clearly and unambiguously in its computer files on and after each such Purchase that such Collateral has been purchased by the Intermediate Seller and/or the Buyer, as applicable, and the Seller agrees that it will indicate clearly and unambiguously on and after the related Purchase Date in its financial statements that such Collateral is owned by the Buyer and is not available to pay creditors of the Seller.

 

 

(h)            The Seller agrees to deliver to the Intermediate Seller and the Buyer on or before each Purchase Date a computer file containing a true, complete and correct Loan List (which shall contain the related Principal Balance, outstanding principal balance, loan number and Obligor name for each Collateral Obligation) as of the related Purchase Date. Such file or list shall be marked as Schedule 1 or Schedule 2, as applicable, to this Agreement, shall be delivered to the Intermediate Seller and/or the Buyer, as applicable, as confidential and proprietary, and is hereby incorporated into and made a part of this Agreement, as such Schedule 1 or Schedule 2 may be supplemented and amended from time to time. In addition, with respect to each Collateral Obligation sold by the Seller to the Buyer hereunder (through the Intermediate Seller and in accordance with the various steps described in this Agreement), the Seller shall deliver to the Buyer (through the Intermediate Seller) an assignment of such Collateral Obligation substantially in the form of Exhibit A hereto.

 

(i)            [Reserved].

 

(j)            For administrative convenience, (i) Collateral Obligations being transferred from the Seller to the Intermediate Seller and from the Intermediate Seller to the Buyer may settle directly from the Seller to the Buyer, (ii) Collateral Obligations being transferred first from the Seller to the Intermediate Seller and second from the Intermediate Seller to the Buyer may settle directly from the Seller to the Buyer, (iii) Collateral Obligations being acquired by the Seller from any seller and then sold first by such seller to the Seller and second by the Seller to the Intermediate Seller and third from the Intermediate Seller to the Buyer may settle directly from such seller to the Buyer and (iv) any of the steps or transfers of cash or assets described in this clause (m) that take place on the same day may be made on a net basis (any amounts owing by one party may be offset by amounts owed to such party, and vice versa).

 

(k)            It is the intention of the parties hereto that the conveyance of all right, title and interest in and to the Collateral to the Buyer by the Intermediate Seller and to the Intermediate Seller by the Seller as provided in this Section 2.01 is intended and shall, in each and every case, constitute an absolute sale, assignment, conveyance and transfer of ownership of such Collateral conveying good title, free and clear of any Lien (other than Permitted Liens) and that the Collateral shall not be part of the Seller’s or the Intermediate Seller’s, as applicable, bankruptcy estate in the event of any bankruptcy or insolvency proceedings with respect to the Seller or the Intermediate Seller, as applicable. Furthermore, it is not intended that any such conveyance be deemed a pledge of the Collateral Obligations and the other Collateral to the Intermediate Seller or the Buyer, as applicable, to secure a debt or other obligation of the Intermediate Seller or the Seller, as applicable.

 

(l)             If, however, notwithstanding the intention of the parties set forth in Section 2.01(n), any of the conveyances provided for in this Section 2.01 by the Seller or the Intermediate Seller, as applicable, are determined to be a transfer to secure indebtedness, then this Agreement shall also be deemed to be, and hereby is, a “security agreement” within the meaning of Article 9 of the UCC. With respect to the Collateral related to Schedule 1 hereunder, (A) the Seller hereby grants to the Intermediate Seller (and the Intermediate Seller hereby assigns to the Buyer), and the Intermediate Seller hereby grants to the Buyer, as the case may be, a duly perfected, first priority “security interest” within the meaning of Article 9 of the UCC in all of its right, title and interest in and to such Collateral, now existing and hereafter created, to secure the prompt and complete payment of a loan deemed to have been made in an amount equal to the aggregate Purchase Price of such Collateral, (B) the Buyer shall have, in addition to the rights and remedies which it may have under this Agreement, all other rights and remedies provided to a secured creditor under the UCC and other applicable law with respect thereto, which rights and remedies shall be cumulative, and (C) the Seller authorizes the Buyer, the Intermediate Seller authorizes the Buyer, and, so long as the Payment in Full Date has not occurred, each of the Seller and Intermediate Seller authorize the Trustee on behalf of the Secured Parties to file UCC financing statements and amendments, as necessary, naming the Seller as “debtor,” the Intermediate Seller as “debtor” or “assignor secured party,” as applicable, the Buyer as “assignor secured party” or “assignee secured party” and the Trustee as “assignee secured party” or similar applicable designations, each describing such Collateral, in each jurisdiction that the Buyer deems necessary in order to protect the security interests in the Collateral granted under this Section 2.01(o).

 

 

Section 2.02          Purchase Price.

 

The purchase price for each Collateral Obligation sold pursuant to this Master Loan Sale Agreement shall be a dollar amount equal to the fair market value thereof as determined by the Seller, the Intermediate Seller and/or the Buyer, as applicable, and shall be on terms no less favorable to the buyer than such buyer would then obtain in a comparable arm’s length transaction with a person that is not an Affiliate (in each case, the “Purchase Price”).

 

Section 2.03          Payment of Purchase Price.

 

(a)            With respect to each Purchase Date, to the extent the value of the Collateral transferred by the Seller to the Intermediate Seller and from the Intermediate Seller to the Buyer exceeds the value of the consideration received by the Intermediate Seller or Seller (as applicable) for such assets, such excess shall be deemed to constitute a capital contribution from the Seller to the Intermediate Seller and from the Intermediate Seller to the Buyer. To the extent the value of the cash received by the Intermediate Seller or Seller (as applicable) from the Buyer exceeds the value of the assets transferred by the Seller to the Intermediate Seller and by the Intermediate Seller to the Buyer, such excess shall be deemed to constitute a dividend from the Buyer to the Intermediate Seller and the Intermediate Seller to the Seller. The Purchase Price for any Collateral acquired by the Buyer from the Intermediate Seller on any Purchase Date pursuant to this Agreement shall be paid in a combination of (A) immediately available funds in cash and by subsequent transfer of such cash from the Intermediate Seller to the Seller and (B) if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price, by means of a capital contribution by the Seller to the Intermediate Seller and by a subsequent capital contribution by the Intermediate Seller to the Buyer.

 

(b)            The Purchase Price for any Collateral purchased by the Buyer to be settled directly with a subsidiary of the Seller on any Purchase Date shall be paid in immediately available funds, which may comprise, if the Buyer does not have sufficient funds in cash to pay the full amount of the Purchase Price, amounts contributed by the Seller to Intermediate Seller and by the Intermediate Seller to the Buyer.

 

 

(c)            Notwithstanding any provision herein to the contrary, the Seller may on any Purchase Date elect to designate all or a portion of the Collateral proposed to be transferred to the Buyer on such date as a capital contribution to the Intermediate Seller and in turn a capital contribution by the Intermediate Seller to the Buyer. In such event, the cash portion of the Purchase Price payable with respect to such transfer shall be reduced by that portion of the Purchase Price of the Collateral that was so contributed; provided that Collateral contributed to the Buyer as capital shall constitute Collateral for all purposes of this Agreement.

 

(d)            The Seller, in connection with each Purchase hereunder relating to any Collateral, shall be deemed to have certified, and hereby does certify, with respect to the Collateral to be purchased by the Buyer on such day, that its representations and warranties contained in Article IV are true and correct on and as of such day, with the same effect as though made on and as of such day.

 

(e)            Upon the payment of the Purchase Price for any Purchase, title to the Collateral included in such Purchase shall vest in the case of Collateral related to Schedule 1 initially in the Intermediate Seller and then in the Buyer as provided herein, whether or not the conditions precedent to such Purchase and the other covenants and agreements contained herein were in fact satisfied; provided that the Intermediate Seller and the Buyer, as applicable, shall not be deemed to have waived any claim it may have under this Agreement for the failure by the Seller or the Intermediate Seller, as applicable, in fact to satisfy any such condition precedent, covenant or agreement.

 

(f)             Collateral Obligations may be purchased or acquired from time to time by the Buyer from the Seller or any of its Affiliates hereunder only if (i) the terms and conditions thereof are no less favorable to the Buyer than the terms it would obtain in a comparable, timely purchase or acquisition with a non-Affiliate and (ii) the transactions are effected in accordance with all applicable laws.

 

Section 2.04          Limitation on Sales to Seller and Affiliates.

 

The Buyer may sell any Collateral Obligation to the Seller or any affiliate thereof at any time; provided that such transaction is conducted in an arm’s length transaction in the ordinary course of business and the value of any such transferred Collateral Obligation shall be the mid-point between the “bid” and “ask” prices provided by a nationally recognized independent pricing service or, if unavailable or determined by the Collateral Manager to be unreliable, the fair market value of such Collateral Obligation as reasonably determined by the Collateral Manager, and such Affiliate shall acquire such Collateral Obligation for a price equal to the value so determined; provided further that an aggregate amount of Collateral Obligations not exceeding 20% of the Net Purchased Loan Balance may be sold or otherwise transferred to the Seller or an affiliate of the Seller that is not a bankruptcy remote specifical purpose entity.

 

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.01          Conditions Precedent

 

This Agreement is subject to the conditions precedent that on or prior to the Refinancing Date each of the conditions precedent to the execution, delivery and effectiveness of each other Transaction Document (other than a condition precedent in any such other Transaction Document relating to the effectiveness of this Agreement) shall have been fulfilled, and:

 

(a)            Counterparts of this Agreement shall have been executed and delivered by or on behalf of the Seller, the Intermediate Seller and the Buyer; and

 

(b)            The Seller shall have delivered to the Buyer filed UCC-1 financing statements as required by Section 2.01(o) describing the applicable Collateral and meeting the requirements of the laws of each jurisdiction in which it is necessary or reasonably desirable, or in which the Seller is required by applicable law, and in such manner as is necessary or reasonably desirable, to perfect the back-up security interest granted under Section 2.01(o).

 

Section 3.02         Conditions Precedent to all Purchases.

 

The obligation of the Intermediate Seller to purchase the Collateral from the Seller and the obligation of the Buyer to purchase the Collateral from the Intermediate Seller on any Purchase Date shall be subject to the satisfaction of the following conditions precedent that:

 

(i)            all representations and warranties (A) of the Seller contained in Sections 4.01 and 4.02 and (B) of the Intermediate Seller contained in Sections 4.03 and 4.04, as applicable, shall be true and correct in all material respects on and as of such date as though made on and as of such date and shall be deemed to have been made on and as of such date (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); and

 

(ii)            the Seller shall have delivered to the Intermediate Seller and the Buyer a duly completed Loan List that is true, accurate and complete in all respects as of the related Purchase Date, which list shall be as of such date incorporated into and made a part of this Agreement and an assignment substantially in the form of Exhibit A hereto, as applicable.

 

Section 3.03         Release of Excluded Amounts.

 

The parties acknowledge and agree that each of the Intermediate Seller and the Buyer has no interest in the Excluded Amounts. Promptly upon the receipt by or release to the Intermediate Seller or the Buyer, as applicable, of any Excluded Amounts, each of the Intermediate Seller and the Buyer hereby irrevocably agrees to deliver and release to (or as directed by) the Seller such Excluded Amounts, which release shall be automatic and shall require no further act by the Intermediate Seller or the Buyer, as applicable; provided that each of the Intermediate Seller and the Buyer respectively agrees that it will execute and deliver such instruments of release and assignment or other documents, or otherwise confirm the foregoing release of such Excluded Amounts, as may be reasonably requested by the Seller in writing.

 

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

 

Section 4.01          Representations and Warranties Regarding the Seller.

 

The Seller makes the following representations and warranties, on which each of the Intermediate Seller and the Buyer relies in acquiring the Collateral purchased hereunder and each of the Secured Parties relies upon in entering into the Indenture or purchasing the Notes. As of each Purchase Date (unless a specific date is specified below), the Seller represents and warrants to the Intermediate Seller and the Buyer for the benefit of the Intermediate Seller and the Buyer and each of their successors and assigns that:

 

(a)            Organization and Good Standing. The Seller has been duly incorporated and is validly existing as a corporation in good standing under the laws of its jurisdiction of incorporation, with all requisite corporate power and authority to own or lease its properties and to conduct its business as such business is presently conducted, and had at all relevant times, and now has, all necessary power, authority and legal right to acquire and own each Collateral Obligation and to sell or contribute such Collateral Obligation to the Intermediate Seller hereunder.

 

(b)            Due Qualification. The Seller is duly qualified to do business and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification, licenses and/or approvals as required in each jurisdiction in which the failure to be so qualified or obtain such license or approval, is likely to have a Material Adverse Effect.

 

(c)            Power and Authority; Due Authorization; Execution and Delivery. The Seller (i) has all necessary corporate power, authority and legal right to (a) execute and deliver this Agreement and (b) carry out the terms of this Agreement and (ii) has duly authorized by all necessary corporate action the execution, delivery and performance of this Agreement and the sale and assignment of an ownership interest in each Collateral Obligation on the terms and conditions herein provided. This Agreement has been duly executed and delivered by the Seller.

 

(d)            Valid Conveyance; Binding Obligations. This Agreement will be duly executed and delivered by the Seller, and this Agreement, other than for accounting and tax purposes, shall effect valid sales of each Collateral Obligation, enforceable against the Seller and creditors of and purchasers from the Seller, and this Agreement shall constitute legal, valid and binding obligations of the Seller enforceable against the Seller in accordance with their respective terms, except as enforceability may be limited by the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization, suspension of payments, or similar debtor relief laws from time to time in effect affecting the rights of creditors generally and general principles of equity (whether such enforceability is considered in a suit at law or in equity).

 

 

(e)            No Violation. The execution, delivery and performance of this Agreement and all other agreements and instruments executed and delivered or to be executed and delivered by the Seller pursuant hereto or thereto in connection with the sale of any Collateral Obligation will not (i) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time or both) a default under, the Seller’s organizational documentation or any contractual obligation of the Seller, (ii) result in the creation or imposition of any Lien (other than Permitted Liens) upon any of the Seller’s properties pursuant to the terms of any such contractual obligation, other than this Agreement, or (iii) violate any applicable law in any material respect.

 

(f)            No Proceedings. There is no litigation, proceeding or investigation pending or, to the knowledge of the Seller, threatened against the Seller, before any Authority (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that could reasonably be expected to have a Material Adverse Effect.

 

(g)            All Consents Required. All approvals, authorizations, consents, orders, licenses or other actions of any Person or of any Authority (if any) required for the due execution, delivery, performance, validity or enforceability of this Agreement to which the Seller is a party have been obtained.

 

(h)            State of Organization, Etc. The Seller will not change its name, identity or legal entity structure or relocate its chief executive office or the location of the Seller’s records regarding the Collateral Obligations (other than those delivered to the Custodian) except after advance notice to the Intermediate Seller and the Buyer and the delivery to the Intermediate Seller and the Buyer of all financing statements, instruments and other documents reasonably requested by the Intermediate Seller or the Buyer.

 

(i)             Solvency. The Seller is not the subject of any bankruptcy proceedings. The Seller is solvent and will not become insolvent after giving effect to the transactions contemplated by this Agreement and the other Transaction Documents. The Seller, after giving effect to the transactions contemplated by this Agreement and the other Transaction Documents, will have an adequate amount of capital to conduct its business.

 

(j)             Compliance with Laws. The Seller has complied in all material respects with all applicable law to which it may be subject.

 

(k)            Taxes. The Seller has filed or caused to be filed all tax returns that are required to be filed by it (subject to any extensions to file properly obtained by the same). The Seller has paid or made adequate provisions for the payment of all Taxes and all assessments made against it or any of its property (other than any amount of Tax the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in accordance with GAAP have been provided on the books of the Seller), and no tax lien has been filed and, to the Seller’s knowledge, no claim is being asserted, with respect to any such Tax, assessment or other charge.

 

 

(l)             Exchange Act Compliance; Regulations T, U and X. None of the transactions contemplated herein or in the other Transaction Documents (including, without limitation, the use of the proceeds from the sale of any Collateral Obligation) will violate or result in a violation of Section 7 of the Exchange Act, or any regulations issued pursuant thereto, including, without limitation, Regulations T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The Seller does not own or intend to carry or purchase, and no proceeds from the sale of the Collateral Obligations will be used to carry or purchase, any Margin Stock or to extend “purpose credit” within the meaning of Regulation U.

 

(m)           No Liens, Etc. Each Collateral Obligation or participation interest therein to be acquired by the Intermediate Seller or the Buyer, as applicable, hereunder is owned by the Seller free and clear of any Lien, security interest, charge or encumbrance (subject only to Permitted Liens), and the Seller has the full right, corporate power and lawful authority to sell the same and interests therein and, upon the sale thereof hereunder, the Buyer will have acquired good and marketable title to and a valid and perfected ownership interest in such Collateral Obligation or participation interests therein, free and clear of any Lien, security interest, charge or encumbrance (subject only to Permitted Liens).

 

(n)            Information True and Correct. All written information (other than projections, other forward-looking information, information of a general economic or general industry nature and pro forma financial information) heretofore (as of each date when this representation and warranty is made) furnished by or on behalf of the Seller to the Intermediate Seller or the Buyer, as applicable, or any assignee thereof in connection with this Agreement or any transaction contemplated hereby is true and accurate in all material respects (to the best knowledge of the Seller, in the case of information obtained by the Seller from Obligors or other unaffiliated third parties), and, taken as a whole, contained as of the date of delivery thereof no untrue statement of a material fact (to the best knowledge of the Seller, in the case of information obtained by the Seller from Obligors or other unaffiliated third parties) and did not omit to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which such information was furnished (to the best knowledge of the Seller, in the case of information obtained by the Seller from Obligors or other unaffiliated third parties) as of the date such information was furnished. The projections and pro forma financial information contained in the materials referenced above are based upon good faith estimates and assumptions believed by management of the Seller to be reasonable at the time made, it being recognized by the Intermediate Seller and the Buyer that such projections and pro forma financial information as it relates to future events are not to be viewed as fact and that actual results during the period or periods covered by such projections and pro forma financial information may differ from the projected and pro forma results set forth therein by a material amount.

 

(o)            Intent of the Seller. The Seller has not sold, contributed, transferred, assigned or otherwise conveyed any interest in any Collateral Obligation or participation interest therein to the Intermediate Seller or the Buyer, as applicable, with any intent to hinder, delay or defraud any of the Seller’s creditors.

 

 

(p)            Value Given. The Seller has received reasonably equivalent value from the Intermediate Seller or the Buyer, as applicable, in exchange for the sale of such Collateral Obligations sold hereunder. No such sale has been made for or on account of an antecedent debt owed by the Seller and no such transfer is or may be voidable or subject to avoidance under any section of the Bankruptcy Code.

 

Section 4.02          Representations and Warranties of the Seller Relating to the Agreement and the Collateral.

 

The Seller makes the following representations and warranties, on which each of the Intermediate Seller and the Buyer relies in acquiring each Collateral Obligation purchased hereunder and each of the Secured Parties relies upon in entering into the Indenture or purchasing the Notes. As of each Purchase Date, the Seller represents and warrants to the Intermediate Seller and the Buyer, as applicable, for the benefit of the Intermediate Seller and the Buyer and each of their successors and assigns that:

 

(a)            Valid Transfer and Security Interest. This Agreement constitutes a valid transfer to the Intermediate Seller or Buyer, as applicable, of all right, title and interest in, to and under each Collateral Obligation, free and clear of any Lien of any Person claiming through or under the Seller or its Affiliates, except for Permitted Liens. If the conveyances contemplated by this Agreement are determined to be a transfer for security, then this Agreement constitutes a grant of a security interest in each Collateral Obligation to the Intermediate Seller or Buyer, as applicable, which upon the delivery of the Collateral Obligation, in accordance with the definition of “Deliver” under the Indenture, to the Intermediate Seller or Buyer, as applicable (or to the Custodian on behalf of the Trustee, for the benefit of the Secured Parties) and the filing of the financing statements shall be a first priority perfected security interest in each such Collateral Obligation, subject only to Permitted Liens.

 

(b)            Eligibility of Sale Portfolio. With respect to each Collateral Obligation, all consents, licenses, approvals or authorizations of or registrations or declarations of any governmental authority or any Person required to be obtained, effected or given by the Seller in connection with the transfer of an ownership interest or security interest in each Collateral Obligation to the Intermediate Seller or the Buyer, as applicable, have been duly obtained, effected or given and are in full force and effect.

 

It is understood and agreed that the representations and warranties provided in this Section 4.02 shall survive (x) the sale of the Collateral Obligations to the Intermediate Seller or the Buyer, as applicable, (y) the grant of a first priority perfected security interest in, to and under each Collateral Obligation pursuant to the Indenture by the Buyer and (z) the termination of this Agreement and the Indenture. Upon discovery by the Seller, the Intermediate Seller or the Buyer of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice thereof to the other and to the Trustee immediately upon obtaining knowledge of such breach.

 

 

Section 4.03          Representations and Warranties Regarding the Intermediate Seller.

 

As of each Purchase Date, the Intermediate Seller represents and warrants to the Buyer for the benefit of the Buyer and each of its successors and assigns that:

 

(a)            Due Organization. The Intermediate Seller is a limited liability company duly formed and validly existing under the laws of the State of Delaware, with full power and authority to own and operate its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement.

 

(b)            Due Qualification and Good Standing. The Intermediate Seller is in good standing in the State of Delaware. The Intermediate Seller is duly qualified to do business and, to the extent applicable, is in good standing and has obtained all material governmental licenses and approvals as required in Delaware and each other jurisdiction in which the failure to be so qualified, maintain good standing or obtain such license or approval, is likely to have a Material Adverse Effect.

 

(c)            Due Authorization; Execution and Delivery; Legal, Value and Binding; Enforceability; Valid Sale. The execution and delivery by the Intermediate Seller of, and the performance of its obligations under this Agreement and the other instruments, certificates and agreements contemplated hereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with its terms, subject, as to enforcement, (A) 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 Intermediate Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity). This Agreement shall effect a valid sale, transfer and assignment of each of the Intermediate Seller to the Buyer of its right, title and interest in the Collateral Obligations sold by the Intermediate Seller to the Buyer on any Purchase Date as set forth herein, enforceable against each of the Intermediate Seller, its creditors and purchasers from the Intermediate Seller, subject, as to enforcement, (A) 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 Intermediate Seller and (B) to general equitable principles (whether enforceability of such principles is considered in a proceeding at law or in equity).

 

(d)            Non-Contravention. None of the execution and delivery by each of the Intermediate Seller of this Agreement, the consummation of the transactions herein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof, will (i) contravene in any material respect the terms of the certificate of formation of the Intermediate Seller or its second amended and restated limited liability company agreement, or any amendment of either thereof, (ii) (A) contravene in any material respect any applicable law, (B) conflict in any material respect, with or result in any breach of, any of the terms and provisions of, or constitute a default under, any indenture, loan, agreement, mortgage, deed of trust or other contractual restriction binding on or affecting it or any of its assets, or (C) contravene in any material respect any order, writ, injunction or decree binding on or affecting it or any of its assets or properties or (iii) result in a breach or violation of, or constitute a default under, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case under this clause (d) which would have a Material Adverse Effect.

 

 

(e)            Governmental Authorizations; Governmental Filings. The Intermediate Seller has obtained, maintained and kept in full force and effect all Governmental Authorizations which are necessary for the execution and delivery by it of this Agreement and the performance by it of its obligations under this Agreement, and no Governmental Authorization or Governmental Filing which has not been obtained or made is required to be obtained or made by it in connection with the execution and delivery by it of this Agreement or the performance of its obligations under this Agreement.

 

(f)            Solvency. The Intermediate Seller, after giving effect to the conveyance by the Intermediate Seller of Collateral Obligations hereunder to the Buyer on each Purchase Date and after giving effect to the transactions contemplated hereunder and under the other Transaction Documents on such date, is solvent on and as of the Refinancing Date or the related Purchase Date.

 

(g)            Investment Company Status. The Intermediate Seller is not required to be registered as an “investment company” within the meaning of the Investment Company Act.

 

(h)            Value Given. The cash payments, if any, received by the Intermediate Seller and Subordinated Notes issued by the Buyer to the Intermediate Seller in respect of the Purchase Price of the Collateral Obligations sold hereunder by the Intermediate Seller to the Buyer on any Purchase Date constitute reasonably equivalent value in consideration for the transfer by the Intermediate Seller to the Buyer of such Collateral Obligations under this Agreement, such transfer was not made for or on account of an antecedent debt owed by the Intermediate Seller to the Buyer and such transfer was not and is not voidable or subject to avoidance under any applicable bankruptcy laws.

 

(i)            No Proceedings. There is no action, suit or proceeding pending against or, to the actual knowledge of an Authorized Officer of the Intermediate Seller, after due inquiry, threatened against or adversely affecting (i) the Intermediate Seller or (ii) the transactions contemplated by this Agreement, before any court, arbitrator or any governmental body, agency or official, in each case, which has had or would reasonably be expected to have a Material Adverse Effect.

 

The representations and warranties set forth in this Section 4.03 shall survive the sale, transfer and assignment of the Collateral Obligations by the Intermediate Seller to the Buyer on or after the Refinancing Date.

 

 

Section 4.04          Representations and Warranties of the Intermediate Seller Relating to the Agreement and the Collateral.

 

The Intermediate Seller hereby represents and warrants to the Buyer, as of each Purchase Date that:

 

(a)            Valid Transfer. This Agreement constitutes a valid transfer to the Buyer of all right, title and interest of the Intermediate Seller in, to and under all of the Collateral transferred by the Intermediate Seller to the Buyer on any Purchase Date, free and clear of any Lien of any Person claiming through or under the Intermediate Seller or any of its Affiliates, except for Permitted Liens.

 

(b)            No Fraud. Each Collateral Obligation sold by the Intermediate Seller to the Buyer hereunder, to the best of the Intermediate Seller’s knowledge, was originated without any fraud or material misrepresentation by the Seller or on the part of the Obligor.

 

(c)            Ordinary Course of Business. Any sale of Collateral Obligations by the Intermediate Seller to the Buyer pursuant to this Agreement is in the ordinary course of business and financial affairs of the Intermediate Seller. Each remittance of collections on such Collateral Obligations by the Intermediate Seller to the Buyer as transferee under this Agreement, will have been made in the ordinary course of business or financial affairs of the Intermediate Seller and the Buyer.

 

(d)            Sale Treatment. The Intermediate Seller has treated the transfer of the Collateral Obligations by the Intermediate Seller to the Buyer hereunder on the related Purchase Date for all purposes as a sale by the Intermediate Seller and purchase by the Buyers on all of its relevant books and records (other than for tax and accounting purposes).

 

Section 4.05          Representations and Warranties Regarding the Buyer.

 

By its execution of this Agreement, the Buyer represents and warrants to the Intermediate Seller and the Seller that:

 

(a)            Due Organization. The Buyer is a limited liability company duly formed and validly existing under the laws of the State of Delaware, with full power and authority to own and operate its assets and properties, conduct the business in which it is now engaged and to execute and deliver and perform its obligations under this Agreement and the other Transaction Documents to which it is a party.

 

(b)            Due Qualification and Good Standing. The Buyer is in good standing under the laws of the State of Delaware. The Buyer is duly qualified to do business and, to the extent applicable, is in good standing and has obtained or will obtain all material governmental licenses and approval in Delaware and in each other jurisdiction in which the nature of its business, assets and properties, including the performance of its obligations under this Agreement and the other Transaction Documents to which it is a party requires such qualification, except where the failure to be so qualified, maintain good standing or obtain such license or approval would not reasonably be expected to have a Material Adverse Effect.

 

(c)            Due Authorization; Execution and Delivery; Legal, Valid and Binding; Enforceability. The execution and delivery by the Buyer of, and the performance of its obligations under this Agreement, the other Transaction Documents to which it is a party and the other instruments, certificates and agreements contemplated hereby or thereby are within its powers and have been duly authorized by all requisite action by it and have been duly executed and delivered by it and constitute its legal, valid and binding obligations enforceable against it in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally or general principles of equity, regardless of whether considered in a proceeding in equity or at law.

 

 

(d)            Non-Contravention. None of the execution and delivery by the Buyer of this Agreement or the other Transaction Documents to which it is a party, the consummation of the transactions herein or therein contemplated, or performance and compliance by it with the terms, conditions and provisions hereof or thereof, will (i) contravene in any material respect the terms of the certificate of formation of the Buyer or its second amended and restated limited liability company agreement, or any amendment of either thereof, (ii) conflict with or contravene (A) any applicable law, (B) any indenture, agreement or other contractual restriction binding on or affecting it or any of its assets, including any Related Contract, or (C) any order, writ, judgment, award, injunction or decree binding on or affecting it or any of its assets or properties or (iii) result in a breach or violation of, or constitute a default under, or permit the acceleration of any obligation or liability in, or but for any requirement of the giving of notice or the passage of time (or both) would constitute such a conflict with, breach or violation of, or default under, or permit any such acceleration in, any contractual obligation or any agreement or document to which it is a party or by which it or any of its assets are bound (or to which any such obligation, agreement or document relates), in each case under this clause (d) which would have a Material Adverse Effect.

 

(e)            Governmental Authorizations; Private Authorizations; Governmental Filings. No order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with the execution, delivery and performance of any Transaction Documents to which the Buyer is a party or the consummation of any of the transactions contemplated thereby other than those that have already been duly made or obtained and remain in full force and effect or those recordings and filings in connection with the Liens granted to the Trustee under the Transaction Documents, except for any order, consent, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption, that, if not obtained, would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(f)             Place of Business. The Buyer’s location (within the meaning of Article 9 of the UCC) is the State of Delaware.

 

(g)            Sale Treatment. Other than for accounting and tax purposes, the Buyer has treated the transfer of Collateral Obligations hereunder to the Buyer for all purposes as a sale by the Seller or the Intermediate Seller, as applicable, and purchase by the Buyer on all of its relevant books and records and other applicable documents.

 

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.01          Amendments and Waivers.

 

(a)            This Agreement may be amended or waived from time to time by the parties hereto by written agreement, with prior written notice to the Trustee; provided that no such amendment or waiver shall reduce the amount of, or delay the timing of, any amounts received on Collateral Obligations which are required to be distributed with respect to any Class of Notes without the consent of the Holders of each Class materially and adversely affected thereby, or change the rights or obligations of any other party hereto without the consent of such party. Failure to object within ten Business Days of notice being given of any proposed amendment shall constitute consent for all purposes hereunder. Notwithstanding the foregoing, the Loan Lists may be amended and modified by the Seller at any time in accordance with this Agreement by providing updated Loan Lists to the Buyer and the Trustee.

 

(b)            Prior to the execution of any such amendment or waiver, the Buyer shall furnish to the Trustee (and the Trustee shall furnish to the Rating Agencies and each Holder) written notification of the substance of such proposed amendment or waiver, together with a copy thereof.

 

(c)            Promptly after the execution of any such amendment or waiver, the Buyer shall furnish (or cause the Trustee to furnish) a copy of such amendment or waiver to the Rating Agencies and to each Holder. It shall not be necessary for the consent of any Holders pursuant to Section 5.01(a) to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.

 

(d)            Prior to the execution of any amendment to this Agreement, the Buyer and the Trustee shall be entitled to receive and rely upon an Opinion of Counsel (which Opinion of Counsel may rely upon one or more certificates from an Authorized Officer of the Seller, the Intermediate Seller, the Buyer and/or the Collateral Manager with respect to factual matters and of the Buyer and/or the Collateral Manager with respect to the effect of any such amendment or waiver on the economic interests of the Buyer or the Holders) stating that the execution of such amendment is authorized or permitted by this Agreement.

 

Section 5.02          Notices, Etc.

 

All demands, notices and other communications hereunder shall, unless otherwise stated herein, be in writing (which shall include facsimile communication and communication by e-mail in portable document format (.pdf)) and faxed, e-mailed or delivered, to each party hereto, at its address set forth below or at such other address as shall be designated by such party in a written notice to the other parties hereto, and to the Trustee or the Rating Agencies, at its address set forth in the Indenture or at such other address as shall be designated by such Person in a written notice to the other parties hereto. Notices and communications by facsimile and e-mail shall be effective when sent (and shall be followed by hard copy sent by regular mail), and notices and communications sent by other means shall be effective when received. Notices and other communications relating to this Agreement to be delivered by the Buyer (or the Trustee on its behalf) to any Holder shall be delivered as provided in the Indenture.

 

 

The address for the Seller is the following:

 

Golub Capital BDC, Inc.

200 Park Avenue, 25th Floor
New York, New York 10166

 

The address for the Intermediate Seller is the following:

 

Golub Capital BDC CLO 8 Depositor LLC
c/o Golub Capital BDC, Inc.

200 Park Avenue, 25th Floor
New York, New York 10166

 

The address for the Buyer is the following:

 

Golub Capital BDC CLO 8 LLC
c/o Golub Capital BDC, Inc.

200 Park Avenue, 25th Floor
New York, New York 10166

 

with a copy to:

 

GC Advisors LLC
200 Park Avenue, 25th Floor
New York, New York 10166

 

Section 5.03          Severability of Provisions.

 

If any one or more of the covenants, provisions or terms of this Agreement shall be for any reason whatsoever held invalid, then such covenants, provisions or terms shall be deemed severable from the remaining covenants, provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other provisions of this Agreement.

 

Section 5.04          GOVERNING LAW; JURY WAIVER.

 

THIS AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREUNDER.

 

 

Section 5.05          Electronic Signatures; Counterparts.

 

This Agreement shall be valid, binding, and enforceable against a party when executed and delivered by an authorized individual on behalf of the party by means of (i) an original manual signature; (ii) a faxed, scanned, or photocopied manual signature, or (iii) any other electronic signature permitted by the federal Electronic Signatures in Global and National Commerce Act, state enactments of the Uniform Electronic Transactions Act, and/or any other relevant electronic signatures law, including any relevant provisions of the UCC (collectively, “Signature Law”), in each case to the extent applicable. Each faxed, scanned, or photocopied manual signature, or other electronic signature, shall for all purposes have the same validity, legal effect, and admissibility in evidence as an original manual signature. Each party hereto shall be entitled to conclusively rely upon, and shall have no liability with respect to, any faxed, scanned, or photocopied manual signature, or other electronic signature, of any other party and shall have no duty to investigate, confirm or otherwise verify the validity or authenticity thereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute one and the same instrument. For the avoidance of doubt, original manual signatures shall be used for execution or indorsement of writings when required under the UCC or other Signature Law due to the character or intended character of the writings.

 

Section 5.06          Bankruptcy Non-Petition and Limited Recourse; Claims.

 

Each of the parties hereto hereby agrees that it will not institute against, or join any other Person in instituting against, the other party hereto any bankruptcy proceeding so long as there shall not have elapsed one year and one day (or such longer preference period as shall then be in effect and one day) after payment in full of all the Notes. In addition, none of the parties hereto shall have any recourse for any amounts payable or any other obligations arising under this Agreement against any officer, member, manager, director, employee, partner, Affiliate or security holder of the other party or any of its successors or assigns. The terms of this Section 5.06 shall survive termination of this Agreement.

 

Section 5.07          Binding Effect; Assignability.

 

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. No third party (other than the Trustee and the other Secured Parties) shall be third-party beneficiaries of this Agreement.

 

Section 5.08          Headings and Exhibits.

 

The headings herein are for purposes of references only and shall not otherwise affect the meaning or interpretation of any provision hereof. The schedules and exhibits attached hereto and referred to herein shall constitute a part of this Agreement and are incorporated into this Agreement for all purposes.

 

Section 5.09          Existing Agreement.

 

The parties hereto acknowledge and agree that the Existing Agreement is hereby amended, restated and replaced in its entirety by this Agreement.

 

 

[Remainder of Page Intentionally Left Blank.]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.

 

	GOLUB CAPITAL BDC, INC., as the Seller
	By:	/s/ Christopher Ericson
		Name:	Christopher Ericson
		Title:	Chief Financial Officer

 

Golub Capital BDC CLO 8

A&R Master Loan Sale Agreement

 

 

	GOLUB CAPITAL BDC CLO 8 DEPOSITOR LLC, as the Intermediate Seller
	By:	Golub Capital BDC, Inc., its designated manager
	By:	/s/ Christopher Ericson
		Name:	Christopher Ericson
		Title:	Chief Financial Officer

 

Golub Capital BDC CLO 8

A&R Master Loan Sale Agreement

 

 

	GOLUB CAPITAL BDC CLO 8 LLC, as the Buyer
	By:	Golub Capital BDC, Inc., its designated manager
	By:	/s/ Christopher Ericson
		Name:	Christopher Ericson
		Title:	Chief Financial Officer

 

Golub Capital BDC CLO 8

A&R Master Loan Sale Agreement

 

 

Exhibit A

 

Form of Assignment (Schedule 2)

 

[Date]

 

In accordance with the Amended and Restated Master Loan Sale Agreement (together with all amendments and modifications from time to time thereto, the “Agreement”), dated as of November 18, 2024, made by and among the undersigned, GOLUB CAPITAL BDC, INC., as the Seller (together with its successors and permitted assigns, the “Seller”), Golub Capital BDC CLO 8 Depositor LLC, as the Intermediate Seller (together with its successors and permitted assigns, the “Intermediate Seller”), and Golub Capital BDC CLO 8 LLC, as the Buyer (together with its successors and permitted assigns, the “Buyer”), the Seller does hereby sell, transfer, convey and assign, set over and otherwise convey to the Intermediate Seller, all of the Seller’s right, title and interest in and to the following (including, without limitation, all obligations of the lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the undersigned to the Intermediate Seller hereunder which obligations the Intermediate Seller hereby assumes), and the Intermediate Seller does hereby sell, transfer, convey and assign, set over and otherwise convey to the Buyer, all of the Intermediate Seller’s right, title and interest in and to the following (including, without limitation, all obligations of the lender to fund any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation conveyed by the undersigned to the Buyer hereunder which obligations the Buyer hereby assumes):

 

(i)            the Collateral Obligations listed on Schedule 2 attached hereto (which Schedule 2 is hereby incorporated by reference in and shall become part of the Loan List referred to as Schedule 1 in the Agreement), all payments paid in respect thereof and all monies due, to become due or paid in respect thereof accruing on and after the Purchase Date and all collections on the Collateral Obligations and other recoveries thereon, in each case as they arise after the Purchase Date;

 

(ii)           all Liens with respect to the Collateral Obligations referred to in clause (i) above;

 

(iii)          all Related Contracts with respect to the Collateral Obligations referred to in clause (i) above;

 

(iv)          all collateral security granted under any Related Contracts; and

 

(v)           all income, payments, proceeds and other benefits of any and all of the foregoing, including but not limited to, all accounts, cash and currency, chattel paper, electronic chattel paper, tangible chattel paper, copyrights, copyright licenses, equipment, fixtures, general intangibles, instruments, commercial tort claims, deposit accounts, inventory, investment property, letter of credit rights, software, supporting obligations, accessions, proceeds and other property consisting of, arising out of, or related to the foregoing, but excluding any Excluded Amount with respect thereto.

 

Capitalized terms used herein have the meaning given such terms in the Agreement.

 

 

This assignment is made pursuant to and in reliance upon the representations and warranties on the part of the undersigned contained in Article IV of the Agreement and no others.

 

THIS ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

 

 

IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly executed on the date written above.

 

	GOLUB CAPITAL BDC, INC.,
	as the Seller
	By:
		Name:
		Title:
	GOLUB CAPITAL BDC CLO 8 DEPOSITOR LLC,
	as the Intermediate Seller
	By:	Golub Capital BDC, Inc., its designated manager
	By:
		Name:
		Title:
	Golub Capital BDC CLO 8 LLC,
	as the Buyer
	By:	Golub Capital BDC, Inc., its designated manager
	By:
		Name:
		Title:

 

 

Schedule 2

 

Loan List

 

[To be attached]

 

 

Schedule 1

 

Collateral Obligations

 

Loan List

 

 

 

Exhibit 10.5

 

Execution Version

 

COMMITMENT INCREASE AGREEMENT

 

November 15, 2024

 

JPMorgan Chase Bank, N.A.,

as Administrative Agent

500 Stanton Christiana Road

NCC 5, Floor 1

Newark, DE 19713-2107

 

Attention: Loan & Agency Services Group

 

Ladies and Gentlemen:

 

We refer to the Second Amended and Restated Senior Secured Revolving Credit Agreement dated as of August 6, 2024 (as amended, modified or supplemented from time to time, the “Credit Agreement”; the terms defined therein being used herein as therein defined) among Golub Capital BDC, Inc. (the “Borrower”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent for said Lenders. You have advised us that the Borrower has requested in a letter dated November 15, 2024 (the “Increase Request”) from the Borrower to the Administrative Agent that the aggregate amount of the Commitments be increased on the terms and subject to the conditions set forth herein.

 

A.            Commitment Increase. Pursuant to Section 2.07(e) of the Credit Agreement, BNP Paribas (the “Assuming Lender”), hereby agrees to make Commitments in the amount set forth opposite the name of the Assuming Lender, as listed in Schedule I hereto pursuant to the instruction of the Administrative Agent, such Commitments to be effective as of the Increase Date (as defined in the Increase Request); provided that the Administrative Agent shall have received a duly executed officer’s certificate from the Borrower, dated the Increase Date, in substantially the form of Exhibit I hereto. Pursuant to Section 2.07(e)(i)(C) of the Credit Agreement, the Administrative Agent and the Issuing Bank hereby consent to the Assuming Lender making the Commitments in the amount specified in the Increase Request and in Schedule I hereto.

 

B.            Confirmation of Assuming Lender. The Assuming Lender (i) confirms that it has received a copy of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Commitment Increase Agreement; (ii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender or Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; and (iii) acknowledges and agrees that, from and after the Increase Date, the Commitments set forth opposite the name of the Assuming Lender listed in Schedule I hereto shall be included in its Commitment and its Commitments and be governed for all purposes by the Credit Agreement and the other Loan Documents.

 

 

C.            Counterparts. This Commitment Increase Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this Commitment Increase Agreement by telecopy or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Commitment Increase Agreement.

 

D.            Governing Law. This Commitment Increase Agreement shall be construed in accordance with and governed by the law of the State of New York. Section 9.09(b) (Submission to Jurisdiction), Section 9.09(c) (Waiver of Venue) and Section 9.09(d) (Service of Process) of the Credit Agreement are hereby incorporated mutatis mutandis and shall apply hereto.

 

EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS Commitment Increase AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS Commitment Increase Agreement BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS paragraph.

 

 

	Very truly yours,
	ASSUMING LENDER
	BNP Paribas
	By:	/s/ Robert Musetti
		Name:	Robert Musetti
		Title:	Managing Director
	By:	/s/ Ed Doherty
		Name:	Ed Doherty
		Title:	Managing Director

 

Commitment Increase Agreement

 

 

Accepted and Agreed:
GOLUB CAPITAL BDC, INC.
By:	/s/ Christopher C. Ericson
	Name:	Christopher C. Ericson
	Title:	Chief Financial Officer and Treasurer
Acknowledged By:
JPRMORGAN CHASE BANK, N.A.,
as Administrative Agent and Issuing Bank
By:	/s/ Tom Gillespie
	Name:	Tom Gillespie
	Title:	Executive Director

 

Commitment Increase Agreement

 

 

SCHEDULE I

 

Assuming Lender	Dollar Commitment
BNP Paribas	$75,000,000

 

 

v3.24.3

Cover	Nov. 15, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Nov. 15, 2024
Entity File Number	814-00794
Entity Registrant Name	GOLUB CAPITAL BDC, INC.
Entity Central Index Key	0001476765
Entity Tax Identification Number	27-2326940
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	200 Park Avenue
Entity Address, Address Line Two	25th Floor
Entity Address, City or Town	New York
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10166
City Area Code	212
Local Phone Number	750-6060
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	GBDC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false

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