jmpllc20170629_8k.htm

 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): June 29, 2017 

 


 

JMP Group LLC

(Exact Name of Registrant as Specified in Charter) 

 

 


 

Delaware

 

001-36802

 

47-1632931

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

 

 

600 Montgomery Street, Suite 1100, San Francisco, California 94111

(Address of Principal Executive Offices, including zip code)

 

 

415-835-8900

(Registrant’s Telephone Number, Including Area Code)

(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:

 

 

Written communication 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 communication pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

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

  

On June 29, 2017, JMP Group LLC (the “Company”) closed a $456.9 million collateralized loan obligation (“CLO”) transaction.  The senior notes offered in this transaction (the “Secured Notes”) will be issued by JMP Credit Advisors CLO IV Ltd., a newly formed special purpose Cayman vehicle (the “Issuer”), and co-issued by JMP Credit Advisors CLO IV LLC, a newly formed special purpose Delaware vehicle (the “Co-Issuer”), and will be backed primarily by a diversified portfolio of broadly syndicated leveraged loans.  The Secured Notes are subject to a two-year non-call period.  The CLO has a four-year reinvestment period that allows for the use of the proceeds from any principal repayments on, or any sales of, collateral assets towards the purchase of qualifying replacement assets, subject to certain conditions and limitations.

 

The capital structure of the CLO is as follows: 

  

($ as shown)

       

Preliminary

       
   

Par

 

Moody's / Fitch

 

Maturity

   

Class

 

Amount

 

Rating

 

Date

 

Coupon

                   

A

  $ 285,750,000  

Aaa/AAA

 

July 17, 2029

 

L+1.37%

B

    54,000,000  

Aa2/NR

 

July 17, 2029

 

L+1.90%

C

    27,000,000  

A2/NR

 

July 17, 2029

 

L+2.65%

D

    24,750,000  

Baa3/NR

 

July 17, 2029

 

L+4.15%

E

    22,500,000  

Ba3/NR

 

July 17, 2029

 

L+6.80%

Senior Subordinated Notes

    10,717,500  

NR/NR

 

July 17, 2029

 

L+5.75%(1)

Junior Subordinated Notes

    32,152,500  

NR/NR

 

July 17, 2029

   
Total   $ 456,870,000            
 

(1)

On each Payment Date, the Senior Subordinated Notes will be entitled to receive the coupon stated above and 45% of all remaining interest proceeds and all remaining principal proceeds prior to any distributions on the Junior Subordinated Notes on such Payment Date.

 

The Notes were sold in transactions exempt from registration under the Securities Act of 1933, as amended, and 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. The Secured Notes were issued pursuant to an indenture, dated as of June 29, 2017.

 

The Company, through a wholly-owned subsidiary, purchased 100% of the Senior Subordinated Notes and Junior Subordinated Notes of the Issuer (collectively, the “Subordinated Notes” and together with the Secured Notes, the “Notes”) pursuant to a subscription agreement, at a face amount of $42.9 million. Subject to certain limitations specified in the joint final rules implementing the credit risk retention requirements of Section 941 of the Dodd-Frank Act, the Company has an obligation to retain Junior Subordinated Notes representing 5% of the aggregate fair value of the Notes, from June 29, 2017 until the latest of: (i) the date on which the total unpaid aggregate principal balance of the collateral obligations and eligible investments has been reduced to 33% of the total unpaid aggregate principal balance of the collateral obligations and eligible investments as of the date of closing; (ii) the date on which the aggregate outstanding amount of the Notes has been reduced to 33% of the aggregate outstanding amount of the Notes as of the date of closing; and (iii) two years after the date of closing. The Junior Subordinated Notes do not bear interest and are not rated.  The stated maturity dates of the Notes are set forth in the table above.  The Secured Notes will be the secured obligations of the Issuer and of the Co-Issuer, and an indenture governing the Notes includes customary covenants and events of default.

 

The Company (through JMP Credit Advisors LLC) will serve as collateral manager to the Issuer under a collateral management agreement, which contains customary representations, warranties and covenants. Under the collateral management agreement, the Company will perform certain investment management functions, including supervising and directing the investment and reinvestment of the Issuer's assets, as well as performing certain administrative and advisory functions.  

 

 

 
 

 

 

U.S. Bank National Association serves as collateral administrator to the Issuer under a collateral administration agreement.  The Company (through JMP Credit Advisors LLC) made customary representations, warranties and covenants in the collateral administration agreement.

 

The Company intends to consolidate the loan investment portfolio and expects to account for the transaction on its balance sheet as non-recourse debt.

 

The descriptions of the documentation relating to this transaction 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 and incorporated into this Current Report on Form 8-K by reference.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

 

Item 9.01     Financial Statements and Exhibits

 

(d) Exhibits

Exhibit No.

Description

   

4.10

Indenture, dated as of June 29, 2017, among JMP Credit Advisors CLO IV Ltd., as Issuer, JMP Credit Advisors CLO IV LLC, as Co-Issuer, and U.S. Bank National Association, as Trustee.

   

10.15

Collateral Administration Agreement, dated as of June 29, 2017, by and among JMP Credit Advisors CLO IV Ltd., JMP Credit Advisors LLC and U.S. Bank National Association, as collateral administrator.

   

 99.1

Press Release issued by the Company, dated June 29, 2017.

 

 

 
 

 

  

Signature(s)

 

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.

 

 

JMP Group LLC

 

 

 

 

 

 

 

 

 

Date: July 3, 2017

By:

/s/ Raymond Jackson

 

 

 

Raymond Jackson

 

 

 

Chief Financial Officer

 

 

 

                                    

 

ex4-10.htm

Exhibit 4.10

 

 



 

 

 

 

JMP CREDIT ADVISORS CLO IV LTD.

Issuer,

 

JMP CREDIT ADVISORS CLO IV LLC

Co-Issuer,

 

AND

 

U.S. BANK NATIONAL ASSOCIATION

Trustee

 

INDENTURE

 

Dated as of June 29, 2017

 

COLLATERALIZED LOAN OBLIGATIONS

 

 

 

 



 

 

 
 

 

 

TABLE OF CONTENTS

 

 

    Page
     

ARTICLE I                 DEFINITIONS

2

     

Section 1.1

Definitions.

2

Section 1.2

Rules of Construction.

66

Section 1.3

Assumptions as to Pledged Obligations.

66

   

ARTICLE II                THE NOTES  

69

   

Section 2.1

Forms Generally.

69

Section 2.2

Forms of Notes.

69

Section 2.3

Authorized Amount; Stated Maturity; Denominations.

71

Section 2.4

Additional Notes.

73

Section 2.5

Execution, Authentication, Delivery and Dating.

74

Section 2.6

Registration, Registration of Transfer and Exchange.

74

Section 2.7

Mutilated, Defaced, Destroyed, Lost or Stolen Note.

86

Section 2.8

Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved.

88

Section 2.9

Persons Deemed Owners.

91

Section 2.10

Surrender of Notes; Cancellation.

91

Section 2.11

Certificated Notes.

91

Section 2.12

Notes Beneficially Owned by Persons Not QIB/QPs, IAI/QPs or AI/QPs or in Violation of ERISA Representations.

92

Section 2.13

Deduction or Withholding from Payments on Notes; No Gross Up.

94

Section 2.14

Tax Treatment; Tax Certifications.

94

   

ARTICLE III              CONDITIONS PRECEDENT  

96

   

Section 3.1

Conditions to Issuance of Notes on Closing Date.

96

Section 3.2

Conditions to Issuance of Additional Notes.

99

Section 3.3

Custodianship; Delivery of Collateral Obligations and Eligible Investments.

101

   

ARTICLE IV              SATISFACTION AND DISCHARGE  

102

   

Section 4.1

Satisfaction and Discharge of Indenture.

102

Section 4.2

Application of Trust Money.

104

Section 4.3

Repayment of Monies Held by Paying Agent.

104

Section 4.4

Limitation on obligation to incur Administrative Expenses.

104

 

 

 
-i-

 

 

ARTICLE V                REMEDIES  

105

   

Section 5.1

Events of Default.

105

Section 5.2

Acceleration of Maturity; Rescission and Annulment.

107

Section 5.3

Collection of Indebtedness and Suits for Enforcement by Trustee.

108

Section 5.4

Remedies.

109

Section 5.5

Optional Preservation of Assets.

112

Section 5.6

Trustee May Enforce Claims without Possession of Notes.

114

Section 5.7

Application of Money Collected.

114

Section 5.8

Limitation on Suits.

114

Section 5.9

Unconditional Rights of Secured Noteholders to Receive Principal and Interest.

115

Section 5.10

Restoration of Rights and Remedies.

115

Section 5.11

Rights and Remedies Cumulative.

115

Section 5.12

Delay or Omission Not Waiver.

115

Section 5.13

Control by Majority of Controlling Class.

116

Section 5.14

Waiver of Past Defaults.

116

Section 5.15

Undertaking for Costs.

117

Section 5.16

Waiver of Stay or Extension Laws.

117

Section 5.17

Sale of Assets.

117

Section 5.18

Action on the Notes.

118

   

ARTICLE VI              THE TRUSTEE  

118

   

Section 6.1

Certain Duties and Responsibilities.

118

Section 6.2

Notice of Default.

121

Section 6.3

Certain Rights of Trustee.

121

Section 6.4

Not Responsible for Recitals or Issuance of Notes.

124

Section 6.5

May Hold Notes.

124

Section 6.6

Money Held in Trust.

124

Section 6.7

Compensation and Reimbursement.

125

Section 6.8

Corporate Trustee Required; Eligibility.

126

Section 6.9

Resignation and Removal; Appointment of Successor.

126

Section 6.10

Acceptance of Appointment by Successor.

128

Section 6.11

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

128

Section 6.12

Co-trustees.

128

Section 6.13

Certain Duties of Trustee Related to Delayed Payment of Proceeds.

129

Section 6.14

Authenticating Agents.

130

Section 6.15

Withholding.

131

Section 6.16

Representative for Secured Noteholders Only; Agent for each Hedge Counterparty and the Holders of the Subordinated Notes.

131

Section 6.17

Representations and Warranties of the Bank.

131

Section 6.18

Communication with Rating Agencies.

132

Section 6.19

Provisions related to the Collateral Management Agreement.

132

 

 

 
-ii-

 

 

ARTICLE VII             COVENANTS  

132

   

Section 7.1

Payment of Principal and Interest.

132

Section 7.2

Maintenance of Office or Agency.

133

Section 7.3

Money for Note Payments to Be Held in Trust.

134

Section 7.4

Existence of Co-Issuers.

135

Section 7.5

Protection of Assets.

136

Section 7.6

Opinions as to Assets.

138

Section 7.7

Performance of Obligations.

138

Section 7.8

Negative Covenants.

139

Section 7.9

Statement as to Compliance.

141

Section 7.10

Co-Issuers May Consolidate, etc. only on Certain Terms

142

Section 7.11

Successor Substituted.

143

Section 7.12

No Other Business.

144

Section 7.13

Annual Rating Review.

144

Section 7.14

Reporting.

144

Section 7.15

Calculation Agent.

145

Section 7.16

Certain Tax Matters.

145

Section 7.17

Ramp-Up Period; Purchase of Additional Collateral Obligations.

152

Section 7.18

Representations Relating to Security Interests in the Assets.

155

Section 7.19

Acknowledgement of Collateral Manager Standard of Care.

157

Section 7.20

Maintenance of Listing.

158

Section 7.21

Section 3(c)(7) Procedures.

158

   

ARTICLE VIII            SUPPLEMENTAL INDENTURES  

159

   

Section 8.1

Supplemental Indentures without Consent of Holders of Notes.

159

Section 8.2

Supplemental Indentures with Consent of Holders of Notes.

163

Section 8.3

Supplemental Indentures with consent of the Section 13 Banking Entities.

166

Section 8.4

Execution of Supplemental Indentures.

166

Section 8.5

Effect of Supplemental Indentures.

167

Section 8.6

Reference in Notes to Supplemental Indentures.

167

   

ARTICLE IX              REDEMPTION OF NOTES  

167

   

Section 9.1

Mandatory Redemption.

167

Section 9.2

Optional Redemption.

168

Section 9.3

Partial Redemption by Refinancing.

170

Section 9.4

Tax Redemption.

171

Section 9.5

Redemption Procedures.

171

Section 9.6

Notes Payable on Redemption Date.

173

Section 9.7

Special Redemption.

174

Section 9.8

Clean-Up Call Redemption.

175

 

 

 
-iii-

 

 

ARTICLE X               ACCOUNTS, ACCOUNTINGS AND RELEASES  

176

   

Section 10.1

Collection of Money.

176

Section 10.2

Collection Accounts.

177

Section 10.3

Payment Account; Custodial Account; Ramp-Up Account; Expense Reserve Account; Interest Reserve Account; Unfunded Exposure Account.

178

Section 10.4

Hedge Counterparty Collateral Account.

181

Section 10.5

Reinvestment of Funds in Accounts; Reports by Trustee.

182

Section 10.6

Accountings.

184

Section 10.7

Release of Securities.

192

Section 10.8

Reports by Independent Accountants.

193

Section 10.9

Reports to Rating Agencies.

195

Section 10.10

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

195

   

ARTICLE XI              APPLICATION OF MONIES  

195

   

Section 11.1

Disbursements of Monies from Payment Account.

195

   

ARTICLE XII             SALE OF COLLATERAL OBLIGATIONS; PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS  

203

   

Section 12.1

Sales of Collateral Obligations.

203

Section 12.2

Purchase of Additional Collateral Obligations.

205

Section 12.3

Disposition of Illiquid Assets.

211

Section 12.4

Conditions Applicable to All Sale and Purchase Transactions.

212

   

ARTICLE XIII            NOTEHOLDERS' RELATIONS  

213

   

Section 13.1

Subordination.

213

Section 13.2

Standard of Conduct.

214

Section 13.3

Provision of Information.

214

   

ARTICLE XIV            MISCELLANEOUS

215

   

Section 14.1

Form of Documents Delivered to Trustee.

215

Section 14.2

Acts of Holders.

215

Section 14.3

Notices, etc., to Trustee, the Co-Issuers, the Collateral Administrator, the Collateral Manager, the Hedge Counterparty, the Paying Agent, the Administrator and the Rating Agencies

216

Section 14.4

Notices to Holders; Waiver.

219

Section 14.5

Effect of Headings and Table of Contents.

220

Section 14.6

Successors and Assigns.

220

Section 14.7

Separability.

220

Section 14.8

Benefits of Indenture.

220

 

 

 
-iv-

 

 

Section 14.9

Intentionally Omitted.

220

Section 14.10

Governing Law.

220

Section 14.11

Submission to Jurisdiction.

220

Section 14.12

Counterparts.

220

Section 14.13

Acts of Issuer.

221

Section 14.14

Confidential Information.

221

Section 14.15

Liability of Co-Issuers.

223

Section 14.16

17g-5 Information.

223

Section 14.17

Moody's Rating Condition.

225

Section 14.18

Waiver of Jury Trial.

226

Section 14.19

Escheat.

226

Section 14.20

Records.

226

   

ARTICLE XV             ASSIGNMENT OF COLLATERAL MANAGEMENT AGREEMENT

226

   

Section 15.1

Assignment of Collateral Management Agreement.

226

   

ARTICLE XVI            HEDGE AGREEMENTS

227

   

Section 16.1

Hedge Agreements.

227

 

 

 
-v-

 

 

Schedule 1– Moody's Industry Classification Group List

Schedule 2–

S&P Industry Classifications

Schedule 3–

Diversity Score Calculation

Schedule 4–

Moody's Rating Definitions

Schedule 5– Fitch Rating Definitions

      

Exhibit A     – Forms of Notes
  A1     –  Form of Class A Note
  A2     – Form of Class B Note
  A3     – Form of Class C Note
  A4     – Form of Class D Note
  A5     –  Form of Class E Note
  A6     – Form of Senior Subordinated Note
 

A7     –

Form of Junior Subordinated Note

 

Exhibit B     – Forms of Transfer and Exchange Certificates
  B1        – Form of Transferor Certificate for Transfer of Rule 144A Global Notes or Certificated Notes to Regulation S Global Notes
  B2A     –  Form of Transferor Certificate for Transfer of Regulation S Global Notes to Rule 144A Global Notes or Certificated Notes
  B2B      – Form of Transferor Certificate for Transfer of Certificated Notes to Rule 144A Global Notes
  B3        – Form of Transferee Certificate for Transfer of Regulation S Global Notes or Certificated Notes to Rule 144A Global Notes
  B4        –  Form of Transferee Certificate for Transfer of Rule 144A Global Notes, Regulation S Global Notes or Certificated Notes to Certificated Notes
  B5        –  Form of Transferee Certificate for Transfer of Rule 144A Global Notes or Certificated Notes to Regulation S Global Notes
  B6        – Form of ERISA Subscription Agreement
     
Exhibit C     –  Calculation of LIBOR
Exhibit D     –   Form of Note Owner Certificate
Exhibit E  Form of NRSRO Certification
Exhibit F Form of Banking Entity Notice

 

 

 

 

 

INDENTURE, dated as of June 29, 2017, among JMP Credit Advisors CLO IV Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"), JMP Credit Advisors CLO IV LLC, a limited liability company formed under the laws of the State of Delaware (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers"), and U.S. Bank National Association, as trustee (herein, together with its permitted successors and assigns in the trusts hereunder, the "Trustee").

 

PRELIMINARY STATEMENT

 

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

 

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

 

GRANTING CLAUSE

 

The Issuer hereby Grants to the Trustee, for the benefit and security of the Holders of the Secured Notes, the Trustee, the Bank (in all of its capacities hereunder), the Collateral Administrator, the Collateral Manager, the Administrator and each Hedge Counterparty (collectively, the "Secured Parties"), all of its right, title and interest in, to and under the following property, in each case, whether now owned or existing, or hereafter acquired or arising, and wherever located, (a) the Collateral Obligations and all payments thereon or with respect thereto, (b) each of the Accounts, to the extent permitted by the applicable Hedge Agreement, each Hedge Counterparty Collateral Account, any Eligible Investments purchased with funds on deposit therein, and all income from the investment of funds therein, (c) the equity interest in any Issuer Subsidiary and Equity Securities and all payments and rights thereunder, (d) the Issuer's right under the Collateral Management Agreement as set forth in Article XV hereof, the Hedge Agreements (provided that there is no such Grant to the Trustee on behalf of any Hedge Counterparty in respect of its related Hedge Agreement), the Collateral Administration Agreement and the Administration Agreement, (e) all Cash or Money delivered to the Trustee (or its bailee) for the benefit of the Secured Parties, (f) all accounts, chattel paper, deposit accounts, financial assets, general intangibles, payment intangibles, instruments, investment property and 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) and products, in each case, with respect to the foregoing (the assets referred to in (a) through (h) are collectively referred to as the "Assets"); provided that such Grant shall not include (i) the U.S.$250 transaction fee paid to the Issuer in consideration of the issuance of the Secured Notes and Subordinated Notes, (ii) the funds attributable to the issuance and allotment of the Issuer's ordinary shares, (iii) the bank account in the Cayman Islands in which such funds are deposited (or any interest thereon), and (iv) the membership interests of the Co-Issuer (the assets referred to in (i) through (iv), collectively, the "Excepted Property").

 

 

 

 

 

The above Grant is made in trust to secure the Secured Notes and the Issuer's obligations to the Secured Parties under this Indenture and each Hedge Agreement (together, the "Secured Obligations"). Except as set forth in the Priority of Payments and Article XIII of this Indenture, the Secured Notes are secured 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, except as expressly provided in this Indenture, and to secure, in accordance with the priorities set forth in the Priority of Payments, (i) the payment of all amounts due on the Secured Notes in accordance with their terms, (ii) the payment of all other sums payable under this Indenture and all amounts payable under each Hedge Agreement, and (iii) compliance with the provisions of this Indenture and each Hedge Agreement, all as provided in this Indenture and each Hedge Agreement, respectively. 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 its duties expressly stated herein in accordance with the provisions hereof.

 

ARTICLE I

DEFINITIONS

 

Section 1.1         Definitions. Except as otherwise specified herein or as the context may otherwise require, the following terms shall have the respective meanings set forth below for all purposes of this Indenture:

 

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

 

"17g-5 Website": A password-protected internet website which shall initially be located at https://www. structuredfn.com. Any change of the 17g-5 Website shall only occur after notice has been delivered by the Issuer to the Information Agent, the Trustee, the Collateral Administrator, the Collateral Manager, the Initial Purchaser, and the Rating Agencies setting the date of change and new location of the 17g-5 Website.

 

"Accountants' Report": A certificate of the firm or firms appointed by the Issuer pursuant to Section 3.2(a)(vi) or Section 10.8(a), as applicable.

 

"Accounts": Each of (i) the Payment Account, (ii) the Collection Account, (iii) the Ramp-Up Account, (iv) the Expense Reserve Account, (v) the Interest Reserve Account, (vi) the Custodial Account, (vii) the Unfunded Exposure Account and (viii) each Hedge Counterparty Collateral Account (if any).

 

 

 
-2-

 

 

"Accredited Investor" or "AI": An accredited investor as defined in Regulation D under the Securities Act.

 

"Act" and "Act of Holders": The respective meanings specified in Section 14.2.

 

"Additional Notes": Any Notes issued pursuant to Section 2.4.

 

"Additional Notes Closing Date": The closing date for the issuance of any Additional Notes pursuant to Section 2.4 as set forth in an indenture supplemental to this Indenture pursuant to Section 8.1(viii).

 

"Adjusted Collateral Principal Amount": As of any date of determination, (a) the Aggregate Principal Balance of the Collateral Obligations (excluding Defaulted Obligations, Deferring Obligations, Discount Obligations and Discounted Excepted Participation Interests), plus (b) without duplication, the amounts on deposit in the Accounts (including Eligible Investments therein) representing Principal Proceeds, plus (c) the sum of (i) with respect to each Defaulted Obligation or Deferring Obligation that has been a Defaulted Obligation or Deferring Obligation for 30 days or less, the product of (A) the Moody's Recovery Rate for such Defaulted Obligation or Deferring Obligation and (B) the principal amount of such Defaulted Obligation or Deferring Obligation, (ii) with respect to each Defaulted Obligation or Deferring Obligation that has been a Defaulted Obligation or Deferring Obligation for more than 30 days but less than three years, the Moody's Collateral Value of such Defaulted Obligation or Deferring Obligation and (iii) with respect to each Defaulted Obligation or Deferring Obligation that has been a Defaulted Obligation or Deferring Obligation for three years or more, zero, plus (d) with respect to each Discounted Excepted Participation Interest, the Moody's Collateral Value of such Discounted Excepted Participation Interest, plus (e) with respect to each Discount Obligation, the product (expressed as a dollar amount) of (i) the purchase price of such Discount Obligation (excluding accrued interest and any syndication or upfront fees paid to the Issuer, but including, at the discretion of the Collateral Manager, the amount of any assignment fees paid by the Issuer to the seller of the Collateral Obligation or its agent) expressed as a percentage of par multiplied by (ii) the Principal Balance of such Discount Obligation, excluding accrued interest, minus (f) the Excess CCC/Caa Adjustment Amount, plus (g) unpaid Principal Financed Accrued Interest (other than with respect to Defaulted Obligations); provided that with respect to any Collateral Obligation that satisfies more than one of the definitions of Defaulted Obligation, Discount Obligation, Deferring Obligations or any asset that falls into the Excess CCC/Caa Adjustment Amount, such Collateral Obligation will, 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.

 

"Administration Agreement": An agreement dated as of the Closing Date between the Administrator (as administrator and share owner) and the Issuer relating to the various corporate management functions the Administrator will perform on behalf of the Issuer, including communications with shareholders and the general public, and the provision of certain clerical, administrative and other corporate services in the Cayman Islands, as such agreement may be amended, supplemented or varied from time to time.

 

 

 
-3-

 

 

"Administrative Expense Cap": An amount equal on any Payment Date (when taken together with any Administrative Expenses paid during the period since the preceding Payment Date or, in the case of the first Payment Date, the Closing Date) to the sum of (a) 0.03% 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 Maximum Investment Amount on the Determination Date related to the immediately preceding Payment Date (or, for purposes of calculating this clause (a) in connection with the first Payment Date, on the Closing Date) and (b) U.S.$200,000 per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year and the actual number of days elapsed); provided that, if the amount of Administrative Expenses paid pursuant to Section 11.1(a)(i)(A), Section 11.1(a)(ii)(A) or Section 11.1(a)(iii)(A) (including any excess applied in accordance with this proviso) on the three immediately preceding Payment Dates or during the related Collection Periods is less than the aggregate of the stated Administrative Expense Caps (without regard to any excess amounts applied in accordance with this proviso) for such three preceding Payment Dates, then the amounts by which such aggregated Administrative Expense Caps exceed such aggregated Administration Expenses may be applied to increase the Administrative Expense Cap with respect to the then-current Payment Date; provided, further, that in respect of each of the first three Payment Dates from the Closing Date, such excess amount shall be calculated based on the Payment Dates, if any, preceding such Payment Date.

 

"Administrative Expenses": The fees, expenses (including indemnities as set forth below) 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) and payable in the following order by the Issuer or the Co-Issuer: first, to the Trustee and the Bank (including indemnities) in each of its capacities pursuant to this Indenture and the other Transaction Documents (including as financial reporting agent), second, to the Collateral Administrator for its fees and expenses (including indemnities) under the Collateral Administration Agreement, third, to make any capital contribution to an Issuer Subsidiary necessary to pay any taxes, registered office or governmental fees owing by such Issuer Subsidiary, and then fourth, on a pro rata basis (including indemnities) to (i) the Independent accountants, agents (other than the Collateral Manager) and counsel of the Co-Issuers for fees and expenses; (ii) the Rating Agencies for fees and expenses (including amendment 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 for fees, costs, expenses and indemnities under this Indenture and the Collateral Management Agreement, but excluding the Management Fees; (iv) the Administrator for fees and expenses pursuant to the Administration Agreement; (v) the independent manager of the Co-Issuer for fees and expenses; and (vi) 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 expenses incurred in connection with setting up and administering Issuer Subsidiaries, any expenses related to FATCA compliance or compliance with any non-U.S. law that is similar to FATCA, the payment of facility rating fees and 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, including any Excepted Advances) and the Notes, including but not limited to, amounts owed to the Co-Issuer pursuant to Section 7.1, any amounts due in respect of the listing of the Notes on any stock exchange or trading system and any costs associated with producing Certificated Notes; provided that (x) amounts due in respect of actions taken on or before the Closing Date shall not be payable as Administrative Expenses but shall be payable only from the Expense Reserve Account pursuant to Section 10.3(d), (y) for the avoidance of doubt, amounts that are specified as payable under the Priority of Payments that are not specifically identified therein as Administrative Expenses (including, without limitation, interest and principal in respect of the Notes and amounts owing to Hedge Counterparties) shall not constitute Administrative Expenses and (z) the Collateral Manager may direct the payment of Rating Agency fees (only out of amounts available pursuant to clause (b) of the definition of "Administrative Expense Cap") other than in the order required above, if, in the Collateral Manager's commercially reasonable judgment such payments are necessary to avoid the withdrawal of any currently assigned rating on any Outstanding Class of Secured Notes.

 

 

 
-4-

 

 

"Administrator": Estera Trust (Cayman) Limited and any successor thereto.

 

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

 

"Affiliate" or "Affiliated": 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 or employee (i) of such Person, (ii) of any subsidiary or parent company of such Person or (iii) of any Person described in clause (a) above; provided that neither the Administrator nor any special purpose entity for which it acts as share trustee or administrator shall be deemed to be an Affiliate of the Issuer or the Co-Issuer solely because the Administrator or any of its Affiliates serves as administrator or share trustee for the Issuer or the Co-Issuer. For the purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote more than 50% of the securities having ordinary voting power for the election of directors of any such Person or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise; provided that no entity to which the Administrator provides shares trustee and/or administration services, including the provision of directors, will be considered to be an Affiliate of the Issuer solely by reason thereof.

 

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

 

"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 Pledged Obligations, the sum of the Principal Balances of all or of such portion of the Collateral Obligations or Pledged Obligations, respectively.

 

"Aggregate Ramp-Up Par Amount": An amount equal to U.S.$450,000,000.

 

"Aggregate Ramp-Up Par Condition": A condition satisfied as of the end of the Ramp Up Period if the Aggregate Principal Balance of the Collateral Obligations that the Issuer has purchased, or entered into binding commitments to purchase, including Collateral Obligations acquired by the Issuer on or prior to the Closing Date, together with the amount of any proceeds of prepayments, maturities or redemptions of Collateral Obligations purchased by the Issuer prior to such date (other than any proceeds that have been reinvested in Collateral Obligations held by the Issuer as of the end of the Ramp-Up Period), equals or exceeds the Aggregate Ramp-Up Par Amount; provided that the Principal Balance of any Defaulted Obligation or any Discounted Excepted Participation Interest shall be its Moody's Collateral Value.

 

 

 
-5-

 

 

"AI/QP": Any Person that, at the time of its acquisition, purported acquisition or proposed acquisition of Subordinated Notes is both (a) an Accredited Investor and (b) a Qualified Purchaser or a Knowledgeable Employee with respect to the Issuer or an entity owned exclusively by Qualified Purchasers and/or Knowledgeable Employees.

 

"Applicable Issuer" or "Applicable Issuers": With respect to the Secured Notes of any Class, the Issuer or each of the Co-Issuers, as specified in Section 2.3 and with respect to the Subordinated Notes, the Issuer only.

 

"Approved Index": Any of Merrill Lynch High Yield Master II Constrained Index, the CSFB High Yield II Index or such other nationally recognized index as the Collateral Manager selects and provides notice of to the Rating Agencies.

 

"Asset Quality Matrix": The following chart is used to determine which of the "row/column combinations" (or the linear interpolation between two adjacent rows and/or two adjacent columns, as applicable) are applicable for purposes of determining compliance with the Moody's Diversity Test, the Maximum Moody's Rating Factor Test and the Minimum Floating Spread Test, as set forth in Section 7.17(e).

 

 

Minimum Diversity Score

Minimum

Weighted

Average Spread

 

45

50

55

60

65

70

75

80

85

90

2.45%

 

1798

1822

1843

1862

1870

1882

1896

1904

1912

1916

2.55%

 

1896

1920

1925

1931

1950

1967

1980

1988

1993

1998

2.65%

 

1982

1999

2027

2032

2041

2053

2063

2077

2088

2094

2.75%

 

2051

2078

2101

2106

2120

2143

2151

2159

2164

2171

2.85%

 

2130

2147

2165

2184

2199

2204

2215

2228

2238

2244

2.95%

 

2170

2214

2219

2241

2260

2272

2276

2290

2295

2299

3.05%

 

2208

2251

2285

2320

2332

2361

2369

2372

2380

2390

3.15%

 

2246

2295

2328

2365

2387

2408

2426

2442

2455

2464

3.25%

 

2287

2338

2380

2408

2440

2465

2480

2496

2512

2525

 

 

 
-6-

 

 

Minimum Diversity Score

Minimum

Weighted

Average Spread

  45 50 55 60 65 70 75 80 85 90

3.35%

 

2330

2377

2423

2448

2482

2510

2535

2553

2566

2579

3.45%

 

2370

2421

2460

2501

2532

2545

2574

2596

2616

2630

3.55%

 

2407

2459

2504

2538

2573

2598

2614

2637

2659

2679

3.65%

 

2449

2498

2541

2580

2613

2638

2664

2687

2710

2730

3.75%

 

2488

2539

2579

2619

2654

2677

2704

2729

2750

2770

3.85%

 

2523

2576

2621

2658

2691

2718

2744

2768

2791

2812

3.95%

 

2565

2614

2658

2699

2732

2757

2784

2809

2832

2851

4.05%

 

2589

2640

2683

2722

2756

2797

2823

2848

2870

2891

4.15%

 

2622

2676

2722

2761

2795

2835

2863

2888

2911

2931

4.25%

 

2660

2712

2758

2799

2834

2875

2902

2925

2949

2969

4.35%

 

2700

2752

2797

2836

2871

2902

2930

2955

2978

2997

4.45%

 

2735

2789

2835

2874

2909

2939

2967

2992

3015

3036

4.55%

 

2771

2824

2871

2911

2946

2977

3005

3030

3052

3072

4.65%

 

2808

2861

2907

2947

2982

3013

3040

3066

3089

3108

4.75%

 

2844

2897

2944

2984

3018

3050

3078

3102

3125

3146

4.85%

 

2877

2932

2979

3019

3054

3085

3113

3137

3161

3181

4.95%

 

2913

2967

3013

3053

3089

3116

3144

3169

3191

3212

5.05%

 

2947

3002

3049

3089

3125

3150

3177

3203

3226

3247

5.15%

 

2982

3037

3082

3123

3165

3190

3212

3238

3260

3280

5.25%

 

3021

3070

3116

3157

3203

3219

3247

3271

3303

3315

5.35%

 

3049

3102

3149

3190

3236

3252

3290

3303

3325

3348

5.45%

 

3068

3128

3182

3232

3270

3300

3312

3335

3360

3379

5.55%

 

3096

3167

3211

3265

3296

3316

3343

3366

3388

3411

5.65%

 

3121

3195

3239

3293

3316

3343

3372

3395

3420

3439

5.75%

 

3159

3212

3274

3321

3356

3370

3398

3427

3448

3474

 

 
-7-

 

 

 

 

Minimum Diversity Score

Minimum

Weighted

Average Spread

  45 50 55 60 65 70 75 80 85 90

5.85%

 

3187

3250

3292

3338

3383

3399

3426

3454

3479

3503

5.95%

 

3214

3275

3330

3374

3399

3424

3456

3484

3509

3530

6.05%

 

3242

3303

3357

3389

3424

3453

3486

3513

3536

3560

 

Maximum Moody's Weighted Average Rating Factor

 

"Assets": The meaning assigned in the Granting Clause hereof.

 

"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.

 

"Assumed Reinvestment Rate": LIBOR (as determined on the most recent Interest Determination Date relating to an Interest Accrual Period beginning on a Payment Date or the Closing Date) minus 0.50% per annum; provided, that the Assumed Reinvestment Rate shall not be less than 0%.

 

"Authenticating Agent": With respect to the Notes, the Person designated by the Trustee to authenticate such Notes on behalf of the Trustee pursuant to Section 6.14.

 

"Authorized Integrals": The meaning specified in Section 2.3.

 

"Authorized Officer": With respect to the Issuer or the Co-Issuer, any Officer or any other Person who is authorized to act for the Issuer or the Co-Issuer, as applicable, in matters relating to, and binding upon, the Issuer or the Co-Issuer. With respect to the Collateral Manager, any Officer, employee, member or agent of the Collateral Manager who is authorized to act for the Collateral Manager in matters relating to, and binding upon, the Collateral Manager with respect to the subject matter of the request, certificate or order in question. With respect to the Collateral Administrator, any Officer, employee, partner or agent of the Collateral Administrator who is authorized to act for the Collateral Administrator in matters relating to, and binding upon, the Collateral Administrator with respect to the subject matter of the request, certificate or order in question. With respect to the Trustee or any other bank or trust company acting as trustee of an express trust or as custodian, a Trust Officer. With respect to any Authenticating Agent, any Officer of such Authenticating Agent who is authorized to authenticate the Notes. Each party may receive and accept a certification (which shall include the email address, if available, of each authorized person) of the authority of any other party as conclusive evidence of the authority of any person to act, and such certification may be considered as in full force and effect until receipt by such other party of written notice to the contrary.

 

"Average Life": 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.

 

 

 
-8-

 

 

"Balance": On any date, with respect to Cash or Eligible Investments in any Account, the aggregate (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": U.S. Bank National Association, in its individual capacity and not as Trustee, and any successor thereto.

 

"Bankruptcy Law": The federal Bankruptcy Code, Title 11 of the United States Code, as amended from time to time, and any successor statute or any other applicable federal or state bankruptcy law or similar law, including, without limitation, Part V of the Companies Law (2016 Revision) of the Cayman Islands and the Companies Winding Up Rules 2008 of the Cayman Islands, each as amended from time to time, and any bankruptcy, insolvency, winding-up, reorganization or similar law enacted under the laws of the Cayman Islands or any other applicable jurisdiction, each as amended from time to time.

 

"Bankruptcy Subordination Agreement": The meaning specified in Section 5.4(d)(ii).

 

"Benefit Plan Investor": (a) Any "employee benefit plan" (as defined in Section 3(3) of Title I of ERISA) that is subject to the fiduciary responsibility provisions of Title I of ERISA, (b) any "plan" as defined in Section 4975(e) of the Code that is subject to Section 4975 of the Code, or (c) any entity whose underlying assets include "plan assets" (within the meaning of 29 C.F.R. §2510.3-101 as modified by Section 3(42) of ERISA) by reason of any such employee benefit plan's or plan's investment in the entity, or otherwise.

 

"BNPP": BNP Paribas Securities Corp.

 

"Board of Directors": With respect to the Issuer, the board of directors of the Issuer appointed pursuant to the current articles of association of the Issuer, and with respect to the Co-Issuer, the managers of the Co-Issuer duly appointed by the members of the Co-Issuer.

 

"Board Resolution": With respect to the Issuer, a resolution of the Board of Directors of the Issuer passed in accordance with the current articles of association of the Issuer and, with respect to the Co-Issuer, an action in writing by the sole member of the Co-Issuer.

 

"Bridge Loan": Any obligation or debt security incurred or issued in connection with a merger, acquisition, consolidation, sale of all or substantially all of the assets of a Person, restructuring or similar transaction, which obligation or security by its terms is required to be repaid within one year of the incurrence thereof with proceeds from additional borrowings or other refinancings (other than any additional borrowing or refinancing if one or more financial institutions has provided the issuer of such obligation or security with a binding written commitment to provide the same, so long as (i) such commitment is equal to the outstanding principal amount of the Bridge Loan and (ii) such committed replacement facility has a maturity of at least one year and cannot be extended beyond such one year maturity pursuant to the terms thereof).

 

 

 
-9-

 

 

"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.

 

"Caa Collateral Obligation": A Collateral Obligation (other than a Defaulted Obligation or a Deferring Obligation) with a Moody's Default Probability Rating of "Caa1" or lower.

 

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

 

"CCC/Caa Collateral Obligations": The CCC Collateral Obligations and/or the Caa Collateral Obligations, as the context requires.

 

"CCC/Caa Excess": The amount equal to the greater of: (i) the excess, if any, of (x) the Aggregate Principal Balance of all CCC Collateral Obligations over (y) 7.5% of the Collateral Principal Amount as of the most recent Measurement Date and (ii) the excess, if any, of (x) the Aggregate Principal Balance of all Caa Collateral Obligations over (y) 7.5% of the Collateral Principal Amount as of the most recent Measurement Date; provided that in determining which of the Collateral Obligations shall be included in the CCC/Caa Excess, the Collateral Obligations with the lowest Market Value (expressed as a percentage of par) shall be deemed to constitute such CCC/Caa Excess.

 

"Calculation Agent": The meaning specified in Section 7.15.

 

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

 

"Cayman FATCA Legislation": The Cayman Islands Tax Information Authority Law (2016 Revision) and the OECD Standard for Automatic Exchange of Financial Account Information – Common Reporting Standard (each as amended) (including any implementing legislation, rules, regulations and guidance notes with respect to such laws).

 

"CEA": The Commodity Exchange Act of 1936, as amended.

 

"Certificate of Authentication": The meaning specified in Section 2.1.

 

"Certificated Notes": Collectively, the Certificated Secured Notes and the Certificated Subordinated Notes.

 

"Certificated Secured Note": The meaning specified in Section 2.2(b).

 

 

 
-10-

 

 

"Certificated Securities": The meaning specified in Section 8.1-102(a)(4) of the UCC.

 

"Certificated Subordinated Note": The meaning specified in Section 2.2(b).

 

"Certificated Subordinated Note Subscription Agreement": The meaning specified in Section 2.6(c).

 

"Class": In the case of (x) the Secured Notes, all of the Secured Notes having the same Note Interest Rate, Stated Maturity and designation and (y) the Subordinated Notes, all of the Subordinated Notes having the same designation.

 

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

 

"Class A/B Coverage Tests": The Par Value Ratio Test and the Interest Coverage Test, each as applied with respect to the Class A Notes and the Class B Notes collectively.

 

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

 

"Class C Coverage Tests": The Par Value Ratio Test and the Interest Coverage Test, each as applied with respect to the Class C Notes.

 

"Class C Notes": The Class C Mezzanine Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

"Class D Coverage Tests": The Par Value Ratio Test and the Interest Coverage Test, each as applied with respect to the Class D Notes.

 

"Class D Notes": The Class D Mezzanine Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

"Class E Coverage Tests": The Par Value Ratio Test and the Interest Coverage Test, each as applied with respect to the Class E Notes.

 

"Class E Notes": The Class E Mezzanine Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

"Clean-Up Call Purchase Price": The meaning specified in Section ☒9.8(c).

 

"Clean-Up Call Redemption": The meaning specified in Section ☒9.8(a).

 

"Clean-Up Call Redemption Date": The meaning specified in Section 9.8(b).

 

"Clean-Up Call Rescission": The meaning specified in Section 9.8(a).

 

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

 

 

 
-11-

 

 

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

 

"Clearing Corporation Security": Securities which are in the custody of or maintained on the books of a Clearing Corporation or a nominee subject to the control of a Clearing Corporation and, if they are Certificated Securities in registered form, properly endorsed to or registered in the name of the Clearing Corporation or such nominee.

 

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

 

"Closing Date": June 29, 2017.

 

"Code": The United States Internal Revenue Code of 1986, as amended from time to time, and the Treasury regulations promulgated thereunder.

 

"Co-Issuer": JMP Credit Advisors CLO IV LLC, until a successor Person shall have become the Co-Issuer pursuant to the applicable provisions of this Indenture, and thereafter "Co-Issuer" shall mean such successor Person.

 

"Co-Issuers": The Issuer and the Co-Issuer.

 

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

 

"Collateral Administrator": U.S. Bank National Association, in its capacity as such 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 or Deferrable Obligations, but including Interest Proceeds actually received from Defaulted Obligations or Deferrable Obligations (each in accordance with the definition of "Interest Proceeds")), 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 fifth Business Day 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 Collateral Management Agreement, dated as of the Closing Date, between the Issuer and the Collateral Manager relating to the management of the Collateral Obligations and the other Assets and the performance of certain other advisory functions by the Collateral Manager on behalf of the Issuer, as amended from time to time in accordance with the terms hereof and thereof.

 

"Collateral Manager": JMP Credit 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.

 

 

 
-12-

 

 

"Collateral Manager Securities": 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 thereover.

 

"Collateral Obligation": Any loan, specifically, interests in bank loans, acquired by way of a purchase or assignment) or Participation Interest that as of the date of acquisition by the Issuer (or the date the Issuer commits to acquire):

 

(i)             is a Secured Loan Obligation or Senior Unsecured Loan;

 

(ii)            is U.S. Dollar denominated and is not convertible by (a) the Issuer or (b) the Obligor of such Collateral Obligation into, nor payable in, any other currency, with any payments under such Collateral Obligation to be made only in U.S. Dollars;

 

(iii)           is not a Defaulted Obligation or a Credit Impaired Obligation;

 

(iv)           is not a Letter of Credit and does not support a Letter of Credit;

 

(v)            is not a lease;

 

(vi)           is not a Structured Finance Obligation;

 

(vii)          is not a Deferrable Obligation or a Deferring Obligation;

 

(viii)        provides for a fixed amount of principal payable 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;

 

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

 

(x)            does not constitute Margin Stock;

 

(xi)           has only payments that do not and will not subject the Issuer or the relevant Issuer Subsidiary to withholding tax or other similar tax (other than withholding on commitment fees, amendment fees, consent fees, extension fees and similar fees or fees that by their nature are letter of credit or 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 or the relevant Issuer Subsidiary after payment of all taxes, whether imposed on such Obligor, the Issuer or the relevant Issuer Subsidiary will equal the full amount that the Issuer or the relevant Issuer Subsidiary would have received had no such taxes been imposed;

 

 

 
-13-

 

 

(xii)           has an S&P Rating of at least "CCC-" or a Moody's Default Probability Rating of at least "Caa3";

 

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

 

(xiv)         does not have an "sf" subscript assigned by Moody's;

 

(xv)          will not require the Issuer, the Co-Issuer or the pool of Assets to be registered as an investment company under the Investment Company Act;

 

(xvi)         is not subject to a tender offer, voluntary redemption, exchange offer, conversion or other similar action for a price less than its outstanding principal balance plus all accrued and unpaid interest;

 

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

 

(xviii)        is not issued by an obligor in the tobacco industry;

 

(xix)          is not a Zero-Coupon Security or a Step-Up Obligation;

 

(xx)           is not a Synthetic Security;

 

(xxi)          (A) is not (1) an Equity Security, (2) by its terms convertible into or exchangeable for an Equity Security or (3) a warrant or (B) does not (1) have Equity Securities attached thereto as part of a "unit" of (2) otherwise include a warrant to purchase Equity Securities;

 

(xxii)         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;

 

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

 

(xxiv)       the purchase price of such obligation shall be at least 50% of such obligation's par amount;

 

(xxv)         is not a Related Obligation;

 

(xxvi)        is Registered;

 

(xxvii)       is able to be pledged to the Trustee pursuant to its Underlying Instruments and is not subject to any securities lending agreement;

 

 

 
-14-

 

 

(xxviii)     does not mature after the shortest Stated Maturity of any of the Secured Notes still Outstanding; and

 

(xxix)        is not (A) a bond, (B) a Senior Secured Note, (C) a commodity forward contract or (D) any other debt security not constituting a loan.

 

"Collateral Principal Amount": As of any date of determination, the sum of (a) the Aggregate Principal Balance of the Collateral Obligations and (b) without duplication, the amounts on deposit in the (i) Collection Account (including Eligible Investments therein) representing Principal Proceeds and (ii) Ramp-Up Account (including Eligible Investments therein).

 

"Collection Account": Collectively, the Interest Collection Subaccount and the Principal Collection Subaccount.

 

"Collection Period": With respect to any Payment Date, the period commencing immediately following the prior Collection Period (or on the Closing Date, in the case of the Collection Period relating to the first Payment Date) and ending on the day that is eight (8) Business Days prior to (but excluding) the Payment Date; provided that (i) the final Collection Period preceding the latest Stated Maturity of any Class of Notes shall commence immediately following the prior Collection Period and end on the day preceding such Stated Maturity, (ii) the final Collection Period preceding a Redemption by Liquidation, Tax Redemption or Clean-Up Call Redemption in whole of the Notes shall commence immediately following the prior Collection Period and end on such Redemption Date, and (iii) the final Collection Period preceding the Redemption by Refinancing and Partial Redemption by Refinancing of any Class of Notes shall commence immediately following the prior Collection Period and end seven (7) Business Days prior to the Redemption Date; provided, further, that with respect to any Payment Date and any amounts payable to the Issuer under a Hedge Agreement, the Collection Period will commence on the day after the prior Payment Date and end on such Payment Date.

 

"Concentration Limitations": Limitations satisfied, if as of any date of determination at or subsequent to, the end of the Ramp-Up Period, 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, calculated in each case as required by Section 1.2 (or, if not in compliance at the time of reinvestment, the relevant requirements must be maintained or improved).

 

(i)     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

20.0%

 

all countries (in the aggregate) other than the United States;

15.0%

 

Canada;

10.0%

 

the United Kingdom;

10.0%

 

all countries (in the aggregate) other than the United States, Canada and the United Kingdom;

15.0%

 

all Group I Countries in the aggregate;

10.0%

 

any individual Group I Country;

 

 

 
-15-

 

 

10.0%

 

all Group II Countries in the aggregate;

7.5%

 

any individual Group II Country;

7.5%

 

all Group III Countries in the aggregate;

5.0%

 

any individual Group III Country;

0%

 

all Group IV Countries in the aggregate;

0%

 

any individual Group IV Country;

5.0%

 

all Tax Advantaged Jurisdictions in the aggregate;

3.0%

 

any individual Tax Advantaged Jurisdiction;

0.0%

 

Greece, Ireland, Italy, Portugal and Spain in the aggregate; and

0.0%

 

any individual country other than the United States, the United Kingdom, Canada, any Group I Country, any Group II Country, any Group III Country or any Group IV Country or any Tax Advantaged Jurisdiction;

 

(ii)            with respect to any Participation Interest (other than with respect to any Excepted Participation Interest), the Moody's Counterparty Criteria are met;

 

(iii)           not less than 92.5% of the Collateral Principal Amount may consist of Collateral Obligations that are Senior Secured Loans and Eligible Investments representing Principal Proceeds;

 

(iv)           not more than 7.5% of the Collateral Principal Amount may consist of Collateral Obligations that are Second Lien Loans and Senior Unsecured Loans;

 

(v)            not more than 2.5% of the Collateral Principal Amount may consist of Current Pay Obligations;

 

(vi)           not more than 2.5% of the Collateral Principal Amount may consist of fixed rate Collateral Obligations;

 

(vii)          not more than 10.0% of the Collateral Principal Amount may consist of Participation Interests;

 

(viii)         not more than 7.5% of the Collateral Principal Amount may consist of DIP Collateral Obligations;

 

(ix)           not more than 2.0% of the Collateral Principal Amount may consist of Collateral Obligations issued by a single Obligor, except that Collateral Obligations issued by up to five (5) Obligors may each constitute up to 2.5% of the Collateral Principal Amount; provided that for each such single Obligor not more than 1.0% of the Collateral Principal Amount may consist of Collateral Obligations that are not Senior Secured Loans, except that for up to one (1) single Obligor Collateral Obligations that are not Senior Secured Loans may constitute up to 1.5% of the Collateral Principal Amount; provided further, that one Obligor shall not be considered an affiliate of another Obligor solely because they are controlled by the same financial sponsor;

 

(x)            not more than 10.0% of the Collateral Principal Amount may consist of Collateral Obligations that are issued by Obligors that belong to any single Moody's Industry Classification, except that one (1) Moody's Industry Classification may represent up to 15.0% of the Collateral Principal Amount and three (3) Moody's Industry Classifications may each represent up to 12.0% of the Collateral Principal Amount;

 

 

 
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(xi)           not more than 10.0% 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 one (1) S&P Industry Classification may represent up to 15.0% of the Collateral Principal Amount and three (3) S&P Industry Classifications may each represent up to 12.0% of the Collateral Principal Amount;

 

(xii)          not more than 7.5% of the Collateral Principal Amount may consist of Caa Collateral Obligations;

 

(xiii)         not more than 7.5% of the Collateral Principal Amount may consist of CCC Collateral Obligations;

 

(xiv)         not more than 3.0% of the Collateral Principal Amount may consist of Collateral Obligations that are required to pay interest less frequently than quarterly;

 

(xv)          not more than 60.0% of the Collateral Principal Amount may consist of Cov-Lite Loans;

 

(xvi)         no portion of the Collateral Principal Amount may consist of Step-Down Obligations;

 

(xvii)        not more than 10.0% of the Collateral Principal Amount may consist of Delayed Drawdown Collateral Obligations and Revolving Collateral Obligations;

 

(xviii)       no portion of the Collateral Principal Amount may consist of Bridge Loans;

 

(xix)          no portion of the Collateral Principal Amount may consist of Small Obligor Loans;

 

(xx)           not more than 2.5% of the Collateral Principal Amount may consist of Collateral Obligations that are issued by obligors organized in Ireland, but not Domiciled in Ireland due to the application of clause (c) of the definition of "Domicile";

 

(xxi)          not more than 10.0% of the Collateral Principal Amount may consist of Collateral Obligations with a purchase price of between 50% and 65% of each such obligation's par amount; and

 

(xxii)         not more than 20.0% of the Collateral Principal Amount may consist of Discount Obligations.

 

 

 
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"Confidential Information": The meaning specified in Section 14.14(b).

 

"Controlling Class": The Class A Notes so long as any Class A 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; then the Class D Notes so long as any Class D Notes are Outstanding; then the Class E Notes so long as any Class E Notes are Outstanding; then the Senior Subordinated Notes if no Secured Notes are Outstanding; and then the Junior Subordinated Notes if no Secured Notes and Senior Subordinated Notes are Outstanding.

 

"Controlling Person": A Person (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of the Issuer or any Person who provides investment advice for a fee (direct or indirect) with respect to such assets, or any affiliate of such a Person. For purposes of this definition of Controlling Person only, 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 and "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.

 

"Corporate Trust Office": The designated corporate trust office of the Trustee, currently located at: (a) for Note transfer purposes and presentment of the Notes for final payment thereon, 111 Fillmore Avenue East, St. Paul, Minnesota 55107-2292, Attention: Global Corporate Trust Services – JMP Credit Advisors CLO IV Ltd.; (b) for all other purposes, 190 S. LaSalle Street, 8th Floor, Chicago, Illinois 60603, Attention: Global Corporate Trust Services – JMP Credit Advisors CLO IV Ltd., or (c) the principal corporate trust office of any successor Trustee. It is understood that the Trustee may designate another address from time to time by giving notice to the Holders, the Collateral Manager, any Hedge Counterparty, the Issuer and the Rating Agencies.

 

"Cov-Lite Loan": A loan that does not contain any financial covenants; provided that a loan that (a) requires the underlying Obligor to comply with one or more Maintenance Covenants (regardless of whether compliance with one or more Incurrence Covenants is otherwise required by the Underlying Instruments) or (b) contains a cross-default provision to, or is pari passu with, another loan of the underlying obligor forming part of the same loan facility that requires the underlying obligor to comply with one or more financial covenants or Maintenance Covenants shall be deemed not to be a Cov-Lite Loan.

 

"Credit Amendment": Any Maturity Amendment that, in the Collateral Manager's judgment exercised in accordance with the Collateral Management Agreement, is necessary with respect to the related Collateral Obligation (a "Credit Amendment Obligation") (i) to prevent such Credit Amendment Obligation from becoming a Defaulted Obligation or (ii), due to the materially adverse financial condition of the related obligor, to minimize material losses on such Credit Amendment Obligation.

 

"Coverage Tests": The Class A/B Coverage Tests, the Class C Coverage Tests, the Class D Coverage Tests and the Class E Coverage Tests.

 

 

 
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"Credit Impaired Obligation": Any Collateral Obligation that in the Collateral Manager's judgment exercised in accordance with the Collateral Management Agreement has a significant risk of declining in credit quality and, with a lapse of time, becoming a Defaulted Obligation and, provided that, at any time a Restricted Trading Period is in effect a Collateral Obligation will be a Credit Impaired Obligation only if, in addition to the foregoing:

 

(a)     such Collateral Obligation has been downgraded or put on a watch list for possible downgrade or on negative outlook 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 fixed rate obligation, there has been an increase in the difference between its yield compared to the yield on the relevant U.S. Treasury security of the same duration of more than 7.5% of its yield since the date of purchase;

 

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

 

(d)     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 due to a deterioration in the related obligor's financial ratios or financial results in accordance with the Underlying Instruments relating to such Collateral Obligation;

 

(e)     if such Collateral Obligation is a loan, the price of such loan 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 average price of any Approved Index as determined by the Collateral Manager over the same period; or

 

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

 

"Credit Improved Obligation":

 

(a)     So long as a Restricted Trading Period is not in effect, any Collateral Obligation that in the Collateral Manager's judgment exercised in accordance with the Collateral Management Agreement has significantly improved in credit quality after it was acquired by the Issuer, which improvement may (but need not) be evidenced by one of the following:

 

(i)     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;

 

 

 
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(ii)     if such Collateral Obligation is a fixed rate obligation, there has been a decrease in the difference between its yield compared to the yield on the U.S. Treasury security of the same duration more than 7.5% of its yield since the date of purchase;

 

(iii)     if the obligor of such Collateral Obligation has a projected cash flow interest coverage ratio (earnings before interest and taxes divided by cash interest expense as determined by the Collateral Manager) that is expected to be more than 1.15 times the current year's projected cash flow interest coverage ratio;

 

(iv)     if the Market Value of such Collateral Obligation has increased since the date of its acquisition by at least 1.0% of the original purchase price at which such Collateral Obligation was acquired by the Issuer; or

 

(v)     if such Collateral Obligation is a loan, the price of such loan 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 any Approved Index over the same period.

 

(b)     If a Restricted Trading Period is in effect, in addition to the foregoing, a Collateral Obligation will qualify as a Credit Improved Obligation only if:

 

(i)     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;

 

(ii)     if such Collateral Obligation is a fixed rate obligation, there has been a decrease in the difference between its yield compared to the yield on the U.S. Treasury security of the same duration more than 7.5% of its yield since the date of purchase;

 

(iii)     if the obligor of such Collateral Obligation has a projected cash flow interest coverage ratio (earnings before interest and taxes divided by cash interest expense as determined by the Collateral Manager) that is expected to be more than 1.15 times the current year's projected cash flow interest coverage ratio;

 

(iv)     if the Market Value of such Collateral Obligation has increased since the date of its acquisition by at least 1.0% of the original purchase price at which such Collateral Obligation was acquired by the Issuer;

 

(v)     if such Collateral Obligation is a loan, the price of such loan 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 any Approved Index over the same period; or

 

 

 
-20-

 

 

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

 

"Current Pay Obligation": Any Collateral Obligation (other than a DIP Collateral Obligation) that:

 

(i)     would otherwise be a Defaulted Obligation but for the exclusion of Current Pay Obligations from the definition of Defaulted Obligation pursuant to the proviso at the end of such definition;

 

(ii)     (a) if the issuer of such Collateral Obligation is subject to a bankruptcy proceeding, the relevant court has authorized the issuer to make payments of principal and interest on such Collateral Obligation and no such authorized payments that are due and payable are unpaid and (b) otherwise, no payments that are contractually due and payable on such Collateral Obligation pursuant to its Underlying Instruments are unpaid (provided that for each of (a) and (b) any forbearance or grace period in excess of 90 days shall be disregarded with respect to any payment that is unpaid but would be due and payable but for such forbearance or grace period); and

 

(iii)     for so long as Moody's is a Rating Agency in respect of any Class of Secured Notes, such Collateral Obligation has a facility rating from Moody's of either (A) at least "Caa1" (and if "Caa1," not on watch for downgrade) and its Market Value is at least 80% of its par value or (B) at least "Caa2" (and if "Caa2," not on watch for downgrade) and its Market Value is at least 85% of its par value (provided that for purposes of this definition, with respect to a Collateral Obligation already owned by the Issuer whose facility rating from Moody's is withdrawn, the facility rating shall be the last outstanding facility rating before the withdrawal);

 

provided that to the extent the Principal Balance of all Collateral Obligations that would otherwise be Current Pay Obligations exceeds 2.5% of the Collateral Principal Amount, such excess over 2.5% will constitute Defaulted Obligations; provided, further, that in determining which of the Collateral Obligations will be included in such excess, the Collateral Obligations with the lowest Market Value expressed as a percentage will be deemed to constitute such excess; provided, further, that each such Collateral Obligation included in such excess will be treated as a Defaulted Obligation for all purposes until such time as the Aggregate Principal Balance of Collateral Obligations that would otherwise be Current Pay Obligations would not exceed, on a pro forma basis including such Defaulted Obligation, 2.5% of the Collateral Principal Amount; provided even further, that each such Collateral Obligation for which the Market Value thereof is not determined in accordance with the provisions of clauses (i) or (ii) of the definition of "Market Value" shall not be a Current Pay Obligation.

 

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

 

 

 
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"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.

 

"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.

 

"Defaulted Obligation": Any Collateral Obligation included in the Assets shall constitute a "Defaulted Obligation" if:

 

(a)     there has occurred and is continuing a default with respect to the payment of interest or principal with respect to such Collateral Obligation, without regard to any grace period, waiver or forbearance thereof except as set forth in this clause (a); provided that such default shall have not been cured; provided, further, that any such default shall be subject to a grace period of the lesser of (i) five Business Days (or seven calendar days, whichever is greater) and (ii) the grace period specified in the applicable Underlying Instruments, in each case measured from the date of such default if the Collateral Manager has certified to the Trustee in writing that the payment failure is not due to credit-related reasons;

 

(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 issuer which is senior or pari passu in right of payment to such Collateral Obligation, without regard to any grace period, waiver or forbearance thereof except as set forth in this clause (b) (provided that both the Collateral Obligation and the other debt obligation are full recourse obligations and secured by the same collateral and the default with respect to such other debt obligation shall not have been cured); provided, further, that any such default shall be subject to a grace period of the lesser of (i) five Business Days (or seven calendar days, whichever is greater) and (ii) the grace period specified in the applicable Underlying Instruments, in each case measured from the date of such default if the Collateral Manager has certified to the Trustee in writing that the payment failure is not due to credit-related reasons;

 

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

 

(d)     such Collateral Obligation has a Moody's probability of default rating (as published by Moody's) of "D" or "LD" or had such rating before such rating was withdrawn, such Collateral Obligation has a Fitch Rating of "D" or had such rating before such rating was withdrawn or such Collateral Obligation has an S&P Rating of "D" or had such rating before such rating was withdrawn;

 

(e)     such Collateral Obligation is pari passu or junior in right of payment as to the payment of principal and/or interest to another debt obligation of the same issuer which has a Fitch Rating of "D", an S&P Rating of "D" or a Moody's probability of default rating (as published by Moody's) of "D" or "LD", and in each case such other debt obligation remains outstanding (provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable issuer);

 

 

 
-22-

 

 

(f)     the Collateral Manager has received written notice or has actual knowledge that a default has occurred under the Underlying Instruments and any applicable grace period has expired such that the holders of such Collateral Obligation have accelerated the repayment of such Collateral Obligation (but only until such default is cured or waived) 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";

 

(h)     such Collateral Obligation is a Participation Interest with respect to which the Selling Institution has defaulted in the performance of any of its payment obligations under the Participation Interest (except to the extent such defaults were cured within the applicable grace period under the Underlying Instruments of the Obligor thereof);

 

(i)     such Collateral Obligation is a Participation Interest in a loan that would, if such loan were a Collateral Obligation, constitute a "Defaulted Obligation" (other than under this clause (i)) or with respect to which the Selling Institution has a Moody's probability of default rating (as published by Moody's) of "D" or "LD", and in each case such other debt obligation remains outstanding; or

 

(j)     a Distressed Exchange has occurred in connection with such Collateral Obligation;

 

provided, that a Collateral Obligation will not constitute a Defaulted Obligation pursuant to clauses (a) through (e), (i) and (j) above if: (x) in the case of clauses (a), (b), (c), (d), (e), (i) and (j), such Collateral Obligation is a Current Pay Obligation (provided that, in the case of clause (i) above, the applicable Selling Institution shall also be required to continue to make current payments to the Issuer under the Participation Interest), or (y) in the case of clauses (b), (c) and (e), such Collateral Obligation is a DIP Collateral Obligation.

 

"Deferrable Obligation": A Collateral Obligation that by its terms permits the deferral or capitalization of payment of accrued, unpaid interest.

 

"Deferred Interest": With respect to any specified Class of Deferred Interest Notes, the meaning specified in Section 2.8(a).

 

"Deferred Interest Notes": The Notes specified as such in Section 2.3.

 

"Deferred Subordinated Management Fee": The meaning specified in Section 11.1(f).

 

"Deferred Subordinated Management Fee Interest": The meaning specified in Section 11.1(f).

 

 

 
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"Deferring Obligation": A Deferrable Obligation that is deferring the payment of interest due thereon and has been so deferring the payment of interest due thereon (i) with respect to Collateral Obligations that have a Moody's Rating of at least "Baa3," for the shorter of two consecutive accrual periods or one year, and (ii) with respect to Collateral Obligations that have a Moody's Rating of "Ba1" or below, for the shorter of one accrual period or six consecutive months, which deferred capitalized interest has not, as of the date of determination, been paid in cash; provided that such Deferrable Obligation will cease to be a Deferring Obligation at such time as it (a) ceases to defer or capitalize the payment of interest, (b) pays in cash all accrued and unpaid interest, including all deferred amounts, and (c) commences payment of all current interest in cash.

 

"Delayed Drawdown Collateral Obligation": Any Asset 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; provided that 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 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 or Participation Interest in which the underlying loan is represented by an Instrument,

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

(2)     causing the Custodian to continuously indicate 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"),

 

(1)     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

 

(2)     causing the Custodian to continuously indicate 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,

 

(1)     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 acquiring 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,

 

(2)     causing such Securities Intermediary to make entries on its books and records continuously identifying such Security Entitlement as belonging to the Custodian and continuously indicating on its books and records that such Security Entitlement is credited to one of the Custodian's Accounts, which shall at all times be securities accounts, and

 

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

 

 

 
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(vi)     in the case of Cash or Money,

 

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

 

(2)     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 has control (within the meaning of Section 9-104 of the UCC), and

 

(3)     causing the Custodian to continuously indicate on its books and records that such Cash or Money so held is credited to the applicable Account; and

 

(vii)     in the case of each general intangible (including any Participation Interest in which the Participation Interest is not represented by an Instrument),

 

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

 

(2)     causing the registration of the security interests granted by this Indenture in the Register of Mortgages and Charges of the Issuer maintained at the Issuer's registered office in the Cayman Islands.

 

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

 

"Determination Date": The last day of each Collection Period.

 

"DIP Collateral Obligation": Any interest in a loan or financing facility that has a public or private facility rating from Moody's and is purchased directly or by way of assignment (a) which is an obligation of (i) a debtor-in-possession as described in §1107 of the Bankruptcy Code or (ii) a trustee if appointment of such trustee has been ordered pursuant to §1104 of the Bankruptcy Code (in either such case, a "Debtor") organized under the laws of the United States or any state therein, or (b) on which the related Obligor is required to pay interest on a current basis and, with respect to either clause (a) or (b) above, the terms of which have been approved by an order of the United States Bankruptcy Court, the United States District Court, or any other court of competent jurisdiction, the enforceability of which order is not subject to any pending contested matter or proceeding (as such terms are defined in the Federal Rules of Bankruptcy Procedure) and which order provides that: (i) (A) such DIP Collateral Obligation is fully secured by liens on the Debtor's otherwise unencumbered assets pursuant to §364(c)(2) of the Bankruptcy Code or (B) such DIP Collateral Obligation is secured by liens of equal or senior priority on property of the Debtor's estate that is otherwise subject to a lien pursuant to §364(d) of the Bankruptcy Code and (ii) such DIP Collateral Obligation is fully secured based upon a current valuation or appraisal report. Notwithstanding the foregoing, such a loan will not be deemed to be a DIP Collateral Obligation following the emergence of the related debtor-in-possession from bankruptcy protection under Chapter 11 of the Bankruptcy Code.

 

 

 
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"Discount Obligation": Any Collateral Obligation forming part of the Assets that is a loan acquired by the Issuer with respect to which, if such Collateral Obligation as determined by the Collateral Manager (i) has a Moody's Rating below "B3", the purchase price thereof is less than 85% of its Principal Balance or (ii) has a Moody's Rating "B3" or higher, the purchase price thereof is less than 80% of its Principal Balance, in each case until the Market Value of the Collateral Obligation for any period of 30 consecutive days equals or exceeds 90% of its Principal Balance, in which case such Collateral Obligation shall cease to be a Discount Obligation.

 

Any Collateral Obligation that would otherwise be considered a Discount Obligation but that is purchased with the proceeds of a sale of a Collateral Obligation that was not a Discount Obligation at the time of its purchase and was sold at a price (i) below 85% if such Collateral Obligation has a Moody's Rating lower than "B3" or (ii) below 80% if such Collateral Obligation has a Moody's Rating "B3" or higher will not be considered a Discount Obligation, so long as such purchased Collateral Obligation: (x) has a Moody's Rating no lower than the Moody's Rating of the previously sold Collateral Obligation, (y) is purchased or committed to be purchased within ten Business Days of such sale, (z) when included in the aggregate Principal Balance of all Collateral Obligations not considered Discount Obligations due to this paragraph, does not cause such aggregate Principal Balance to exceed 10% of the Aggregate Ramp-Up Par Amount at any time and (aa) is purchased at a purchase price that equals or exceeds both (1) the sale price of the sold Collateral Obligation and (2) 65% of its Principal Balance; provided (i) that to the extent the Aggregate Principal Balance of Collateral Obligations purchased since the Closing Date under this paragraph exceeds 15% of the Aggregate Ramp-Up Par Amount, such excess shall be considered Discount Obligations; provided, further, that such Collateral Obligation shall cease to be a Discount Obligation at such time as the Market Value of the Collateral Obligation for any period of 30 consecutive days equals or exceeds 90% of its Principal Balance.

 

"Discounted Excepted Participation Interest": Each Excepted Participation Interest that has not been elevated to an assignment of the underlying loan on or prior to the end of the Ramp-Up Period, provided that any such Excepted Participation Interest that has been elevated to an assignment of the underlying loan at any time after the end of the Ramp-Up Period shall not be deemed to be a "Discounted Excepted Participation" on or after such time.

 

"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 issuer or Obligor of such Collateral Obligation has issued to the holders of such Collateral Obligation a new security or package of securities or obligations that, in the sole judgment of the Collateral Manager, amounts to a diminished financial obligation or has the purpose of helping the issuer of such Collateral Obligation avoid default; provided that no Distressed Exchange shall be deemed to have occurred if the securities or obligations received by the Issuer in connection with such exchange or restructuring meet the definition of "Collateral Obligation".

 

 

 
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"Distribution Report": The meaning specified in Section 10.6(b).

 

"Diversity Score": A single number that indicates collateral concentration in terms of both issuer and industry concentration, calculated as set forth in Schedule 2.

 

"Domicile" or "Domiciled": With respect to any issuer of or Obligor with respect to a Collateral Obligation: (a) except as provided in clauses (b), (c) and (d) below, its country of organization; (b) if it is organized in a Tax Advantaged 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; (c) if it is organized in Ireland, its "Domicile" shall be deemed to be 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; or (d) if its payment obligations in respect of such Collateral Obligation are guaranteed by a person or entity (in a guarantee agreement with such person or entity, which guarantee agreement complies with Moody's then-current public guidelines with respect to guarantees) that is organized in the United States, then the United States.

 

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

 

"Due Date": Each date on which any payment is due on a Pledged Obligation in accordance with its terms.

 

"Effective Spread": With respect to any floating rate Collateral Obligation, the current per annum rate at which it pays interest minus LIBOR or, if such floating rate Collateral Obligation bears interest based on a floating rate index other than a London interbank offered rate-based index, the Effective Spread shall be the then-current base rate applicable to such floating rate Collateral Obligation plus the rate at which such floating rate Collateral Obligation pays interest in excess of such base rate minus three-month LIBOR; provided that (i) with respect to any unfunded commitment of any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, the Effective Spread means the commitment fee payable with respect to such unfunded commitment, (ii) with respect to the funded portion of any commitment under any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, the Effective Spread means the current per annum rate at which it pays interest minus LIBOR or, if such funded portion bears interest based on a floating rate index other than a London interbank offered rate-based index, the Effective Spread will be the then-current base rate applicable to such funded portion plus the rate at which such funded portion pays interest in excess of such base rate minus three-month LIBOR and (iii) with respect to any LIBOR Floor Obligation, the stated interest rate spread on such Collateral Obligation above the applicable index shall be deemed to be equal to the sum of (A) the stated interest rate spread over the applicable index and (B) the excess, if any, of the specified "floor" rate relating to such Collateral Obligation over the LIBOR rate applicable to the Secured Notes on the immediately preceding Interest Determination Date; provided, further, that the Effective Spread of any floating rate Collateral Obligation shall (i) be deemed to be zero to the extent that the Issuer or the Collateral Manager has actual knowledge that no payment of cash interest on such floating rate Collateral Obligation will be made by the Obligor thereof during the applicable due period and (ii) not include any non-cash interest; provided, further, that the Effective Spread of any Letter of Credit shall not include any amounts that the Issuer or the Collateral Manager have actual knowledge are being withheld by the related agent bank or will be deposited into a Letter of Credit Reserve Account.

 

 

 
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"Eligible Investment Required Ratings": (a) If such obligation or security (i) has both a long term and a short term credit rating from Moody's, such ratings are "Aa3" or higher (not on credit watch for possible downgrade) and "P-1" (not on credit watch for possible downgrade), respectively, (ii) has only a long term credit rating from Moody's, such rating is at least equal to or higher than the current Moody's long term ratings of the U.S. government, and (iii) has only a short term credit rating from Moody's, such rating is "P-1" (not on credit watch for possible downgrade) and (b) so long as any Class A Note is rated by Fitch, from Fitch (i) for obligations or securities with remaining maturities up to 30 days, a short-term credit rating of at least "F1" and a long-term credit rating of at least "A" (if such long-term rating exists) or (ii) for obligations or securities with remaining maturities of more than 30 days but not in excess of 60 days, a short-term rating of "F1+" and a long-term credit rating of at least "AA-" (if such long-term rating exists).

 

"Eligible Investments": (a) Cash or (b) any United States dollar investment that, at the time it is Delivered to the Trustee (directly or through an intermediary or bailee), is one or more of the following obligations or securities:

 

(i)     direct obligations of, and 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 satisfy the Eligible Investment Required Ratings.

 

(ii)     demand and time deposits in, certificates of deposit of, trust accounts with, bankers' acceptances issued by, or federal funds sold by any depository institution or trust company incorporated under the laws of the United States of America (including the Bank and Affiliates of the Bank) or any state thereof and subject to supervision and examination by federal and/or state banking authorities, in each case payable within 183 days of issuance, so long as the commercial paper and/or the debt obligations of such depository institution or trust company 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 with the Eligible Investment Required Ratings and that either bear interest or are sold at a discount from the face amount thereof and have a maturity of not more than 183 days from their date of issuance; provided that this clause (iii) shall not include extendible commercial paper or asset backed commercial paper; and

 

 

 
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(iv)     registered money market funds domiciled outside of the United States which funds have credit ratings of (x) "Aaa-mf" by Moody's and (y) "AAAmmf" by Fitch or equivalent ratings at that time by Moody's and Fitch;

 

provided that Eligible Investments purchased with funds in the Collection Account shall be held until maturity except as otherwise specifically provided herein and shall include only such obligations or securities, other than those referred to in clause (iv) above, as mature (or are putable at par to the issuer thereof) no later than the earlier of 60 days and the Business Day prior to the next Payment Date; provided, further, that none of the foregoing obligations or securities shall constitute Eligible Investments if (a) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments, (b) such obligation or security is subject to withholding tax unless the issuer of the security is required to make "gross-up" payments that ensure that the net amount actually received by the Issuer (after payment of all taxes, whether imposed on such Obligor or the Issuer) will equal the full amount that the Issuer would have received had no such taxes been imposed, (c) such obligation or security is secured by real property, (d) such obligation or security is purchased at a price greater than 100% of the principal or face amount thereof or (e) in the Collateral Manager's sole judgment, such obligation or security is subject to material non-credit related risks. Eligible Investments may include, without limitation, those investments for which the Trustee or an Affiliate of the Trustee is the obligor or depository institution, or provides services and receives compensation.

 

Notwithstanding the foregoing clauses (b)(i) through (iv) or any other criteria set forth in this definition of Eligible Investments, Eligible Investments may only include obligations or securities that constitute "cash equivalents" for purposes of the rights and assets in paragraph (c)(8)(i)(B) of the exclusions from the definition of "covered fund" for purposes of the Volcker Rule. Any direction given by the Collateral Manager to the Trustee to invest in an Eligible Investment shall be deemed to be a confirmation from the Collateral Manager to the Trustee that such Eligible Investment complies with the requirements of the foregoing sentence.

 

"Eligible Post-Reinvestment Principal Proceeds": As of any date of determination (and on a cumulative basis), 50% of the aggregate amount of Principal Proceeds (whether received in the current Collection Period or in any prior Collection Period (or portion thereof), in each case, after the end of the Reinvestment Period) actually received by the Issuer after the end of the Reinvestment Period in respect of (i) sales of Credit Improved Obligations and Credit Impaired Obligations and (ii) Unscheduled Principal Payments, in each case, as of such date of determination.

 

"Entitlement Holder": The meaning specified in Section 8-102(a)(7) of the UCC.

 

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

 

"Equity Security": Any security or debt obligation which at the time of acquisition, conversion or exchange does not satisfy one or more of the requirements of the definition of "Collateral Obligation" (other than clause (xx)) and is not an Eligible Investment; it being understood that Equity Securities may not be purchased by the Issuer but may be received by the Issuer in exchange for a Collateral Obligation or a portion thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the issuer thereof.

 

 

 
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"ERISA": The United States Employee Retirement Income Security Act of 1974, as amended from time to time.

 

"ERISA Subscription Agreement": A subscription agreement containing ERISA-related representations, warranties and covenants substantially in the form set forth in Exhibit B6 hereto.

 

"Euroclear": Euroclear Bank S.A./N.V. as operator of the Euroclear System.

 

"Event of Default": The meaning specified in Section 5.1.

 

"Excepted Advances": Customary advances made to protect or preserve rights against the borrower of or Obligor under a Collateral Obligation or to indemnify an agent or representative for lenders pursuant to the Underlying Instruments.

 

"Excepted Participation Interest": Any Participation Interest that was acquired by the Issuer pursuant to a Master Participation Agreement.

 

"Excepted Property": The meaning specified in the Granting Clause.

 

"Excess CCC/Caa Adjustment Amount": As of any date of determination, an amount equal to the product of (i) the Aggregate Principal Balance of all Collateral Obligations included in the CCC/Caa Excess multiplied by (ii) 1 minus the weighted average Market Value (expressed as a percentage of the par amount of each such Collateral Obligation) of all Collateral Obligations included in the CCC/Caa Excess.

 

"Excess Weighted Average Fixed Coupon": As of any Measurement Date, a percentage equal to the product obtained by multiplying (a) the greater of zero and the excess, if any, of the Weighted Average Fixed Coupon over the Minimum Weighted Average Fixed Coupon by (b) the number obtained by dividing the Aggregate Principal Balance of all fixed rate Collateral Obligations (excluding any Defaulted Obligation and, to the extent of any non-cash interest, any Deferrable Obligation) by the Aggregate Principal Balance of all floating rate Collateral Obligations (excluding any Defaulted Obligation and, to the extent of any non-cash interest, any Deferrable Obligation).

 

"Excess Weighted Average Floating Spread": As of any Measurement Date, an amount equal to the product obtained by multiplying (a) the greater of zero and the excess, if any, of the Weighted Average Floating Spread over the Minimum Floating Spread by (b) the number obtained by dividing the Aggregate Principal Balance of all floating rate Collateral Obligations (excluding any Defaulted Obligation and, to the extent of any non-cash interest, any Deferrable Obligation) by the Aggregate Principal Balance of all fixed rate Collateral Obligations (excluding any Defaulted Obligation and, to the extent of any non-cash interest, any Deferrable Obligation).

 

 

 
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"Exchange Act": The United States Securities Exchange Act of 1934, as amended from time to time.

 

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

 

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

 

"Federal Reserve Board": The Board of Governors of the Federal Reserve System.

 

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

 

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

 

"First Lien Last Out Loan": A loan that would otherwise be a Senior Secured Loan, but which can by its terms become subordinate in right of payment to another obligation of the Obligor of the loan with respect to liquidation.

 

"Fitch": Fitch Ratings, Inc., and any successor in interest, provided that if Fitch is no longer rating the Class A Notes at the request of the Issuer, references to it hereunder and under and for all purposes of the Indenture and the other Transaction Documents shall be inapplicable and shall have no force or effect.

 

"Fitch Eligible Counterparty Ratings": With respect to an institution, investment or counterparty, a short-term credit rating of at least "F1" and a long-term credit rating of at least "A" by Fitch.

 

"Fitch Rating" has the meaning specified in Schedule 4 hereto.

 

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

 

"Global Notes": Any Regulation S Global Notes or Rule 144A Global 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 Moody's Rating Condition (to the extent applicable) and the delivery of prior written notice of such action to Fitch.

 

"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 Pledged Obligations, 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 Pledged Obligations, 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.

 

 

 
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"Group Country": Any Group I Country, Group II Country, Group III Country or Group IV Country.

 

"Group I Country": Australia, The Netherlands, The United Kingdom and New Zealand.

 

"Group II Country": Germany, Sweden and Switzerland.

 

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

 

"Group IV Country": Greece, Italy, Portugal and Japan.

 

"Hedge Agreements": Any interest rate swap, floor and/or cap agreements, including, without limitation, one or more interest rate basis swap agreements, between the Issuer and any Hedge Counterparty, as amended from time to time, and any replacement agreement entered into pursuant to Section 16.1.

 

"Hedge Counterparty": Any one or more institutions entering into or guaranteeing a Hedge Agreement with the Issuer that satisfies the Required Hedge Counterparty Rating that has entered into a Hedge Agreement with the Issuer, including any permitted assignee or successor under the Hedge Agreements.

 

"Hedge Counterparty Collateral Account": Each account established pursuant to Section 10.4.

 

"Hedge Counterparty Credit Support": As of any date of determination, any cash or cash equivalents on deposit in, or otherwise to the credit of, the Hedge Counterparty Collateral Account in an amount required to satisfy the then-current Rating Agency criteria.

 

"Holder": With respect to any Note, the Person whose name appears on the Register as the registered holder of such Note or the holder of a beneficial interest in (i.e. a beneficial owner of) such Note, except as otherwise provided for in this Indenture.

 

"IAI": An institutional Accredited Investor as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D of the Securities Act.

 

"IAI/QP": Any Person that, at the time of its acquisition, purported acquisition or proposed acquisition of Notes is both (a) an IAI and (b) a Qualified Purchaser or an entity owned exclusively by Qualified Purchasers.

 

 

 
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"Illiquid Asset": The meaning specified in Section 12.3.

 

"Incentive Management Fee": The fee payable to the Collateral Manager on each Payment Date on and after which the Incentive Management Fee Threshold has been met, pursuant to Section 8(a) of the Collateral Management Agreement and the Priority of Payments, in an amount equal to 20% of any remaining Interest Proceeds and Principal Proceeds, as applicable, on such Payment Date.

 

"Incentive Management Fee Threshold": The threshold that will be satisfied on any Payment Date if the Holders of the Junior Subordinated Notes have received an annualized internal rate of return (computed using the "XIRR" function in Microsoft® Excel or an equivalent function in another software package and based on the respective dates of issuance and an aggregate purchase price of $28,937,250 for the Junior Subordinated Notes) of at least 12% on the outstanding investment in the Junior Subordinated Notes as of such Payment Date after giving effect to all payments made or to be made on such Payment Date.

 

"Incurrence Covenant": A covenant by the underlying Obligor under a loan to comply with one or more financial covenants only upon the occurrence of certain actions of the underlying Obligor or certain events relating to the underlying Obligor, including, but not limited to, a debt issuance, dividend payment, share purchase, merger, acquisition or divestiture, unless, as of any date of determination, such action was taken or such event has occurred, in each case the effect of which causes such covenant to meet the criteria of a Maintenance Covenant.

 

"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, 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 of such Person solely because such manager or director acts as an independent manager or independent director thereof or of any affiliates of such Person.

 

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.

 

 

 
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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 and the Collateral Manager.

 

"Index Maturity": With respect to any Class of Notes, the period indicated with respect to such Class in Section 2.3.

 

"Information": S&P's "Credit Estimate Information Requirements" dated August 2011 and any other available information S&P reasonably requests in order to produce a credit estimate for a particular asset.

 

"Information Agent": The meaning specified in Section 14.16.

 

"Initial Purchaser": BNPP, in its capacity as the initial purchaser under the Purchase Agreement.

 

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

 

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

 

"Interest Accrual Period": (i) With respect to the initial Payment Date (or, in the case of a Class that is subject to Refinancing, the first Payment Date following the Refinancing), the period from and including the Closing Date (or, in the case of a Refinancing, the date of issuance of the Replacement Notes), to but excluding such Payment Date; and (ii) with respect to each succeeding Payment Date, the period from and including the immediately preceding Payment Date to but excluding the following Payment Date until the principal of the Notes is paid or made available for payment; provided, that any interest bearing notes issued after the Closing Date in accordance with the terms of this Indenture shall accrue interest during the Interest Accrual Period in which such additional notes are issued from and including the applicable date of issuance of such additional notes to but excluding the last day of such Interest Accrual Period at the applicable Interest Rate.

 

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

 

"Interest Coverage Ratio": With respect to any designated Class or Classes of Secured Notes, as of any date of determination, on or after the Determination Date immediately preceding the third Payment Date, the percentage derived by dividing:

 

(a)     the sum of (i) the Collateral Interest Amount as of such date of determination minus (ii) amounts payable (or expected as of the date of determination to be payable) on the following Payment Date as set forth in clauses (A), (B) and (C) of Section 11.1(a)(i); by

 

(b)     interest due and payable on the Secured Notes of such Class or Classes and each Priority Class of Secured Notes on such Payment Date (excluding Deferred Interest and any interest on the Deferred Interest with respect to any such Class or Classes).

 

 

 
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"Interest Coverage Test": A test that is satisfied with respect to any specified Class or Classes of Secured Notes, if as of the Determination Date immediately preceding the third Payment Date, and at any date of determination occurring thereafter (i) the Interest Coverage Ratio for such Class or Classes is at least equal to the applicable Required Coverage Ratio for such Class or Classes, or (ii) such Class or Classes is no longer outstanding.

 

"Interest Determination Date": (i) With respect to the first Interest Accrual Period, the second London Banking Day preceding the Closing Date and (ii) for each Interest Accrual Period after the first Interest Accrual Period, the second London Banking Day preceding the first day of each Interest Accrual Period.

 

"Interest Proceeds": With respect to any Collection Period or Determination Date, without duplication, the sum of: (i) all payments of interest and other income (including delayed compensation but excluding any interest due on any Deferrable Obligation that has been deferred or capitalized at the time of acquisition) received 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, ticking 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) the reduction of the par of the related Collateral Obligation as determined by the Collateral Manager at its discretion (with notice to the Trustee and the Collateral Administrator); (iv) any payment received with respect to any Hedge Agreement other than (a) an upfront payment received upon entering into such Hedge Agreement or (b) a payment received as a result of the termination of any Hedge Agreement to the extent not used by the Issuer to enter into a new or replacement Hedge Agreement (for purposes of this subclause (iv), any such payment received or to be received on or before the last day of the Collection Period in respect of such Payment Date will be deemed received in respect of the preceding Collection Period and included in the calculation of Interest Proceeds received in such Collection Period); (v) any payments received as repayment for Excepted Advances; (vi) any amounts deposited in the Interest Collection Subaccount from the Expense Reserve Account or the Ramp-Up Account pursuant to Section 10.3 in respect of the related Determination Date; (vii) any proceeds from an Issuer Subsidiary Asset characterized as "Interest Proceeds" received by the Issuer from any Issuer Subsidiary; and (viii) commitment fees, letter of credit fees and other similar fees received by the Issuer during such Collection Period in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations; provided that except as set forth in clause (vi) above, any amounts received in respect of (1) any Defaulted Obligation or (2) from an Issuer Subsidiary, in respect of an Issuer Subsidiary Asset that was acquired or received in connection with a workout or restructuring of such Defaulted Obligation will constitute (A) Principal Proceeds (and not Interest Proceeds) until the aggregate of all recoveries in respect of such Defaulted Obligation (including any such proceeds from such Issuer Subsidiary, in respect of such Issuer Subsidiary Asset) since immediately before it became a Defaulted Obligation equals the outstanding Principal Balance (excluding any unfunded commitment on any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation) of such Collateral Obligation immediately before it became a Defaulted Obligation, and then (B) Interest Proceeds thereafter; provided, further, that amounts described in clause (i) of the definition of Principal Financed Accrued Interest may be designated by the Collateral Manager as Interest Proceeds as long as the Aggregate Principal Balance on the date of such designation of the (a) Collateral Obligations and (b) Eligible Investments representing Principal Proceeds equals or exceeds the Aggregate Ramp-Up Par Amount (on a pro forma basis); provided, further, that amounts that would otherwise constitute Interest Proceeds may be designated as Principal Proceeds pursuant to Section 7.17(c) with notice to the Collateral Administrator; provided, further, that all payments (interest, principal and otherwise) from any Credit Amendment that does not satisfy the Weighted Average Life Test shall be designated as Principal Proceeds. Notwithstanding the foregoing, in the Collateral Manager's sole discretion (to be exercised on or before the related Determination Date), on any date after the first Payment Date, Interest Proceeds in any Collection Period may be deemed to be Principal Proceeds so long as no such designation would result in an interest deferral on any Class of Secured Notes. Under no circumstances shall Interest Proceeds include the Excepted Property or any interest earned thereon.

 

 

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

 

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

 

"Investment Company Act": The Investment Company Act of 1940, as amended from time to time.

 

"Investment Criteria": The criteria specified in Section 12.2.

 

"Investment Criteria Adjusted Balance": With respect to any Asset, the Principal Balance of such Asset; provided that for all purposes the Investment Criteria Adjusted Balance of any: (i) Deferring Obligation shall be the Moody's Collateral Value of such Deferring Obligation, (ii) Discount Obligation shall be the purchase price (expressed as a dollar amount) of such Discount Obligation; and (iii) CCC/Caa Collateral Obligation included in the CCC/Caa Excess shall 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, Discount Obligation or is included in the CCC/Caa Excess shall be the lowest amount determined pursuant to clauses (i), (ii) or (iii).

 

"Irish Listing Agent": The meaning specified in Section 7.2.

 

"Issuer": JMP Credit Advisors CLO IV Ltd., 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": A written order dated and signed in the name of the Issuer or the Co-Issuer (which written order may be a standing order) by an Authorized Officer of the Issuer or the Co-Issuer, as applicable, or, to the extent permitted herein or in the Collateral Management Agreement, by the Collateral Manager by an Authorized Officer thereof, on behalf of the Issuer. For the avoidance of doubt, an order or request provided in an email or other electronic communication acceptable to the Trustee sent by an Authorized Officer of the Issuer or Co-Issuer or by an Authorized Officer of the Collateral Manager on behalf of the Issuer or the Co-Issuer shall constitute an Issuer Order, in each case except to the extent that the Trustee requests otherwise.

 

 

 
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"Issuer Request": A written request dated and signed in the name of the Issuer or the Co-Issuer (which written request may be a standing request) by an Authorized Officer of the Issuer or the Co-Issuer, as applicable, or, to the extent permitted herein or in the Collateral Management Agreement, by the Collateral Manager by an Authorized Officer thereof, on behalf of the Issuer.

 

"Issuer Subsidiary": The meaning specified in Section 7.16(e).

 

"Issuer Subsidiary Asset": The meaning specified in Section 7.16(g).

 

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

 

"Knowledgeable Employee": The meaning specified in Rule 3c-5 under the Investment Company Act.

 

"Letter of Credit": A facility whereby (i) a fronting bank ("LOC Agent Bank") issues or will issue a letter of credit ("LC") for or on behalf of a borrower pursuant to an underlying instrument, (ii) in the event that the LC is drawn upon and the borrower does not reimburse the LOC Agent Bank, the lender/participant is obligated to fund its portion of the facility and (iii) the LOC Agent Bank passes on (in whole or in part) the fees it receives for providing the LC to the lender/participant.

 

"Letter of Credit Reserve Account": The meaning specified in Section 7.16(h).

 

"LIBOR": (i) With respect to the Secured Notes and the Senior Subordinated Notes, the meaning set forth in Exhibit C and (ii) with respect to a Collateral Obligation, the "Libor" rate determined in accordance with the terms of such Collateral Obligation.

 

"Libor": The London interbank offered rates.

 

"LIBOR Floor Obligation": As of any date, a floating rate Collateral Obligation (a) for which the related Underlying Instruments allow a Libor rate option, (b) that provides that such Libor rate is (in effect) calculated as the greater of (i) a specified "floor" rate per annum and (ii) the London interbank offered rate for the applicable interest period for such Collateral Obligation and (c) that, as of such date, bears interest based on such Libor rate option, but only if as of such date the London interbank offered rate for the applicable interest period is less than such floor rate.

 

"Listed Notes": The Notes specified as such in Section 2.3.

 

 

 
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"LOC Agent Bank": The meaning specified in the definition of "Letter of Credit" in this Section 1.1.

 

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

 

"Maintenance Covenant": As of any date of determination, a covenant by the underlying Obligor of a loan to comply with one or more financial covenants during each reporting period applicable to such loan, whether or not any action by, or event relating to, the underlying Obligor occurs after such date of determination.

 

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

 

"Management Fee Interest": Collectively, the Subordinated Management Fee Interest and the Deferred Subordinated Management Fee Interest.

 

"Management Fees": Collectively, the Senior Management Fee, the Subordinated Management Fee and the Incentive Management Fee.

 

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

 

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

 

(i)     the quote determined by any of Loan Pricing Corporation, MarkIt Partners, or any other nationally recognized loan pricing service selected by the Collateral Manager, or

 

(ii)     if such quote described in clause (i) is not available, the average of the bid-side quotes determined by three broker-dealers active in the trading of such asset that are Independent (with respect to each other and the Collateral Manager); or

 

(A)     if only two such bids can be obtained, the lower of the bid-side quotes of such two bids; or

 

(B)     with respect to determining Market Value in connection with calculating the Adjusted Collateral Principal Amount only, if only one such bid can be obtained, such bid; provided that this subclause (B) shall not apply at any time at which the Collateral Manager is not a registered investment adviser under the Investment Advisers Act; or

 

(iii)     if such quote or bid described in clause (i) or (ii) is not available, then the Market Value of such Collateral Obligation shall be the lower of (x) the Market Value determined by the Collateral Manager, consistent with the manner in which it would determine the market value of an asset for purposes of other funds or accounts managed by it and (y) the purchase price of such Collateral Obligation; provided that, if the Collateral Manager is not a registered investment adviser under the Investment Advisers Act, the Market Value of any such asset may not be determined in accordance with this clause (iii) for more than thirty days; or

 

 

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

 

provided that, for purposes of determining the Market Value of any CCC/Caa Collateral Obligation included in the Excess CCC/Caa Adjustment Amount, such Market Value may not exceed the principal amount of such Collateral Obligation.

 

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

 

"Master Participation Agreement": Each of the master participation agreements, dated as of June 2, 2017 and as of June 13, 2017, in each case, between the Issuer and another CLO managed by the Collateral Manager (as amended from time to time in accordance with its terms) and collectively, the "Master Participation Agreements".

 

"Maximum Investment Amount": As of any date of determination, the sum of, without duplication, (a) the Collateral Principal Amount, (b) the outstanding principal amount of all Defaulted Obligations that have been Defaulted Obligations for longer than three years and (c) the aggregate amount of all Principal Financed Accrued Interest.

 

"Maximum Moody's Rating Factor Test": A test that will be satisfied on any date of determination if the Moody's Adjusted Weighted Average Rating Factor of the Collateral Obligations is less than or equal to the lesser of (i) the sum of (a) the number set forth in the column entitled "Maximum Moody's Weighted Average Rating Factor" in the Asset Quality Matrix, based upon the applicable "row/column combination" chosen by the Collateral Manager with notice to the Collateral Administrator (or the linear interpolation between two adjacent rows and/or two adjacent columns, as applicable) in accordance with Section 7.17(e), plus (b) the Moody's Weighted Average Recovery Adjustment and (ii) 3200.

 

"Measurement Date": (i) Any day on which the Issuer purchases, or enters into a commitment to purchase, a Collateral Obligation or promptly after an Officer of the Collateral Manager becomes aware that a default of a Collateral Obligation has occurred, (ii) any Determination Date, (iii) the date as of which the information in any Monthly Report or Distribution Report is calculated, (iv) with five 5 Business Days prior written notice, any Business Day requested by the Rating Agencies and (v) the last day of the Ramp-Up Period; provided that in the case of (i) through (iv), no "Measurement Date" can occur prior to the last day of the Ramp-Up Period.

 

 

 
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"Memorandum and Articles": The Issuer's Memorandum and Articles of Association, as they may be amended, revised or restated from time to time.

 

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

 

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

 

"Minimum Floating Spread": The number set forth in the column entitled "Minimum Weighted Average Spread" in the Asset Quality Matrix based upon the applicable "row/column combination" chosen by the Collateral Manager with notice to the Trustee and the Collateral Administrator (or the linear interpolation between two adjacent rows and/or two adjacent columns, as applicable) in accordance with Section 7.17(e) (the "Matrix Combination"), reduced by the Moody's Weighted Average Recovery Adjustment; provided that the Minimum Floating Spread shall not be lower than 2.45%.

 

"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 Fixed Coupon equals or exceeds the Minimum Floating Spread.

 

"Minimum Weighted Average Fixed Coupon" means (i) if any of the Collateral Obligations are fixed rate obligations, 7.00% and (ii) otherwise 0.00%.

 

"Money": The meaning specified in Section 1.1-201(24) of the UCC.

 

"Monthly Report": The meaning specified in Section 10.6(a).

 

"Monthly Report Determination Date": The meaning specified in Section 10.6(a).

 

"Moody's": Moody's Investors Service, Inc. and any successor thereto.

 

"Moody's Adjusted Weighted Average Rating Factor": As of any date of determination, a number equal to the Moody's Weighted Average Rating Factor determined in the following manner: for purposes of determining a Moody's Default Probability Rating, Moody's Rating or Moody's Derived Rating in connection with determining the Moody's Weighted Average Rating Factor for purposes of this definition, the last paragraph of the definition of "Moody's Default Probability Rating" and "Moody's Derived Rating" and the penultimate paragraph of the definition of "Moody's Rating" shall each be disregarded, and instead each applicable rating on credit watch by Moody's that is on (a) positive watch will be treated as having been upgraded by one rating subcategory, (b) negative watch will be treated as having been downgraded by two rating subcategories, (c) positive outlook will be treated with no change to the rating subcategory, and (d) negative outlook will be treated as having been downgraded by one rating subcategory.

 

"Moody's Collateral Value": As of any date of determination, with respect to any Defaulted Obligation, Deferring Obligation or Discounted Excepted Participation Interest, the lesser of (i) the Moody's Recovery Amount of such Defaulted Obligation, Deferring Obligation or Discounted Excepted Participation Interest as of such date and (ii) the Market Value of such Defaulted Obligation, Deferring Obligation or Discounted Excepted Participation Interest as of such date.

 

 

 
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"Moody's Counterparty Criteria": With respect to any Participation Interest proposed to be acquired by the Issuer, criteria that will be met if immediately after giving effect to such acquisition, (x) the percentage of the Collateral Principal Amount that consists in the aggregate of Participation Interests with Selling Institutions that have the same or a lower Moody's credit rating does not exceed the "Aggregate Percentage Limit" set forth below for such Moody's credit rating and (y) the percentage of the Collateral Principal Amount that consists in the aggregate of Participation Interests with any single Selling Institution that has the Moody's credit rating set forth below or a lower credit rating does not exceed the "Individual Percentage Limit" set forth below for such Moody's credit rating:

 

Moody's credit rating of

Selling Institution
(at or below)

 

Aggregate
Percentage
Limit

 

Individual
Percentage
Limit

Aaa

 

20.0%

 

20.0%

Aa1

 

20.0%

 

10.0%

Aa2

 

20.0%

 

10.0%

Aa3

 

15.0%

 

10.0%

A1

 

10.0%

 

5.0%

A2 and "P-1"

 

5.0%

 

5.0%

A3

 

0%

 

0%

  

"Moody's Default Probability Rating": With respect to any Collateral Obligation, the rating determined pursuant to Schedule 3.

 

"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.

 

"Moody's Diversity Test": A test that will be satisfied on any date of determination if the Diversity Score (rounded to the nearest whole number) equals or exceeds the greater of (x) the number set forth in the column entitled "Minimum Diversity Score" in the Asset Quality Matrix based upon the applicable "row/column combination" chosen by the Collateral Manager with notice to the Trustee and the Collateral Administrator (or the linear interpolation between two adjacent rows and/or two adjacent columns, as applicable) in accordance with Section 7.17(e) and (y) solely during the Reinvestment Period, 50.

 

"Moody's Industry Classification": The industry classifications set forth in Schedule 1, as such industry classifications shall be updated at the sole option of the Collateral Manager (with notice to the Trustee and the Collateral Administrator) if Moody's publishes revised industry classifications.

 

 

 
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"Moody's Minimum Weighted Average Recovery Rate Test": The test that will be satisfied on any date of determination if the Moody's Weighted Average Recovery Rate equals or exceeds 44%.

 

"Moody's Non-Senior Secured Loan": Any assignment of or Participation Interest in or other interest in a loan that is not a Moody's Senior Secured Loan.

 

"Moody's Ramp-Up Condition": A condition that will be satisfied if the Issuer or the Collateral Manager, as the case may be, has provided to Moody's both (1) a Ramp-Up Period Report that shows that the Aggregate Ramp-Up Par Condition was satisfied, each Par Value Ratio Test was satisfied, the Concentration Limitations were complied with and the Portfolio Quality Test was satisfied and (2) the Ramp-Up Period Issuer Certificate that (i) indicates the Issuer has received a Ramp-Up Period Accountants' Report that recalculates information set forth on the Ramp-Up Period Report, (ii) certifies, based on the information in such Ramp-Up Period Accountants' Report and the comparisons performed by the Trustee and the Collateral Manager in accordance with Section 7.17(b), that the information in the Ramp-Up Period Report is accurate in all material respects and (iii) attributes such conclusions from the foregoing review to the Issuer. For the avoidance of doubt, neither the Ramp-Up Period Report nor the Ramp-Up Period Issuer Certificate will include the Ramp-Up Period Accountants' Report.

 

"Moody's Ramp-Up Failure": The meaning specified in Section 7.17(c).

 

"Moody's Rating": With respect to any Collateral Obligation, as of any date of determination, the rating determined in accordance with the following methodology:

 

(i)     With respect to a Collateral Obligation (A) that is publicly rated by Moody's, such public rating (B) that is not publicly rated by Moody's but for which a rating or rating estimate has been assigned by Moody's upon the request of the Issuer or the Collateral Manager, such rating or, in the case of a rating estimate, the applicable rating estimate for such obligation or (C) for which neither clause (A) nor (B) applies but that has a private point-in-time rating assigned to it by Moody's within the preceding 12 months, such private point-in-time rating;

 

(ii)     With respect to a Collateral Obligation that is a Moody's Senior Secured Loan or Participation Interest in a Moody's Senior Secured Loan, if not determined pursuant to clause (i) above, if the obligor of such Collateral Obligation has a corporate family rating by Moody's, then the Moody's rating that is one subcategory higher than such corporate family rating;

 

(iii)     With respect to a Collateral Obligation, if not determined pursuant to clause (i) or (ii) above, if the obligor of such Collateral Obligation has one or more senior unsecured obligations publicly rated by Moody's, then the Moody's public rating on any such obligation (or, if such Collateral Obligation is a Moody's Senior Secured Loan, the Moody's rating that is two subcategories higher than the Moody's public rating on any such senior unsecured obligation) as selected by the Collateral Manager in its sole discretion;

 

 

 
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(iv)     With respect to a Collateral Obligation (other than a Moody's Senior Secured Loan or Participation Interest in a Moody's Senior Secured Loan), if not determined pursuant to clause (i) through (iii) above, if the obligor of such Collateral Obligation has a corporate family rating by Moody's, then the Moody's rating that is one subcategory lower than such corporate family rating;

 

(v)     With respect to a Collateral Obligation (other than a Moody's Senior Secured Loan or Participation Interest in a Moody's Senior Secured Loan), if not determined pursuant to clause (i) through (iv) above, if the obligor of such Collateral Obligation has one or more subordinated obligations publicly rated by Moody's, then the Moody's rating that is one subcategory higher than the Moody's public rating on any such obligation as selected by the Collateral Manager in its sole discretion;

 

(vi)     With respect to a Collateral Obligation, if not determined pursuant to clause (i) through (v) above, the Moody's Derived Rating; and

 

(vii)     With respect to a Collateral Obligation, if not determined pursuant to clause (i) through (vi) above, "Caa3".

 

For purposes of calculating a Moody's Rating, each applicable rating, at the time of calculation, (i) on credit watch by Moody's with positive implications will be treated as having been upgraded by one rating subcategory, (ii) on credit watch by Moody's with negative implications will be treated as having been downgraded by one rating subcategory and (iii) on either negative outlook or positive outlook by Moody's will not be treated as having been downgraded or upgraded by any rating subcategories.

 

With respect to any credit estimate assigned by Moody's to a Collateral Obligation hereunder, the Issuer (or the Collateral Manager on the Issuer's behalf) shall send to Moody's the related Obligor's updated financial information upon receipt thereof from such Obligor and will use commercially reasonable efforts to obtain such information at least (x) annually and (y) upon any significant change in the financial condition of such Obligor or any material amendment to its Underlying Instruments (in each case, as determined by the Collateral Manager in its commercially reasonable business judgment) but (in each case) only to the extent such Obligor is required to provide it pursuant to the Underlying Instruments.

 

"Moody's Rating Condition": For so long as Moody's is a Rating Agency, a condition that is satisfied if:

 

(i)     with respect to the end of the Ramp-Up Period rating confirmation procedure described in Sections 7.17(a) through (d), Moody's provides written confirmation (including by means of electronic message, facsimile transmission, press release, posting to its internet website, or other means then considered industry standard) that Moody's will not downgrade or withdraw its Initial Rating of the Secured Notes of each Class; or

 

(ii)     with respect to any other event or action, Moody's has, upon request of the Collateral Manager or the Issuer, confirmed in writing (including by means of electronic message, facsimile transmission, press release, posting to its internet website, or other means then considered industry standard) to the Issuer, the Trustee, the Collateral Administrator and the Collateral Manager that no immediate withdrawal or reduction with respect to its then-current rating by Moody's of the Secured Notes of each Class will occur as a result of such event or action; provided that the Moody's Rating Condition will not be applicable if no Secured Notes remain Outstanding;

 

 

 
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provided further that if Moody's (a) makes a public announcement or informs the Issuer, the Collateral Manager or the Trustee that (i) it believes the Moody's Rating Condition is not required with respect to an action or (ii) its practice is to not give such confirmations, or (b) it no longer constitutes a Rating Agency under this Indenture, the Moody's Rating Condition will not apply.

 

"Moody's Rating Factor": For each Collateral Obligation, the number set forth in the table below opposite the Moody's Default Probability Rating of such Collateral Obligation.

 

Moody's Default

Probability Rating

 

Moody's Rating

Factor

 

Moody's Default

Probability Rating

 

Moody's Rating

Factor

                 

Aaa

   

1

 

Ba1

   

940

Aa1

   

10

 

Ba2

   

1,350

Aa2

   

20

 

Ba3

   

1,766

Aa3

   

40

 

B1

   

2,220

A1

   

70

 

B2

   

2,720

A2

   

120

 

B3

   

3,490

A3

   

180

 

Caa1

   

4,770

Baa1

   

260

 

Caa2

   

6,500

Baa2

   

360

 

Caa3

   

8,070

Baa3

   

610

 

Ca or lower

   

10,000

 

"Moody’s Rating Factor Adjustment Amount":  With respect to the Minimum Floating Spread for each Matrix Combination, (A) if the Minimum Floating Spread is less than 2.75%, 45, (B) if the Minimum Floating Spread is equal to or greater than 2.75% but less than 2.95%, 53, (C) if the Minimum Floating Spread is at equal to or greater than 2.95% but less than 3.45%, 55, (D) if the Minimum Floating Spread is equal to or greater than 3.45% but less than 4.15%, 57, (E) if the Minimum Floating Spread is equal to or greater than 4.15% but less than 4.85%, 62, and (F) if the Minimum Floating Spread is equal to or greater than 4.85%, 64.

 

"Moody's Recovery Amount": With respect to any Collateral Obligation, an amount equal to the product of (i) the applicable Moody's Recovery Rate and (ii) the Principal Balance of such Collateral Obligation.

 

"Moody's Recovery Rate": With respect to any Collateral Obligation, as of any date of determination, the recovery rate determined in accordance with the following, in the following order of priority:

 

 

 
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(i)     if the Collateral Obligation has been specifically assigned a recovery rate by Moody's (for example, in connection with the assignment by Moody's of an estimated rating), such recovery rate;

 

(ii)     if the preceding clause does not apply to the Collateral Obligation, and the Collateral Obligation is a Moody's Senior Secured Loan or Moody's Non-Senior Secured Loan (in each case other than a DIP Collateral Obligation), the rate determined pursuant to the table below based on the number of rating subcategories difference between the Collateral Obligation's Moody's Rating and its Moody's Default Probability Rating (for purposes of clarification, if the Moody's Rating is higher than the Moody's Default Probability Rating, the rating subcategories difference will be positive and if it is lower, negative):

 

Number of Moody's Ratings

Subcategories Difference Between

the Moody's Rating and

the Moody's Default

Probability Rating

 

Moody's Senior

Secured Loans

 

Second Lien Loans and First

Lien Last Out Loans (provided that

such Collateral Obligations must

have both a corporate family rating and an

instrument rating assigned by Moody's)

 

Unsecured Loans and all other

Collateral Obligations that do not fall

under the previous two columns

+2 or more

 

60.0%

 

55.0%

 

45.0%

+1

 

50.0%

 

45.0%

 

35.0%

0

 

45.0%

 

35.0%

 

30.0%

-1

 

40.0%

 

25.0%

 

25.0%

-2

 

30.0%

 

15.0%

 

15.0%

-3 or less

 

20.0%

 

5.0%

 

5.0%

or

           

 

(iii)     if the Collateral Obligation is a DIP Collateral Obligation (other than a DIP Collateral Obligation which has been specifically assigned a recovery rate by Moody's), 50%.

 

"Moody's Senior Secured Loan": The meaning specified in Schedule 3.

 

"Moody's Weighted Average Rating Factor": The number (rounded up to the nearest whole number) determined by the following calculation:

 

The Principal Balance of each Collateral Obligation (excluding any Current Pay Obligation and Defaulted Obligation)

X

The Moody's Rating Factor of such Collateral Obligation (as described above)

 

 

 
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divided by

 

The Aggregate Principal Balance of all such Collateral Obligations.

 

"Moody's Weighted Average Recovery Adjustment": As of any date of determination, the greater of (a) zero and (b) the product of (i)(A) the Moody's Weighted Average Recovery Rate as of such date of determination multiplied by 100 minus (B) 44 and (ii) (A) with respect to the adjustment of the Maximum Moody's Rating Factor Test, the applicable Moody's Rating Factor Adjustment Amount and (B) with respect to the adjustment of the Minimum Floating Spread, 0.05%; provided that if the Weighted Average Moody's Recovery Rate for purposes of determining the Moody's Weighted Average Recovery Adjustment is greater than 60%, then such Weighted Average Moody's Recovery Rate will equal 60% unless the Moody's Rating Condition is satisfied.

 

"Moody's Weighted Average Recovery Rate": As of any date of determination, the number, expressed as a percentage, obtained by summing the product of the Moody's Recovery Rate on such Measurement Date of each Collateral Obligation (excluding any Defaulted Obligation) and the Principal Balance of such Collateral Obligation, dividing such sum by the Aggregate Principal Balance of all such Collateral Obligations and rounding up to the first decimal place.

 

"Non-Call Period": The period from the Closing Date to but excluding the Payment Date in July 2019.

 

"Non-Emerging Market Obligor": An Obligor that is Domiciled in (x) any country that has a country ceiling for foreign currency bonds of at least "Aa2" by Moody's or (y) without duplication, the United States.

 

"Non-Permitted ERISA Holder": The meaning specified in Section 2.12(d).

 

"Non-Permitted Holder": The meaning specified in Section 2.12(b).

 

"Note Interest Amount": With respect to any specified Class of Secured Notes and any Payment Date, the amount of interest for the next Interest Accrual Period payable in respect of each U.S.$100,000 Outstanding principal amount of such Class of Secured Notes.

 

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

 

"Noteholder" or "Noteholders": With respect to any Note, the Person(s) whose name(s) appear(s) on the Register as the registered holder(s) 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 2.3) or any supplemental indenture (and including any Additional Notes issued hereunder pursuant to Section 2.4).

 

 

 
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"NRSRO": Any nationally recognized statistical rating organization, other than the Rating Agencies.

 

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

 

"Obligor": The obligor or guarantor under a loan.

 

"Offer": The meaning specified in Section 10.7(c)

 

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

 

"Offering Circular": The offering circular, dated June 26, 2017 relating to the Notes, including any supplements thereto.

 

"Officer": With respect to the Issuer, the Co-Issuer and any corporation or limited liability company, any director, manager, the Chairman of the Board of Directors, the President, any Vice President, the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of such entity or any Person authorized by such entity and shall, for the avoidance of doubt, include any duly appointed attorney-in-fact of the Issuer; with respect to any partnership, any general partner thereof or any Person authorized by such entity; with respect to a limited liability company, any member thereof or any Person authorized by such entity; and with respect to the Trustee, any Trust Officer.

 

"offshore transaction": The meaning specified in Regulation S.

 

"Opinion of Counsel": A written opinion addressed to the Trustee and, if required by the terms hereof, the Rating Agencies, in form and substance reasonably satisfactory to the Trustee (and if so addressed, the Rating Agencies), of a nationally or internationally recognized law firm or an attorney admitted to practice (or law firm, one or more of the partners of which are admitted to practice) before the highest court of any State of the United States or the District of Columbia (or the Cayman Islands, in the case of an opinion relating to the laws of the Cayman Islands) in the relevant jurisdiction, which attorney (or law firm) may, except as otherwise expressly provided in this Indenture, be counsel for the Issuer or the Co-Issuer, as the case may be, and which firm or attorney, 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 either be addressed to the Trustee (and, if required by the terms hereof, the Rating Agencies) or shall state that the Trustee (and, if required by the terms hereof, the Rating Agencies) shall be entitled to rely thereon.

 

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

 

 

 
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"Other Plan Law": Any state, local, non-U.S. or other law, regulation or other legal restriction that is substantially similar to the fiduciary responsibility or prohibited transaction provisions contained in Title I of ERISA or Section 4975 of the Code.

 

"Outstanding": With respect to 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;

 

(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;

 

(iv)     Notes alleged to have been mutilated, defaced, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.7;

 

provided that in determining whether the Holders of the requisite Aggregate Outstanding Amount have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under the Collateral Management Agreement, (I)(x) any Notes owned by the Issuer, the Co-Issuer, or any other obligor upon the Notes or any Affiliate thereof or (y) only in the case of a vote on (i) the removal of the Collateral Manager for "cause" upon the occurrence of the events specified in Section 12(c) of the Collateral Management Agreement, (ii) any objection rights with regard to the replacement of any Key Persons (as defined in the Collateral Management Agreement) and (iii) the waiver of any event constituting "cause" under Section 12(c) of the Collateral Management Agreement, Collateral Manager Securities, shall each be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes a Trust Officer of the Trustee has actual knowledge (or has been provided written notice of) to be so owned shall be so disregarded, (II) Notes so owned that have been pledged in good faith may 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 the Issuer, the Co-Issuer, any other obligor upon the Notes or any Affiliate of the Issuer, the Co-Issuer, or such other obligor (or the Collateral Manager, any Affiliate of the Collateral Manager or any account or investment fund over which the Collateral Manager or any Affiliate has discretionary voting authority) and (III) for purposes of the procedures described under Section 12 of the Collateral Management Agreement, if any Section 13 Banking Entity delivers a notice in the form set forth in Exhibit F (a "Banking Entity Notice") to the Issuer, the Collateral Manager and the Trustee (including via e-mail) then, effective on the date on which such Banking Entity Notice is delivered, the Notes held by such Section 13 Banking Entity shall be disregarded and deemed not to be outstanding so long as such Notes are held by such Section 13 Banking Entity with respect to any vote, consent, waiver, objection or similar action in connection with any matter described under Section 12 of the Collateral Management Agreement. Such Notes shall be deemed outstanding and such Section 13 Banking Entity may vote, consent, waive, object or take any similar action in connection with any other matters under the Collateral Management Agreement or under any other Transaction Document. For the avoidance of doubt, (i) no subsequent notice or other action by a Section 13 Banking Entity purporting to modify, amend or rescind a Banking Entity Notice shall be effective and shall be void ab initio, (ii) no Holder or beneficial owner of Notes shall be required to provide a Banking Entity Notice (regardless of whether such Holder or beneficial owner is or is not a Section 13 Banking Entity) and (iii) whether a Banking Entity Notice shall bind any subsequent transferee of a holder or beneficial owner delivering such Banking Entity Notice will be specified in the Banking Entity Notice, and the Section 13 Banking Entity, by delivering such notice, will be deemed to have agreed to inform any Person to whom it transfers its Notes if such notice is binding on transferees (unless such transferee also delivers a Banking Entity Notice) and, if not binding, any vote, consent, waiver, objection or similar action of such transferee shall be effective for all purposes described under Section 12 of the Collateral Management Agreement.

 

 

 
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"Pari Passu Class": With respect to each Class of Notes, each Class of Notes that ranks pari passu with such Class, as indicated in Section 2.3.

 

"Partial Redemption by Refinancing": The meaning specified in Section 9.3.

 

"Par Value Ratio": With respect to any specified Class or Classes of Secured Notes as of the last day of the Ramp-Up Period or any Measurement Date thereafter, the percentage derived from dividing: (a) the Adjusted Collateral Principal Amount by (b) the sum of (i) the Aggregate Outstanding Amounts of the Secured Notes of such Class or Classes and each Priority Class of Secured Notes, plus (ii) Deferred Interest with respect to such Class or Classes and each Priority Class of Secured Notes.

 

"Par Value Ratio Test": A test that is satisfied with respect to any Class or Classes of Secured Notes as of any date of determination at, or subsequent to, the last day of the Ramp-Up Period, if (i) the Par Value Ratio for such Class or Classes is at least equal to the applicable Required Coverage Ratio for such Class or Classes or (ii) such Class or Classes of Secured Notes is no longer Outstanding.

 

"Participation Interest": A 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 loan would constitute a Collateral Obligation were it acquired directly, (ii) the seller of the participation interest is the lender on the loan, (iii) the aggregate participation interests in the loan does not exceed the principal amount or commitment of such loan, (iv) such participation interest does not grant, in the aggregate, to the participant in such participation interest a greater interest than the seller holds in the loan or commitment that is the subject of the participation interest, (v) the entire purchase price for such participation interest is paid in full at the time of its acquisition (or, in the case of a participation interest in a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, at the time of the funding of such loan), (vi) the participation interest 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 interest is documented under a Loan Syndications and Trading Association, Loan Market Association or similar agreement standard for loan participation transactions among institutional participants (including, for the avoidance of doubt, the Master Participation Agreements). For the avoidance of doubt, a Participation Interest shall not include a sub-participation interest in any loan.

 

 

 
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"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": The 17th 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 October 2017; provided that following the redemption or repayment in full of the Secured Notes, Holders of Subordinated Notes may receive payments (including in respect of an Optional Redemption of the Subordinated Notes) on any dates designated by the Collateral Manager (which dates may or may not be the dates stated above) upon eight (8) Business Days prior written notice to the Trustee and the Collateral Administrator (which notice the Trustee shall promptly forward to the Holders of the Subordinated Notes) and such dates shall thereafter constitute "Payment Dates"; provided, further, that each Redemption Date shall be deemed to be a "Payment Date."

 

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

 

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

 

"Pledged Obligations": As of any date of determination, the Collateral Obligations, the Eligible Investments and any Equity Security which forms part of the Assets that have been Granted to the Trustee.

 

"Portfolio Quality Test": A test satisfied if, as of any date on which a determination is required hereunder at, or subsequent to, the end of the Ramp-Up Period, 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 satisfy each of the tests set forth below (or, unless otherwise explicitly provided for in Section 12.2(a), if any such test is not satisfied, the results of such test are maintained or improved), calculated in each case as required by Section 1.2:

 

(i)       the Minimum Fixed Coupon Test;

 

(ii)      the Minimum Floating Spread Test;

 

 

 
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(iii)     the Maximum Moody's Rating Factor Test;

 

(iv)     the Moody's Diversity Test;

 

(v)      the Moody's Minimum Weighted Average Recovery Rate Test; and

 

(vi)     the Weighted Average Life Test.

 

"Post-Acceleration Payment Date": Any Payment Date after the principal of the Secured Notes has been declared to be or has otherwise become immediately due and payable pursuant to Section 5.2; provided that such declaration has not been rescinded or annulled.

 

"Post-Reinvestment Period Settlement Obligation": The meaning set forth in Section 12.2(f).

 

"Principal Balance": Subject to Section 1.2, with respect to (a) any Pledged Obligation (other than a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation) as of any date of determination, the outstanding principal amount of such Pledged Obligation 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, plus (except as expressly set forth in this Indenture) any undrawn commitments that have not been irrevocably reduced with respect to such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation; provided that for all purposes (i) the Principal Balance of any Equity Security or Collateral Obligation that has been a Defaulted Obligation for three years or more shall be deemed to be zero, (ii) the Principal Balance of any Collateral Obligation that, at the time of its purchase by the Issuer, was subject to an Offer for a price of less than its par amount, shall be, until the expiration of such Offer in accordance with its terms, the Offer price (expressed as a dollar amount) of such Collateral Obligation, (iii) the Principal Balance of a Deferrable Obligation (x) shall not include any deferred interest that has been added to principal since its acquisition and remains unpaid and (y) shall only include interest that has been deferred or capitalized at the time of acquisition if (1) in the Collateral Manager's commercially reasonable business judgment, such interest remains unpaid for any reason other than due to the related Obligor's ability to repay such amounts and (2) such Deferrable Obligation has a Moody's Default Probability Rating of "B3" or better (and, for the avoidance of doubt, such interest shall constitute Principal Proceeds upon receipt thereof by the Issuer), (iv) the Principal Balance of a Deferring Obligation shall not include any deferred or capitalized interest referred to in clause (iii)(y) above and (v) the Principal Balance of a Zero-Coupon Security which, by its terms, does not at any time pay cash interest thereon shall be deemed to be the accreted value of such Collateral Obligation (other than a Defaulted Obligation) or Eligible Investment as of the date of determination; provided further, that for the purposes of determining any of the Coverage Tests or any of the Portfolio Quality Tests, the Principal Balance of any Pledged Obligation or any other security or debt obligation that forms part of the Assets, in each case, that matures after the shortest Stated Maturity of any of the Secured Notes still Outstanding shall be deemed to be zero.

 

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

 

 

 
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"Principal Financed Accrued Interest": With respect to: (i) any Collateral Obligation owned or purchased by the Issuer on the Closing Date, an amount equal to the unpaid interest on such Collateral Obligation that accrued prior to the Closing Date that is owing to the Issuer and remains unpaid as of the Closing Date and (ii) any Collateral Obligation purchased after the Closing Date, the amount of Principal Proceeds, if any, applied towards the purchase of accrued interest on such Collateral Obligation; provided that in the case of this clause (ii), Principal Financed Accrued Interest shall not include any accrued interest purchased with Interest Proceeds deemed to be Principal Proceeds as set forth in the definition of "Interest Proceeds;" provided, further, that once any Principal Financed Accrued Interest is actually received by the Issuer, it shall no longer constitute Principal Financed Accrued Interest hereunder.

 

"Principal Proceeds": With respect to any Collection Period or Determination Date, all amounts received by the Issuer during the related Collection Period that do not constitute Interest Proceeds and any other amounts that have been designated as Principal Proceeds pursuant to the terms of this Indenture; provided that for the avoidance of doubt, under no circumstances shall Principal Proceeds include the Excepted Property.

 

"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 Hedge Termination Event": The occurrence of (a) the Issuer's failure to make required payments or deliveries pursuant to a Hedge Agreement with respect to which the Issuer is the sole Defaulting Party (as defined in the relevant Hedge Agreement), (b) the occurrence of certain events of bankruptcy, dissolution or insolvency with respect to the Issuer with respect to which the Issuer is the sole Defaulting Party (as defined in the relevant Hedge Agreement), (c) the liquidation of the Assets due to an Event of Default under the Indenture, (d) a change in law after the Closing Date which makes it unlawful for either the Issuer or a Hedge Counterparty to perform its obligations under a Hedge Agreement or (e) any termination of a Hedge Agreement as a result of actions taken by the Trustee in response to a reduction in the Collateral Principal Amount with respect to which the Issuer is the sole Defaulting Party or Affected Party (as defined in the relevant Hedge Agreement).

 

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

 

"Proceeding": Any suit in equity, action at law or other judicial or non-judicial enforcement or administrative proceeding.

 

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

 

"Purchase Agreement": The agreement dated as of June 29, 2017 by and among the Co-Issuers and the Initial Purchaser relating to the initial purchase of the Notes purchased by the Initial Purchaser, as amended from time to time.

 

"QEF": The meaning specified in Section 7.16(b).

 

 

 
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"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 Institutional Buyer": The meaning specified in Rule 144A under the Securities Act.

 

"Qualified Purchaser": The meaning specified in Section 2(a)(51) of the Investment Company Act and Rule 2a51-2 under the Investment Company Act.

 

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

 

"Ramp-Up Period": The period commencing on the Closing Date and ending upon the earlier of (a) 30 days prior to the Determination Date relating to the second Payment Date and (b) any date selected by the Collateral Manager in its sole discretion on or after which the Aggregate Ramp-Up Par Condition has been satisfied.

 

"Ramp-Up Period Accountants' Report": The meaning specified in Section 7.17(b).

 

"Ramp-Up Period Issuer Certificate": The meaning specified in Section 7.17(b).

 

"Ramp-Up Period Report": The meaning specified in Section 7.17(b).

 

"Ramp-Up Period Special Redemption": The meaning specified in Section 9.7.

 

"Rating Agency": Each of Moody's and Fitch, only for so long as Notes rated by such entity on the Closing Date are Outstanding and rated by such entity.

 

"Record Date": As to any applicable Payment Date, the 15th day (whether or not a Business Day) prior to such Payment Date.

 

"Redemption Date": Any Business Day specified for a redemption of Notes pursuant to Article IX.

 

"Redemption by Refinancing": The meaning specified in Section 9.2(a).

 

"Redemption Price": When used with respect to (i) any Class of Secured Notes (a) an amount equal to 100% (or such lesser amount as agreed in writing by the applicable Holder) of the Aggregate Outstanding Amount thereof plus (b) accrued and unpaid interest thereon (including, but not limited to, Deferred Interest), to the Redemption Date, and (ii) any Subordinated Note, its proportional share allocated in accordance with the Priority of Payments (based on the Aggregate Outstanding Amount of such Subordinated Notes) of the amount of the proceeds of the Assets (including proceeds created when the lien of this Indenture is released) remaining after giving effect to the redemption of the Secured Notes in full and payment in full of (and/or creation of a reserve for) all expenses of the Co-Issuers; provided that solely with respect to a Tax Redemption or Optional Redemption of the Secured Notes in whole, Holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes may elect, by written notice to the Issuer, the Trustee, the Paying Agent and the Collateral Manager, to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Notes, in which case such reduced price shall be the "Redemption Price" for such Note.

 

 

 
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"Reference Banks": The meaning specified in Exhibit C.

 

"Refinancing": The meaning specified in Section 9.2(a).

 

"Refinancing Proceeds": With respect to any Refinancing, the Cash proceeds received by the Issuer therefrom.

 

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

 

"Registered": In registered form for U.S. federal income tax purposes and issued after July 18, 1984.

 

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

 

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

 

"Regulation S Global Note": Collectively, the Regulation S Global Secured Notes and the Regulation S Global Subordinated Notes.

 

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

 

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

 

"Reinvestment Diversion Test": A test that shall be satisfied as of any Measurement Date during the Reinvestment Period (but on or after the last day of the Ramp-Up Period) on which Class E Notes remain outstanding, if the Par Value Ratio with respect to the Class E Notes as of such Measurement Date is at least equal to 105.70%.

 

"Reinvestment Period": The period from and including the Closing Date to and including the earliest of (i) the Payment Date in July 2021, (ii) the date of the acceleration of the Maturity of any Class of Secured Notes pursuant to Section 5.2 (subject to reinstatement upon the rescission, if any, of the related declaration of acceleration), and (iii) the date on which the Collateral Manager reasonably determines and notifies the Issuer, the Rating Agencies, the Trustee and the Collateral Administrator that it can no longer reinvest in additional Collateral Obligations in accordance with Section 12.2 or the Collateral Management Agreement; provided that in the case of clause (iii), (a) 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 and (b) if the Collateral Manager notifies the Issuer, the Trustee (who shall notify the holders of Notes) and the Collateral Administrator thereof in writing that it is withdrawing such notice, then the Reinvestment Period shall be reinstated within one Business Day after the date of such notification.

 

 

 
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"Reinvestment Period Settlement Condition": The meaning specified in Section 12.2(f).

 

"Reinvestment Period Special Redemption": The meaning specified in Section 9.7.

 

"Reinvestment Target Par Balance": The Aggregate Ramp-Up Par Amount minus (A) any reduction in the Aggregate Outstanding Amount of the Notes through the payment of Principal Proceeds or Interest Proceeds plus (B) the aggregate amount of Principal Proceeds that result from the issuance of any Additional Notes (after giving effect to such issuance of any Additional Notes).

 

"Related Obligation": means an obligation issued by the Collateral Manager, any of its Affiliates that are collateralized debt obligation funds or any other Person that is a collateralized debt obligation fund whose investments are primarily managed by the Collateral Manager or any of its Affiliates (excluding, for the avoidance of doubt, any Excepted Participation Interest).

 

"Replacement Notes": The meaning specified in Section 9.2(a) hereof.

 

"Report Date": The meaning specified in Section 9.8(a).

 

"Requesting Party": The meaning specified in Section 14.17.

 

"Required Coverage Ratio": With respect to a specified Class of Secured Notes and the related Interest Coverage Test or Par Value Ratio Test as the case may be, as of any date of determination, the applicable percentage indicated below opposite such specified Class:

 

Class

 

Required Par Value Ratio

A/B

 

122.45%

C

 

114.70%

D

 

108.94%

E

 

104.70%

 

Class

 

Required Interest Coverage Ratio

A/B

 

120%

C

 

115%

D

 

110%

E

 

105%

 

"Required Hedge Counterparty Rating": With respect to any Hedge Counterparty (or its guarantor under a guarantee satisfying the then-current Rating Agency criteria with respect to guarantees), the ratings required by the criteria of each Rating Agency in effect at the time of execution of the related Hedge Agreement as determined by the Collateral Manager (except to the extent that such Rating Agency indicates in writing that any such criteria need not be satisfied with respect to such Hedge Counterparty).

 

 

 
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"Restricted Trading Period": Each day during which (1)(A) the Fitch rating of the Class A Notes or the Moody's rating of the Class A Notes or Class B Notes is withdrawn (and not reinstated) or is one or more sub-categories below its rating on the Closing Date or (B) the Moody's rating of the Class C Notes, Class D Notes or Class E Notes is withdrawn (and not reinstated) or is two or more sub-categories below its rating on the Closing Date and (2) after giving effect to any sale or purchase of the relevant Collateral Obligation, (A) as a result of the use of "Restricted Trading Period" pursuant to Section 12.2(b), any of the Par Value Ratio Tests will not be satisfied and (B) as a result of the use of "Restricted Trading Period" pursuant to any other provision, the Aggregate Principal Balance of Collateral Obligations (excluding the Collateral Obligations being sold) and Eligible Investments constituting Principal Proceeds (including, without duplication, the anticipated net Sale Proceeds of such sale) will be less than the Reinvestment Target Par Balance; provided that such period will not be a Restricted Trading Period upon the direction of a Majority of the Controlling Class, which direction by the Majority of the Controlling Class shall remain in effect until the earlier of (i) a subsequent direction by a Majority of the Controlling Class to declare the beginning of a Restricted Trading Period or (ii) a further downgrade or withdrawal of any Class of Notes that notwithstanding such direction would cause the conditions set forth in clauses (1)(A) or (1)(B) to be true. No Restricted Trading Period shall restrict any sale of a Collateral Obligation entered into by the Issuer at the time when a Restricted Trading Period is not in effect, regardless of whether such sale has settled.

 

"Retention Holder": JMP Investment Holdings LLC in its capacity as retention holder with respect to the U.S. Risk Retention Rules (or upon transfer of the U.S. Retention Interest (as defined in the Offering Circular) to the Collateral Manager or another "majority-owned affiliate" (as defined under the U.S. Risk Retention Rules) of the Collateral Manager, the Collateral Manager or such majority-owned affiliate).

 

"Reuters Screen": The rates for deposits in dollars which appear on the Reuters Screen LIBOR 01 Page (or such other page that may replace that page on such service for the purpose of displaying comparable rates) on the Bloomberg Financial Markets Commodities News as of 11:00 a.m., London time, on the Interest Determination Date.

 

"Revolving Collateral Obligation": Any Asset (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 shall be a Revolving Collateral Obligation only until all commitments to make advances to the borrower expire or are terminated or irrevocably reduced to zero.

 

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

 

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

 

"Rule 144A Global Notes": Collectively, the Rule 144A Global Secured Notes and the Rule 144A Global Subordinated Notes.

 

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

 

 

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

 

"Rule 144A Information": The meaning specified in Section 7.14.

 

"S&P": Standard & Poor's Global Ratings, an S&P Global business, and any successor thereto.

 

"S&P Industry Classification": The industry classifications set forth in Schedule 2, as such industry classifications shall be updated at the option of the Collateral Manager (with notice to the Trustee and the Collateral Administrator) 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:

 

(a)     with respect to a Collateral Obligation that is not a DIP Collateral Obligation (i) 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 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), (ii) if there is no issuer credit rating of the issuer by S&P but (A) if 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; (B) if 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 subcategory below such rating; and (C) if 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 subcategory above such rating if such rating is higher than "BB+," and shall be two subcategories above such rating if such rating is "BB+" or lower or (iii) if the above clauses are not applicable and such Collateral Obligation has a Moody's rating, then the S&P Rating of such Collateral Obligation shall be the S&P equivalent of the rating assigned by Moody's;

 

(b)     with respect to any Collateral Obligation that is a DIP Collateral Obligation, the S&P Rating thereof shall be the credit rating assigned to such issue by S&P (provided, that if any such Collateral Obligation that is a DIP Collateral Obligation is newly issued and the Collateral Manager expects an S&P credit rating within 90 days, the S&P Rating of such Collateral Obligation shall be "B-" until such credit rating is obtained from S&P);

 

provided that for purposes of the determination of the S&P Rating, (x) if the applicable rating assigned by S&P to an Obligor or its obligations is on "credit watch positive" by S&P, such rating shall be treated as being one subcategory above such assigned rating, (y) if the applicable rating assigned by S&P to an Obligor or its obligations is on "credit watch negative" by S&P, such rating shall be treated as being one subcategory below such assigned rating and (z) any reference to the S&P rating in this definition shall mean the public S&P rating and shall not include any private or confidential S&P rating unless (1) the Obligor and any other relevant party has provided written consent to S&P for the use of such rating; and (2) such rating is subject to continuous monitoring by S&P.

 

 

 
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"Sale": The meaning specified in Section 5.17.

 

"Sale Proceeds": All proceeds (excluding accrued interest, if any) received with respect to Assets as a result of sales of such Assets 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.

 

"Scheduled Distribution": With respect to any Pledged Obligation, for each Due Date, the scheduled payment of principal and/or interest due on such Due Date with respect to such Pledged Obligation, determined in accordance with the assumptions specified in Section 1.3.

 

"Second Lien Loan": (A) Any assignment of or Participation Interest in or other interest in a loan that (i) is not (and that by its terms is not permitted to become) subordinate in right of payment to any other obligation of the Obligor of the loan other than a Senior Secured Loan with respect to the liquidation of such Obligor or the collateral for such loan and other than with respect to liquidation, trade claims, capitalized leases or similar obligations, and (ii) is secured by a valid second priority perfected security interest or lien to or on specified collateral securing the Obligor's obligations under the loan, which security interest or lien is not subordinate to the security interest or lien securing any other debt for borrowed money other than a Senior Secured Loan on such specified collateral (subject to customary exemptions for permitted liens, including, without limitation, any tax liens) or (B) any First Lien Last Out Loan.

 

"Section 13 Banking Entity": An entity that (i) is defined as a "banking entity" under the Volcker Rule regulations (Section __.2(c)), (ii) provides written certification thereof to the Issuer and the Trustee, and (iii) identifies the Class or Classes of Notes held by such entity and the outstanding principal amount thereof.

 

"Secured Loan Obligation": Any Senior Secured Loan or Second Lien Loan.

 

"Secured Notes": The Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes.

 

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

 

"Securities Account Control Agreement": An agreement dated as of the Closing Date among the Issuer, the Trustee and the Bank, as securities intermediary, as amended from time to time.

 

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

 

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

 

 

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

 

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

 

"Senior Management Fee": The fee payable to the Collateral Manager in arrears on each Payment Date (prorated for the related Interest Accrual Period), including any Redemption Date, pursuant to Section 8(a) of the Collateral Management Agreement and Section 11.1, in an amount equal to 0.15% per annum (calculated on the basis of a 360-day year and the actual number of days elapsed during the related Collection Period) of the Maximum Investment Amount at the beginning of the Collection Period relating to such Payment Date.

 

"Senior Secured Loan": Any assignment of, Participation Interest in or other interest in a loan that (i) is secured by a first priority perfected security interest or lien on specified collateral (subject to customary exemptions for permitted liens, including, without limitation, any tax liens), (ii) has the most senior pre-petition priority (including pari passu with other obligations of the Obligor) in any bankruptcy, reorganization, arrangement, insolvency, moratorium or liquidation proceedings, (iii) the value of the collateral securing the loan at the time of its purchase by the Issuer together with the attributes of the Obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for such cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay or refinance the loan in accordance with the terms of its Underlying Instruments and to repay all other loans of equal seniority secured by a first priority perfected security interest or lien on the same collateral and (iv) by its terms is not permitted to become subordinate in right of payment to any other obligation of the Obligor thereof (other than with respect to trade claims, capitalized leases or similar obligations).

 

"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 that is secured by a first or second priority perfected security interest or lien in or on specified collateral securing the issuer's obligations under such note.

 

"Senior Subordinated Note Amount": With respect to the Senior Subordinated Notes, the amount accrued during the related Interest Accrual Period at a per annum rate of the Senior Subordinated Note Rate on the Outstanding Senior Subordinated Notes as of the first day of such Interest Accrual Period.

 

"Senior Subordinated Note Rate": LIBOR plus 5.75%.

 

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

 

"Senior Unsecured Loan": Any assignment of or Participation Interest in or other interest in an Unsecured Loan that is not subordinated to any other unsecured indebtedness of the Obligor (other than with respect to liquidation, trade claims, capitalized leases or similar obligations).

 

 

 
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"Sequential Note Redemption": 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 (including any defaulted interest on) the Class A Notes until such amount has been paid in full (or, with respect to any Class A Note, has been paid in such lesser amount as the Holder of such Class A Note elects to receive);

 

(ii)     to the payment of principal of (including any defaulted interest) the Class B Notes until such amount has been paid in full (or, with respect to any Class B Note, has been paid in such lesser amount as the Holder of such Class B Note elects to receive);

 

(iii)     to the payment of accrued and unpaid interest (including any defaulted interest) and any Deferred Interest on the Class C Notes until such amounts have been paid in full;

 

(iv)     to the payment of principal of the Class C Notes until such amount has been paid in full (or, with respect to any Class C Note, has been paid in such lesser amount as the Holder of such Class C Note elects to receive);

 

(v)     to the payment of accrued and unpaid interest (including any defaulted interest) and any Deferred Interest on the Class D Notes until such amounts have been paid in full;

 

(vi)     to the payment of principal of the Class D Notes until such amount has been paid in full (or, with respect to any Class D Note, has been paid in such lesser amount as the Holder of such Class D Note elects to receive);

 

(vii)     to the payment of accrued and unpaid interest (including any defaulted interest) and any Deferred Interest on the Class E Notes until such amounts have been paid in full; and

 

(viii)     to the payment of principal of the Class E Notes until such amount has been paid in full (or, with respect to any Class E Note, has been paid in such lesser amount as the Holder of such Class E Note elects to receive).

 

"Similar Law": Any state, local, non-U.S. or other law, regulation or other legal restriction that could cause the underlying assets of the Issuer to be treated as assets of the investor by virtue of its interest in such Notes and thereby subject the Issuer or the Collateral Manager (or other persons responsible for the investment and operation of the Issuer's assets) to any Other Plan Law.

 

"Small Obligor Loan": Any obligation made pursuant to Underlying Instruments governing the issuance of indebtedness having an aggregate principal amount (whether drawn or undrawn) of less than U.S. $200,000,000.

 

"Special Redemption": The meaning specified in Section 9.7.

 

 

 
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"Special Redemption Amount": The meaning specified in Section 9.7.

 

"Special Redemption Date": The meaning specified in Section 9.7.

 

"STAMP": The meaning specified in Section 2.6(a).

 

"Standby Directed Investment": The meaning specified in Section 10.5.

 

"Stated Maturity": With respect to any security, the maturity date specified in such security or applicable Underlying Instrument; and with respect to the Notes of any Class, the date specified as such in Section 2.3.

 

"Step-Down Obligation": Any Collateral Obligation (other than a LIBOR Floor Obligation) the Underlying Instruments of which contractually mandate decreases in coupon payments or spread over time (in each case other than decreases that are conditioned upon an improvement in the creditworthiness of the Obligor or changes in a pricing grid or based on improvements in financial ratios or other similar coupon or spread-reset features); provided, that a Collateral Obligation 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": Any Collateral Obligation which by the terms of the related Underlying Instruments provides for an increase, in the case of a Collateral Obligation which bears interest at a fixed rate, in the per annum interest rate on such Collateral Obligation or, in the case of a Collateral Obligation which bears interest at a floating rate, in the spread over that applicable index or benchmark rate, solely as a function of the passage of time; provided, that a Collateral Obligation 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 of a special purpose vehicle secured directly by, referenced to, or representing ownership of, a pool of receivables or other assets, including collateralized debt obligations and mortgage-backed securities.

 

"Subordinated Management Fee": The fee payable to the Collateral Manager in arrears on each Payment Date (prorated for the related Interest Accrual Period), including any Redemption Date, pursuant to Section 8(a) of the Collateral Management Agreement and Section 11.1, in an amount equal to 0.35% per annum (calculated on the basis of a 360-day year and the actual number of days elapsed during the related Collection Period) of the Maximum Investment Amount at the beginning of the Collection Period relating to such Payment Date.

 

"Subordinated Management Fee Interest": Interest on any accrued and unpaid Subordinated Management Fee (other than any Deferred Subordinated Management Fee), which shall accrue at the rate of three-month LIBOR in effect at such periods plus 0.35% for the period from (and including) the date on which such Subordinated Management Fee shall be payable through (but excluding) the date of payment thereof (calculated on the basis of a 360 day year and the actual number of days elapsed).

 

"Subordinated Notes": Collectively, the Senior Subordinated Notes and the Junior Subordinated Notes.

 

 

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

 

"Supermajority": With respect to any Class of Notes, the Holders of at least 66⅔% of the Aggregate Outstanding Amount of the Notes of such Class.

 

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

 

"Tax": Any tax, levy, impost, duty, charge, assessment, deduction, withholding or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority other than a stamp, registration, documentation or similar tax.

 

"Tax Advantaged Jurisdiction": The Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, the Netherlands Antilles or Singapore and any other tax advantaged jurisdiction that satisfies the Moody's Rating Condition.

 

"Tax Event": (i) Any portion of any payment due from any Obligor under any Collateral Obligation becoming subject to the imposition of U.S. or foreign withholding tax (other than a withholding tax on letter of credit fees or commitment fees, to the extent that such withholding tax does not exceed 30% of the amount of such fees), which withholding tax is not compensated for by a "gross-up" provision under the terms of such Collateral Obligation, (ii) any jurisdiction's imposing net income, profits or similar tax on the Issuer, (iii) any portion of any payment due under a Hedge Agreement by the Issuer becoming subject to the imposition of U.S. or foreign withholding tax, which withholding tax is compensated for by a "gross-up" provision under the terms of the Hedge Agreement or (iv) any portion of any payment due under a Hedge Agreement by a Hedge Counterparty becoming subject to the imposition of U.S. or foreign withholding tax, which withholding tax is not compensated for by a "gross-up" provision under the terms of the Hedge Agreement; provided that the total amount of (A) the tax or taxes imposed on the Issuer as described in clause (ii) of this definition, (B) the total amount withheld from payments to the Issuer which is not compensated for by a "gross-up" provision as described in clauses (i) and (iv) of this definition and (C) the total amount of any tax "gross-up" payments that are required to be made by the Issuer as described in clause (iii) of this definition are determined to be in excess of either (1) 5.0% of the aggregate interest due and payable on the Collateral Obligations during the related Collection Period or (2) more than $1,000,000 during the related Collection Period.

 

"Tax Guidelines": The provisions set forth in Annex A to the Collateral Management Agreement.

 

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

 

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

 

"Transaction Documents": This Indenture, the Securities Account Control Agreement, the Collateral Management Agreement, the Collateral Administration Agreement, the Purchase Agreement and the Administration Agreement.

 

 

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

 

"Trust Officer": When used with respect to the Trustee or the Bank in any other capacity hereunder, any officer within the Corporate Trust Office (or any successor group of the Trustee) including any director, vice president, assistant vice president, associate or other officer of the Trustee 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 Indenture.

 

"Trustee": As defined in the first sentence of this Indenture and any successor thereto.

 

"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.

 

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

 

"Underlying Instrument": The indenture or other agreement pursuant to which a Pledged Obligation has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Pledged Obligation or of which the holders of such Pledged Obligation are the beneficiaries.

 

"Unfunded Exposure Account": The trust account established pursuant to Section 10.3(f).

 

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

 

"Unscheduled Principal Payments": All Principal Proceeds received as a result of prepayments, redemptions, exchange offers, tender offers or other unscheduled payments (but not sales) with respect to a Collateral Obligation (including unscheduled mandatory prepayments); provided that, the term "Unscheduled Principal Payments" shall also include any amounts transferred from the Unfunded Exposure Account to the Principal Collection Subaccount for treatment as Unscheduled Principal Payments upon the unscheduled termination or reduction of the Issuer's funding commitment with respect to a Delayed Drawdown Collateral Obligation or a Revolving Collateral Obligation.

 

"Unsecured Loan": Any assignment of or other interest in an unsecured loan that is not subordinated to any other unsecured indebtedness of the Obligor.

 

"Unused Proceeds": The meaning specified in Section 10.3(c).

 

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

 

 

 
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"U.S. Person": The meaning specified in Section 7701(a)(30) of the Code.

 

"U.S. person": The meaning specified in Regulation S.

 

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

 

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

 

"Weighted Average Fixed Coupon": As of any Measurement Date, an amount equal to the number, expressed as a percentage, obtained by dividing:

 

(a)     in the case of each fixed rate Collateral Obligation (excluding any Deferrable Obligation to the extent of any non-cash interest), the product of (1) the stated interest coupon on such Collateral Obligation and (2) the Principal Balance of such Collateral Obligation (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation); by

 

(b)     an amount equal to the lesser of (i) the product of (A) the Aggregate Ramp-Up Par Amount and (B) a fraction, the numerator of which is equal to the Aggregate Principal Balance of fixed rate Collateral Obligations and the denominator of which is equal to the Aggregate Principal Balance of all Collateral Obligations as of such Measurement Date (in each case excluding (1) any Deferrable Obligation to the extent of any non-cash interest and (2) the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation that is a fixed rate Collateral Obligation) and (ii) the Aggregate Principal Balance of the fixed rate Collateral Obligations as of such Measurement Date (excluding (1) any Deferrable Obligation to the extent of any non-cash interest and (2) the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation that is a fixed rate Collateral Obligation);

 

provided that in the case of each of the foregoing clauses (a) and (b), in calculating the Weighted Average Fixed Coupon in respect of (i) any Step-Down Obligation, the coupon of such Collateral Obligation shall be the lowest permissible coupon pursuant to the Underlying Instruments of the Obligor of such Step-Down Obligation and (ii) any Letter of Credit, the coupon of such Collateral Obligation shall not include any amounts that the Issuer or the Collateral Manager have actual knowledge are being withheld by the related agent bank or will be deposited into a Letter of Credit Reserve Account.

 

"Weighted Average Floating Spread": As of any Measurement Date, a fraction (expressed as a percentage) obtained by (i)(A) multiplying the Principal Balance of each floating rate Collateral Obligation (including the unfunded portions of all Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations) held by the Issuer as of such Measurement Date by its Effective Spread and (B) multiplying (1) the amount equal to LIBOR applicable to the Secured Notes during the Interest Accrual Period in which such Measurement Date occurs by (2) the excess (if any) of the Aggregate Principal Balance (including for this purpose, for any Collateral Obligation that is neither a Defaulted Obligation nor a Deferring Obligation, any capitalized interest) of the Collateral Obligations as of such Measurement Date minus the Reinvestment Target Par Balance, (ii) summing the amounts determined pursuant to clause (i), and (iii) dividing the sum determined pursuant to clause (ii) by the Aggregate Principal Balance of all floating rate Collateral Obligations plus the unfunded portions of all Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations held by the Issuer as of such Measurement Date; provided that Defaulted Obligations shall not be included in the calculation of the Weighted Average Floating Spread; provided, further, that in calculating the Weighted Average Floating Spread in respect of any Step Down Obligation, the Effective Spread of such Collateral Obligation shall be the lowest permissible Effective Spread pursuant to the Underlying Instruments of the Obligor of such Step Down Obligation.

 

 

 
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"Weighted Average Life": As of any Measurement Date, with respect to each Collateral Obligation (other than any Defaulted Obligations) the number of years following such date obtained by (i) summing the products obtained by multiplying (a) the Average Life at such time of each such Collateral Obligation by (b) the Principal Balance of such Collateral Obligation and (ii) dividing such sum by the Aggregate Principal Balance at such time of all Collateral Obligations (excluding any Defaulted Obligations).

 

"Weighted Average Life Test": A test satisfied on any date of determination if the Weighted Average Life of all Collateral Obligations as of such date is less than the number of years (rounded to the nearest one hundredth thereof) during the period from such date of determination to June 29, 2025.

 

"Zero Coupon Security": Any Collateral Obligation that at the time of purchase does not by its terms provide for the payment of cash interest; provided that if, after such purchase such Collateral Obligation provides for the payment of cash interest, it will cease to be a Zero-Coupon Security.

 

Section 1.2        Rules of Construction. Except as otherwise specified herein or as the context may otherwise require, the definitions of the terms defined in Section 1.1 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 in this Indenture to designated "Articles," "Sections," "Subsections" and other subdivisions are to the designated articles, sections, subsections 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, subsection or other subdivision.

 

Section 1.3        Assumptions as to Pledged Obligations. Unless otherwise specified, the assumptions described below shall be applied in connection with all calculations required to be made pursuant to this Indenture with respect to Scheduled Distributions on any Pledged Obligation, 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 Pledged Obligations and on any other amounts that may be received for deposit in the Collection Account.

 

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

 

 

 
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(b)     For purposes of calculating the Coverage Tests and the Reinvestment Diversion Test, except as otherwise specified in the Coverage Tests and the Reinvestment Diversion Test, as applicable, such calculations shall 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 Pledged Obligation (other than a Defaulted Obligation to the extent required to be treated as Principal Proceeds, which shall be assumed to have a Scheduled Distribution of zero) shall be the sum of (i) the total amount of payments and collections to be received during such Collection Period in respect of such Pledged Obligation (including the proceeds of the sale of such Pledged Obligation received and, in the case of sales which have not yet settled, to be received during the Collection Period and not reinvested in additional Collateral Obligations or Eligible Investments or retained in the Collection Account for subsequent reinvestment pursuant to Section 12.2) that, if paid as scheduled, shall be available in the Collection Account at the end of the Collection Period and (ii) any such amounts received by the Issuer in prior Collection Periods that were not disbursed on a previous Payment Date.

 

(d)     Each Scheduled Distribution receivable with respect to a Pledged Obligation shall be assumed to be received on the applicable Due Date, and each such Scheduled Distribution shall be assumed to be immediately deposited in the Collection Account to earn interest at the Assumed Reinvestment Rate. All such funds shall be assumed to continue to earn interest until the date on which they are required to be available in the Collection Account for application, in accordance with the terms hereof, to payments of principal of or interest on the Notes or other amounts payable pursuant to this Indenture. For the avoidance of doubt, all amounts calculated pursuant to this Section 1.3(d) are estimates and may differ from the actual amounts available to make distributions hereunder, and no party shall have any obligation to make any payment hereunder due to the assumed amounts calculated under this Section 1.3(d) being greater than the actual amounts available. For purposes of the applicable determinations required by Section 10.6(b)(iv), Article XII and the definition of "Interest Coverage Ratio," the expected interest on Secured Notes and floating rate Collateral Obligations shall be calculated using the then current interest rates applicable thereto.

 

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

 

(f)     For the purposes of calculating the Moody's Weighted Average Rating Factor, any Collateral Obligation that is a Current Pay Obligation which has a Moody's Rating of "D" or "LD" or a Defaulted Obligation shall be excluded.

 

 

 
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(g)     For the purposes of calculating the Incentive Management Fee Threshold, the purchase price of the Subordinated Notes issued on the Closing Date shall be deemed to be 92%.

 

(h)     Except as otherwise provided herein, Defaulted Obligations shall not be included in the calculation of the Portfolio Quality Test.

 

(i)     For purposes of calculating all Concentration Limitations, in both the numerator and the denominator of any component of the Concentration Limitations, Defaulted Obligations shall be treated as having a principal balance equal to zero.

 

(j)     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 maturity, redemption, sale or other disposition of Collateral Obligations shall be deemed to have the characteristics of such Collateral Obligations until reinvested in additional Collateral Obligations. Such calculations shall be based upon the principal amount of such Collateral Obligations, except in the case of Defaulted Obligations and Credit Impaired Obligations, in which case the calculations shall be based upon the Principal Proceeds received on the disposition or sale of such Defaulted Obligations or Credit Impaired Obligations.

 

(k)     For purposes of calculating the Sale Proceeds of a Collateral Obligation in sale transactions, Sale Proceeds shall include any Principal Financed Accrued Interest received in respect of such sale.

 

(l)     For purposes of calculating clause (iii) of the definition of Concentration Limitations, without duplication, the amounts on deposit in the Collection Account and the Ramp-Up Account (including Eligible Investments therein) representing Principal Proceeds shall each be deemed to be a floating rate Collateral Obligation that is a Senior Secured Loan.

 

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

 

(n)     Unless otherwise specified, any reference to the fee payable under Section 11.1 to an amount calculated with respect to a period at per annum rate shall be computed on the basis of a 360-day year and the actual number of days elapsed. Any fees applicable to periods shorter than or longer than a calendar quarter shall be prorated to the actual number of days within such period.

 

(o)     Unless otherwise specified, test calculations that evaluate to a percentage shall be rounded to the nearest ten-thousandth and test calculations that evaluate to a number shall be rounded to the nearest one-hundredth. However, for purposes of calculating compliance with each of the Concentration Limitations, all calculations will be rounded to the nearest 0.1%.

 

(p)     Unless otherwise specifically provided herein, all calculations required to be made and all reports which are to be prepared pursuant to this Indenture shall be made on the basis of the trade date unless the Issuer or the Collateral Manager on behalf of the Issuer notifies the Trustee and the Collateral Administrator in writing, on or prior to the Determination Date, that such calculations shall be made on the basis of the settlement date.

 

 

 
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(q)     Determination of the purchase price of a Collateral Obligation shall be made independently each time such Collateral Obligation is purchased by the Issuer and pledged to the Trustee, without giving effect to whether the Issuer has previously purchased such Collateral Obligation (or an obligation of the related borrower or issuer).

 

(r)     When calculating the results of any vote, consent or other action by Holders of Notes hereunder, the Trustee shall consider only the registered owner of each Note except to the extent that (in connection with such vote, consent or other action) any Person has certified to the Trustee in writing substantially in the form of Exhibit D to this Indenture that it is the owner of a beneficial interest in such Global Note.

 

(s)     The equity interest in any Issuer Subsidiary permitted under Section ☒7.16 and each asset of any such Issuer Subsidiary shall be deemed to constitute an Asset and be deemed to be a Collateral Obligation (or, if such asset would constitute an Equity Security if acquired and held by the Issuer, an Equity Security) for all purposes of this Indenture and each reference to Assets, Collateral Obligations and Equity Securities herein shall be construed accordingly. Any future anticipated tax liabilities of an Issuer Subsidiary related to an Issuer Subsidiary Asset held by such Issuer Subsidiary shall be excluded from the calculation of the Weighted Average Floating Spread and Weighted Average Coupon (which exclusion, for the avoidance of doubt, may result in such Issuer Subsidiary Asset having a negative interest rate spread or coupon for purposes of such calculations) and the Interest Coverage Ratio with respect to any specified Class or Classes of Secured 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 Authorized Officers of the Applicable Issuers 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, Regulation S Global Secured Notes, Regulation S Global Subordinated Notes and Rule 144A Global Secured Notes, shall be as set forth in the applicable part of Exhibit A hereto.

 

(a)     Regulation S Global Notes, Rule 144A Global Notes and Certificated Notes. (i) The Secured Notes of each Class sold to persons who are not U.S. persons in offshore transactions in reliance on Regulation S and the Subordinated Notes sold to persons who are not U.S. persons in offshore transactions in reliance on Regulation S (except to the extent that (x) such person elects to acquire a Certificated Note as provided below and (y) in the case of Subordinated Notes, the Issuer elects that a Subordinated Note be evidenced by a Certificated Subordinated Note) shall each be issued initially in the form of one permanent global note per Class in definitive, fully registered form without interest coupons substantially in the applicable form of Exhibit A1, A2, A3, A4 or A5 hereto, in the case of the Secured Notes (each, a "Regulation S Global Secured Note"), and in the form of Exhibit A6 hereto, in the case of the Subordinated Notes (each, a "Regulation S Global Subordinated Note"), and shall be deposited 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 Applicable Issuers and authenticated by the Trustee as hereinafter provided.

 

 

 
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(i)     The Secured Notes of each Class and the Subordinated Notes sold to persons that are QIB/QPs (except (x) to the extent that any such QIB/QP elects to acquire a Certificated Secured Note as provided below, (y) with respect to the Class E Notes, to the extent provided below and (z) in the case of Subordinated Notes, the Issuer elects that a Subordinated Note be evidenced by a Certificated Subordinated Note) shall each be issued initially in the form of one permanent global note per Class in definitive, fully registered form without interest coupons substantially in the applicable form of Exhibit A1, A2, A3, A4 or A5 hereto, in the case of the Secured Notes (each, a "Rule 144A Global Secured Note"), and in the form of Exhibit A6 hereto, in the case of the Subordinated Notes (each, a "Rule 144A Global Subordinated Note") which shall be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC, duly executed by the Applicable Issuers and authenticated by the Trustee as hereinafter provided. Any Secured Notes sold to persons that are IAI/QPs and any Secured Notes sold to a QIB/QP or a non-U.S. person in reliance on Regulation S that so elects and notifies the Issuer and the Initial Purchaser and, except with respect to purchases from the Issuer or the Initial Purchaser on the Closing Date, any Class E Notes sold to purchasers acquiring such Notes on behalf of or with the assets of a Benefit Plan Investor or a Controlling Person, shall be issued in the form of definitive, fully registered notes without interest coupons substantially in the applicable form of Exhibit A1, A2, A3, A4 or A5 hereto (each, 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. The Subordinated Notes sold to persons that are (A) AI/QPs or (B) Benefit Plan Investors or Controlling Persons and any Subordinated Notes sold to a QIB/QP or a non-U.S. person in reliance on Regulation S that so elects and notifies the Issuer and Initial Purchaser, shall be issued in the form of definitive, fully registered notes without coupons substantially in the form of Exhibit A6 hereto (each, a "Certificated Subordinated Note"), in each case 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.

 

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

 

 

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

 

Agent Members and owners of beneficial interests in Global Notes shall have no rights under this Indenture with respect to any Global Notes held by the Trustee, as custodian for DTC and DTC may be treated by the Co-Issuers, the Trustee, and any agent of the Co-Issuers or the Trustee as the absolute owner of such Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Co-Issuers, the Trustee, or any agent of the Co-Issuers 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.

 

(c)     Certificated Securities. Following the Closing Date and except as provided in Section 2.6(a) and Section 2.11, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of Certificated Notes.

 

Section 2.3        Authorized Amount; Stated Maturity; Denominations. The aggregate principal amount of the Secured Notes and the Subordinated Notes that may be authenticated and delivered under this Indenture is limited to U.S.$456,870,000 aggregate principal amount of Notes, Additional Notes issued pursuant to Section 2.4 and Notes issued pursuant to supplemental indentures in accordance with Article VIII.

 

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

 

Notes

 

Class Designation

 

A

 

B

 

C

 

D

Original Principal Amount

 

$285,750,000

 

$54,000,000

 

$27,000,000

 

$24,750,000

Stated Maturity

 

Payment Date in
July 2029

 

Payment Date in
July 2029

 

Payment Date in
July 2029

 

Payment Date in
July 2029

Index

 

LIBOR

 

LIBOR

 

LIBOR

 

LIBOR

Index Maturity

 

3 month

 

3 month

 

3 month

 

3 month

Spread or Rate

 

LIBOR + 1.37%

 

LIBOR + 1.90%

 

LIBOR + 2.65%

 

LIBOR + 4.15%

Initial Rating(s):

               

Fitch

 

AAAsf

 

N/A

 

N/A

 

N/A

Moody's

 

Aaa(sf)

 

Aa2(sf)

 

A2(sf)

 

Baa3(sf)

Ranking:

               

Priority Classes

 

None

 

A

 

A, B

 

A, B, C

Pari Passu Classes

 

None

 

None

 

None

 

None

Junior Classes

 

B, C, D, E, Subordinated

 

C, D, E, Subordinated

 

D, E, Subordinated

 

E, Subordinated

Listed Notes

 

Yes

 

Yes

 

Yes

 

Yes

Deferred Interest Notes

 

No

 

No

 

Yes

 

Yes

ERISA Restricted Notes

 

No

 

No

 

No

 

No

Applicable Issuer(s)

 

Co-Issuers

 

Co-Issuers

 

Co-Issuers

 

Co-Issuers

 

 

 
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Class Designation

 

E

 

Senior Subordinated

 

Junior Subordinated

Original Principal Amount

 

$22,500,000

 

$10,717,500

 

$32,152,500

Stated Maturity

 

Payment Date in
July 2029

 

Payment Date in
July 2029

 

Payment Date in
July 2029

Index

 

LIBOR

 

LIBOR

 

N/A

Index Maturity

 

3 month

 

3 month

 

N/A

Spread or Rate

 

LIBOR + 6.80%

 

Senior Subordinated Note Rate(1)

 

N/A

Initial Rating(s):

           

Fitch

 

N/A

 

N/A

 

N/A

Moody's

 

Ba3(sf)

 

N/A

 

N/A

Ranking:

           

Priority Classes

 

A, B, C, D

 

A, B, C, D, E

 

A, B, C, D, E, Senior Subordinated

Pari Passu Classes

 

None

 

None

 

None

Junior Classes

 

Subordinated

 

Junior Subordinated

 

None

Listed Notes

 

Yes

 

Yes

 

Yes

Deferred Interest Notes

 

Yes

 

Yes

 

N/A

ERISA Restricted Notes

 

Yes*

 

Yes*

 

Yes*

Applicable Issuer(s)

 

Co-Issuers

 

Issuer

 

Issuer

 

*

Each of (i) the Class E Notes issued in the form of Certificated Secured Notes and (ii) Certificated Subordinated Notes, subject to certain limitations, shall be available to Benefit Plan Investors and Controlling Persons; provided, that Benefit Plan Investors and Controlling Persons may purchase interests in the Class E Notes and Subordinated Notes from the Issuer or the Initial Purchaser on the Closing Date in the form of Global Notes.

   
(1)

On each Payment Date, the Senior Subordinated Notes will be entitled to receive the Senior Subordinated Note Amount and 45% of all remaining Interest Proceeds and all remaining Principal Proceeds prior to any distributions on the Junior Subordinated Notes on such Payment Date. To the extent that on any Payment Date there are insufficient funds available to pay the Senior Subordinated Note Amount, the unpaid Senior Subordinated Note Amount on such Payment Date will be deferred and be payable as Deferred Interest in accordance with the Priority of Payments; provided that failure to pay the Senior Subordinated Note Amount on any Payment Date due to the unavailability of funds in respect thereof shall not constitute an Event of Default.

    

The Secured Notes and the Subordinated Notes shall be issued in minimum denominations of U.S.$250,000 (provided, that the minimum denomination will be U.S.$25,000 for (a) AIs that are also Knowledgeable Employees with respect to the Issuer and (b) transferees purchasing a Subordinated Note that was originally issued in a denomination of less than U.S.$250,000 to an AI that is also a Knowledgeable Employee with respect to the Issuer) and integral multiples of U.S.$1.00 in excess thereof (the "Authorized Integrals").

 

 

 
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Section 2.4         Additional Notes. (a) At any time within the Reinvestment Period (or, in the case of an issuance of additional Subordinated Notes only, at any time), subject to the written approval of a Majority of the Junior Subordinated Notes and the Collateral Manager, the Applicable Issuers may, pursuant to a supplemental indenture in accordance with Section 8.1 hereof, (x) issue Additional Notes of any one or more new classes of notes that are subordinated to the existing Secured Notes (or to the most junior class of securities of the Applicable 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), (y) issue and sell additional Subordinated Notes only and/or (z) issue and sell Additional Notes of each existing Class (on a pro rata basis with respect to each Class of Notes or on a pro rata basis for all Classes that are subordinate to the Controlling Class, except, in each case, that a larger proportion of Subordinated Notes may be issued) up to an aggregate maximum amount of Additional Notes not to exceed 100% of the original principal amount of each such Class of Notes; provided, further, that (i) the Applicable Issuers shall comply with the requirements of Sections 2.6, 3.2, 7.9 and 8.1, (ii) unless only additional Subordinated Notes are being issued, the Global Rating Agency Condition shall have been satisfied with respect to such additional issuance, (iii) such Additional Notes (other than Subordinated Notes) must be issued at a cash sales price equal to or greater than the principal amount thereof, (iv) unless only additional Subordinated Notes are being issued, immediately after giving effect to such issuance, each Coverage Test is satisfied or, with respect to any Coverage Test that was not satisfied immediately prior to giving effect to such issuance and will continue not to be satisfied immediately after giving effect to such issuance, the degree of compliance with such Coverage Test is maintained or improved immediately after giving effect to such issuance and the application of the proceeds thereof, (v) the proceeds of any Additional Notes (net of fees and expenses incurred in connection with such issuance) shall be treated as Principal Proceeds or used to purchase additional Collateral Obligations subject to the restrictions in Section 12.2, (vi) unless only additional Subordinated Notes are being issued, the prior written consent of a Majority of the Controlling Class shall have been obtained, (vii) the Additional Notes will be issued in a manner that allows the Issuer to provide the tax information relating to the original issue discount that this Indenture requires the Issuer to provide to Holders and beneficial owners of Secured Notes (including the additional notes), (viii) an opinion of tax counsel of nationally recognized standing in the United States experienced in such matters shall be delivered to the Trustee, in form and substance satisfactory to the Collateral Manager, to the effect that (A) such new Secured Notes would have the same U.S. federal income tax characterization as debt as any Secured Notes Outstanding immediately after such Refinancing that are pari passu with such new Secured Notes and (B) any additional Class A Notes, Class B Notes, Class C Notes or Class D Notes will be treated, and any additional Class E Notes should be treated, as indebtedness for U.S. federal income tax purposes, provided, however, that the opinion of tax counsel described in this clause (B) will not be required with respect to any additional notes that bear a different CUSIP number (or equivalent identifier) from the Notes of the same Class that were issued on the Closing Date and are Outstanding at the time of the additional issuance; (ix) no Event of Default has occurred and is continuing at the time of such additional issuance, and (x) no more than three additional issuances have occurred at the time of such proposed additional issuance (including such additional issuance); provided that with the consent of a Majority of the Controlling Class clauses (iii), (iv), (ix) and (x) may be waived.

 

(a)     The terms and conditions of the Additional Notes of each Class issued pursuant to this Section 2.4 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 do not have to be identical to those of the initial Notes of that Class; provided, that the interest rate on such Notes shall not exceed the interest rate on the corresponding Class of such Notes). Interest on the Additional Notes that are Secured Notes or Senior Subordinated 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.

 

(b)     Any Additional Notes of each Class issued pursuant to this Section 2.4 shall, be offered first to Noteholders of that Class in such amounts as are necessary to preserve their pro rata holdings of Notes of such Class.

 

 

 
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Section 2.5         Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of each of the Applicable Issuers by one of their respective Authorized Officers. The signature of such Authorized Officer on the Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signatures of individuals who were at any time the Authorized Officers of the Issuer or the Co-Issuer, as applicable, shall bind the Issuer and the Co-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 and the Co-Issuer may deliver Notes executed by the Applicable Issuers to the Trustee or the Authenticating Agent for authentication and the Trustee or the Authenticating Agent, upon Issuer Order, shall authenticate and deliver such Notes as provided in this Indenture and not otherwise.

 

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

 

Notes issued upon transfer, exchange or replacement of other Notes shall be issued in Authorized Integrals reflecting the original Aggregate Outstanding 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. In the event that 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 (or original aggregate face amount, as applicable) 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 Officers, 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 2.6         Registration, Registration of Transfer and Exchange. (a)  The Issuer shall cause the Notes to be Registered and shall cause to be kept a register (the "Register") at the Corporate Trust Office 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" 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.

 

 

 
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If a Person other than the Trustee is appointed by the Issuer as Registrar, the Issuer shall 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 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 and a copy of each certification in the form of Exhibit D that it has received. In addition and upon request at any time, the Registrar shall obtain (at the Issuer's expense) and provide to the Issuer, the Collateral Manager and the Initial Purchaser a copy of the securities position report from DTC.

 

Subject to this Section 2.6, upon surrender for registration of transfer of any Notes at the office or agency of the Co-Issuers to be maintained as provided in Section 7.2, the Applicable Issuers 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 Initial Purchaser may request a list of Holders from the Trustee and the Trustee shall provide such a list of Holders to the extent such information is available to the Trustee.

 

At the option of the Holder, Notes may be exchanged for Notes of like terms, in any Authorized Integrals and of like aggregate principal or face amount, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Note is surrendered for exchange, the Applicable Issuers 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 and, solely in the case of the Secured Notes, the Co-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 form satisfactory to the Registrar duly executed by the Holder thereof or his attorney duly authorized in writing.

 

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 form 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 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.

 

 

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

 

(a)     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 either of the Co-Issuers to become subject to the requirement that it register as an investment company under the Investment Company Act.

 

(b)     (i) Each purchaser and transferee (and if the purchaser or transferee is a Benefit Plan Investor or governmental, church or non-U.S. plan or other plan, or entity holding the assets of any such plan, its fiduciary) of Class A Notes, Class B Notes, Class C Notes and Class D Notes or any interest in such Notes shall be deemed (or, in certain cases, will be required) on each day from the date on which such beneficial owner acquires its interest in any such Notes through and including the date on which such beneficial owner disposes of its interest in such Notes to represent and agree that either (1) it is not, and is not directly or indirectly acquiring such Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan Investor, or a governmental, church, non-U.S. or other plan, or an entity holding the assets of such plans, that is subject to Other Plan Law or (2) its acquisition, holding and disposition of any such Note (or interest therein) does not and will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of Other Plan Law.

 

(i)     Each purchaser and transferee of (A) Class E Notes issued in the form of Certificated Secured Notes or (B) Certificated Subordinated Notes shall have completed and delivered to the Issuer an ERISA Subscription Agreement. Each purchaser of Class E Notes and Subordinated Notes in the form of Global Notes that is a Benefit Plan Investor or a Controlling Person, purchasing such Notes from the Issuer or the Initial Purchaser on the Closing Date, shall have completed and delivered to the Issuer an ERISA Subscription Agreement.

 

(ii)     Except with respect to purchases by Benefit Plan Investors or Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date as provided in Section 2.6(c)(ii), each purchaser from the Issuer of Class E Notes issued in the form of Global Secured Notes shall be required to represent and agree, and each transferee of Class E Notes issued in the form of Global Secured Notes will be deemed to represent, on each day from the date on which such beneficial owner acquires its interest in such Notes through and including the date on which such beneficial owner disposes of its interest in such Notes to represent and agree that (1) it is not, and is not directly or indirectly acquiring such Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan Investor or a Controlling Person and (2) if it is, or is directly or indirectly acquiring or holding such Notes (or any interest therein) on behalf of or with assets of, a governmental, church, non-U.S. or other plan, or entity holding assets of such plans, (A) its acquisition, holding and disposition of such Notes (or any interest therein) does not and will not constitute or result in a non-exempt violation of Other Plan Law and (B) it is not subject to Similar Law.

 

 

 
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(iii)     [Reserved.]

 

(iv)     Except with respect to purchases by Benefit Plan Investors or Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date as provided in Section 2.6(c)(ii), each purchaser and transferee of Subordinated Notes or any interest in such a Subordinated Note from the Issuer shall be required (or, in the case of a transferee of Subordinated Notes in the form of Rule 144A Global Subordinated Notes or Regulation S Global Subordinated Notes, deemed) to represent and agree that on each day from the date on which such beneficial owner acquires its interest in any such Subordinated Notes through and including the date on which such beneficial owner disposes of its interest in such Subordinated Notes, (1) it is not, and is not directly or indirectly acquiring such Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan Investor or a Controlling Person and (2) if it is, or is directly or indirectly acquiring or holding such Notes (or any interest therein) on behalf of or with assets of, a governmental, church, non-U.S. or other plan, or entity holding assets of such plans, (A) its acquisition, holding and disposition of such Subordinated Notes (or any interest therein) does not and will not constitute or result in a non-exempt violation of Other Plan Law and (B) it is not subject to Similar Law.

 

(c)     The Trustee shall not be responsible for ascertaining whether any transfer complies with, or for otherwise monitoring or determining compliance with, the requirements or terms of the Securities Act, applicable state securities laws, ERISA, the Code or the Investment Company Act; except that if a certificate is specifically required by the terms of this Section 2.6 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 it conforms substantially on its face to the applicable requirements of this Section 2.6. Notwithstanding the foregoing, the Trustee, relying solely on representations made or deemed to have been made by Holders of the Class E Notes, Holders of the Senior Subordinated Notes and Holders of the Junior Subordinated Notes, shall not permit any transfer of Class E Notes, Senior Subordinated Notes or Junior Subordinated Notes, as applicable, if such transfer would result in 25% or more of the Aggregate Outstanding Amount of the Class E Notes, the Senior Subordinated Notes or the Junior Subordinated Notes, as applicable, being held by Benefit Plan Investors, as calculated pursuant to 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA.

 

(d)     For so long as any of the Notes are Outstanding, the Issuer shall not issue or permit the transfer of any shares of the Issuer to U.S. Persons and the Co-Issuer shall not issue or permit the transfer of any membership interests of the Co-Issuer to U.S. Persons.

 

(e)     So long as a Global Note remains Outstanding and is held by or on behalf of DTC, transfers of such Global Note, in whole or in part, shall only be made in accordance with Section 2.2(b) and this Section 2.6(f).

 

 

 
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(i)     Subject to clauses (ii) and (iii) of this Section 2.6(f), transfers of a Global Note shall be limited to transfers of such Global Note in whole, but not in part, to nominees of DTC or to a successor of DTC or such successor's nominee.

 

(ii)     Rule 144A Global Notes or Certificated Notes to Regulation S Global Notes. If a holder of a beneficial interest in a Rule 144A Global Note deposited with DTC or a Holder of a Certificated Note wishes at any time to exchange its interest in such Rule 144A Global Note or Certificated Note for an interest in the corresponding Regulation S Global Note, or to transfer its interest in such Rule 144A Global Note or Certificated Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Regulation S Global Note, such holder, provided such holder or, in the case of a transfer, the transferee is not a U.S. person and is acquiring such interest in an offshore transaction, may, subject to the immediately succeeding sentence and the rules and procedures of DTC, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Regulation S Global Note. Upon receipt by the Trustee or the Registrar of (A) instructions given in accordance with DTC's procedures from an Agent Member directing the Trustee or the Registrar to credit or cause to be credited a beneficial interest in the corresponding Regulation S Global Note, but not less than the minimum denomination applicable to such holder's Notes, in an amount equal to the beneficial interest in the Rule 144A Global Note or Certificated Note to be exchanged or transferred, and in the case of a transfer of Certificated Notes, such Holder's Certificated Notes properly endorsed for assignment to the transferee, (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) in the case of a transfer of Certificated Notes, a Holder's Certificated Note properly endorsed for assignment to the transferee, (D) a certificate in the form of Exhibit B1 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 Rule 144A Global Notes or the Certificated Notes including that the holder or the transferee, as applicable, is not a U.S. person, and in an offshore transaction pursuant to and in accordance with Regulation S and (E) a written certification in the form of Exhibit B5 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is a non-U.S. person purchasing such beneficial interest in an offshore transaction pursuant to Regulation S, then the Trustee or the Registrar shall approve the instructions at DTC to reduce the principal amount of the Rule 144A Global Note (or, in the case of a transfer of Certificated Notes, the Trustee or the Registrar shall cancel such Notes) and to increase the principal amount of the Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Note or Certificated Note to be exchanged or transferred, and to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Regulation S Global Note equal to the reduction in the principal amount of the Rule 144A Global Note (or, in the case of a cancellation of Certificated Notes, equal to the principal amount of Notes so cancelled).

 

 

 
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(iii)     Regulation S Global Notes to Rule 144A Global Notes or Certificated Notes. If a holder of a beneficial interest in a Regulation S Global Note deposited with DTC wishes at any time to exchange its interest in such Regulation S Global Note for an interest in the corresponding Rule 144A Global Note or for a Certificated Note or to transfer its interest in such Regulation S Global Note to a Person who wishes to take delivery thereof in the form of an interest in the corresponding Rule 144A Global Note or for a Certificated Note, such holder may, subject to the immediately succeeding sentence and the rules and procedures of Euroclear, Clearstream and/or DTC, as the case may be, exchange or transfer, or cause the exchange or transfer of, such interest for an equivalent beneficial interest in the corresponding Rule 144A Global Note or for a Certificated Note. Upon receipt by the Trustee or the Registrar of (A) if the transferee is taking a beneficial interest in a Rule 144A Global Note, instructions from Euroclear, Clearstream and/or DTC, as the case may be, directing the Registrar to cause to be credited a beneficial interest in the corresponding Rule 144A Global Note in an amount equal to the beneficial interest in such Regulation S Global Note, but not less than the minimum denomination applicable to such holder's Notes to be exchanged or transferred, such instructions to contain information regarding the participant account with DTC to be credited with such increase, (B) a certificate in the form of Exhibit B2A attached hereto given by the holder of such beneficial interest and stating, among other things, that, in the case of a transfer, either (x) the Person transferring such interest in such Regulation S Global Note reasonably believes that the Person acquiring such interest in a Rule 144A Global Note is a 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, or (y) the Person transferring such interest in such Regulation S Global Note is transferring to an IAI (in the case of a Secured Note) or an Accredited Investor (in the case of a Subordinated Note) in a transaction exempt from registration under the Securities Act 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 B3 attached hereto given by the transferee in respect of such beneficial interest stating, among other things, that such transferee is a QIB/QP or, in the case of a transfer of Certificated Notes, a written certification in the form of Exhibit B4 attached hereto given by the transferee, stating, among other things, that such transferee is an IAI/QP (in the case of Secured Notes only), an AI/QP (in the case of Subordinated Notes only), or a QIB/QP, then the Registrar shall either (x) if the transferee is taking a beneficial interest in a Rule 144A Global Note, approve the instructions at DTC to reduce, or cause to be reduced, the Regulation S Global Note or Regulation S Global Note by the aggregate principal amount of the beneficial interest in the Regulation S Global Note to be transferred or exchanged and the Registrar shall instruct DTC, concurrently with such reduction, to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Rule 144A Global Note equal to the reduction in the principal amount of the Regulation S Global Note or (y) if the transferee is taking an interest in a Certificated Note, the Registrar shall record the transfer in the Register in accordance with Section 2.6(a) and, upon execution by the Applicable Issuers, the Trustee shall authenticate and the Registrar shall deliver one or more Certificated Notes, as applicable, registered in the names specified in the instructions described 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 the Regulation S Global Note transferred by the transferor), and in Authorized Integrals.

 

 

 
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(iv)     Transfer and Exchange of Certificated Notes to Certificated Notes. If a holder of a Certificated Note wishes at any time to exchange such Certificated Note for one or more Certificated Notes or transfer such Certificated Note to a transferee who wishes to take delivery thereof in the form of a Certificated Note, such holder may effect such exchange or transfer in accordance with this Section 2.6(f)(iv). Upon receipt by the Trustee or the Registrar of (A) a Holder's Certificated Note properly endorsed for assignment to the transferee, and (B) certificates in the form of Exhibit B4, then the Trustee or the Registrar shall cancel such Certificated Note in accordance with Section 2.10, record the transfer in the Register in accordance with Section 2.6(a) and, upon execution by the Applicable Issuers, the Trustee shall authenticate and the Registrar shall deliver one or more Certificated Notes bearing the same designation as the Certificated Note endorsed for transfer, registered in the names specified in the assignment described in clause (A) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the Certificated Note surrendered by the transferor), and in Authorized Integrals.

 

(v)     Transfer of Rule 144A Global Notes to Certificated Notes. If a holder of a beneficial interest in a Rule 144A Global Note deposited with DTC wishes at any time to exchange its interest in such Rule 144A Global Note for a Certificated Note or to transfer its interest in such Rule 144A Global Note to a Person who wishes to take delivery thereof in the form of a Certificated Note, such holder 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 a Certificated Note. Upon receipt by the Trustee or the Registrar of (A) a certificate substantially in the form of Exhibit B4 and (B) appropriate instructions from DTC, if required, the Trustee or the Registrar shall approve the instructions at DTC to reduce, or cause to be reduced, the Rule 144A Global Note by the aggregate principal amount of the beneficial interest in the Rule 144A Global Note to be transferred or exchanged, record the transfer in the Register in accordance with Section 2.6(a) and upon execution by the Applicable Issuers authenticate and deliver one or more Certificated Notes, registered in the names specified in the instructions described in clause (B) above, in principal amounts designated by the transferee (the aggregate of such principal amounts being equal to the aggregate principal amount of the interest in the Rule 144A Global Note transferred by the transferor), and in Authorized Integrals.

 

(vi)     Transfer of Certificated Notes to Rule 144A Global Notes. If a holder of a Certificated Note wishes at any time to exchange its interest in such Certificated Note for a beneficial interest in a Rule 144A Global Note or to transfer such Certificated Note to a Person who wishes to take delivery thereof in the form of a beneficial interest in a Rule 144A Global Note, such holder 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 Certificated Note for beneficial interest in a Rule 144A Global Note (provided that no IAI or Accredited Investor may hold an interest in a Rule 144A Global Note). Upon receipt by the Trustee or the Registrar of (A) a Holder's Certificated Note properly endorsed for assignment to the transferee; (B) a certificate substantially in the form of Exhibit B2B attached hereto executed by the transferor and certificates substantially in the forms of Exhibit B3 (provided that no such transferor or transferee certificate shall be required if a holder of a Certificated Note on the Closing Date that has provided all required certifications to the Issuer upon acquisition thereof wishes to exchange a Certificated Note for a Rule 144A Global Note); (C) instructions given in accordance with DTC's procedures from an Agent Member to instruct DTC to cause to be credited a beneficial interest in the Rule 144A Global Notes in an amount equal to the Certificated Notes to be transferred or exchanged; and (D) a written order given in accordance with DTC's procedures containing information regarding the participant's account of DTC to be credited with such increase, the Trustee or the Registrar shall cancel such Certificated Note in accordance with Section 2.10, record the transfer in the Register in accordance with Section 2.6(a) and approve the instructions at DTC, concurrently with such cancellation, to credit or cause to be credited to the securities account of the Person specified in such instructions a beneficial interest in the corresponding Rule 144A Global Note equal to the principal amount of the Certificated Note transferred or exchanged.

 

 

 
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(vii)     Other Exchanges. In the event that a Global Note is exchanged for Notes in definitive registered form without interest coupons pursuant to Section 2.11, such Global Notes may be exchanged for one another only in accordance with such procedures as are substantially consistent with the provisions above (including certification requirements intended to insure that such transfers are made only to Holders who are Qualified Purchasers in transactions exempt from registration under the Securities Act or are to persons who are not U.S. persons who are non-U.S. residents (as determined for purposes of the Investment Company Act), and otherwise comply with Regulation S under the Securities Act, as the case may be), and as may be from time to time adopted by the Co-Issuers and the Trustee.

 

(f)     [Reserved].

 

(g)     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 Applicable Issuers such satisfactory evidence, which may include an Opinion of Counsel acceptable to them, as may be reasonably required by the Applicable Issuers (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 Investment Company Act, ERISA or the Code. Upon provision of such satisfactory evidence, the Trustee or its Authenticating Agent, at the written direction of the Applicable Issuers shall, after due execution by the Applicable Issuers authenticate and deliver Notes that do not bear such applicable legend.

 

 

 
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(h)     Each Person who becomes a beneficial owner of Secured Notes of a Class represented by an interest in a Global Note shall be deemed to have represented and agreed as follows:

 

(i)     In connection with the purchase of such Notes: (A) none of the Co-Issuers, the Collateral Manager, the Initial Purchaser, the Trustee, the Collateral Administrator, the Administrator or any of their respective Affiliates is acting as a fiduciary or financial or investment advisor 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 Co-Issuers, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator, the Initial Purchaser, or any of their respective Affiliates other than any statements in the Offering Circular, and such beneficial owner has read and understands the 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 Co-Issuers, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator, the Initial Purchaser, 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 Note both (x) a Qualified Institutional Buyer that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25 million in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries, and not the fiduciary, trustee or sponsor of the plan and (y) a Qualified Purchaser (within the meaning of Section 2(a)(51) of the Investment Company Act and the rules thereunder) or an entity owned exclusively by Qualified Purchasers or (2) not a "U.S. person" as defined in Regulation S and is acquiring such Notes in an offshore transaction (as defined in Regulation S) in reliance on the exemption from registration provided by Regulation S; (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 (except when each beneficial owner of such Person is a Qualified Purchaser); (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 has had access to such financial and other information concerning the Issuer and the Notes as it has deemed necessary or appropriate in order to make an informed investment decision with respect to its purchase of the Notes, including an opportunity to ask questions of and request information from the Issuer and the Collateral Manager and (J) such beneficial owner shall provide notice of the relevant transfer restrictions to subsequent transferees.

 

(ii)     In the case of the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes on each day from the date on which such beneficial owner acquires its interest in any such Secured Notes through and including the date on which such beneficial owner disposes of its interest in such Secured Notes either that (A) it is not, and is not directly or indirectly acquiring such Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan Investor, or a governmental, church, non-U.S. or other plan, or entities holding the assets of such plans or (B) its acquisition, holding and disposition of such Note (or interest therein) does not and will not constitute or result in a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or a violation of Other Plan Law.

 

 

 
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(iii)     Except with respect to purchases by Benefit Plan Investors or Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date as provided in Section 2.6(c)(ii), in the case of the Class E Notes issued in the form of Global Notes, on each day from the date on which such beneficial owner acquires its interest in such Class E Notes through and including the date on which such beneficial owner disposes of its interest in such Class E Notes, that (A) such beneficial owner is not, and is not directly or indirectly acquiring such Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan Investor or a Controlling Person and (B) if it is, or is directly or indirectly acquiring or holding such Notes (or any interest therein) on behalf of or with assets of, a governmental, church, non-U.S. or other plan, or entity holding assets of such plans, (1) its acquisition, holding and disposition of such Class E Notes (or any interest therein) does not and will not constitute or result in a non-exempt violation of Other Plan Law and (2) it is not subject to Similar Law.

 

(iv)     Such beneficial owner will be bound by the provisions of Section 2.14.

 

(v)     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 or the securities laws of any state or other jurisdiction, 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 or other securities laws for resale of such Notes. Such beneficial owner understands that none of the Co-Issuers or the pool of Assets has been or will be registered under the Investment Company Act, and that the Co-Issuers are exempt from registration as such by virtue of Section 3(c)(7) of the Investment Company Act.

 

(vi)     It is aware that, except as otherwise provided in this Indenture, any Notes being sold to it in reliance on Regulation S will be represented by one or more Regulation S Global Notes, and that beneficial interests therein may be held only through DTC for the respective accounts of Euroclear or Clearstream.

 

 

 
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(vii)     It will provide notice to each Person to whom it proposes to transfer any interest in the Notes of the transfer restrictions and representations set forth in Section 2.6, including the Exhibits referenced herein.

 

(viii)     It agrees not to seek to commence in respect of the Issuer or the Co-Issuer, or cause the Issuer or Co-Issuer to commence, a bankruptcy proceeding before a year and a day, or, if longer, the applicable preference period then in effect plus one day, has elapsed since the payment in full to the holders of the Notes issued pursuant to this Indenture.

 

(ix)     Such purchaser or transferee understands that the Issuer has the right under this Indenture to compel any Non-Permitted Holder to sell its interest in the Notes or may sell such interest in the Notes on behalf of such Non-Permitted Holder.

 

(x)     It is not a member of the public in the Cayman Islands

 

(i)     Each Person who becomes a beneficial owner of Subordinated Notes represented by a Global Subordinated Note shall be deemed to have made the following representations and agreements:

 

(i)     In connection with the purchase of such Subordinated Note: (A) none of the Co-Issuers, the Collateral Manager, the Initial Purchaser, the Trustee, the Collateral Administrator, the Administrator or any of their respective Affiliates is acting as a fiduciary or financial or investment advisor 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 Co-Issuers, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator, the Initial Purchaser, or any of their respective Affiliates other than any statements in the Offering Circular and such beneficial owner has read and understands the 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 Co-Issuers, the Collateral Manager, the Trustee, the Collateral Administrator, the Administrator, the Initial Purchaser, 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 Note) both (x) a Qualified Institutional Buyer that is not a broker-dealer which owns and invests on a discretionary basis less than U.S.$25 million in securities of issuers that are not affiliated persons of the dealer and is not a plan referred to in paragraph (a)(1)(i)(D) or (a)(1)(i)(E) of Rule 144A or a trust fund referred to in paragraph (a)(1)(i)(F) of Rule 144A that holds the assets of such a plan, if investment decisions with respect to the plan are made by beneficiaries, and not the fiduciary, trustee or sponsor of the plan and (y) a Qualified Purchaser (within the meaning of Section 2(a)(51) of the Investment Company Act and the rules thereunder) or an entity owned exclusively by Qualified Purchasers or (2) not a "U.S. person" as defined in Regulation S and is acquiring the Subordinated Notes in an offshore transaction in reliance on the exemption from registration provided by Regulation S; (E) such beneficial owner is acquiring its interest in such Subordinated Notes for its own account; (F) such beneficial owner was not formed for the purpose of investing in such Subordinated Notes (except when each beneficial owner of such Person is a Qualified Purchaser); (G) such beneficial owner understands that the Issuer may receive a list of participants holding interests in the Subordinated Notes from one or more book entry depositories; (H) such beneficial owner shall hold and transfer at least the minimum denomination of such Subordinated Notes; (I) such beneficial owner is a sophisticated investor and is purchasing the Subordinated Notes with a full understanding of all of the terms, conditions and risks thereof, and is capable of assuming and willing to assume those risks; (J) such beneficial owner has had access to such financial and other information concerning the Issuer and the Notes as it has deemed necessary or appropriate in order to make an informed investment decision with respect to its purchase of the Notes, including an opportunity to ask questions of and request information from the Issuer and the Collateral Manager; and (K) such beneficial owner will provide notice of the relevant transfer restrictions to subsequent transferees.

 

 

 
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(ii)     That, except with respect to purchases by Benefit Plan Investors or Controlling Persons from the Issuer or the Initial Purchaser on the Closing Date as provided in Section 2.6(c)(ii), on each day from the date on which it acquires its interest in the Subordinated Notes through and including the date on which it disposes of its interest in such Subordinated Notes that (1) it is not, and is not directly or indirectly acquiring such Notes (or any interest therein) on behalf of, or with assets of, a Benefit Plan Investor or a Controlling Person, or (2) if it is, or is directly or indirectly acquiring or holding such Notes (or any interest therein) on behalf of or with assets of, a governmental, church, non-U.S. or other plan, or entity holding assets of such plans, (A) its acquisition, holding and disposition of such Subordinated Notes (or any interest therein) does not and will not constitute or result in a non-exempt violation of such Other Plan Law, and (B) it is not subject to Similar Law.

 

(iii)     Such beneficial owner will be bound by the provisions of Section 2.14.

 

(iv)     Such beneficial owner understands that such Subordinated 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 Subordinated Notes have not been and shall not be registered under the Securities Act, and, if in the future such beneficial owner decides to offer, resell, pledge or otherwise transfer such Subordinated Notes, such Subordinated Notes may be offered, resold, pledged or otherwise transferred only in accordance with the provisions of this Indenture and the legend on such Subordinated 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 or other securities laws for resale of the Subordinated Notes. Such beneficial owner understands that neither of the Co-Issuers has been registered under the Investment Company Act, and that the Co-Issuers are exempt from registration as such by virtue of Section 3(c)(7) of the Investment Company Act.

 

 

 
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(v)     Such beneficial owner is aware that, except as otherwise provided in this Indenture, the Subordinated Notes being sold to it will be represented by one or more Regulation S Global Subordinated 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 Subordinated Notes of the restrictions and representations set forth in this Section 2.6, including the Exhibits referenced herein.

 

(vii)     Such beneficial owner agrees not to seek to commence in respect of the Issuer or the Co-Issuer, or cause the Issuer or Co-Issuer to commence, a bankruptcy proceeding before a year and a day, or, if longer, the applicable preference period then in effect plus one day, has elapsed since the payment in full to the holders of the Notes issued pursuant to this Indenture.

 

(viii)    Such purchaser or transferee understands that the Issuer has the right under this Indenture to compel any Non-Permitted Holder to sell its interest in the Notes or may sell such interest in the Notes on behalf of such Non-Permitted Holder.

 

(ix)       It is not a member of the public in the Cayman Islands.

 

(j)     Each Person who becomes an owner of Certificated Subordinated Notes shall be required to make the representations and agreements set forth in Exhibit B4 in a subscription agreement or representation letter with the Issuer. Subject to Section 2.2(b)(ii), an IAI who is also a QIB may acquire an interest in a Rule 144A Global Note. No U.S. person may at any time acquire an interest in a Regulation S Global Note.

 

(k)     Any purported transfer of a Note not in accordance with this Section 2.6 shall be null and void and shall not be given effect for any purpose whatsoever.

 

(l)     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 Subordinated Notes to comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 and any other laws or regulations in the United States, the Cayman Islands or otherwise, including, without limitation, requiring each transferee of a Subordinated Note to make representations to the Issuer in connection with such compliance.

 

(m)     The Registrar, the Trustee and the Issuer shall be entitled to conclusively rely on any transfer certificate delivered pursuant to this Section 2.6 and shall be able to presume conclusively the continuing accuracy thereof, in each case without further inquiry or investigation.

 

Section 2.7        Mutilated, Defaced, Destroyed, Lost or Stolen Note. If (a) any mutilated or defaced Note is surrendered to a Transfer Agent, or if there shall be delivered to the Applicable Issuers, 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 Applicable Issuers, the Trustee and such Transfer Agent, and any agent of the Applicable Issuers, 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 Applicable Issuers, the Trustee or such Transfer Agent that such Note has been acquired by a Protected Purchaser, the Applicable Issuers shall execute and, upon Issuer Order (which Issuer Order shall be deemed to have been provided upon delivery of an executed Note to the Trustee), the Trustee shall authenticate and deliver, 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.

 

 

 
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If, after delivery of such new Note, a Protected Purchaser of the predecessor Note presents for payment, transfer or exchange such predecessor Note, the Applicable Issuers, 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 Applicable Issuers, 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 Applicable Issuers in their 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 2.7, the Applicable Issuers, the Trustee or the applicable Transfer Agent 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 2.7 in lieu of any mutilated, defaced, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Applicable Issuers and such new Note shall be entitled, subject to the second paragraph of this Section 2.7, to all the benefits of this Indenture equally and proportionately with any and all other Notes of the same Class duly issued hereunder.

 

The provisions of this Section 2.7 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, defaced, destroyed, lost or stolen Notes.

 

 

 
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Section 2.8          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 Note Interest Rate and such interest shall be payable in arrears on each Payment Date in the case of the Secured Notes, on the Aggregate Outstanding Amount thereof on the first day of the related Interest Accrual Period (after giving effect to payments of principal thereof on such date). Payment of interest on each Class of Secured Notes (and payments of the Senior Subordinated Note Amount to the Holders of the Senior Subordinated Notes and payments of available Interest Proceeds to the Holders of the Senior Subordinated Notes and the Junior Subordinated Notes) shall be subordinated to the payments of interest on the related Priority Classes as provided in Section 11.1. So long as any Priority Classes are Outstanding with respect to any Class of Deferred Interest Notes, any payment of interest due on such Class of Deferred Interest Notes (including, with respect to the Senior Subordinated Notes, any payment of Senior Subordinated Notes Amount due on the Senior Subordinated Notes) which is not available to be paid in accordance with the Priority of Payments on any Payment Date, if such interest is not paid in order to satisfy the Coverage Tests ("Deferred Interest" with respect thereto), shall not be considered "due and payable" for the purposes of Section 5.1(a) (and the failure to pay such interest (including, with respect to the Senior Subordinated Notes, such Senior Subordinated Note Amount) shall not be an Event of Default) until the earliest of the Payment Date (i) on which such interest (including, with respect to the Senior Subordinated Notes, such Senior Subordinated Note Amount) is available to be paid in accordance with the Priority of Payments, (ii) which is a Redemption Date with respect to such Class of Deferred Interest Notes, and (iii) which is the Stated Maturity of such Class of Deferred Interest Notes. Deferred Interest on any Class of Deferred Interest Notes shall not be added to the principal balance of such Class. For the avoidance of doubt, the failure to pay the Senior Subordinated Note Amount on any Payment Date due to the unavailability of funds in respect thereof will not constitute an Event of Default. Deferred Interest 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 with respect to such Class of Deferred Interest Notes, and (ii) which is the Stated Maturity of such Class of Deferred Interest Notes. Interest shall cease to accrue on each Secured Note, or in the case of a partial repayment, on such part, from the date of repayment or the respective Stated Maturity unless payment of principal is improperly withheld or unless default is otherwise made with respect to such payments of principal. To the extent lawful and enforceable, (x) interest on Deferred Interest with respect to the Class C Notes, the Class D Notes or the Class E Notes shall accrue at the Note Interest Rate for such Class until paid as provided herein and (y) interest on the interest on any Class A Note or any Class B Note or, if no Class A Notes or Class B Notes are Outstanding, any Class C Note, or, if no Class A Notes, Class B Notes or Class C Notes are Outstanding, any Class D Note, or, if no Class A Notes, Class B Notes, Class C Notes or Class D Notes are Outstanding, any Class E Note, that is not paid when due shall accrue at the Note Interest Rate for such Class until paid as provided herein. On each Payment Date, the Senior Subordinated Notes will be entitled to receive the Senior Subordinated Note Amount and 45% of all remaining Interest Proceeds and all remaining Principal Proceeds prior to any distributions on the Junior Subordinated Notes on such Payment Date in accordance with the Priority of Payments. To the extent lawful and enforceable, interest on any Deferred Interest on the Senior Subordinated Notes shall accrue at the same per annum rate as the then current Senior Subordinated Note Rate.

 

(a)     The principal of each Secured Note of each Class matures at par and is due and payable on the Payment Date which is the Stated Maturity for such Class of Secured Notes, 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 after principal and interest on each Class of Notes that constitutes a Priority Class with respect to such Class has been paid in full and is subordinated to the payment on each Payment Date of the principal and interest due and payable on such Priority Class(es), and other amounts in accordance with the Priority of Payments, and any payment of principal of 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 or any Redemption Date), 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 of the Priority Classes with respect to such Class have been paid in full.

 

 

 
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(b)     Principal payments on the Notes shall be made in accordance with the Priority of Payments and Section 9.1.

 

(c)     As a condition to the payment of principal of and interest on any Secured Note or any payment on any Subordinated Note, the Trustee and any Paying Agent shall require certification acceptable to it to enable the Issuer, the Co-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 deduct or withhold from payments in respect of such Note under any present or future law or regulation of the United States and any other applicable jurisdiction, or any present or future law or regulation of any political subdivision thereof or taxing authority therein or to comply with any reporting or other requirements under any such law or regulation. The Co-Issuers shall not be obligated to pay any additional amounts to the Holders of 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.

 

(d)     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 or by a Paying Agent in United States dollars to DTC or its designee with respect to a Global 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 United States dollar account, as the case may be, maintained by DTC or its nominee with respect to a Global Note, and to the Holder or its designee with respect to a Certificated Note, provided that in the case of a Certificated Note, the Holder thereof shall have provided written wiring instructions to the Trustee or the applicable Paying Agent, on or before the related Record Date; provided, further, that 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 on or prior to such Maturity; provided that if the Trustee and the Applicable Issuers shall have been furnished such security or indemnity as may be required by them to save each of them harmless and an undertaking thereafter to surrender such certificate, then, in the absence of notice to the Applicable Issuers or the Trustee that the applicable Note has been acquired by a bona fide purchaser, such final payment shall be made without presentation or surrender. Neither the Co-Issuers, the Trustee, the Collateral Manager, nor any Paying Agent shall have any responsibility or liability for any aspects of the 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 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 Applicable Issuers shall, not more than 30 nor less than 10 days 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 shall be made, the amount of such payment per U.S.$100,000 original principal amount of Secured Notes and original principal amount of Subordinated Notes and the place where such Notes may be presented and surrendered for such payment.

 

 

 
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(e)     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 of each Class from Interest Proceeds and Principal Proceeds shall be made in the proportion that the Aggregate Outstanding Amount of the Subordinated 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 Subordinated Notes of such Class on such Record Date.

 

(f)     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.

 

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

 

(h)     Notwithstanding any other provision of this Indenture, the obligations of the Issuer and Co-Issuer under the Notes and the Transaction Documents are limited recourse or non-recourse obligations of the Issuer and Co-Issuer, as applicable, 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 Co-Issuers hereunder or in connection herewith after such realization shall be extinguished and shall not thereafter revive. No recourse shall be had against any Officer, director, employee, member, manager, partner, shareholder or incorporator of either the Co-Issuers, the Collateral Manager or their respective successors or assigns for any amounts payable under the Notes or (except as otherwise provided herein or in the Collateral Management Agreement) in the Transaction Documents. It is understood that the foregoing provisions of this paragraph (i) shall not (x) 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 (y) 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 or the Co-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.

 

 

 
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(i)     Subject to the foregoing provisions of this Section 2.8, each Note delivered under this Indenture and upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights of unpaid interest and principal (or other applicable amount) that were carried by such other Note.

 

Section 2.9         Persons Deemed Owners. The Issuer, the Co-Issuer, the Trustee, and any agent of the Co-Issuers or the Trustee may treat as the owner of such Note the Person in whose name any 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 neither the Issuer, the Co-Issuers nor the Trustee nor any agent of the Issuer, the Co-Issuers or the Trustee shall be affected by notice to the contrary.

 

Section 2.10         Surrender of Notes; Cancellation. (a)  Notwithstanding anything herein to the contrary, no Note may be surrendered (including any surrender in connection with any abandonment, donation, gift, contribution or other event or circumstance) except for payments, registration of transfer, exchange, redemption in accordance with Article IX or for replacement in connection with any Note that is deemed lost or stolen.

 

(a)     All Notes that are surrendered for payment, registration of transfer, exchange, redemption or for cancellation, or mutilated, defaced or deemed lost or stolen, shall be promptly cancelled by the Trustee and may not be reissued or resold. Any such Notes 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 2.10, except as expressly permitted by this Indenture. All canceled Notes held by the Trustee shall be destroyed by the Trustee in accordance with its standard policy, unless the Co-Issuers shall direct by an Issuer Order received prior to destruction that they be returned to it.

 

(b)     The Issuer may not acquire any of the Notes (including any Notes that are surrendered, cancelled or abandoned). The preceding sentence shall not limit an optional or mandatory redemption of the Notes pursuant to the terms of this Indenture.

 

Section 2.11         Certificated Notes. (a) A Global Note deposited with DTC pursuant to Section 2.2 shall be transferred in the form of a corresponding Certificated Note to the beneficial owners thereof only if such transfer complies with Section 2.6 and either (i) DTC notifies the Co-Issuers that it is unwilling or unable to continue as depository for such Global Note or (ii) at any time DTC ceases to be a Clearing Agency registered under the Exchange Act and, in each case, a successor depository is not appointed by the Co-Issuers within 90 days after such notice. In addition, the owner of a beneficial interest in a Global Note shall be entitled to receive a Certificated Note in exchange for such interest if an Event of Default has occurred and is continuing and such transfer is requested by the Holder of such Global Note.

 

 

 
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(a)     Any Global Note that is transferable in the form of a Certificated Note to the beneficial owners thereof pursuant to this Section 2.11 shall be surrendered by DTC to the Trustee's designated office located in the United States to be so transferred, in whole or from time to time in part, without charge, and the Applicable Issuers shall execute and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of definitive physical certificates (pursuant to the instructions of DTC) in Authorized Integrals. Any Certificated Note delivered in exchange for an interest in a Global Note shall, except as otherwise provided by Section 2.6(h) and (i), bear the legends set forth in the applicable Exhibit A and shall be subject to the transfer restrictions referred to in such legends.

 

(b)     Subject to the provisions of paragraph (b) of this Section 2.11, the Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.

 

(c)     In the event of the occurrence of either of the events specified in subclauses (i) and (ii) of subsection (a) of this Section 2.11, the Co-Issuers shall promptly make available to the Trustee a reasonable supply of Certificated Notes in definitive, fully registered form without interest coupons.

 

The Certificated Notes shall be in substantially the same form as the corresponding Global Notes with such changes therein as the Issuer and Trustee shall agree. In the event that Certificated Notes are not so issued by the Issuer to such beneficial owners of interests in Global Notes as required by Section 2.11(a), the Issuer expressly acknowledges that the beneficial owners shall be entitled to pursue any remedy that the Holder of a Global Note would be entitled to pursue in accordance with Article V of this Indenture (but only to the extent of such beneficial owner's interest in the Global Note) as if Certificated Notes had been issued. 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 beneficial owners in whose names such Certificated Notes shall be registered or as to delivery instructions for such Certificated Notes.

 

Section 2.12         Notes Beneficially Owned by Persons Not QIB/QPs, IAI/QPs or AI/QPs or in Violation of ERISA Representations. (a) Notwithstanding anything to the contrary elsewhere in this Indenture, any transfer of (x) a beneficial interest in any Note to a U.S. person that is not (i) in the case of a Rule 144A Global Note, a QIB/QP (ii) in the case of a Certificated Secured Note, an IAI/QP or a QIB/QP, or (y) in the case of a Certificated Subordinated Note, a QIB/QP or an AI/QP, and, in each case that is not made pursuant to an applicable exemption under the Securities Act and the Investment Company Act shall be null and void and any such purported transfer of which the Issuer, the Co-Issuer or the Trustee shall have notice may be disregarded by the Issuer, the Co-Issuer and the Trustee for all purposes.

 

 

 
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(a)     If (i) any U.S. person that is not a QIB/QP (in the case of a Rule 144A Global Secured Note) or an IAI/QP or QIB/QP (in the case of a Certificated Secured Note) shall become the beneficial owner of an interest in any Secured Note, (ii) any U.S. person that is not a QIB/QP (in the case of a Rule 144A Global Subordinated Note) or an AI/QP or QIB/QP (in the case of a Certificated Subordinated Note) that does not have an exemption available under the Securities Act and the Investment Company Act shall become the beneficial owner of an interest in any Subordinated Note, or (iii) any U.S. person becomes the beneficial owner of an interest in any Regulation S Global Secured Note or Regulation S Global Subordinated Note (any such person a "Non-Permitted Holder"), the Issuer shall, promptly after discovery that such person is a Non-Permitted Holder by the Issuer, the Co-Issuer or the Trustee (and notice to the Issuer by the Trustee if a Trust Officer of the Trustee obtains actual knowledge or by the Co-Issuer if it makes the discovery), 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 of the date of such notice. If such Non-Permitted Holder fails to so transfer such Notes, 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 a not a Non-Permitted Holder on such terms as the Issuer may choose. The Issuer, or the Collateral Manager (on its own or acting through an investment bank selected by the Collateral Manager at the Issuer's expense) 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 selling such Notes to the highest such bidder. However, the Issuer 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 subsection shall be determined in the sole discretion of the Issuer, and the Issuer shall not 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.

 

(b)     Notwithstanding anything to the contrary elsewhere in this Indenture, any transfer of a beneficial interest in any Note to a Person who has made or is deemed to have made an ERISA-related representation required by Section 2.6 that is subsequently shown to be false or misleading shall be null and void and any such purported transfer of which the Issuer, the Co-Issuer or the Trustee shall have notice may be disregarded by the Issuer, the Co-Issuer and the Trustee for all purposes.

 

(c)     If any Person becomes the beneficial owner of an interest in any Note who has made or is deemed to have made a prohibited transaction representation or a Benefit Plan Investor, Controlling Person, Similar Law or Other Plan Law representation required by Section 2.6 that is subsequently shown to be false or misleading or whose beneficial ownership otherwise causes 25% or more of the Aggregate Outstanding Amount of the Class E Notes, the Senior Subordinated Notes or the Junior Subordinated Notes being held by Benefit Plan Investors, as calculated pursuant to 29 C.F.R. § 2510.3-101, as modified by Section 3(42) of ERISA (any such person a "Non-Permitted ERISA Holder"), the Issuer and/or the Co-Issuer shall, promptly after discovery that such person is a Non-Permitted ERISA Holder by the Issuer, the Co-Issuer or the Trustee (and notice to the Issuer or the Co-Issuer, as applicable, by the Trustee if a Trust Officer of the Trustee obtains actual knowledge or by the Issuer or the Co-Issuer if it makes the discovery), send notice to such Non-Permitted ERISA Holder demanding that such Non-Permitted ERISA Holder transfer its interest in the Notes held by such person to a Person that is not a Non-Permitted ERISA Holder within 10 days of the date of such notice. If such Non-Permitted ERISA Holder fails to so transfer such Notes, the Issuer or the Co-Issuer, as applicable, shall have the right, without further notice to the Non-Permitted ERISA Holder, to sell such Notes or interest in such Notes to a purchaser selected by the Issuer or the Co-Issuer, as applicable, that is a not a Non-Permitted ERISA Holder on such terms as the Issuer may choose. The Issuer or the Co-Issuer, as applicable, 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 or the Co-Issuer, as applicable, may select a purchaser by any other means determined by it 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 or the Co-Issuer, as applicable, 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 subsection shall be determined in the sole discretion of the Issuer or the Co-Issuer, as applicable, and the Issuer and the Co-Issuer shall not 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.

 

 

 
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Section 2.13         Deduction or Withholding from Payments on Notes; No Gross Up. If the Issuer is required to deduct or withhold from, or with respect to, payments to any Holder of the Notes for any Tax, then the Trustee or other Paying Agent, as applicable, shall deduct, or withhold, the amount required to be deducted or withheld and remit to the relevant authority such amount. Without limiting the generality of the foregoing, the Issuer may withhold any amount that it determines is required to be withheld from any amounts otherwise distributable to any holder of a Note. The Issuer shall not be obligated to pay any additional amounts to the Holders or beneficial owners of the Notes as a result of any withholding or deduction for, or on account of, any Tax imposed on payments in respect of the Notes. The amount of any withholding tax or deduction with respect to any Holder shall be treated as cash distributed to such Holder at the time it is withheld or deducted by the Trustee or Paying Agent and remitted to the appropriate taxing authority.

 

Section 2.14     Tax Treatment; Tax Certifications.

 

(a)     Each Holder (including, for purposes of this Section 2.14, any beneficial owner of Notes) will treat the Issuer, the Co-Issuer, and the Notes as described under the heading "Certain U.S. Federal Income Tax Considerations" in the Offering Circular for U.S. federal, state and local income tax purposes and will take no action inconsistent with such treatment unless required by law.

 

(b)     Each Holder will timely furnish the Issuer, the Trustee or any agent of the Issuer (including any Paying Agent) any U.S. federal income tax forms or certifications (such as an applicable IRS Form W-8 (together with appropriate attachments), IRS Form W-9, or any successors to such IRS forms) that the Issuer or its agents (including any Paying Agent) may reasonably request, and any documentation, agreements, information, or certifications that are reasonably requested by the Issuer or tis agents (including any Paying Agent) (A) to permit the Issuer or its agents to make payments to it without, or at a reduced rate of, deduction or withholding, (B) to enable the Issuer or its agents to qualify for a reduced rate of withholding or deduction in any jurisdiction from or through which it receives payments, and (C) to enable the Issuer or its agents to satisfy reporting and other obligations under the Code and Treasury regulations, and will update or replace such documentation, agreements, information, or certifications as appropriate or in accordance with their terms or subsequent amendments, and acknowledges that the failure to provide, update or replace any such documentation, agreements, information, or certifications may result in the imposition of withholding or back-up withholding upon payments to such Holder. Amounts withheld pursuant to applicable tax laws will be treated as having been paid to a Holder by the Issuer.

 

 

 
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(c)     Each Holder will provide the Issuer, the Trustee or any other agent of the Issuer with any correct, complete and accurate information and will take any other actions that may be required for the Issuer to comply with FATCA and the Cayman FATCA Legislation and to prevent the imposition of U.S. federal withholding tax under FATCA on any payment to or for the benefit of the Issuer. In the event the Holder fails to provide such information or take such actions, or to the extent that the Holder's ownership of Notes would otherwise cause the Issuer to be subject to any tax under FATCA, (A) the Issuer (and any agent acting on its behalf including any Paying Agent) is authorized to withhold amounts otherwise distributable to such Holder as compensation for any amounts withheld from payments to or for the benefit of the Issuer as a result of such failure or the Holder's ownership, and (B) to the extent necessary to avoid an adverse effect on the Issuer or the Noteholders as a result of such failure or the Holder's ownership, the Issuer will have the right to compel the Holder to sell its Notes, and, if such Holder does not sell its Notes within 10 Business Days after notice from the Issuer, to sell such Notes at a public or private sale called and conducted in any manner permitted by law, and to remit the net proceeds of such sale (taking into account any taxes incurred by the Issuer in connection with such sale) to the Holder as payment in full for such Notes. The Issuer may also assign each such Note a separate CUSIP or CUSIPs in the Issuer's sole discretion. Each Holder agrees that the Issuer, the Trustee or their agents or representatives may (1) provide any information and documentation concerning its investment in its Notes to the Cayman Islands Tax Information Authority, the U.S. Internal Revenue Service and any other relevant tax authority and (2) take such other steps as they deem necessary or helpful to ensure that the Issuer complies with FATCA and the Cayman FATCA Legislation.

 

(d)     Each Holder of Class E Notes, Senior Subordinated Notes or Junior Subordinated Notes, if it is not a "United States person" (as defined in Section 7701(a)(30) of the Code), represents that either:

 

(i)     It is not a bank (within the meaning of Section 881(c)(3)(A)) or an affiliate of a bank;

 

(ii)     If it is a bank (within the meaning of Section 881(c)(3)(A)), then after giving effect to its purchase of Notes, it (x) will not directly or indirectly own more than 33-1/3%, by number or value, of the aggregate of the Notes within such Class and will not otherwise be related to the Issu