Indenture

INDENTURE Dated as of April 30, 2013 Among JMP CREDIT ADVISORS CLO II LTD., Issuer JMP CREDIT ADVISORS CLO II LLC, Co-Issuer and U.S. BANK NATIONAL ASSOCIATION, as Trustee

by JMP Group
May 6th, 2013
Exhibit 10.1
 
Execution Version
 
 
 
 
 
dated as of April 30, 2013
 
among
 
JMP CREDIT ADVISORS CLO II LTD.,
Issuer
 
JMP CREDIT ADVISORS CLO II LLC,
Co-Issuer
 
and
 
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
 
 
 

 
 
 

 
 
CONTENTS
 
 
Clause Page
       
       
1.
Definitions
2
 
1.1
Definitions.
2
 
1.2
Assumptions as to Assets.
73
       
2.
The Notes
77
 
2.1
Forms Generally.
77
 
2.2
Forms of Notes.
77
 
2.3
Authorized Amount; Stated Maturity; Denominations.
79
 
2.4
Execution, Authentication, Delivery and Dating.
80
 
2.5
Registration, Registration of Transfer and Exchange.
81
 
2.6
Mutilated, Defaced, Destroyed, Lost or Stolen Note.
90
 
2.7
Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved.
91
 
2.8
Persons Deemed Owners.
95
 
2.9
Cancellation.
95
 
2.10
DTC Ceases to be Depository.
96
 
2.11
Notes Beneficially Owned by Persons Not QIB/QPs or Knowledgeable Employees that are also Accredited Investors, or in Violation of ERISA Representations or Noteholder Reporting Obligations.
96
 
2.12
Treatment and Tax Certification.
98
 
2.13
Additional Issuance.
100
       
3.
Conditions Precedent
101
 
3.1
Conditions to Issuance of Notes on Closing Date.
101
 
3.2
Conditions to Additional Issuance.
105
 
3.3
Custodianship; Delivery of Collateral Obligations and Eligible Investments.
106
       
4.
Satisfaction And Discharge
107
 
4.1
Satisfaction and Discharge of Indenture.
107
 
4.2
Application of Trust Money.
109
 
4.3
Repayment of Monies Held by Paying Agent.
109
       
5.
Remedies
109
 
5.1
Events of Default.
109
 
5.2
Acceleration of Maturity; Rescission and Annulment.
111
 
5.3
Collection of Indebtedness and Suits for Enforcement by Trustee.
112
 
5.4
Remedies.
114
 
5.5
Optional Preservation of Assets.
116
 
5.6
Trustee May Enforce Claims Without Possession of Notes.
118
 
5.7
Application of Money Collected.
118
 
5.8
Limitation on Suits.
118
 
 
- i -

 
 
 
5.9
Unconditional Rights of Secured Noteholders to Receive Principal and Interest.
119
 
5.10
Restoration of Rights and Remedies.
119
 
5.11
Rights and Remedies Cumulative.
119
 
5.12
Delay or Omission Not Waiver.
120
 
5.13
Control by Majority of Controlling Class.
120
 
5.14
Waiver of Past Defaults.
120
 
5.15
Undertaking for Costs.
121
 
5.16
Waiver of Stay or Extension Laws.
121
 
5.17
Sale of Assets.
121
 
5.18
Action on the Notes.
122
       
6.
The Trustee
122
 
6.1
Certain Duties and Responsibilities
122
 
6.2
Notice of Default.
124
 
6.3
Certain Rights of Trustee.
124
 
6.4
Not Responsible for Recitals or Issuance of Notes.
128
 
6.5
May Hold Notes.
128
 
6.6
Money Held in Trust.
128
 
6.7
Compensation and Reimbursement.
128
 
6.8
Corporate Trustee Required; Eligibility.
129
 
6.9
Resignation and Removal; Appointment of Successor.
130
 
6.10
Acceptance of Appointment by Successor.
131
 
6.11
Merger, Conversion, Consolidation or Succession to Business of Trustee.
132
 
6.12
Co-Trustees.
132
 
6.13
Certain Duties of Trustee Related to Delayed Payment of Proceeds.
133
 
6.14
Authenticating Agents.
134
 
6.15
Withholding.
134
 
6.16
Representative for Secured Noteholders Only; Agent for each other Secured Party.
135
 
6.17
Representations and Warranties of U.S. Bank National Association
135
       
7.
Covenants
135
 
7.1
Payment of Principal and Interest.
135
 
7.2
Maintenance of Office or Agency.
136
 
7.3
Money for Note Payments to be Held in Trust.
136
 
7.4
Existence of Co-Issuers.
138
 
7.5
Protection of Assets.
141
 
7.6
Opinions as to Assets.
143
 
7.7
Performance of Obligations.
143
 
7.8
Negative Covenants.
143
 
7.9
Statement as to Compliance.
146
 
7.10
Co-Issuers May Consolidate, etc., Only on Certain Terms.
146
 
7.11
Successor Substituted.
148
 
7.12
No Other Business.
148
 
7.13
Maintenance of Listing.
148
 
7.14
Annual Rating Review; Review of Credit Estimates.
148
 
 
- ii -

 
 
 
7.15
Reporting.
149
 
7.16
Calculation Agent.
149
 
7.17
Certain Tax Matters.
150
 
7.18
Effective Date; Purchase of Additional Collateral Obligations.
153
 
7.19
Representations Relating to Security Interests in the Assets.
158
 
7.20
Rule 17g-5 Compliance.
160
 
7.21
Filings.
162
 
7.22
Article 122a of the CRD
162
       
8.
Supplemental Indentures
163
 
8.1
Supplemental Indentures Without Consent of Noteholders.
163
 
8.2
Supplemental Indentures With Consent of Noteholders.
166
 
8.3
Execution of Supplemental Indentures.
168
 
8.4
Effect of Supplemental Indentures.
170
 
8.5
Reference in Notes to Supplemental Indentures.
170
       
9.
Redemption Of Notes
170
 
9.1
Mandatory Redemption.
170
 
9.2
Optional Redemption.
170
 
9.3
Tax Redemption.
173
 
9.4
Redemption Procedures.
174
 
9.5
Notes Payable on Redemption Date.
176
 
9.6
Special Redemption.
176
 
9.7
Clean-Up Call Redemption.
177
       
10.
Accounts, Accountings And Releases
178
 
10.1
Collection of Money.
178
 
10.2
Collection Account.
179
 
10.3
Transaction Accounts.
181
 
10.4
The Revolver Funding Account.
184
 
10.5
Reinvestment of Funds in Accounts; Reports by Trustee.
185
 
10.6
Accountings.
186
 
10.7
Release of Assets.
194
 
10.8
Reports by Independent Certified Public Accountants.
195
 
10.9
Reports to Rating Agencies and Additional Recipients.
196
 
10.10
Procedures Relating to the Establishment of Accounts Controlled by the Trustee.
197
 
10.11
Section 3(c)(7) Procedures.
197
       
11.
Application Of Monies
197
 
11.1
Disbursements of Monies from Payment Account.
197
       
12.
Sale of Collateral Obligations; Purchase of Additional Collateral Obligations
206
 
12.1
Sales of Collateral Obligations.
206
 
12.2
Purchase of Additional Collateral Obligations.
211
 
12.3
Conditions Applicable to All Sale and Purchase Transactions.
213
 
 
- iii -

 
 
13.
Noteholders' Relations
214
 
13.1
Subordination.
214
 
13.2
Standard of Conduct.
215
       
14.
Miscellaneous
215
 
14.1
Form of Documents Delivered to Trustee.
215
 
14.2
Acts of Holders.
216
 
14.3
Notices, etc., to Trustee, the Co-Issuers, the Portfolio Manager, the Designated Successor Manager, the Placement Agent, the Collateral Administrator, the Paying Agent, the Administrator and each Rating Agency.
217
 
14.4
Notices to Holders; Waiver.
219
 
14.5
Effect of Headings and Table of Contents.
220
 
14.6
Successors and Assigns.
220
 
14.7
Severability.
220
 
14.8
Benefits of Indenture.
221
 
14.9
Governing Law.
221
 
14.10
Submission to Jurisdiction.
221
 
14.11
Waiver of Jury Trial.
221
 
14.12
Counterparts.
221
 
14.13
Acts of Issuer.
222
 
14.14
Confidential Information.
222
 
14.15
Liability of Co-Issuers.
223
 
14.16
Rating Condition Deemed Inapplicable.
223
       
15.
Assignment Of Certain Agreements
224
 
15.1
Assignment of Portfolio Management Agreement and Designated Successor Management Agreement.
224
 
 
Schedules and Exhibits
 
Schedule 1
   
List of Collateral Obligations
Schedule 2
   
Moody's Industry Classification Group List
Schedule 3
   
S&P Industry Classifications
Schedule 4
   
Diversity Score Calculation
Schedule 5
   
Moody's Rating Definitions
Schedule 6
   
S&P Recovery Rate Tables
Schedule 7
   
Approved Index List
       
Exhibit
A
 
Forms of Notes
 
A1
 
Form of Global Secured Note
 
A2
 
Form of Regulation S Global Subordinated Note
 
A3
 
Form of Certificated Secured Note
 
A4
 
Form of Certificated Subordinated Note
 
A5
 
Form of Reinvesting Holder Note
 
 
- iv -

 
 
Exhibit
B
 
Forms of Transfer and Exchange Certificates
 
B1
 
Form of Transferor Certificate for Transfer of Rule 144A Global Note or Certificated Secured Note to Regulation S Global Note
 
B2
 
Form of Purchaser Representation Letter for Certificated Notes
 
B3
 
Form of Transferor Certificate for Transfer of Regulation S Global Note or Certificated Secured Note to Rule 144A Global Note
 
B4
 
Form of ERISA and Affected Bank Certificate
 
B5
 
Form of Transferee Certificate of Rule 144A Global Note
 
B6
 
Form of Transferee Certificate of Regulation S Global Note
 
B7
 
Form of Transferee Certificate of Regulation S Global Subordinated Note
 
B8
 
Form of Transferor Certificate for Transfer of Certificated Subordinated Note to Regulation S Global Subordinated Note
       
Exhibit
C
 
Form of Opinion of Milbank, Tweed, Hadley & McCloy LLP
Exhibit
D
 
Form of Opinion of Katten Muchin Rosenman LLP
Exhibit
E
 
Form of Opinion of Alston & Bird LLP
Exhibit
F
 
Form of Opinion of Gibbons P.C.
Exhibit
G
 
Form of Opinion of Appleby (Cayman) Ltd.
Exhibit
H
 
Calculation of LIBOR
Exhibit
I
 
Form of Note Owner Certificate
Exhibit
J
 
Form of Reinvesting Holder Direction
Exhibit
K
 
Form of Retention of Net Economic Interest Letter
 
 
- v -

 
 
INDENTURE, dated as of April 30, 2013, among JMP Credit Advisors CLO II Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"), JMP Credit Advisors CLO II LLC, a Delaware limited liability company (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 CLAUSES
 
The Issuer hereby Grants to the Trustee, for the benefit and security of the Holders of the Secured Notes, the Trustee, the Portfolio Manager, the Designated Successor Manager, the Administrator and the Bank in each of its capacities under the Transaction Documents, including but not limited to, the Collateral Administrator (collectively, the "Secured Parties"), all of its right, title and interest in, to and under, in each case, whether now owned or existing, or hereafter acquired or arising, all of the Issuer's accounts, chattel paper, deposit accounts, money, financial assets, general intangibles, instruments, investment property, letter-of-credit rights, and supporting obligations, including, but not limited to:  (a) the Collateral Obligations (listed, as of the Closing Date, in Schedule 1 to this Indenture) which the Issuer causes to be delivered to the Trustee (directly or through an intermediary or bailee) on the Closing Date herewith and all payments thereon or with respect thereto, and all Collateral Obligations which are delivered to the Trustee in the future pursuant to the terms hereof and all payments thereon or with respect thereto, (b) each of the Accounts, and any Eligible Investments purchased with funds on deposit in any of the Accounts, and all income from the investment of funds therein, (c) the Portfolio Management Agreement and the Designated Successor Management Agreement as set forth in Article 15 hereof and the Collateral Administration Agreement, (d) all Cash or Money delivered to the Trustee (or its bailee) for the benefit of the Secured Parties, (e) all accounts, chattel paper, deposit accounts, financial assets, general intangibles, instruments, investment property, goods, letter-of-credit rights, documents and other supporting obligations relating to the foregoing (in each case as defined in the UCC), (f) any other property otherwise delivered to the Trustee by or on behalf of the Issuer (whether or not constituting Collateral Obligations or Eligible Investments) and (g) all proceeds with respect to the foregoing; provided that such Grants shall not include (i) the U.S.$250 transaction fee paid to the Issuer in consideration of the issuance of the Notes and (ii) the funds attributable to the issuance and allotment of the Issuer's ordinary shares or the bank account in the Cayman Islands in which such funds are deposited (or any interest thereon) (collectively, the "Excepted Property") (the assets referred to in (a) through (g) above, excluding the Excepted Property, are collectively referred to as the "Assets").
 
 
 

 
 
The above Grant is made in trust to secure the Secured Notes and certain other amounts payable by the Issuer as described herein.  Except as set forth in the Priority of Payments and Article 13 of this Indenture, the Secured Notes are secured by the Grant equally and ratably without prejudice, priority or distinction between any Secured Note and any other Secured Note by reason of difference in time of issuance or otherwise.  The Grant is made to secure, in accordance with the priorities set forth in the Priority of Payments and Article 13 of this Indenture, (i) the payment of all amounts due on the Secured Notes in accordance with their terms, (ii) the payment of all other sums (other than in respect of the Reinvesting Holder Notes and the Subordinated Notes) payable under this Indenture, (iii) the payment of amounts owing by the Issuer under the Transaction Documents, including, but not limited to, the Portfolio Management Agreement, the Designated Successor Management Agreement and the Collateral Administration Agreement, and (iv) compliance with the provisions of this Indenture, all as provided in this Indenture (collectively, the "Secured Obligations").  The foregoing Grant shall, for the purpose of determining the property subject to the lien of this Indenture, be deemed to include any securities and any investments granted to the Trustee by or on behalf of the Issuer, whether or not such securities or investments satisfy the criteria set forth in the definitions of "Collateral Obligation" or "Eligible Investments," as the case may be.
 
The Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with the provisions hereof, and agrees to perform the duties herein in accordance with the terms hereof.
 
1.             Definitions
 
1.1           Definitions.  Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms.  Except as otherwise specified herein or as the context may otherwise require:  (i) references to an agreement or other document are to it as amended, supplemented, restated and otherwise modified from time to time and to any successor document (whether or not already so stated); (ii) references to a statute, regulation or other government rule are to it as amended from time to time and, as applicable, are to corresponding provisions of successor governmental rules (whether or not already so stated); (iii) the word "including" and correlative words shall be deemed to be followed by the phrase "without limitation" unless actually followed by such phrase or a phrase of like import; (iv) the word "or" is always used inclusively herein (for example, the phrase "A or B" means "A or B or both," not "either A or B but not both"), unless used in an "either … or" construction; (v) references to a Person are references to such Person's successors and assigns (whether or not already so stated); (vi) all references in this Indenture to designated "Articles", "Sections", "sub-Sections" and other subdivisions are to the designated articles, sections, sub-sections and other subdivisions of this Indenture; and (vii) the words "herein", "hereof", "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular article, section, sub-section or other subdivision.
 
 
- 2 -

 
 
"17g-5 Website":  The internet website of the Issuer initially located at https://www.structuredfn.com, access to which is limited to Rating Agencies and NRSROs who have provided an NRSRO Certification.
 
"25% Limitation":  The meaning specified in Section 2.5(c)(iii).
 
"Accountants' Report":  An agreed upon procedures report from the firm or firms selected by the Issuer pursuant to Section 10.8(a).
 
"Accounts":  (i) the Payment Account, (ii) the Collection Account, (iii) the Ramp-Up Account, (iv) the Revolver Funding Account, (v) the Closing Expense Account, (vi) the Custodial Account, (vii) the Expense Reimbursement Account, (viii) the Reinvestment Amount Account, (ix) the Interest Reserve Account and (x) the LC Reserve Account.
 
"Accredited Investor":  An "accredited investor" as defined in Rule 501(a) under the Securities Act or an entity all of the investors in which are such accredited investors.
 
"Act" and "Act of Holders":  The meanings specified in Section 14.2.
 
"Adjusted Collateral Principal Amount":  As of any date of determination, (a) the Aggregate Principal Balance of the Collateral Obligations (other than Defaulted Obligations, Discount Obligations and Deferring Securities), plus (b) Principal Financed Accrued Interest (excluding any unpaid accrued interest purchased with Principal Proceeds in respect of a Defaulted Obligation), plus (c) without duplication, the amounts on deposit in the Collection Account, the Reinvestment Amount Account and the Ramp-Up Account (including Eligible Investments therein) representing Principal Proceeds, plus (d) the lesser of the (i) S&P Collateral Value of all Defaulted Obligations and Deferring Securities and (ii) Moody's Collateral Value of all Defaulted Obligations and Deferring Securities; provided that the Adjusted Collateral Principal Amount will be zero for any Defaulted Obligation which the Issuer has owned for more than three years after the date that it became a Defaulted Obligation, plus (e) the aggregate, for each Discount Obligation, of the purchase price (expressed as a percentage of par) multiplied by the Principal Balance of such Discount Obligation as of such date of determination, expressed as a dollar amount minus (f) the Excess CCC/Caa Adjustment Amount; provided that, with respect to any Collateral Obligation that satisfies more than one of the definitions of Defaulted Obligation, Discount Obligation or Deferring Security or any asset that falls into the Excess CCC/Caa Adjustment Amount, such Collateral Obligation shall, for the purposes of this definition, be treated as belonging to the category of Collateral Obligations which results in the lowest Adjusted Collateral Principal Amount on any date of determination; provided, further, that, any Collateral Obligation purchased with the proceeds of an additional issuance of Subordinated Notes solely for the purpose of effecting a cure of a Manager Replacement Event pursuant to Section 12(d) of the Portfolio Management Agreement, shall, for purposes of this definition, be deemed to have a Principal Balance equal to its purchase price for a period of 60 days following such additional issuance of Subordinated Notes.
 
 
- 3 -

 
 
"Adjusted Weighted Average Moody's Rating Factor":  As of any date of determination, a number equal to the Weighted Average Moody's 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 Weighted Average Moody's Rating Factor for purposes of this definition, the last paragraph of the definition of each of "Moody's Default Probability Rating", "Moody's Rating" and "Moody's Derived Rating" shall 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 and (c) negative outlook will be treated as having been downgraded by one rating subcategory.
 
"Administration Agreement":  An agreement between the Administrator and the Issuer (as amended from time to time) relating to the various corporate management functions that 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 during the term of such agreement.
 
"Administrative Expense Cap":  An amount equal on any Payment Date (when taken together with any Administrative Expenses paid during the period since the preceding Payment Date or in the case of the first Payment Date, the period since the Closing Date), to the sum of (a) 0.02% per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year consisting of twelve 30-day months) of the Fee Basis Amount on the related Determination Date plus (b) U.S.$225,000 per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year consisting of twelve 30-day months); provided that (1) in respect of any Payment Date after the third Payment Date following the Closing Date, if the aggregate amount of Administrative Expenses paid pursuant to Sections 11.1(a)(i)(A), 11.1(a)(ii)(A) and 11.1(a)(iii)(A) (including any excess applied in accordance with this proviso) on the three immediately preceding Payment Dates and during the related Collection Periods is less than the stated Administrative Expense Cap (without regard to any excess applied in accordance with this proviso) in the aggregate for such three preceding Payment Dates, then the amounts by which such aggregated Administrative Expense Caps exceed such aggregated Administrative Expenses may be applied to increase the Administrative Expense Cap with respect to the then-current Payment Date; and (2) in respect of the third Payment Date following the Closing Date, such excess amount shall be calculated based on the Payment Dates preceding such Payment Date.
 
 
- 4 -

 
 
"Administrative Expenses":  The fees, expenses (including indemnities) and other amounts due or accrued with respect to any Payment Date (including, with respect to any Payment Date, any such amounts that were due and not paid on any prior Payment Date) and payable in the following order by the Issuer or the Co-Issuer:  first, to the Trustee pursuant to Section 6.7 and the other provisions of this Indenture, second, to the Bank in each of its capacities under the Transaction Documents, including but not limited to, being the Collateral Administrator pursuant to the Collateral Administration Agreement and the Securities Intermediary pursuant to the Securities Account Control Agreement, third, on a pro rata basis, the following amounts (excluding indemnities) to the following parties: (i) the Independent certified public accountants, agents (other than the Portfolio Manager and the Designated Successor Manager) and counsel of the Issuer or the Co-Issuer for fees and expenses; (ii) the Rating Agencies for fees and expenses (including any annual fee, amendment fees and surveillance fees) in connection with any rating of the Notes or in connection with the rating of (or provision of credit estimates in respect of) any Collateral Obligations; (iii) the Portfolio Manager under this Indenture and the Portfolio Management Agreement, including without limitation reasonable expenses of the Portfolio Manager (including fees for its accountants, agents, third party administrator, and outside counsel) incurred in connection with the purchase or sale of any Collateral Obligations, any other expenses incurred in connection with the Collateral Obligations (including expenses associated with pricing of the portfolio) and amounts payable pursuant to the Portfolio Management Agreement, including, without limitation, Sections 8, 10 and 23 thereof, but excluding the Management Fee; (iv) the Administrator pursuant to the Administration Agreement; and (v) any other Person in respect of any other fees or expenses permitted under this Indenture and the documents delivered pursuant to or in connection with this Indenture (including any expenses, Taxes and governmental fees related to any Blocker Subsidiary or any expenses related to achieving FATCA Compliance or otherwise complying with the tax laws, 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) and the Notes, including but not limited to, amounts owed to the Co-Issuer pursuant to Section 7.1 and any amounts due in respect of the listing of the Notes on any stock exchange or trading system, and fourth, on a pro rata basis, indemnities payable to any Person pursuant to any Transaction Document; provided that (x) amounts due in respect of actions taken on or before the Closing Date shall not be payable as Administrative Expenses, but shall be payable only from the Closing Expense Account pursuant to Section 10.3(d) and (y) for the avoidance of doubt, amounts that are expressly payable to any Person under the Priority of Payments in respect of an amount that is stated to be payable as an amount other than as Administrative Expenses (including, without limitation, interest, distributions and principal in respect of the Notes) shall not constitute Administrative Expenses.
 
"Administrator":  Appleby Trust (Cayman) Ltd. and any successor thereto.
 
"Affected Bank":  A "bank" for purposes of Section 881 of the Code or any entity affiliated with such a bank that is neither (x) a U.S. Person nor (y) entitled to the benefits of an income tax treaty with the United States under which withholding taxes on interest payments made by obligors resident in the United States to such bank are reduced to 0%.
 
"Affected Class": Any Class of Notes that, as a result of the occurrence of a Tax Event described in the definition of "Tax Redemption", has not received 100% of the aggregate amount of principal and interest that would otherwise be due and payable to such Class on any Payment Date.
 
"Affiliate":  With respect to a Person, (i) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (ii) any other Person who is a director, Officer, employee or general partner (a) of such Person, (b) of any subsidiary or parent company of such Person or (c) of any Person described in clause (i) above; provided that none of the Administrator or any special purpose entity for which the Administrator acts as administrator shall be deemed to be an Affiliate of the Issuer or Co-Issuer solely because such Person or its Affiliates serves as administrator for the Issuer or 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 such Persons or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
 
 
- 5 -

 
 
"Agent Members":  Members of, or participants in, DTC, Euroclear or Clearstream.
 
"Aggregate Coupon":  As of any Measurement Date, the sum of the products obtained by multiplying, in the case of each Fixed Rate Obligation, (i) the stated coupon on such Collateral Obligation expressed as a percentage and (ii) the Principal Balance (including for this purpose any capitalized interest) of such Collateral Obligation (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest, and the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation).
 
"Aggregate Excess Funded Spread":  As of any Measurement Date, the amount obtained by multiplying: (a) the amount equal to LIBOR applicable to the Notes during the Interest Accrual Period in which such Measurement Date occurs; by (b) the amount (not less than zero) equal to (i) the Aggregate Principal Balance (including for this purpose any capitalized interest) of the Collateral Obligations as of such Measurement Date (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest) minus (ii) the Reinvestment Target Par Balance.
 
"Aggregate Funded Spread":  As of any Measurement Date, the sum of: (a) in the case of each Floating Rate Obligation that bears interest at a spread over a London interbank offered rate based index, (i) the stated interest rate spread (excluding any non-cash interest and the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation) on such Collateral Obligation above such index multiplied by (ii) the Principal Balance (including for this purpose any capitalized interest) of such Collateral Obligation (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest, and the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation), and (b) in the case of each Floating Rate Obligation that bears interest at a spread over an index other than a London interbank offered rate based index, (i) the excess of the sum of such spread (excluding any non-cash interest and the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation) and such index over LIBOR as of the immediately preceding Interest Determination Date (which spread or excess may be expressed as a negative percentage) multiplied by (ii) the Principal Balance (including for this purpose any capitalized interest) of each such Collateral Obligation (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest, and the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation); provided that for purposes of this definition, the interest rate spread with respect to any Floating Rate Obligation that has a floor based on the London interbank offered rate will be deemed to be the stated interest rate spread plus, if positive, (x) the value of such floor minus (y) LIBOR as of the immediately preceding Interest Determination Date.
 
"Aggregate Outstanding Amount":  With respect to any of the Notes as of any date, the aggregate unpaid principal amount of such Notes Outstanding (including any Note Deferred Interest previously added to the principal amount of any Class of Notes that remains unpaid) on such date.
 
 
- 6 -

 
 
"Aggregate Principal Balance":  When used with respect to all or a portion of the Collateral Obligations or the Assets, the sum of the Principal Balances of all or of such portion of the Collateral Obligations or Assets, respectively.
 
"Aggregate Unfunded Spread": As of any Measurement Date, the sum of the products obtained by multiplying (i) for each Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation (other than Defaulted Obligations), the related commitment fee then in effect as of such date and (ii) the undrawn commitments of each such Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation as of such date.
 
"Applicable Advance Rate":  For each Collateral Obligation and for the applicable number of Business Days between the certification date for a sale or participation required by Section 9.4 and the expected date of such sale or participation, the percentage specified below:
 
   
Same
Day
   
1-2
Days
   
3-5
 Days
   
6-15
 Days
 
Senior Secured Loans with a Market Value of:
                       
90% or more
    100 %     93 %     92 %     88 %
below 90%
    100 %     80 %     73 %     60 %
Other Collateral Obligations with a Moody's Rating of at least "B3" and a Market Value of 90% or more
    100 %     89 %     85 %     75 %
All other Collateral Obligations
    100 %     75 %     65 %     45 %

 
"Applicable Issuer or Applicable Issuers":  With respect to the Secured Notes other than the Class E Notes and the Class F Notes, the Co-Issuers; with respect to the Class E Notes, the Class F Notes and the Subordinated Notes, the Issuer only; and with respect to any additional notes issued in accordance with Sections 2.13 and 3.2, the Issuer and, if such notes are co-issued, the Co-Issuer.
 
"Approved Index List":  The nationally recognized indices specified in Schedule 7 hereto as amended from time to time by the Portfolio Manager (without the consent of any Noteholder) to add or replace with other nationally recognized indices with prior notice of any amendment to Moody's and S&P in respect of such amendment and a copy of any such amended Approved Index List to the Collateral Administrator (it being understood that Article 8 shall not apply to any such amendment).
 
"Asset-backed Commercial Paper":  Commercial paper or other short-term obligations of a program that primarily issues externally rated commercial paper backed by assets or exposures held in a bankruptcy-remote, special purpose entity.
 
"Assets":  The meaning assigned in the Granting Clauses hereof.
 
 
- 7 -

 
 
"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 0.20% per annum; provided that the Assumed Reinvestment Rate shall not be less than 0.00%.
 
"Authenticating Agent":  With respect to the Notes or a Class of the Notes, the Person designated by the Trustee to authenticate such Notes on behalf of the Trustee pursuant to Section 6.14 hereof.
 
"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 Portfolio Manager, any Officer, employee, member or agent of the Portfolio Manager who is authorized to act for the Portfolio Manager in matters relating to, and binding upon, the Portfolio Manager with respect to the subject matter of the request, certificate or order in question, as certified to the Issuer and the Trustee in writing.  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 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.
 
"Available Funds":  With respect to any Payment Date, the amount of any positive balance (of Cash and Eligible Investments) in the Collection Account as of the Determination Date relating to such Payment Date and, with respect to any other date, such amount as of that date.
 
"Balance":  On any date, with respect to Cash or Eligible Investments in any account, the aggregate of the (i) current balance of Cash, demand deposits, time deposits, certificates of deposit and federal funds; (ii) principal amount of interest-bearing corporate and government securities, money market accounts and repurchase obligations; and (iii) purchase price (but not greater than the face amount) of non-interest-bearing government and corporate securities and commercial paper.
 
"Bank":  U.S. Bank National Association, in its individual capacity and not as Trustee, and any successor thereto.
 
"Bankruptcy Filing":  (i) The institution of any proceeding to have the Issuer, Co-Issuer or any Blocker Subsidiary, as the case may be, adjudicated as bankrupt or insolvent or (ii) the filing of any petition seeking relief, reorganization, arrangement, adjustment or composition of or in respect of the Issuer, Co-Issuer or any Blocker Subsidiary, as the case may be, under applicable bankruptcy law or other applicable law.
 
 
- 8 -

 
 
"Bankruptcy Law":  The federal Bankruptcy Code, Title 11 of the United States Code, Part V of the Companies Law of the Cayman Islands and the Companies Winding Up Rules of the Cayman Islands, each as amended from time to time.
 
"Benefit Plan Investor":  An employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to Part 4, Subtitle B of Title I of ERISA, a plan (as defined in Section 4975(e)(1) of the Code) to which Section 4975 of the Code applies or an entity whose underlying assets include "plan assets" by reason of such an employee benefit plan's or a plan's investment in such entity.
 
"Blocker Subsidiary":  An entity treated as a corporation for U.S. federal income tax purposes, 100% of the equity interests in which are owned directly or indirectly by the Issuer.
 
"Board of Directors":  With respect to the Issuer, the directors of the Issuer duly appointed by the shareholders of the Issuer or the Board of Directors of the Issuer pursuant to the Memorandum and Articles in accordance with the law of Cayman Islands.
 
"Board of Members":  With respect to the Co-Issuer, the members 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 and, with respect to the Co-Issuer, a resolution of the Board of Members of the Co-Issuer pursuant to the Co-Issuer's operative agreement.
 
"Bond":  A debt security (that is not a Loan) that is issued by a corporation, limited liability company, partnership or trust.
 
"Bridge Loan": Any loan or other obligation that (x) is incurred in connection with a merger, acquisition, consolidation, or sale of all or substantially all of the assets of a Person or similar transaction and (y) by its terms, is required to be repaid within one year of the incurrence thereof with proceeds from additional borrowings or other refinancings (it being understood that any such loan or debt security that has a nominal maturity date of one year or less from the incurrence thereof but has a term-out or other provision whereby (automatically or at the sole option of the obligor thereof) the maturity of the indebtedness thereunder may be extended to a later date is not a Bridge Loan).
 
"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 Security) with a Moody's Rating of "Caa1" or lower.
 
"Caa Excess":  The amount equal to the excess of the Principal Balance of all Caa Collateral Obligations over an amount equal to 7.5% of the Collateral Principal Amount as of the current Determination Date; provided that, in determining which of the Caa Collateral Obligations (or portions thereof) shall be included in the Caa Excess, the Caa Collateral Obligations (or portions thereof) with the lowest Market Value (assuming that such Market Value is expressed as a percentage of the Principal Balance of such Collateral Obligations as of such Determination Date) shall be deemed to constitute such Caa Excess.
 
 
- 9 -

 
 
"Calculation Agent":  The meaning specified in Section 7.16.
 
"Cash":  Such funds denominated in currency of the United States of America as at the time shall be legal tender for payment of all public and private debts, including funds standing to the credit of an Account.
 
"CCC Collateral Obligation":  A Collateral Obligation (other than a Defaulted Obligation or a Deferring Security) with an S&P Rating of "CCC+" or lower.
 
"CCC Excess":  The amount equal to the excess of the Principal Balance of all CCC Collateral Obligations over an amount equal to 7.5% of the Collateral Principal Amount as of the current Determination Date; provided that, in determining which of the CCC Collateral Obligations (or portions thereof) shall be included in the CCC Excess, the CCC Collateral Obligations (or portions thereof) with the lowest Market Value (assuming that such Market Value is expressed as a percentage of the Principal Balance of such Collateral Obligations as of such Determination Date) shall be deemed to constitute such CCC Excess.
 
"Certificate of Authentication":  The meaning specified in Section 2.1.
 
"Certificated Accredited Investor Note":  The meaning specified in Section 2.2(b)(ii).
 
"Certificated Note":  A Note issued in the form of a definitive, fully registered note without coupons substantially in the applicable form attached as Exhibit A3, A4 or A5 hereto, which shall be registered in the name of the owner thereof, duly executed by the Issuer and authenticated by the Trustee as herein provided.
 
"Certificated Secured Note":  A Note issued in the form of a definitive, fully registered note without coupons substantially in the form attached as Exhibit A3 hereto which shall be registered in the name of the owner thereof, duly executed by the Issuer or the Co-Issuers and authenticated by the Trustee as herein provided.
 
"Certificated Subordinated Note":  The meaning specified in Section 2.2(b)(ii).
 
"Certificated Security":  The meaning specified in Section 8-102(a)(4) of the UCC.
 
"Class":  In the case of (a) the Secured Notes, all of the Secured Notes having the same Interest Rate, Stated Maturity and designation, (b) the Subordinated Notes, all of the Subordinated Notes, and (c) the Reinvesting Holder Notes, all of the Reinvesting Holder Notes.  For purpose of exercising any rights to consent, give direction or otherwise vote, the Subordinated Notes and the Reinvesting Holder Notes will be treated as a single Class and the Reinvesting Holder Notes will be deemed to have a principal balance of zero.
 
"Class A/B Coverage Tests":  The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class A Notes and the Class B Notes.
 
 
- 10 -

 
 
"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 B Notes":  The Class B Senior Secured Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
"Class Break-even Default Rate":  With respect to any Class or Classes of Notes, the maximum percentage of defaults, at any time, that the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, determined through application of the applicable S&P CDO Monitor chosen by the Portfolio Manager in accordance with the definition of "S&P CDO Monitor" that is applicable to the portfolio of Collateral Obligations, which, after giving effect to S&P's assumptions on recoveries, defaults and timing and to the Priority of Payments, will result in sufficient funds remaining for the payment of such Class or Classes of Notes in full.  After the Effective Date, S&P will provide the Portfolio Manager with the Class Break-even Default Rates for each S&P CDO Monitor based upon the Weighted Average Floating Spread and the Weighted Average S&P Recovery Rate to be associated with such S&P CDO Monitor as selected by the Portfolio Manager from Section 2 of Schedule 6 or any other Weighted Average Floating Spread and Weighted Average S&P Recovery Rate selected by the Portfolio Manager from time to time.
 
"Class C Coverage Tests":  The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class C Notes.
 
"Class C Notes":  The Class C Senior Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
"Class D Coverage Tests": The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class D Notes.
 
"Class D Notes":  The Class D Senior Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
"Class Default Differential":  With respect to any Class of Notes, at any time, the rate calculated by subtracting the Class Scenario Default Rate at such time for such Class of Notes from the Class Break-even Default Rate for such Class of Notes at such time.
 
"Class E Coverage Tests": The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class E Notes.
 
"Class E Notes": The Class E Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
"Class F Coverage Tests": The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied with respect to the Class F Notes.
 
"Class F Notes": The Class F Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
 
- 11 -

 
 
"Class Scenario Default Rate":  With respect to any Class of Notes, at any time, an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with S&P's Initial Rating of such Class of Notes, determined by application by the Portfolio Manager and the Collateral Administrator of the S&P CDO Monitor at such time.
 
"Class X Notes":  The Class X Senior Secured Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
"Class X Principal Amortization Amount":  For each Payment Date beginning with the January 2014 Payment Date and ending with (and including) the April 2016 Payment Date, U.S.$380,000.
 
"Clean-Up Call Redemption":  The meaning specified in Section 9.7 hereof.
 
"Clean-Up Call Redemption Price": The meaning specified in Section 9.7 hereof.
 
"Clearing Agency":  An organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act.
 
"Clearing Corporation":  (i) Clearstream, (ii) DTC, (iii) Euroclear and (iv) any entity included within the meaning of "clearing corporation" under Section 8-102(a)(5) of the UCC.
 
"Clearing Corporation Security":  Securities which are in the custody of or maintained on the books of a Clearing Corporation or a nominee subject to the control of a Clearing Corporation and, if they are Certificated Securities in registered form, properly endorsed to or registered in the name of the Clearing Corporation or such nominee.
 
"Clearstream":  Clearstream Banking, société anonyme, a corporation organized under the laws of the Duchy of Luxembourg (formerly known as Cedelbank, société anonyme).
 
"CLO Information Service":  Initially, Intex Solutions, Inc., and thereafter any third-party vendor that compiles and provides access to information regarding CLO transactions and is selected by the Portfolio Manager to receive copies of the Monthly Report and the Distribution Report.
 
"Closing Date":  April 30, 2013.
 
"Closing Expense Account":  The trust account established pursuant to Section 10.3(d).
 
"Code":  The United States Internal Revenue Code of 1986, as amended from time to time.
 
"Co-Issuer":  The Person named as such on the first page of this Indenture, 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.
 
 
- 12 -

 
 
"Collateral Administration Agreement":  An agreement dated as of the Closing Date relating to the administration of the Assets among the Issuer, the Portfolio Manager and the Collateral Administrator, as amended from time to time.
 
"Collateral Administrator":  U.S. Bank National Association, in its capacity as collateral administrator under the Collateral Administration Agreement, and any successor thereto.
 
"Collateral Interest Amount":  As of any date of determination, without duplication, the aggregate amount of Interest Proceeds that has been received or that is expected to be received (other than Interest Proceeds expected to be received from Defaulted Obligations, Deferrable Securities and Partial Deferrable Securities, but including (x) Interest Proceeds actually received from Defaulted Obligations, Deferrable Securities and Partial Deferrable Securities and (y) Interest Proceeds expected to be received of the type described in clause (i) of the definition of "Partial Deferrable Security"), in each case during the Collection Period in which such date of determination occurs (or after such Collection Period but on or prior to the related Payment Date if such Interest Proceeds would be treated as Interest Proceeds with respect to such Collection Period).
 
"Collateral Obligation":  A Senior Secured Loan, Second Lien Loan, Senior Secured Bond (including, but not limited to, interests in bank loans acquired by way of a purchase or assignment) or a Participation Interest in a Senior Secured Loan or a Second Lien Loan, or a Letter of Credit Reimbursement Obligation, in each case pledged by the Issuer to the Trustee that as of the date of acquisition by the Issuer:
 
 
(i)
is U.S. Dollar denominated and is neither convertible by the issuer thereof into, nor payable in, any other currency;
 
 
(ii)
is not a Defaulted Obligation or a Credit Risk Obligation;
 
 
(iii)
is not a lease (including a finance lease);
 
 
(iv)
is not a Deferrable Security, a Deferring Security, an Interest Only Security, a Step-Up Obligation or a Step-Down Obligation;
 
 
(v)
if a Partial Deferrable Security, is not currently in default with respect to the portion of the interest due thereon to be paid in Cash on each payment date with respect thereto;
 
 
(vi)
provides (in the case of a Delayed Drawdown Collateral Obligation, a Revolving Collateral Obligation or a Letter of Credit Reimbursement Obligation, with respect to amounts drawn thereunder) for a fixed amount of principal payable in Cash on scheduled payment dates and/or at maturity and does not by its terms provide for earlier amortization or prepayment at a price of less than par;
 
 
(vii)
does not constitute Margin Stock;
 
 
- 13 -

 
 
 
(viii)
is an asset with respect to which the Issuer will receive payments due under the terms of such asset and proceeds from disposing of such asset free and clear of withholding tax, other than (A) withholding tax as to which the obligor or issuer must make additional payments so that the net amount received by the Issuer after satisfaction of such tax is the amount due to the Issuer before the imposition of any withholding tax, (B) withholding tax on (x) fees received with respect to a Letter of Credit Reimbursement Obligation, late payment fees, prepayment fees or other similar fees, (y) amendment, waiver, consent and extension fees and (z) commitment fees and other similar fees in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations and (C) withholding taxes imposed pursuant to Sections 1471, 1472, 1473 or 1474 of the Code, or any regulations or other authoritative guidance promulgated or agreements entered in respect thereto;
 
 
(ix)
has a Moody's Rating and an S&P Rating;
 
 
(x)
is not a debt obligation whose repayment is subject to substantial non-credit related risk as determined by the Portfolio Manager (in its sole discretion);
 
 
(xi)
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 (other than customary advances made to protect or preserve rights against the borrower or the obligor thereof, or to indemnify an agent or representative for lenders pursuant to the Underlying Instrument);
 
 
(xii)
does not have an "f", "r", "p", "pi", "q", "t" or "sf" subscript assigned by S&P;
 
 
(xiii)
is not a Related Obligation, a Zero Coupon Bond, a Bridge Loan, a Structured Finance Obligation or a Repack Obligation;
 
 
(xiv)
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;
 
 
(xv)
is not an Equity Security or, by its terms, convertible into or exchangeable for an Equity Security at any time over its life;
 
 
(xvi)
is not the subject of an Offer other than (A) a Permitted Offer or (B) an exchange offer in which a security that is not registered under the Securities Act is exchanged for a security that has substantially identical terms (except for transfer restrictions) but is registered under the Securities Act or a security or other Collateral Obligation that would otherwise qualify for purchase under the Investment Criteria;
 
 
(xvii)
does not have an S&P Rating that is below "CCC-" or a Moody's Default Probability Rating that is below "Caa3";
 
 
- 14 -

 
 
 
(xviii)
does not mature after the Stated Maturity of the Notes (other than the Class X Notes);
 
 
(xix)
if it accrues interest at a floating rate, it accrues interest at a floating rate determined by reference to (a) the Dollar prime rate, federal funds rate or LIBOR or (b) a similar interbank offered rate, commercial deposit rate or any other index in respect of which S&P has been notified;
 
 
(xx)
is Registered;
 
 
(xxi)
is not a Real Estate Loan;
 
 
(xxii)
is not a Synthetic Security;
 
 
(xxiii)
does not pay interest less frequently than semi-annually;
 
 
(xxiv)
is not an interest in a grantor trust;
 
 
(xxv)
if it is a Letter of Credit Reimbursement Obligation, payments in respect of such obligation or security will be subject to withholding by the agent bank in respect of fee income, unless (a) the Issuer has received an opinion of nationally recognized external legal counsel to the effect that such withholding should or will not be required or (b) the Issuer deposits into the LC Reserve Account an amount equal to 30% (or such other percentage equal to the withholding rate then in effect) of all of the fees received in respect of such Letter of Credit Reimbursement Obligation;
 
 
(xxvi)
unless it is a Letter of Credit Reimbursement Obligation, does not include or support a letter of credit;
 
 
(xxvii)
is issued by an obligor that is (x) Domiciled in the United States, Canada, a Group I Country, a Group II Country, a Group III Country or a Tax Jurisdiction and (y) not Domiciled in Greece, Ireland, Italy, Portugal or Spain;
 
 
(xxviii)
is not issued by a sovereign, or by a corporate issuer located in a country, which sovereign or country on the date on which the obligation is acquired by the Issuer 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;
 
 
- 15 -

 
 
 
(xxix)
either (A) is not treated as indebtedness for U.S. federal income tax purposes and is issued by an entity (x) that is not a Blocker Subsidiary and that is treated for U.S. federal income tax purposes as a corporation the equity interests in which are not treated as "United States real property interests" for U.S. federal income tax purposes, it being understood that stock will not be treated as a United States real property interest if the class of such stock is regularly traded on an established securities market and the Issuer holds no more than 5% of such class at any time, all within the meaning of Section 897(c)(3) of the Code, (y) that is treated for U.S. federal income tax purposes as a partnership, grantor trust, or disregarded entity for U.S. federal income tax purposes that is not engaged in a U.S. trade or business for U.S. federal income tax purposes and does not own any "United States real property interests" within the meaning of Section 897(c)(1) of the Code, or (z) that is treated for U.S. federal income tax purposes as a grantor trust all of the assets of which are treated as debt instruments that are Registered for U.S. federal income tax purposes, (B) is treated as indebtedness for U.S. federal income tax purposes and is not a United States real property interest as defined under Section 897 of the Code, or (C) the Issuer has received an opinion from a nationally recognized U.S. tax counsel experienced in such matters, to the effect that the acquisition, ownership or disposition of such obligation or security will not cause the Issuer to be treated as engaged in a trade or business within the United States for U.S. federal income tax purposes or otherwise subject the Issuer to U.S. federal income tax on a net income tax basis;
 
 
(xxx)
is not an obligation that is subject to a Securities Lending Agreement;
 
 
(xxxi)
is not (i) a Subordinated Loan (other than a First Lien Last Out Loan), (ii) a mezzanine loan or debt security or (iii) an unsecured loan or debt security;
 
 
(xxxii)
is not issued pursuant to Underlying Instruments governing the issuance of indebtedness having an aggregate issuance amount (whether drawn or undrawn) of less than (i) in the case of an obligor that is Domiciled in the United States or a Tax Jurisdiction, $150,000,000, and (ii) in the case of an obligor that is Domiciled outside of the United States (other than a Tax Jurisdiction), $200,000,000; and
 
 
(xxxiii)
is purchased at a price at least equal to 65% of its principal balance.
 
"Collateral Principal Amount":  As of any date of determination, the sum of (a) the Aggregate Principal Balance of the Collateral Obligations (other than Defaulted Obligations), plus (b) without duplication, the amounts on deposit in the Collection Account, the Reinvestment Amount Account and the Ramp-Up Account (including Eligible Investments therein) representing Principal Proceeds.
 
"Collateral Quality Test":  A test satisfied on any date of determination on and after the Effective Date and during the Reinvestment Period (and in connection with the acquisition of Substitute Obligations, after the Reinvestment Period) if, in the aggregate, the Collateral Obligations owned (or in relation to a proposed purchase of a Collateral Obligation, proposed to be owned) by the Issuer satisfy each of the tests set forth below (or, after the Effective Date, if a test is not satisfied on such date of determination, the degree of compliance with such test is maintained or improved after giving effect to any purchase or sale effected on such date of determination), calculated in each case as required by Section 1.2 herein:
 
 
(i)
the Minimum Floating Spread Test;
 
 
(ii)
the Minimum Weighted Average Coupon Test;
 
 
(iii)
the Maximum Moody's Rating Factor Test;
 
 
- 16 -

 
 
 
(iv)
the Moody's Diversity Test;
 
 
(v)
the S&P CDO Monitor Test;
 
 
(vi)
the Minimum Weighted Average Moody's Recovery Rate Test;
 
 
(vii)
the Minimum Weighted Average S&P Recovery Rate Test; and
 
 
(viii)
the Weighted Average Life Test.
 
"Collection Account":  The trust account established pursuant to Section 10.2, which consists of the Principal Collection Subaccount and the Interest Collection Subaccount.
 
"Collection Period":  (i) With respect to the first Payment Date, the period commencing on the Closing Date and ending at the close of business on the 8th Business Day prior to the first Payment Date; and (ii) with respect to any other Payment Date, the period commencing on the day immediately following the prior Collection Period and ending (a) in the case of the final Collection Period preceding the latest Stated Maturity of any Class of Notes, on the day preceding such Stated Maturity, (b) in the case of the final Collection Period preceding an Optional Redemption, Clean-Up Call Redemption or Tax Redemption in whole of the Notes, on the day preceding the Redemption Date and (c) in any other case, at the close of business on the 8th Business Day prior to such Payment Date.
 
"Concentration Limitations":  Limitations satisfied on any date of determination on or after the Effective Date and during the Reinvestment Period (and, in connection with the acquisition of Substitute Obligations, after the Reinvestment Period) if, in the aggregate, the Collateral Obligations owned (or in relation to a proposed purchase or sale of a Collateral Obligation, proposed to be owned) by the Issuer comply with all of the requirements set forth below (or in relation to a proposed purchase or sale after the Effective Date, if not in compliance, the relevant requirements must be maintained or improved after giving effect to the purchase or sale), calculated in each case as required by Section 1.2 herein:
 
 
(i)
not less than 95.0% of the Collateral Principal Amount may consist of Senior Secured Loans, Cash and Eligible Investments;
 
 
(ii)
not more than 5.0% of the Collateral Principal Amount may consist of Senior Secured Bonds;
 
 
(iii)
not more than 2.5% of the Collateral Principal Amount may consist of Second Lien Loans;
 
 
(iv)
not more than 5.0% of the Collateral Principal Amount may consist, in the aggregate, of Second Lien Loans and Senior Secured Bonds and not more than 1.0% of the Collateral Principal Amount may consist of any single Collateral Obligation (including portions of a Collateral Obligation purchased on different dates) that is not a Senior Secured Loan;
 
 
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(v)
not more than 1.75% (or 1.0% in the case of obligations that are not Senior Secured Loans) of the Collateral Principal Amount may consist of obligations issued by a single obligor and its Affiliates, except that, without duplication, obligations (other than DIP Collateral Obligations, Second Lien Loans and Senior Secured Bonds) issued by up to five obligors and their respective Affiliates may each constitute up to 2.5% of the Collateral Principal Amount.
 
 
(vi)
not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations with a Moody's Default Probability Rating of "Caa1" or below;
 
 
(vii)
not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations with an S&P Rating of "CCC+" or below;
 
 
(viii)
not more than 5.0% of the Collateral Principal Amount may consist of Collateral Obligations that pay interest less frequently than quarterly;
 
 
(ix)
not more than 5.0% of the Collateral Principal Amount may consist of Fixed Rate Obligations;
 
 
(x)
not more than 2.5% of the Collateral Principal Amount may consist of Current Pay Obligations;
 
 
(xi)
not more than 5.0% of the Collateral Principal Amount may consist of DIP Collateral Obligations;
 
 
(xii)
not more than 10.0% of the Collateral Principal Amount may consist, in the aggregate, of unfunded commitments under Delayed Drawdown Collateral Obligations and unfunded and funded commitments under Revolving Collateral Obligations;
 
 
(xiii)
not more than 10.0% of the Collateral Principal Amount may consist of Participation Interests;
 
 
(xiv)
not more than 5.0% of the Collateral Principal Amount may consist of Partial Deferrable Securities; and not more than 1.0% of the Collateral Principal Amount may consist of any single Partial Deferrable Security;
 
 
(xv)
the Moody's Counterparty Criteria are met;
 
 
(xvi)
the Third Party Credit Exposure Limits may not be exceeded;
 
 
(xvii)
not more than 10.0% of the Collateral Principal Amount may have an S&P Rating derived from a Moody's Rating as set forth in clause (iii)(a) of the definition of the term "S&P Rating";
 
 
(xviii)
not more than 10.0% of the Collateral Principal Amount may consist of Collateral Obligations with a Moody's Rating derived from an S&P Rating as provided in clause (e)(i)(A) or (B) of the definition of the term "Moody's Derived Rating";
 
 
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(xix)
not more than 1.0% of the Collateral Principal Amount may consist of obligations issued by a single obligor that is Domiciled in the United Kingdom, a Group II Country or a Group III Country;
 
 
(xx)
(a) all of the Collateral Obligations must be issued by Non-Emerging Market Obligors; and (b) no more than the percentage listed below of the Collateral Principal Amount may be issued by obligors Domiciled in the country or countries set forth opposite such percentage:
 
% Limit
Country or Countries
10.0%
All countries (in the aggregate) other than the United States;
5.0%
any individual Group I Country other than Australia or New Zealand;
5.0%
all Group II Countries in the aggregate;
5.0%
all Group III Countries in the aggregate;
5.0%
all Tax Jurisdictions in the aggregate;
5.0%
any individual country other than the United States, Canada, any Group I Country, any Group II Country or any Group III Country; and
0.0%
Greece, Ireland, Italy, Portugal and Spain in the aggregate;

 
 
(xxi)
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 (x) the largest S&P Industry Classification may represent up to 15.0% of the Collateral Principal Amount and (y) the second, third and fourth largest S&P Industry Classifications may each represent up to 13.5% of the Collateral Principal Amount;
 
 
(xxii)
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 (x) the largest Moody's Industry Classification may represent up to 15.0% of the Collateral Principal Amount and (y) the second, third and fourth largest Moody's Industry Classifications may each represent up to 13.5% of the Collateral Principal Amount;
 
 
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(xxiii)
not more than 3.0% of the Collateral Principal Amount may consist of the LC Commitment Amount under Letter of Credit Reimbursement Obligations;
 
 
(xxiv)
not more than 50.0% of the Collateral Principal Amount may consist of Cov-Lite Loans;
 
 
(xxv)
not more than 5.0% of the Collateral Principal Amount may consist of Qualified Facility Loans; and not more than 1.0% of the Collateral Principal Amount may consist of any single Qualified Facility Loan; provided that all obligors in respect of Qualified Facility Loans must be Domiciled in the United States or a Tax Jurisdiction.
 
"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 Class F Notes so long as any Class F Notes are Outstanding; and then the Subordinated Notes so long as any 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 an affiliate of any such Person.  For this purpose, an "affiliate" of a person includes any person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the person.  "Control," with respect to a person other than an individual, means the power to exercise a controlling influence over the management or policies of such person.
 
"Corporate Trust Office":  The principal office of the Trustee at which it administers its trust activities, currently located at:  (a) for Note transfer purposes and presentment of the Notes for final payment thereon, 60 Livingston Avenue, St. Paul, MN, 55107, Attention: Corporate Trust Services – JMP Credit Advisors CLO II Ltd., email: [email protected]; and (b) for all other purposes, 190 South LaSalle Street, 8th Floor, Chicago, IL, 60603, Attention: Corporate Trust Services – JMP Credit Advisors CLO II Ltd., email: [email protected], facsimile number (312) 332-8030, or such other address as the Trustee may designate from time to time by notice to the Holders, the Portfolio Manager and the Issuer or the principal corporate trust office of any successor Trustee.
 
"Cov-Lite Loan": A Collateral Obligation that is not subject to financial covenants; provided that a Collateral Obligation shall not constitute a Cov-Lite Loan if (a) the Underlying Instruments require the obligor thereunder 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) the Underlying Instruments contain 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.
 
 
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"Coverage Tests":  The Overcollateralization Ratio Test and the Interest Coverage Test, each as applied to each specified Class of Secured Notes.  Neither (A) the aggregate outstanding amount of the Class X Notes nor (B) the amount of interest due and payable on the Class X Notes will be taken into account in determining any of the Overcollateralization Ratios or Interest Coverage Ratios; and, therefore, neither of such amounts will be taken into account in determining whether or not any of the Coverage Tests or the Interest Diversion Test are satisfied at any time. For the avoidance of doubt, the "aggregate outstanding amount of the Class X Notes" means, as of any date, the difference between (A) $3,800,000 minus (B) the aggregate amount of all or any portion of each Class X Principal Amortization Amount and (without duplication) each Unpaid Class X Principal Amortization Amount paid pursuant to the Priority of Payments on any Payment Date that occurred prior to such date.
 
"CRD":  The Capital Requirements Directive which is comprised of Directives 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions and Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions, as amended from time to time.
 
"Credit Improved Criteria": The criteria that will be met if (a) with respect to any Collateral Obligation, the change in price of such Collateral Obligation during the period from the date on which it was acquired by the Issuer to the date of determination by a percentage either is more positive, or less negative, as the case may be, than the percentage change in the average price of any index specified on the Approved Index List plus 0.25% over the same period or (b) with respect to a Fixed Rate Obligation only, there has been a decrease in the difference between its yield compared to the yield on the United States Treasury security of the same duration of more than 7.5% since the date of purchase.
 
"Credit Improved Obligation":  Any Collateral Obligation which, in the Portfolio Manager's judgment exercised in accordance with the Portfolio 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:  (a) such Collateral Obligation satisfies the Credit Improved Criteria, (b) such Collateral Obligation has been upgraded at least one rating sub-category by either Rating Agency or has been placed and remains on credit watch with positive implication by either Rating Agency, (c) the issuer of such Collateral Obligation has raised equity capital or other capital subordinated to the Collateral Obligation, (d) the issuer of such Collateral Obligation has, in the Portfolio Manager's reasonable commercial judgment, shown improved results or possesses less credit risk, or (e) such Collateral Obligation has a Market Value in excess of (i) par or (ii) the initial purchase price paid by the Issuer for such Collateral Obligation, in each case since such Collateral Obligation was acquired by the Issuer; provided, that during a Restricted Trading Period, in addition to the foregoing, a Collateral Obligation will qualify as a Credit Improved Obligation only if (i)(x) it has been upgraded by any Rating Agency at least one rating sub-category or has been placed and remains on a credit watch with positive implication by Moody's or S&P since it was acquired by the Issuer and (y) the Credit Improved Criteria are satisfied with respect to such Collateral Obligation or (ii) a Majority of the Controlling Class votes to treat such Collateral Obligation as a Credit Improved Obligation.
 
 
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"Credit Risk Criteria": The criteria that will be met if (a) with respect to any Collateral Obligation, the change in price of such Collateral Obligation during the period from the date on which it was acquired by the Issuer to the date of determination by a percentage either is more negative, or less positive, as the case may be, than the percentage change in the average price of any index specified on the Approved Index List less 0.25% over the same period, (b) with respect to a Fixed Rate Obligation only, there has been an increase in the difference between its yield compared to the yield on the United States Treasury security of the same duration of more than 7.5% since the date of purchase or (c) the Market Value of such Collateral Obligation has decreased by at least 2.5% of the price paid by the Issuer for such Collateral Obligation due to a deterioration in the related Obligor's financial ratios or financial results in accordance with the Underlying Instruments relating to such Collateral Obligation.
 
"Credit Risk Obligation":  Any Collateral Obligation that is not a Defaulted Obligation and that, in the Portfolio Manager's judgment exercised in accordance with the Portfolio Management Agreement, has a significant risk of declining in credit quality or price and, with the lapse of time, becoming a Defaulted Obligation, and is designated as a "Credit Risk Obligation" by the Portfolio Manager; provided that, during a Restricted Trading Period, a Collateral Obligation will qualify as a Credit Risk Obligation for purposes of sales of Collateral Obligations in addition to the foregoing, only if (i)(x) such Collateral Obligation has been downgraded by any Rating Agency at least one rating sub-category or has been placed and remains on a credit watch with negative implication by Moody's or S&P since it was acquired by the Issuer and (y) the Credit Risk Criteria are satisfied with respect to such Collateral Obligation or (ii) a Majority of the Controlling Class votes to treat such Collateral Obligation as a Credit Risk Obligation.
 
"Current Pay Obligation":  Any Collateral Obligation (other than a DIP Collateral Obligation) that would otherwise be treated as a Defaulted Obligation but as to which no payments are due and payable that are unpaid (disregarding any forbearance or grace period in excess of 90 days with respect to any payment that is unpaid but would be due and payable but for such forbearance or grace period and excluding any such principal that has become due and payable as a result of the acceleration of such Collateral Obligation) and with respect to which the Portfolio Manager has certified to the Trustee (with a copy to the Collateral Administrator) in writing that it believes, in its reasonable business judgment, that the issuer or obligor of such Collateral Obligation (a) will continue to make scheduled payments of interest (and/or fees, as applicable, in the case of a Delayed Drawdown Collateral Obligation Revolving Collateral Obligation or Letter of Credit Reimbursement Obligation) thereon and will pay the principal thereof by maturity or as otherwise contractually due, (b) if the issuer or obligor is subject to a bankruptcy proceeding, it has been the subject of an order of a bankruptcy court that permits it to make the scheduled payments on such Collateral Obligation and all payments authorized by the bankruptcy court have been paid in cash when due, (c) the Collateral Obligation has a Market Value of at least 80% of its par value and (d) if any Notes are then rated by Moody's (A) has a Moody's Rating of at least "Caa1" and a Market Value of at least 80% of its par value or (B) has a Moody's Rating of at least "Caa2" and a Market Value of at least 85% of its par value (Market Value being determined, solely for the purposes of clauses (c) and (d), without taking into consideration clause (iii)(y) of the definition of the term "Market Value").
 
 
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"Current Portfolio":  At any time, the portfolio of Collateral Obligations and Eligible Investments representing Principal Proceeds (determined in accordance with Section 1.2 to the extent applicable), then held by the Issuer.
 
"Custodial Account":  The custodial account established pursuant to Section 10.3(b).
 
"Custodian":  The meaning specified in the first sentence of Section 3.3(a) with respect to items of collateral referred to therein, and each entity with which an Account is maintained, as the context may require, each of which shall be a Securities Intermediary.
 
"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 as to which:
 
 
(a)
a default as to the payment of principal and/or interest has occurred and is continuing with respect to such Collateral Obligation, without regard to any grace period applicable thereto, or waiver or forbearance thereof, after the passage (in the case of a default that in the Portfolio Manager's judgment, as certified to the Trustee in writing, is not due to credit-related causes) of three Business Days but in no case beyond the passage of any grace period applicable thereto;
 
 
(b)
a default known to the Portfolio 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 applicable thereto, or waiver or forbearance thereof, after the passage (in the case of a default that in the Portfolio Manager's judgment, as certified to the Trustee in writing, is not due to credit-related causes) of three Business Days but in no case beyond the passage of any grace period applicable thereto; provided that (i) both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable Obligor or secured by the same collateral and the holders of such Collateral Obligation have accelerated the maturity of all or a portion of such Collateral Obligation and (ii) such Collateral Obligation shall constitute a Defaulted Obligation under this clause (b) only until such acceleration has been rescinded;
 
 
(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 within 60 days after being instituted or such issuer has filed for protection under Chapter 11 of the United States Bankruptcy Code;
 
 
(d)
such Collateral Obligation has an S&P Rating of "CC" or lower or "SD" or had such rating immediately before such rating was withdrawn or the Obligor on such Collateral Obligation has a "probability of default" rating assigned by Moody's of "D" or "LD";
 
 
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(e)
such Collateral Obligation is pari passu in right of payment as to the payment of principal and/or interest to another debt obligation of the same issuer which has an S&P Rating of "CC" or lower or "SD" or had such rating immediately before such rating was withdrawn or the Obligor on such Collateral Obligation has a "probability of default" rating assigned by Moody's of "D" or "LD"; provided that both the Collateral Obligation and such other debt obligation are full recourse obligations of the applicable issuer or secured by the same collateral;
 
 
(f)
a default with respect to which the Portfolio Manager has received notice or has knowledge that a default has occurred under the Underlying Instruments and any applicable grace period has expired and the holders of such Collateral Obligation have accelerated the repayment of the Collateral Obligation (but only until such acceleration has been rescinded) in the manner provided in the Underlying Instrument;
 
 
(g)
the Portfolio 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 for the applicable grace period, and continues to default, in any respect in the performance of any of its payment obligations under the Participation Interest; or
 
 
(i)
such Collateral Obligation is a Participation Interest in a loan that would, if such loan were a Collateral Obligation, constitute a "Defaulted Obligation" or with respect to which the Selling Institution has an S&P Rating of "CC" or lower or "SD" or had such rating before such rating was withdrawn;
 
provided that (x) a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to clauses (b) through (e) and (i) above if such Collateral Obligation (or, in the case of a Participation Interest other than a Letter of Credit Reimbursement Obligation, the underlying Senior Secured Loan or Second Lien Loan) is a Current Pay Obligation (provided that the Aggregate Principal Balance of Current Pay Obligations exceeding 7.5% of the Collateral Principal Amount will be treated as Defaulted Obligations) and (y) a Collateral Obligation shall not constitute a Defaulted Obligation pursuant to any of clauses (b), (c), (e) and (i) if such Collateral Obligation (or, in the case of a Participation Interest other than a Letter of Credit Reimbursement Obligation, the underlying Senior Secured Loan or Second Lien Loan) is a DIP Collateral Obligation (other than a DIP Collateral Obligation that has an S&P Rating of "CC" or lower or "SD").
 
Each obligation (other than Letter of Credit Reimbursement Obligations) received in connection with a Distressed Exchange that (a) would be a Collateral Obligation but for the fact that it is a Defaulted Obligation or (b) would satisfy the proviso in the definition of "Distressed Exchange" but for the fact that it exceeds the percentage limit therein, shall in each case be deemed to be a Defaulted Obligation, and each other obligation (including any Letter of Credit Reimbursement Obligation) received in connection with a Distressed Exchange (except as expressly provided below) shall be deemed to be an Equity Security.  For the avoidance of doubt, 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 satisfy the definition of "Collateral Obligation", in which case, notwithstanding anything herein to the contrary, such received securities or obligations shall be treated for all purposes as Collateral Obligations.
 
 
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"Deferrable Security":  A Collateral Obligation (excluding a Partial Deferrable Security) which by its terms permits the deferral of payment or capitalization of accrued, unpaid interest.
 
"Deferred Interest Notes":  The Notes specified as such in Section 2.3.
 
"Deferring Security":  A Deferrable Security that (x) is deferring the payment of interest due thereon and (y) 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.
 
"Delayed Drawdown Collateral Obligation":  A Collateral Obligation (other than a Revolving Collateral Obligation) that (a) requires the Issuer to make one or more future advances to the borrower under the Underlying Instruments relating thereto, (b) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates, and (c) does not permit the re-borrowing of any amount previously repaid by the borrower thereunder; but any such Collateral Obligation will be a Delayed Drawdown Collateral Obligation only until all commitments by the Issuer to make advances to the borrower expire or are terminated or are reduced to zero.
 
"Deliver or "Delivered" or "Delivery":  The taking of the following steps:
 
 
(i)
in the case of each Certificated Security (other than a Clearing Corporation Security), Instrument and Participation Interest in which the underlying loan is represented by an Instrument,
 
 
(a)
causing the delivery of such Certificated Security or Instrument to the Custodian by registering the same in the name of the Custodian or its affiliated nominee or by endorsing the same to the Custodian or in blank;
 
 
(b)
causing the Custodian to indicate continuously on its books and records that such Certificated Security or Instrument is credited to the applicable Account; and
 
 
(c)
causing the Custodian to maintain continuous possession of such Certificated Security or Instrument;
 
 
(ii)
in the case of each Uncertificated Security (other than a Clearing Corporation Security),
 
 
(a)
causing such Uncertificated Security to be continuously registered on the books of the issuer thereof in the name of the Custodian; and
 
 
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(b)
causing the Custodian to indicate continuously on its books and records that such Uncertificated Security is credited to the applicable Account;
 
 
(iii)
in the case of each Clearing Corporation Security,
 
 
(a)
causing the relevant Clearing Corporation to credit such Clearing Corporation Security to the securities account of the Custodian, and
 
 
(b)
causing the Custodian to indicate continuously on its books and records that such Clearing Corporation Security is credited to the applicable Account;
 
 
(iv)
in the case of each security issued or guaranteed by the United States of America or agency or instrumentality thereof and that is maintained in book-entry records of a Federal Reserve Bank ("FRB") (each such security, a "Government Security"),
 
 
(a)
causing the creation of a Security Entitlement to such Government Security by the credit of such Government Security to the securities account of the Custodian at such FRB, and
 
 
(b)
causing the Custodian to indicate continuously on its books and records that such Government Security is credited to the applicable Account;
 
 
(v)
in the case of each Security Entitlement not governed by clauses (i) through (iv) above,
 
 
(a)
causing a Securities Intermediary (x) to indicate on its books and records that the underlying Financial Asset has been credited to the Custodian's securities account, (y) to receive a Financial Asset from a Securities Intermediary or to acquire the underlying Financial Asset for a Securities Intermediary, and in either case, accepting it for credit to the Custodian's securities account or (z) to become obligated under other law, regulation or rule to credit the underlying Financial Asset to a Securities Intermediary's securities account,
 
 
(b)
causing such Securities Intermediary to make entries on its books and records continuously identifying such Security Entitlement as belonging to the Custodian and continuously indicating on its books and records that such Security Entitlement is credited to the Custodian's securities account, and
 
 
(c)
causing the Custodian to indicate continuously on its books and records that such Security Entitlement (or all rights and property of the Custodian representing such Security Entitlement) is credited to the applicable Account;
 
 
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(vi)
in the case of Cash or Money,
 
 
(a)
causing the delivery of such Cash or Money to the Custodian,
 
 
(b)
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, and
 
 
(c)
causing the Custodian to indicate continuously on its books and records that such Cash or Money is credited to the applicable Account; and
 
 
(vii)
in the case of each general intangible (including any Participation Interest in which neither the Participation Interest nor the underlying loan is represented by an Instrument),
 
 
(a)
causing the filing of a Financing Statement in the office of the Recorder of Deeds of the District of Columbia, Washington, DC, and
 
 
(b)
causing the registration of the security interests granted under this Indenture in the Register of Mortgages and Charges of the Issuer at the Issuer's registered office in the Cayman Islands.
 
In addition, the Portfolio Manager on behalf of the Issuer will obtain any and all consents required by the Underlying Instruments relating to any general intangibles for the transfer of ownership and/or pledge hereunder (except to the extent that the requirement for such consent is rendered ineffective under Section 9-406 of the UCC).
 
"Designated Class A Owner":  Prudential Investment Management, Inc., on its own behalf and on behalf of its Affiliates, that beneficially owns collectively not less than a Majority of the Class A Notes.
 
"Designated Class A Voting Condition":  The Designated Class A Owner is the Holder of at least a Majority of the Class A Notes.
 
"Designated Successor Management Agreement":  The agreement dated as of the Closing Date, between the Issuer and the Designated Successor Manager, as may be amended from time to time in accordance with the terms hereof and thereof.
 
"Designated Successor Management Fee":  The Designated Successor Senior Management Fee and the Designated Successor Subordinated Management Fee.
 
"Designated Successor Senior Management Fee":  The fee payable to the Designated Successor Manager in arrears on each Payment Date (prorated for the related Collection Period) pursuant to Section 2 of the Designated Successor Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.05% per annum (calculated on the basis of a 360-day year consisting of twelve 30-day months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date; provided that the Designated Successor Senior Management Fee payable on any Payment Date shall not include any such fee (or any portion thereof) the payment of which has been irrevocably waived by the Designated Successor Manager pursuant to Section 11.1(d) no later than the Determination Date immediately prior to such Payment Date.  Upon the Designated Successor Manager ceasing to be acting as such due to it becoming the Portfolio Manager, the Designated Successor Senior Management Fee shall then and thereafter cease to accrue and be payable (other than for already-accrued amounts) pursuant to the Designated Successor Management Agreement and hereunder and, in lieu thereof, the Senior Management Fee shall be increased by an equal amount and thereafter accrue and be payable to the Portfolio Manager as an additional amount of Senior Management Fee in accordance with the Portfolio Management Agreement and hereunder.  Upon the Designated Successor Manager ceasing to be acting as such due to its resignation, the termination of the Designated Successor Management Agreement or any other reason except in the case of the Designated Successor Manager becoming the Portfolio Manager, the Designated Successor Senior Management Fee shall then and thereafter cease to accrue and be payable (other than for already-accrued amounts) pursuant to the Designated Successor Management Agreement and hereunder.
 
 
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"Designated Successor Subordinated Management Fee":  The fee payable to the Designated Successor Manager in arrears on each Payment Date (prorated for the related Collection Period) pursuant to Section 2 of the Designated Successor Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.05% per annum (calculated on the basis of a 360-day year consisting of twelve 30-day months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date; provided that the Designated Successor Subordinated Management Fee payable on any Payment Date shall not include any such fee (or any portion thereof) the payment of which has been irrevocably waived by the Designated Successor Manager pursuant to Section 11.1(d) no later than the Determination Date immediately prior to such Payment Date.  Upon the Designated Successor Manager ceasing to be acting as such due to it becoming the Portfolio Manager, the Designated Successor Subordinated Management Fee shall then and thereafter cease to accrue and be payable (other than for already-accrued amounts) pursuant to the Designated Successor Management Agreement and hereunder and, in lieu thereof, the Subordinated Management Fee shall be increased by an equal amount and thereafter accrue and be payable to the Portfolio Manager as an additional amount of Subordinated Management Fee in accordance with the Portfolio Management Agreement and hereunder.  Upon the Designated Successor Manager ceasing to be acting as such due to its resignation, the termination of the Designated Successor Management Agreement or any other reason except in the case of the Designated Successor Manager becoming the Portfolio Manager, the Designated Successor Subordinated Management Fee shall then and thereafter cease to accrue and be payable (other than for already-accrued amounts) pursuant to the Designated Successor Management Agreement and hereunder.
 
"Designated Successor Manager":  Prudential Investment Management, Inc., a New Jersey corporation, until a successor Person shall have become the Designated Successor Manager pursuant to the provisions of the Designated Successor Management Agreement, and thereafter "Designated Successor Manager" shall mean such successor Person.
 
"Determination Date":  The last day of each Collection Period.
 
"DIP Collateral Obligation":  A loan made to a debtor-in-possession pursuant to Section 364 of the U.S. Bankruptcy Code having the priority allowed by either Section 364(c) or 364(d) of the U.S. Bankruptcy Code and fully secured by senior liens.
 
 
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"Discount Obligation":  Any Collateral Obligation which was purchased (as determined without averaging prices of purchases on different dates) for less than (a) 80.0% of its Principal Balance (or, in the case of a Revolving Collateral Obligation, 75.0% of its Principal Balance), or (b) if such Collateral Obligation has a Moody's Rating below "B3", 85.0% of its Principal Balance; provided that, in each case, such Collateral Obligation shall cease to be a Discount Obligation at such time as the Market Value (expressed as a percentage of the par amount of such Collateral Obligation) determined for such Collateral Obligation on each day during any period of 30 consecutive days since the acquisition by the Issuer of such Collateral Obligation, equals or exceeds 90.0% of its Principal Balance (or, in the case of a Revolving Collateral Obligation, 85.0% of its Principal Balance) as of the end of such 30 consecutive day period.
 
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 but was sold at a price below (i) 85%, in the case of a Collateral Obligation with a Moody's Rating lower than "B3" or (ii) 80% (or, in the case of a Revolving Collateral Obligation, 75%), in the case of a Collateral Obligation with a Moody's Rating "B3" or higher will not be considered a Discount Obligation, so long as the Portfolio Manager, using its commercially reasonable business judgment, believes that such purchased Collateral Obligation is of better credit quality than the previous, sold asset, at the time of its acquisition, immediately following the purchase of such Collateral Obligation, the Maximum Moody's Rating Factor Test is improved or at least remains unchanged after giving effect thereto and such purchased Collateral Obligation: (x) has an S&P Rating and a Moody's Rating no lower than the S&P Rating and the Moody's Rating, respectively, of the previously sold Collateral Obligation, (y) is purchased or committed to be purchased within ten Business Days of such sale and (z) 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 that this paragraph shall not apply to any such Collateral Obligation (or portions thereof) at any time on or after the acquisition by the Issuer of such Collateral Obligation if, as determined at the time of such acquisition, such application would result in more than 15% of the Collateral Principal Amount consisting of Collateral Obligations (or portions thereof) to which this paragraph applies.
 
"Distressed Exchange":  In connection with any Collateral Obligation, a distressed exchange or other debt restructuring has occurred, as reasonably determined by the Portfolio 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 Portfolio 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 (i) are not Letter of Credit Reimbursement Obligations and (ii) satisfy the definition of "Collateral Obligation" (provided that the Aggregate Principal Balance of all securities and obligations to which this proviso applies or has applied, measured cumulatively from the Closing Date onward, may not exceed 25% of the Target Initial Par Amount).
 
"Distribution Report":  The meaning specified in Section 10.6(b).
 
 
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"Diversity Score":  A single number that indicates collateral concentration in terms of both issuer and industry concentration, calculated as set forth in Schedule 4 hereto.
 
"Dollar, USD or U.S.$":  A dollar or other equivalent unit in such coin or currency of the United States of America as at the time shall be legal tender for all debts, public and private.
 
"Domicile" or "Domiciled":  With respect to any issuer of, or Obligor with respect to, a Collateral Obligation:
 
 
(a)
except as provided in clause (b) or (c) below, its country of organization;
 
 
(b)
if it is organized in a Tax Jurisdiction other than Ireland, each of such jurisdiction and the country in which, in the Portfolio Manager's good faith estimate, a substantial portion of its operations are located or from which a substantial portion of its revenue is derived, in each case directly or through subsidiaries (which shall be any jurisdiction and country known at the time of designation by the Portfolio Manager to be the source of the majority of revenues, if any, of such issuer or obligor); or
 
 
(c)
if it is organized in Ireland, its "Domicile" will be deemed to be the country in which, in the Portfolio Manager's good faith estimate, a substantial portion of its operations are located or from which a substantial portion of its revenue is derived, in each case directly or through subsidiaries (which shall be any jurisdiction and country known at the time of designation by the Portfolio Manager to be the source of the majority of revenues, if any, of such issuer or obligor).
 
"DTC:  The Depository Trust Company, its nominees, and their respective successors.
 
"Due Date":  Each date on which any payment is due on an Asset in accordance with its terms.
 
"Effective Date":  The earlier to occur of (i)  September 5, 2013 and (ii) the first date on which the Portfolio Manager certifies to the Trustee and the Collateral Administrator that the Target Initial Par Condition has been satisfied.
 
"Effective Date Accountants' Report":  The meaning assigned to such term in Section 7.18(d).
 
"Effective Date Issuer Certificate":  The meaning assigned to such term in Section 7.18(d).
 
"Effective Date Report":  The meaning assigned to such term in Section 7.18(d).
 
"Eligible Custodian": A custodian that satisfies, mutatis mutandis, the eligibility requirements set out in Section 6.8.
 
 
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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 better (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 "Aaa" (not on credit watch for possible downgrade) or (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) if such obligation or security has both a long-term and a short-term credit rating from S&P, such ratings are "A" and "A-1" or better (or, in the absence of a short-term credit rating, "A+" or better).
 
"Eligible Investments":  Any Dollar investment that, at the time it is Delivered (directly or through an intermediary or bailee), (x) matures not later than the earlier of (A) the date that is 60 days after the date of Delivery thereof and (B) the Business Day immediately preceding the Payment Date immediately following the date of Delivery thereof, and (y) is one or more of the following obligations or securities:
 
 
(i)
direct Registered obligations of, and Registered obligations the timely payment of principal and interest on which is fully and expressly guaranteed by, the United States of America or any agency or instrumentality of the United States of America, in each case with the Eligible Investment Required Ratings, the obligations of which are expressly backed by the full faith and credit of the United States of America;
 
 
(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 its Affiliates) or any state thereof and subject to supervision and examination by federal and/or state banking authorities, in each case payable within 183 days after issuance, so long as the commercial paper and/or the debt obligations of such depository institution or trust company (or, in the case of the principal depository institution in a holding company system, the commercial paper or debt obligations of such holding company) at the time of such investment or contractual commitment providing for such investment have the Eligible Investment Required Ratings;
 
 
(iii)
unleveraged repurchase obligations (if treated as debt by the Issuer and the counterparty) with respect to (a) any security described in clause (i) above or (b) any other Registered security issued or guaranteed by an agency or instrumentality of the United States of America, in either case entered into with a depository institution or trust company (acting as principal) described in clause (ii) above or entered into with an entity (acting as principal) with, or whose parent company has (in addition to a guarantee agreement with such entity, which guarantee agreement complies with S&P's then-current criteria with respect to guarantees), the Eligible Investment Required Ratings;
 
 
(iv)
Registered debt securities bearing interest or sold at a discount issued by a corporation formed under the laws of the United States of America or any State thereof that satisfies the Eligible Investment Required Ratings at the time of such investment or contractual commitment providing for such investment;
 
 
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(v)
commercial paper or other short-term obligations (other than Asset-backed Commercial Paper) with the Eligible Investment Required Ratings and that either bear interest or are sold at a discount from the face amount thereof and have a maturity of not more than 183 days from their date of issuance;
 
 
(vi)
a Reinvestment Agreement issued by any bank (if treated as a deposit by such bank), or a Reinvestment Agreement issued by any insurance company or other corporation or entity, in each case with the Eligible Investment Required Ratings; provided that (a) the Issuer has received written confirmation from each Rating Agency (with a copy to the Trustee) that such investment would not cause the rating of the Notes to be reduced or withdrawn or (b) such Reinvestment Agreement may be unwound at the option of the Issuer without penalty; and
 
 
(vii)
non-U.S. money market funds that have, at all times, credit ratings of "Aaa-mf" by Moody's and "AAAm" or "AAAm-G" by S&P, respectively;
 
provided that (1) Eligible Investments purchased with funds in the Collection Account shall be held until maturity except as otherwise specifically provided herein and shall include only such obligations or securities, other than those referred to in clause (vii) above, as mature (or are putable at par to the issuer thereof) no later than the Business Day prior to the next Payment Date unless such Eligible Investments are issued by the Trustee in its capacity as a banking institution, in which event such Eligible Investments may mature on such Payment Date; and (2) none of the foregoing obligations or securities shall constitute Eligible Investments if (a) such obligation or security has an "f", "r", "p", "pi", "q", "sf" or "t" subscript assigned by S&P, (b) all, or substantially all, of the remaining amounts payable thereunder consist of interest and not principal payments, (c) payments with respect to such obligations or securities or proceeds of disposition are subject to withholding taxes (other than withholding taxes that may be imposed on late payment fees, prepayment fees or other similar fees with respect to such obligation or for withholding taxes that may be imposed pursuant to FATCA) by any jurisdiction unless the payor is required to make "gross-up" payments that cover the full amount of any such withholding tax on an after-tax basis, (d) such obligation or security is secured by real property, (e) such obligation or security is purchased at a price greater than 100% of the principal or face amount thereof, (f) such obligation or security is subject of a tender offer, voluntary redemption, exchange offer, conversion or other similar action, unless full payment of principal is paid in cash upon the exercise of such action, (g) in the Portfolio Manager's judgment, such obligation or security is subject to material non-credit related risks, (h) such obligation is a Structured Finance Obligation or (i) such obligation or security is represented by a certificate of interest in a grantor trust; provided, further, that none of the foregoing obligations or securities will constitute Eligible Investments unless the obligation or security either (A) is not treated as indebtedness for U.S. federal income tax purposes and is issued by an entity (x) that is not a Blocker Subsidiary and that is treated for U.S. federal income tax purposes as a corporation the equity interests in which are not treated as "United States real property interests" for U.S. federal income tax purposes, it being understood that stock will not be treated as a United States real property interest if the class of such stock is regularly traded on an established securities market and the Issuer holds no more than 5% of such class at any time, all within the meaning of Section 897(c)(3) of the Code, (y) that is treated for U.S. federal income tax purposes as a partnership or disregarded entity for U.S. federal income tax purposes that is not engaged in a U.S. trade or business for U.S. federal income tax purposes and does not own any "United States real property interests" within the meaning of Section 897(c)(1) of the Code, or (z) that is treated for U.S. federal income tax purposes as a grantor trust all of the assets of which are treated as debt instruments that are Registered for U.S. federal income tax purposes, (B) is treated as indebtedness for U.S. federal income tax purposes and is not a United States real property interest as defined under Section 897 of the Code, or (C) the Issuer has received an opinion from a nationally recognized U.S. tax counsel experienced in such matters, to the effect that the acquisition, ownership or disposition of such obligation or security will not cause the Issuer to be treated as engaged in a trade or business within the United States for U.S. federal income tax purposes or otherwise subject the Issuer to U.S. federal income tax on a net income tax basis.  Eligible Investments may include, without limitation, those investments for which the Bank or an Affiliate of the Bank provides services and receives compensation.
 
 
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"Enforcement Event":  The meaning specified in Section 11.1(a)(iii).
 
"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 the requirements of a Collateral Obligation and is not an Eligible Investment.
 
"ERISA":  The United States Employee Retirement Income Security Act of 1974, as amended.
 
"ERISA Restricted Notes":  The Class E Notes, the Class F Notes, the Subordinated Notes and the Reinvesting Holder Notes.
 
"Euroclear":  Euroclear Bank S.A./N.V.
 
"Event of Default":  The meaning specified in Section 5.1.
 
"Excel Default Model Input File":  The meaning specified in Section 7.18(c).
 
"Excepted Property":  The meaning assigned in the Granting Clauses hereof.
 
"Excess CCC/Caa Adjustment Amount":  As of any date of determination, an amount not less than zero, equal to the greater of:  (a) the excess of (i) the Aggregate Principal Balance of all Collateral Obligations (or portions thereof) included in the CCC Excess, over (ii) the sum of the Market Values of all Collateral Obligations  (or portions thereof) included in the CCC Excess; and (b) the excess of (i) the Aggregate Principal Balance of all Collateral Obligations (or portions thereof) included in the Caa Excess, over (ii) the sum of the Market Values of all Collateral Obligations  (or portions thereof) included in the Caa Excess.
 
"Excess Weighted Average Coupon": A percentage equal as of any date of determination to a number obtained by multiplying (a) the excess, if any, of the Weighted Average Coupon over the Minimum Weighted Average Coupon, by (b) the number obtained by dividing the Aggregate Principal Balance (including for this purpose any capitalized interest) of all Fixed Rate Obligations by the Aggregate Principal Balance (including for this purpose any capitalized interest) of all Floating Rate Obligations (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest).
 
 
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"Excess Weighted Average Floating Spread": A percentage equal as of any date of determination to a number obtained by multiplying (a) the excess, if any, of the Weighted Average Floating Spread over the Minimum Floating Spread, by (b) the number obtained by dividing the Aggregate Principal Balance (including for this purpose any capitalized interest) of all Floating Rate Obligations by the Aggregate Principal Balance (including for this purpose any capitalized interest) of all Fixed Rate Obligations (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest).
 
"Exchange Act":  The United States Securities Exchange Act of 1934, as amended.
 
"Expense Reimbursement Account":  The trust account established pursuant to Section 10.3(g).
 
"FATCA":  Sections 1471 through 1474 of Code and any related provisions of law, court decisions or administrative guidance promulgated or agreements entered into in respect thereof.
 
"FATCA Compliance": Compliance with FATCA (including, if applicable, the Issuer entering into or complying with an agreement with the U.S. Internal Revenue Service contemplated by Section 1471(b) of the Code), in each case as necessary so that no tax or other withholding will be imposed thereunder in respect of payments to or for the benefit of the Issuer or any Blocker Subsidiary.
 
"Federal Reserve Board":  The Board of Governors of the Federal Reserve System.
 
"Fee Basis Amount":  As of any date of determination, the sum of (a) the Collateral Principal Amount, (b) the Aggregate Principal Balance of all Defaulted Obligations and (c) the aggregate amount of all Principal Financed Accrued Interest.
 
"Financial Asset":  The meaning specified in Section 8-102(a)(9) of the UCC.
 
"Financing Statements":  The meaning specified in Section 9-102(a)(39) of the UCC.
 
"First Lien Last Out Loan":  Any assignment of or Participation Interest in a Loan that:  (a) may by its terms become subordinate in right of payment to any other obligation of the obligor of the Loan solely upon the occurrence of a default or event of default by the obligor of the Loan and (b) is secured by a valid perfected first priority security interest or lien in, to or on specified collateral securing the obligor's obligations under the Loan.
 
"Fixed Rate Obligation":  Any Collateral Obligation that bears a fixed rate of interest.
 
"Floating Rate Obligation":  Any Collateral Obligation that bears a floating rate of interest.
 
"GAAP":  The meaning specified in Section 6.3(j).
 
 
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"Global Note":  Any Regulation S Global Note or Rule 144A Global Note.
 
"Grant" or "Granted":  To grant, bargain, sell, convey, assign, transfer, mortgage, pledge, create and grant a security interest in and right of setoff against, deposit, set over and confirm.  A Grant of the Assets, or of any other instrument, shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate continuing right to claim for, collect, receive and receipt for principal and interest payments in respect of the Assets, and all other Monies payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.
 
"Group I Country":  The Netherlands, Australia, New Zealand and the United Kingdom (or such other countries as may be notified by Moody's to the Portfolio Manager from time to time).
 
"Group II Country":  Germany, Sweden and Switzerland (or such other countries as may be notified by Moody's to the Portfolio Manager from time to time).
 
"Group III Country":  Austria, Belgium, Denmark, Finland, France, Iceland, Liechtenstein, Luxembourg and Norway (or such other countries as may be notified by Moody's to the Portfolio Manager from time to time).
 
"Hedge Agreement":  The meaning specified in Section 8.1(c).
 
"Holder" or "Noteholder":  With respect to any Note, the Person whose name appears on the Note Register as the registered holder of such Note.
 
"Incentive Management Fee":  The fee payable to the Portfolio Manager pursuant to Sections 11.1(a)(i)(W)(x), 11.1(a)(ii)(H)(x) and 11.1(a)(iii)(W)(x).
 
"Incurrence Covenant": A covenant by any borrower to comply with one or more financial covenants only upon the occurrence of certain actions of the borrower, including a debt issuance, dividend payment, share purchase, merger, acquisition or divestiture.
 
"Indenture":  This instrument as originally executed and, if from time to time supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, as so supplemented or amended.
 
"Independent":  As to any Person, any other Person (including, in the case of an accountant or lawyer, a firm of accountants or lawyers, and any member thereof, or an investment bank and any member thereof) who (i) does not have and is not committed to acquire any material direct or any material indirect financial interest in such Person or in any Affiliate of such Person, and (ii) is not connected with such Person as an Officer, employee, promoter, underwriter, voting trustee, partner, director or Person performing similar functions.  "Independent" when used with respect to any accountant may include an accountant who audits the books of such Person if in addition to satisfying the criteria set forth above the accountant is independent with respect to such Person within the meaning of Rule 101 of the Code of Professional Conduct of the American Institute of Certified Public Accountants.  For purposes of this definition, no manager or director of any Person will fail to be Independent solely because such Person acts as an Independent director or Independent manager of such Person or of any Affiliates of such Person.
 
 
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Whenever any Independent Person's opinion or certificate is to be furnished to the Trustee, such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof.
 
Any pricing service, certified public accountant or legal counsel that is required to be Independent of another Person under this Indenture must satisfy the criteria above with respect to the Issuer, the Portfolio Manager and their Affiliates.
 
"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 April 2011 and any other available information S&P reasonably requests in order to produce a credit estimate for a particular asset.
 
"Information Agent":  The Portfolio Manager.
 
"Initial Rating":  With respect to the 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, the period from and including the Closing Date to but excluding such Payment Date; and (ii) with respect to each succeeding Payment Date, the period from and including the immediately preceding Payment Date to but excluding the following Payment Date until the principal of the Secured 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":  For any designated Class or Classes of Secured Notes (other than the Class X Notes, for which no Interest Coverage Ratio applies), as of any date of determination, the percentage derived from the following equation:  (A – B) / C, where:
 
A = The Collateral Interest Amount as of such date of determination;
 
B = Amounts payable (or expected as of the date of determination to be payable) on the following Payment Date as set forth in clauses (A) and (B) in Section 11.1(a)(i); and
 
 
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C = Interest due and payable on the Secured Notes of such Class or Classes and each Class of Secured Notes (in each case, other than the Class X Notes) that rank senior to such Class or Classes (excluding Note Deferred Interest but including any interest on Note Deferred Interest with respect to any Deferred Interest Notes) on such Payment Date; provided that for the purposes of this definition, the Class A Notes and the Class B Notes shall be treated as one Class.
 
"Interest Coverage Test":  A test that is satisfied with respect to any Class or Classes of Secured Notes as of any date of determination on, or subsequent to, the Determination Date occurring immediately prior to the second Payment Date, if (i) the Interest Coverage Ratio for such Class or Classes on such date is at least equal to the Required Interest Coverage Ratio for such Class or Classes or (ii) such Class or Classes of Secured Notes is no longer outstanding.
 
"Interest Determination Date":  The second London Banking Day preceding the first day of each Interest Accrual Period.
 
"Interest Diversion Test":  A test that is satisfied as of any Measurement Date during the Reinvestment Period on which the Class F Notes remain outstanding if the Overcollateralization Ratio with respect to the Class F Notes as of such Measurement Date is at least equal to 103.16%.
 
"Interest Only Security":  Any obligation or security that does not provide in the related Underlying Instruments for the payment or repayment of a stated principal amount in one or more installments on or prior to its stated maturity.
 
"Interest Proceeds":  With respect to any Collection Period or Determination Date, without duplication, the sum of:
 
 
(i)
all payments of interest and delayed compensation (representing compensation for delayed settlement) received in Cash by the Issuer during the related Collection Period on the Collateral Obligations and Eligible Investments, including the accrued interest received in connection with a sale thereof during the related Collection Period, less any such amount that represents Principal Financed Accrued Interest;
 
 
(ii)
all principal and interest payments received by the Issuer during the related Collection Period on Eligible Investments purchased with Interest Proceeds;
 
 
(iii)
all amendment and waiver fees, late payment fees and other fees received by the Issuer during the related Collection Period, except for those in connection with (a) the lengthening of the maturity of the related Collateral Obligation or (b) the reduction of the par of the related Collateral Obligation, as determined by the Portfolio Manager with notice to the Trustee, the Collateral Administrator and the Designated Successor Manager;
 
 
(iv)
commitment fees and other similar fees received by the Issuer during such Collection Period in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations;
 
 
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(v)
any amounts deposited in the Collection Account from the Closing Expense Account, the Expense Reimbursement Account and/or the Interest Reserve Account that are designated as Interest Proceeds in the sole discretion of the Portfolio Manager pursuant to this Indenture in respect of the related Determination Date; and
 
 
(vi)
any funds withdrawn from the LC Reserve Account during the related Collection Period in accordance with Section 10.3(h) for application as Interest Proceeds;
 
provided that (A) (1) any amounts received in respect of any Defaulted Obligation will constitute Principal Proceeds (and not Interest Proceeds) until the aggregate of all collections in respect of such Defaulted Obligation since it became a Defaulted Obligation equals the outstanding principal balance of such Collateral Obligation at the time it became a Defaulted Obligation and (2) (x) any amounts received in respect of any Equity Security that was received in exchange for a Defaulted Obligation and is held by a Blocker Subsidiary will constitute Principal Proceeds (and not Interest Proceeds) until the aggregate of all collections in respect of such Equity Security equals the outstanding principal balance of the Collateral Obligation, at the time it became a Defaulted Obligation, for which such Equity Security was received in exchange and (y) any amounts received in respect of any other asset held by a Blocker Subsidiary will constitute Principal Proceeds (and not Interest Proceeds) until the aggregate of all collections in respect of such asset equals the outstanding principal balance of such asset, (B) any amounts deposited in the Collection Account as Principal Proceeds pursuant to clause (S) of Section 11.1(a)(i) due to the failure of the Interest Diversion Test to be satisfied shall not constitute Interest Proceeds, (C) no funds on deposit in the LC Reserve Account will be treated as Interest Proceeds unless and until withdrawn from such account under Section 10.3(h) for application as Interest Proceeds, (D) the funds and other property attributable to the issuance and allotment of the Issuer's ordinary shares or the bank account in the Cayman Islands in which such funds are deposited (or any interest thereon) shall not constitute Interest Proceeds and (E) all Post-Reinvestment Period Amendment Proceeds shall not constitute Interest Proceeds.
 
"Interest Rate":  With respect to each Class of Notes, the per annum stated interest rate payable on 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.
 
"Interest Reserve Account":  The meaning specified in Section 10.3(e).
 
"Interest Reserve Amount":  The meaning specified in Section 3.1(xii).
 
"Interim Report Date":  The meaning specified in Section 7.18(a).
 
"Investment Company Act":  The United States Investment Company Act of 1940, as amended from time to time.
 
"Investment Criteria":  The criteria specified in Section 12.2.
 
 
- 38 -

 
 
"Investment Criteria Adjusted Balance":  With respect to each Collateral Obligation, the Principal Balance of such Collateral Obligation; provided that the Investment Criteria Adjusted Balance of any:
 
 
(i)
Deferring Security will be the lesser of the (x) S&P Collateral Value of such Deferring Security and (y) Moody's Collateral Value of such Deferring Security;
 
 
(ii)
Discount Obligation will be the product of the (x) purchase price (expressed as a percentage of par and, for the avoidance of doubt, without averaging) and (y) Principal Balance of such Discount Obligation; and
 
 
(iii)
Collateral Obligation included in the CCC Excess and the Caa Excess will be the Market Value of such Collateral Obligation;
 
provided further that the Investment Criteria Adjusted Balance for any Collateral Obligation that satisfies more than one of the definitions of Deferring Security or Discount Obligation or is included in the CCC Excess and the Caa Excess will be the lowest amount determined pursuant to clauses (i), (ii) and (iii) above.
 
"Irish Listing Agent":  McCann FitzGerald Listing Services Limited, in its capacity as Irish Listing Agent for the Co-Issuers, and any successor thereto.
 
"IRS": The Internal Revenue Service.
 
"Issuer":  The Person named as such on the first page of this Indenture until a successor Person shall have become the Issuer pursuant to the applicable provisions of this Indenture, and thereafter "Issuer" shall mean such successor Person.
 
"Issuer Order" and "Issuer Request":  A written order or request (which may be a standing order or request) dated and signed in the name of the Issuer or the Co-Issuer by an Authorized Officer of the Issuer or the Co-Issuer, as applicable, or by the Portfolio Manager by an Authorized Officer thereof, on behalf of the Issuer.
 
"Issuer Placed Notes":  The portion of the Class E Notes, Class F Notes and the Subordinated Notes issued and placed on the Closing Date by the Issuer in privately negotiated transactions directly to investors identified by the Portfolio Manager and/or one or more of the Portfolio Manager's Affiliates.
 
"JMP":  JMP Credit Advisors LLC, a Delaware limited liability company.
 
"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.
 
"Knowledgeable Employee":  The meaning set forth in Rule 3c-5 promulgated under the Investment Company Act.
 
"LC Commitment Amount": With respect to any Letter of Credit Reimbursement Obligation, the amount which the Issuer could be required to pay to the LOC Agent Bank in respect thereof (including, for the avoidance of doubt, any portion thereof which the Issuer has collateralized or deposited into a trust or with the LOC Agent Bank for the purpose of making such payments).
 
 
- 39 -

 
 
"LC Reserve Account": The meaning set forth in Section 10.3(h).
 
"Letter of Credit Reimbursement Obligation": A facility whereby (i) a fronting bank that, at the time of acquisition of such Letter of Credit Reimbursement Obligation by the Issuer or the Issuer's commitment to acquire the same, has a short-term rating of at least "A-1" and a long-term rating of at least "A" (or, if no short-term rating exists, a long-term rating of "A+") by S&P (an "LOC Agent Bank") issues or will issue a letter of credit (an "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, (iii) the LOC Agent Bank passes on to the lender/participant (in whole or in part) the fees and any other amounts it receives for providing the LC and (iv)(a) the related Underlying Instruments require the Issuer to fully collateralize the Issuer's obligations to the related LOC Agent Bank or obligate the Issuer to make a deposit into a trust in an aggregate amount equal to the related LC Commitment Amount, (b) the collateral posted by the Issuer is held by, or the Issuer's deposit is made in, a depository institution meeting the requirement set forth in Section 10.1 and (c) the collateral posted by the Issuer is invested in Eligible Investments that are overnight funds.
 
"LIBOR":  The meaning set forth in Exhibit H hereto.
 
"Listed Notes":  The Notes specified as such in Section 2.3.
 
"Loan":  Any obligation for the payment or repayment of borrowed money that is documented by a term loan agreement, revolving loan agreement or other similar credit agreement.
 
"LOC Agent Bank": The meaning specified in the definition of the term "Letter of Credit Reimbursement Obligation".
 
"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":  A covenant by any borrower to comply with one or more financial covenants during each reporting period, whether or not such borrower has taken any specified action.
 
"Majority":  With respect to any Class or Classes of Notes, the Holders of more than 50% of the Aggregate Outstanding Amount of the Notes of such Class or Classes.
 
"Management Fee":  The Senior Management Fee, the Subordinated Management Fee, the Incentive Management Fee, the Designated Successor Senior Management Fee and the Designated Successor Subordinated Management Fee.
 
 
- 40 -

 
 
"Manager Replacement Event": The meaning specified in the Portfolio Management Agreement.
 
"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 Portfolio Manager) equal to the product of the principal amount thereof and the price determined in the following manner:
 
 
(i)
the bid price determined by (A) in the case of a Loan, the Loan Pricing Corporation or Markit Group Limited, (B) in the case of a bond only, Interactive Data Corporation or NASD's TRACE or (C) in either case, any other nationally recognized pricing service selected by the Portfolio Manager with notice to Moody's and S&P; or
 
 
(ii)
if the price described in clause (i) is not available,
 
 
(a)
the average of the bid prices determined by three broker-dealers active in the trading of such asset that are Independent from each other and the Issuer and the Portfolio Manager; or
 
 
(b)
if only two such bids can be obtained, the lower of the bid prices of such two bids; or
 
 
(c)
if only one such bid can be obtained, and such bid was obtained from a Qualified Broker/Dealer, the bid price of such bid; provided that the Aggregate Principal Balance of Collateral Obligations held by the Issuer at any one time with Market Values determined pursuant to this clause (ii)(c) may not exceed 5% of the Collateral Principal Amount; or
 
 
(iii)
if a price described in clause (i) or (ii) is not available, then the Market Value of an asset will be the lower of (x) the higher of (A) such asset's S&P Recovery Rate and (B) 70% of the notional amount of such asset and (y) the price at which the Portfolio Manager reasonably believes such asset could be sold in the market within 30 days, as certified by the Portfolio Manager to the Trustee and the Collateral Administrator and determined by the Portfolio 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; provided, however, that, if the Portfolio Manager is not a Registered Investment Advisor, the Market Value of any such asset may not be determined in accordance with this clause (iii)(y) for more than 30 days; provided further that, solely if such asset either was purchased within the three preceding months or was previously assigned a Market Value within three preceding months, either (A) if such asset was purchased within the three preceding months, its purchase price or (B) otherwise, the last Market Value that was assigned to it other than pursuant to this proviso; or
 
 
- 41 -

 
 
 
(iv)
if the Market Value of an asset is not determined in accordance with clause (i), (ii) or (iii) above, then such Market Value shall be deemed to be zero until such determination is made in accordance with clause (i), (ii) or (iii) above.
 
"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.
 
"Maturity Amendment":  With respect to any Collateral Obligation, any waiver, modification, amendment or variance that would extend the stated maturity date of such Collateral Obligation.  For the avoidance of doubt, a waiver, modification, amendment or variance that would extend the stated maturity date of the credit facility of which a Collateral Obligation is part, but would not extend the stated maturity date of the Collateral Obligation held by the Issuer, does not constitute a Maturity Amendment.
 
"Maximum Moody's Rating Factor Test":  A test that will be satisfied on any date of determination if the Adjusted Weighted Average Moody's Rating Factor of the Collateral Obligations is less than or equal to the lesser of (x) 3200 and (y) the sum of (i) the number set forth in the Minimum Diversity Score/Maximum Rating/Minimum Spread Matrix at the intersection of the applicable "row/column combination" chosen by the Portfolio Manager, with notice to the Designated Successor Manager (or interpolating between two adjacent rows and/or two adjacent columns, as applicable) as set forth in Section 7.18(g) plus (ii) the Moody's Weighted Average Recovery Adjustment; provided that Collateral Obligations that are Defaulted Obligations are excluded from such calculation.
 
"Measurement Date":  (i) Any day on which a purchase of a Collateral Obligation occurs, (ii) any Determination Date, (iii) the date as of which the information in any Monthly Report is calculated, (iv) with five Business Days prior notice to the Issuer and the Trustee, any Business Day requested by either Rating Agency and (v) the Effective Date.
 
"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 Diversity Score/Maximum Rating/Minimum Spread Matrix":  The following chart used to determine which of the "row/column combinations" 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 7.18(g).
 
 
- 42 -

 
 
Minimum Weighted Average Spread
Minimum Diversity Score
45
50
55
60
65
70
75
80
2.475%
1938
2008
2068
2118
2163
2203
2243
2278
2.575%
1966
2036
2096
2146
2191
2231
2271
2306
2.675%
1994
2064
2124
2174
2219
2259
2299
2334
2.775%
2022
2092
2152
2202
2247
2287
2327
2362
2.875%
2050
2120
2180
2230
2275
2315
2355
2390
2.975%
2078
2148
2208
2258
2303
2343
2383
2418
3.075%
2106
2176
2236
2286
2331
2371
2411
2446
3.175%
2134
2204
2264
2314
2359
2399
2439
2474
3.275%
2162
2232
2292
2342
2387
2427
2467
2502
3.375%
2190
2260
2320
2370
2415
2455
2495
2530
3.475%
2218
2288
2348
2398
2443
2483
2523
2558
3.575%
2246
2316
2376
2426
2471
2511
2551
2586
3.675%
2274
2344
2404
2454
2499
2539
2579
2614
3.775%
2302
2372
2432
2482
2527
2567
2607
2642
3.875%
2330
2400
2460
2510
2555
2595
2635
2670
3.975%
2358
2428
2488
2538
2583
2623
2663
2698
4.075%
2386
2456
2516
2566
2611
2651
2691
2726
4.175%
2414
2484
2544
2594
2639
2679
2719
2754
4.275%
2442
2512
2572
2622
2667
2707
2747
2782
4.375%
2470
2540
2600
2650
2695
2735
2775
2810
4.475%
2498
2568
2628
2678
2723
2763
2803
2838
4.575%
2523
2593
2653
2703
2748
2788
2828
2863
4.675%
2548
2618
2678
2728
2773
2813
2853
2888
4.775%
2573
2643
2703
2753
2798
2838
2878
2913
4.875%
2598
2668
2728
2778
2823
2863
2903
2938
4.975%
2623
2693
2753
2803
2848
2888
2928
2963
 
Moody's Rating Factor
 
 
- 43 -

 
 
"Minimum Floating Spread":  The number set forth in the column entitled "Minimum Weighted Average Spread" in the Minimum Diversity Score/Maximum Rating/Minimum Spread Matrix based upon the applicable "row/column combination" chosen by the Portfolio Manager (or interpolating between two adjacent rows and/or two adjacent columns, as applicable) in accordance with Section 7.18(g), reduced by the Moody's Weighted Average Recovery Adjustment; provided that the Minimum Floating Spread shall in no event be lower than 2.475%.
 
"Minimum Floating Spread Test":  The test that is satisfied on any date of determination if the Weighted Average Floating Spread plus the Excess Weighted Average Coupon equals or exceeds the Minimum Floating Spread.
 
"Minimum Weighted Average Coupon": 6.00%.
 
"Minimum Weighted Average Coupon Test": The test that is satisfied on any date of determination if the Weighted Average Coupon plus the Excess Weighted Average Floating Spread equals or exceeds the Minimum Weighted Average Coupon.
 
"Minimum Weighted Average Moody's Recovery Rate Test":  The test that will be satisfied on any date of determination if the Weighted Average Moody's Recovery Rate equals or exceeds 44.0%.
 
"Minimum Weighted Average S&P Recovery Rate Test":  The test that will be satisfied on any date of determination if the Weighted Average S&P Recovery Rate for each Class of Secured Notes outstanding equals or exceeds the Weighted Average S&P Recovery Rate for such Class selected by the Portfolio Manager in connection with the S&P CDO Monitor Test.
 
"Money":  The meaning specified in Section 1-201(24) of the UCC.
 
"Monthly Report":  The meaning specified in Section 10.6(a).
 
"Moody's":  Moody's Investors Service, Inc. and any successor thereto.
 
"Moody's Collateral Value":  On any date of determination, with respect to any Defaulted Obligation or Deferring Security, the lesser of (i) the Moody's Recovery Amount of such Defaulted Obligation or Deferring Security as of such date and (ii) the Market Value of such Defaulted Obligation or Deferring Security as of such date.
 
 
- 44 -

 
 
"Moody's Counterparty Criteria":  With respect to any Participation Interest or Letter of Credit Reimbursement Obligation 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 or Letter of Credit Reimbursement Obligations with Selling Institutions or LOC Agent Banks, as the case may be, 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 or Letter of Credit Reimbursement Obligations with any single Selling Institution or LOC Agent Bank, as the case may be, 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 or LOC Agent Bank (at or below)
 
Aggregate
Percentage
Limit
 
Individual Percentage
Limit
Aaa
 
20%
   
20%
 
Aa1
 
20%
   
10%
 
Aa2
 
20%
   
10%
 
Aa3
 
15%
   
10%
 
A1
 
10%
   
5%
 
A2*
 
5%
   
5%
 
A3 or below
 
0%
   
0%
 

*
Permitted only if entity also has a Moody's short-term rating of P-1.
 
"Moody's Default Probability Rating":  With respect to any Collateral Obligation, the rating determined pursuant to the methodology set forth under the heading "Moody's Default Probability Rating" on Schedule 5 hereto (or such other schedule provided by Moody's to the Issuer, the Trustee, the Collateral Administrator, the Portfolio Manager and the Designated Successor Manager).
 
"Moody's Derived Rating":  With respect to any Collateral Obligation, the rating determined pursuant to the methodology set forth under the heading "Moody's Derived Rating" on Schedule 5 hereto (or such other schedule provided by Moody's to the Issuer, the Trustee, the Collateral Administrator, the Portfolio Manager and the Designated Successor Manager).
 
"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 number set forth in the column entitled "Minimum Diversity Score" in the Minimum Diversity Score/Maximum Rating/Minimum Spread Matrix based upon the applicable "row/column combination" chosen by the Portfolio Manager (or interpolating between two adjacent rows and/or two adjacent columns, as applicable) in accordance with Section 7.18(g).
 
"Moody's Industry Classification":  The industry classifications set forth in Schedule 2 hereto, as such industry classifications shall be updated at the option of the Portfolio Manager if Moody's publishes revised industry classifications.
 
"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.
 
 
- 45 -

 
 
"Moody's Ramp-Up Failure":  The meaning specified in Section 7.18(e).
 
"Moody's Rating":  With respect to any Collateral Obligation, the rating determined pursuant to the methodology set forth under the heading "Moody's Rating" on Schedule 5 hereto (or such other schedule provided by Moody's to the Issuer, the Trustee, the Collateral Administrator, the Portfolio Manager and the Designated Successor Manager).
 
"Moody's Rating Condition":  With respect to any action taken or to be taken by or on behalf of the Issuer, a condition that is satisfied (or, deemed inapplicable in the case of sub-clauses (b)(ii) and (b)(iii) below) if (a) with respect to the Effective Date rating confirmation procedure set forth in Section 7.18(e), Moody's provides written confirmation (which may take the form of a press release or other written communication which may be in electronic form or posted on Moody's website or any other form then considered industry standard) of its Initial Rating of the Class A Notes or the Class X Notes or (b) with respect to any other event or circumstance, (i) Moody's provides written confirmation (which may take the form of a press release or other written communication which may be in electronic form or posted on Moody's website or any other form then considered industry standard) that the occurrence of that event or circumstance will not cause Moody's to downgrade or withdraw its then-current rating of the Class A Notes or the Class X Notes, (ii) no Secured Notes of any Class then rated by Moody's are Outstanding, or (iii) no Secured Notes of any Class then Outstanding are rated by Moody's.
 
"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, or such other equivalent table containing the Moody's Rating Factor provided by Moody's to the Issuer or the Portfolio Manager (who shall provide a copy to the Trustee and the Collateral Administrator).
 
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
 

 
For purposes of the Maximum Moody's Rating Factor Test, any Collateral Obligation issued or guaranteed by the United States government or any agency or instrumentality thereof is assigned a Moody's Rating Factor corresponding to the then-current Moody's long-term issuer rating of the United States of America.
 
 
- 46 -

 
 
"Moody's Recovery Amount":  With respect to any Collateral Obligation that is a Defaulted Obligation or a Deferring Security, an amount equal to (a) the applicable Moody's Recovery Rate multiplied by (b) 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:
 
 
(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, Moody's Non-Senior Secured Loan, Moody's Senior Secured Floating Rate Note or Senior Secured Bond (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 and
Moody's Senior
Secured Floating
Rate Notes
 
Moody's Non-Senior
Secured Loans and Senior
Secured Bonds
+2 or more
 
60%
   
35%
 
+1
 
50%
   
30%
 
0
 
45%
   
25%
 
-1
 
40%
   
10%
 
-2
 
30%
   
5%
 
-3 or less
 
20%
   
0%
 

 
(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 Floating Rate Note":  A Senior Secured Bond (x) that has a Moody's facility rating and the obligor of such note has a Moody's corporate family rating and (y) the Moody's facility rating of which is not lower than such Moody's corporate family rating.
 
"Moody's Senior Secured Loan":  The meaning specified in Schedule 5 (or such other schedule provided by Moody's to the Issuer, the Trustee and the Portfolio Manager).
 
 
- 47 -

 
 
"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 Weighted Average Moody's 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, 60 and (B) with respect to adjustment of the Minimum Floating Spread, 0.20%; provided, however, 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 shall equal 60% or such other percentage as shall have been notified to Moody's by or on behalf of the Issuer; provided, further, that the amount specified in clause (b)(i) above may only be allocated once on any date of determination and the Portfolio Manager shall designate to the Collateral Administrator in writing on each such date the portion of such amount that shall be allocated to clause (b)(ii)(A) and the portion of such amount that shall be allocated to clause (b)(ii)(B) (it being understood that, absent an express designation by the Portfolio Manager, all such amounts shall be allocated to clause (b)(ii)(A)).
 
"Natixis":  Natixis Securities Americas LLC.
 
"Non-Call Period": The period from the Closing Date to but excluding October 30, 2015 (or, if such day is not a Business Day, the next succeeding Business Day).
 
"Non-Emerging Market Obligor":  An obligor that is Domiciled in any country that has a country ceiling for foreign currency bonds of at least "Aa2" by Moody's and a foreign currency issuer credit rating of at least "AA" by S&P.
 
"Non-Permitted ERISA Holder":  The meaning specified in Section 2.11(d).
 
"Non-Permitted Holder":  The meaning specified in Section 2.11(b).
 
"Note Deferred Interest":  With respect to any specified Class of Deferred Interest Notes, the meaning specified in Section 2.7(a).
 
"Note Interest Amount":  With respect to any Class of Secured Notes and any Payment Date, the amount of interest for the related Interest Accrual Period payable in respect of each U.S.$100,000 Outstanding principal amount of such Class of Secured Notes.
 
"Note Register and Note Registrar":  The respective meanings specified in Section 2.5(a). 
 
"Noteholder Reporting Obligations":  The obligations set forth in Section 2.12(c).
 
"Notes":  Collectively, the Secured Notes, the Subordinated Notes and the Reinvesting Holder Notes authorized by, and authenticated and delivered under, this Indenture (as specified in Section 2.3).
 
"NRSRO":  Any nationally recognized statistical rating organization.
 
 
- 48 -

 
 
"NRSRO Certification":  A letter, in a form acceptable to the Issuer and the Portfolio Manager (on behalf of the Issuer), executed by an NRSRO and addressed to the Issuer and the Portfolio Manager, with a copy to the Trustee, the Information Agent and the Designated  Successor Manager, attaching a copy of a certification satisfying the requirements of paragraph (a)(3)(iii)(B) of Rule 17g-5, upon which the Issuer and the Portfolio Manager may conclusively rely for purposes of granting such NRSRO access to the 17g-5 Website.
 
"Obligor":  With respect to a Loan or a Bond, the Person who is obligated to repay such Loan or Bond (including, if applicable, a guarantor thereof), and whose assets are principally relied upon by the Issuer at the time such Loan or Bond was acquired by the Issuer as the source of repayment of such Loan or Bond.
 
"Offer":  The meaning specified in Section 10.7(c).
 
"Offering":  The offering of any Notes pursuant to the relevant Offering Circular.
 
"Offering Circular":  Each offering circular relating to the offer and sale of the Notes, including any supplements thereto.
 
"Officer":  (a) With respect to the Issuer, the Co-Issuer and any corporation, any director, the Chairman of the Board of Directors or the Board of Members (as applicable), 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; (b) with respect to any partnership, any general partner thereof or any Person authorized by such entity; (c) with respect to a limited liability company, any member thereof or any Person authorized by such entity; and (d) with respect to the Trustee and any bank or trust company acting as trustee of an express trust or as custodian or agent, any vice president or assistant vice president of such entity or any officer customarily performing functions similar to those performed by a vice president or assistant vice president of such entity.
 
"offshore transaction":  The meaning specified in Regulation S.
 
"Opinion of Counsel":  A written opinion addressed to the Trustee (or upon which the Trustee is expressly permitted to rely) and, if required by the terms hereof, each Rating Agency, in form and substance reasonably satisfactory to the Trustee and, if so addressed, each Rating Agency, of a nationally or internationally recognized and reputable law firm one or more of the partners of which are admitted to practice before the highest court of any State of the United States or the District of Columbia (or the Cayman Islands, in the case of an opinion relating to the laws of the Cayman Islands), which law firm 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 law firm 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 so required, each Rating Agency or shall state that the Trustee and, if so required, each Rating Agency 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, other federal or non-U.S. laws or regulations that are substantially similar to the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code.
 
"Outstanding":  With respect to the Notes or the Notes of any specified Class, as of any date of determination, all of the Notes or all of the Notes of such Class, as the case may be, theretofore authenticated and delivered under this Indenture, except:
 
 
(i)
Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation in accordance with the terms of Section 2.9;
 
 
(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)(i)(B); provided that if such Notes or portions thereof are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;
 
 
(iii)
Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, unless proof satisfactory to the Trustee is presented that any such Notes are held by a "protected purchaser" (within the meaning of Section 8-303 of the UCC); and
 
 
(iv)
Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.6;
 
provided that in determining whether the Holders of the requisite Aggregate Outstanding Amount of the Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the following Notes shall be disregarded and deemed not to be Outstanding:
 
 
(i)
Notes owned by the Issuer, the Co-Issuer or any other obligor in respect of the Notes; and
 
 
(ii)
any Notes that are Portfolio Manager Securities, in the case of a vote on (i) the termination of the Portfolio Management Agreement or removal of the Portfolio Manager, in each case, for "cause" pursuant to the Portfolio Management Agreement, (ii) any approval rights with respect to the replacement of Key Persons or the effecting of a Key Persons Cure (each as defined in the Portfolio Management Agreement) or the objection to or designation of a successor portfolio manager under the Portfolio Management Agreement if the Portfolio Manager (which is not the Designated Successor Manager) is being removed under the Portfolio Management Agreement, (iii) the objection to or designation of a successor portfolio manager under the Portfolio Management Agreement if the Designated Successor Manager has become the Portfolio Manager and is being removed as the Portfolio Manager pursuant to the Portfolio Management Agreement, and (iv) the waiver of any event constituting "Cause" as a basis for termination of the Portfolio Management Agreement and removal of the Portfolio Manager,
 
 
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except that (1) in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Trust Officer of the Trustee actually knows to be so owned or to be Portfolio Manager Securities shall be so disregarded; and (2) Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not one of the Persons specified above. Portfolio Manager Securities will have voting rights with respect to all other matters as to which the Holders of such Notes are entitled to vote.
 
"Overcollateralization Ratio":  With respect to any specified Class or Classes of Secured Notes (other than the Class X Notes, for which no Overcollateralization Ratio applies) as of any date of determination, the percentage derived from:  (i) the Adjusted Collateral Principal Amount on such date divided by (ii) the Aggregate Outstanding Amount on such date of the Secured Notes of such Class or Classes and each Priority Class of Secured Notes (in each case, other than the Class X Notes); provided that for the purposes of this definition, the Class A Notes and the Class B Notes shall be treated as one Class.
 
"Overcollateralization Ratio Test":  A test that is satisfied with respect to any Class or Classes of Secured Notes as of any date of determination on which such test is applicable if (i) the Overcollateralization Ratio for such Class or Classes on such date is at least equal to the Required Overcollateralization Ratio for such Class or Classes or (ii) such Class or Classes of Secured Notes is no longer Outstanding.
 
"Pari Passu Class":  With respect to any specified Class of Notes, each Class of Notes that ranks pari passu to such Class, as indicated in Section 2.3.
 
"Partial Deferrable Security":  Any Collateral Obligation with respect to which under the related Underlying Instruments (i) a portion of the interest due thereon is required to be paid in Cash on each payment date therefor and is not permitted to be deferred or capitalized (which portion shall at least be equal to LIBOR plus 1.00% per annum or the applicable index with respect to which interest on such Collateral Obligation is calculated plus 1.00% per annum (or, in the case of a fixed rate Collateral Obligation, at least equal to the swap rate for a designated maturity equal to the scheduled maturity of such Collateral Obligation)) and (ii) the issuer thereof or obligor thereon may defer or capitalize the remaining portion of the interest due thereon.
 
"Partial Redemption Date":  Any Redemption Date on which one or more but not every Class of Notes is being Refinanced with Refinancing Proceeds pursuant to Section 9.2(a)(ii).
 
"Participation Interest":  A Letter of Credit Reimbursement Obligation or a participation interest in a Loan that, at the time of acquisition or the Issuer's commitment to acquire the same, is represented by a contractual obligation of a Selling Institution that has at the time of such acquisition or the Issuer's commitment to acquire the same at least both a long-term rating of "A" and a short-term rating of "A-1" (or if no short-term rating exists, a long-term rating of "A+") by S&P.
 
"Passing Report": The meaning set forth in Section 7.18(e).
 
 
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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 15th 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 2013 except that the final Payment Date (subject to any earlier redemption or payment of the Notes) shall be in April 2023.
 
"PBGC":  The United States Pension Benefit Guaranty Corporation.
 
"Permitted Offer":  An Offer (i) pursuant to the terms of which the offeror offers to acquire a debt obligation (including a Collateral Obligation) in exchange for consideration consisting of (x) Cash in an amount equal to or greater than the full face amount of the debt obligation being exchanged plus any accrued and unpaid interest or (y) other debt obligations that rank pari passu or senior to the debt obligations being exchanged which have a face amount equal to or greater than the full face amount of the debt obligation being exchanged and are eligible to be Collateral Obligations plus any accrued and unpaid interest in Cash and (ii) as to which the Portfolio Manager has determined in its reasonable commercial judgment that the offeror has sufficient access to financing to consummate the Offer.
 
"Person":  An individual, corporation (including a business trust), partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated association or government or any agency or political subdivision thereof.
 
"Placement Agent":  Natixis, in its capacity as placement agent for the Notes (other than the Issuer Placed Notes and the Class X Notes) under the Placement Agreement.
 
"Placement Agreement":  The agreement dated as of the Closing Date by and between the Co-Issuers and the Placement Agent relating to the Offering of the Notes (other than the Issuer Placed Notes and the Class X Notes), as may be amended from time to time.
 
"Portfolio Management Agreement":  The agreement, dated as of the Closing Date, between the Issuer and the Portfolio Manager relating to the management of the Collateral Obligations and the other Assets by the Portfolio Manager on behalf of the Issuer, as may be amended from time to time in accordance with the terms hereof and thereof, or any other management agreement between the Issuer and any successor Portfolio Manager (including, subject to the terms of the Designated Successor Management Agreement, the Designated Successor Manager).
 
"Portfolio Manager":  JMP, until the Designated Successor Manager or another successor Person shall have become the Portfolio Manager pursuant to the provisions of the Portfolio Management Agreement, and thereafter "Portfolio Manager" shall mean such successor Person.
 
 
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"Portfolio Manager Securities":  As of any date of determination, (a) all Notes held on such date by (i) the Portfolio Manager, (ii) any Affiliate of the Portfolio Manager or (iii) any account, fund, client or portfolio managed or advised on a discretionary basis by the Portfolio Manager or any of its Affiliates and (b) all Notes as to which economic exposure is held on such date (whether through any derivative financial transaction or otherwise) by any Person identified in the foregoing clause (a).
 
"Post-Reinvestment Period Amendment Proceeds":  With respect to any amendment to a Collateral Obligation (including a Maturity Amendment) that the Issuer (or the Portfolio Manager on the Issuer's behalf) votes in favor of, Post-Reinvestment Period Amendment Proceeds shall constitute (i) in the case of an amendment that does not include a Maturity Amendment, any economic benefit (including, but not limited to, a step-up in the stated coupon, an amendment fee, consent fee or other related fees), and (ii) in the case of an amendment that includes a Maturity Amendment, all coupon payments received in respect of such Collateral Obligation along with any other related amendment fees.
 
"Principal Balance":  Subject to Section 1.2, with respect to (a) any Asset other than a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, as of any date of determination, the outstanding principal amount of such Asset (excluding any capitalized interest) and (b) any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, as of any date of determination, the outstanding principal amount of such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation (excluding any capitalized interest), plus (except as expressly set forth in this Indenture) any undrawn commitments that have not been irrevocably reduced or withdrawn with respect to such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation; provided that for all purposes the Principal Balance of (1) any Equity Security or interest-only strip shall be deemed to be zero,  and (2) any Defaulted Obligation that is not sold or terminated within three years after becoming a Defaulted Obligation shall be deemed to be zero.
 
"Principal Collection Subaccount":  The meaning specified in Section 10.2(a).
 
"Principal Financed Accrued Interest":  With respect to any Collateral Obligation, the amount of Principal Proceeds, if any, applied towards the purchase of accrued interest on such Collateral Obligation.
 
"Principal Proceeds":  With respect to any Collection Period or Determination Date, all amounts received by the Issuer during the related Collection Period that do not constitute Interest Proceeds and any amounts that have been designated as Principal Proceeds pursuant to the terms of this Indenture.
 
"Priority Category":  With respect to any Collateral Obligation, the applicable category listed in the table under the heading "Priority Category" in Section 1(d) of Schedule 6.
 
"Priority Class":  With respect to any specified Class of Notes, each Class of Notes that ranks senior to such Class, as indicated in Section 2.3.
 
"Priority of Payments":  The meaning specified in Section 11.1(a).
 
 
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"Proceeding":  Any suit in equity, action at law or other judicial or administrative proceeding.
 
"Proposed Portfolio":  The portfolio of Collateral Obligations and Eligible Investments resulting from the proposed purchase, sale, maturity or other disposition of a Collateral Obligation or a proposed reinvestment in an additional Collateral Obligation, as the case may be.
 
"QIB/QP":  Any Person that, at the time of its acquisition, purported acquisition or proposed acquisition of Notes is both a Qualified Institutional Buyer and a Qualified Purchaser.
 
"Qualified Broker/Dealer":  Any of Bank of America/Merrill Lynch, Deutsche Bank, JP Morgan, BNP Paribas, UBS, Citibank, Royal Bank of Scotland, Royal Bank of Canada, Morgan Stanley, Goldman Sachs, Credit Suisse, Wachovia/Wells Fargo, Barclays Bank, Imperial Capital, Toronto Dominion/TD Securities, General Electric Capital, Canadian Imperial Bank of Commerce (CIBC), Jefferies & Company, Société Génerale, Suntrust Bank, Macquarie Bank, Keybank, ING, Bank of Montreal, Bank of New York Mellon, Scotia Bank, Sumitomo, PNC Bank, Bank of Tokyo, Mizuho or Natixis.
 
"Qualified Facility Loan":  Any loan made pursuant to Underlying Instruments governing the issuance of indebtedness having an aggregate principal amount (whether drawn or undrawn) of at least U.S.$150,000,000 and less than U.S.$200,000,000.
 
"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).
 
"Rating":  The Moody's Rating and/or S&P Rating, as applicable.
 
"Rating Agency":  Each of Moody's (for so long as any Class A Notes or Class X Notes are rated by Moody's and Outstanding) and S&P (for so long as any Class of Secured Notes is rated by S&P and Outstanding) or, with respect to Assets generally, if at any time Moody's or S&P ceases to provide rating services with respect to debt obligations, any other nationally recognized investment rating agency selected by the Issuer (or the Portfolio Manager on behalf of the Issuer).  In the event that at any time Moody's ceases to be a Rating Agency, references to rating categories of Moody's in this Indenture shall be deemed instead to be references to the equivalent categories of such other rating agency as of the most recent date on which such other rating agency and Moody's published ratings for the type of obligation in respect of which such alternative rating agency is used; provided that, if any S&P Rating is determined by reference to a rating by Moody's, S&P shall be notified of such change.  In the event that at any time S&P ceases to be a Rating Agency, references to rating categories of S&P in this Indenture shall be deemed instead to be references to the equivalent categories of such other rating agency as of the most recent date on which such other rating agency and S&P published ratings for the type of obligation in respect of which such alternative rating agency is used.
 
 
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"Rating Condition": The Moody's Rating Condition and the S&P Rating Condition, as applicable.
 
"Real Estate Loan":  A loan that is secured primarily by a mortgage, deed of trust or similar lien on commercial real estate (other than hotels and casinos) or residential real estate.
 
"Record Date":  With respect to the Global Notes, the date one day prior to the applicable Payment Date and, with respect to the Certificated Notes, the date 15 days prior to the applicable Payment Date.
 
"Redemption Date":  Any Business Day (including without limitation any Payment Date) specified for a redemption of Notes pursuant to Article 9.
 
"Redemption Price": (a) For each Secured Note to be redeemed (x) 100% of the Aggregate Outstanding Amount of such Secured Note, plus (y) accrued and unpaid interest thereon (including interest on any accrued and unpaid Note Deferred Interest, in the case of the Deferred Interest Notes) to the Redemption Date, and (b) for each Subordinated Note and Reinvesting Holder Note to be redeemed, its proportional share (based on the Aggregate Outstanding Amount of the Subordinated Notes or Reinvesting Holder Note, as applicable) of the portion of the proceeds of the remaining Assets (after giving effect to the Optional Redemption, Clean-Up Call Redemption or Tax Redemption of the Secured Notes in whole or after all of the Secured Notes have been repaid in full and payment in full of (and/or creation of a reserve for) all expenses (including all Management Fees and Administrative Expenses) of the Co-Issuers); provided that, in connection with any Tax Redemption, Holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes may elect to receive less than 100% of the Redemption Price that would otherwise be payable to the Holders of such Class of Secured Notes.
 
"Reference Banks":  The meaning specified in Exhibit H hereto.
 
"Refinancing":  A loan or an issuance of replacement securities, whose terms in each case will be negotiated by the Portfolio Manager on behalf of the Issuer, from one or more financial institutions or purchasers to refinance the Secured Notes in connection with an Optional Redemption, it being understood that any rating of such replacement securities by a Rating Agency will be based on a credit analysis specific to such replacement securities and independent of the rating of the Secured Notes being refinanced.
 
"Refinancing Proceeds":  The Cash proceeds from the Refinancing.
 
"Registered":  In registered form within the meaning of Section 881(c)(2)(B)(i) of the Code and the United States Department of the Treasury regulations promulgated thereunder and issued after July 18, 1984; provided that a certificate of interest in a grantor trust shall not be treated as Registered unless each of the obligations or securities held by the trust was issued after that date.
 
"Registered Investment Advisor":  A Person duly registered as an investment advisor in accordance with the United States Investment Advisers Act of 1940, as amended.
 
 
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"Regulation S":  Regulation S, as amended, under the Securities Act.
 
"Regulation S Global Note":  The meaning specified in Section 2.2(b)(i).
 
"Regulation S Global Subordinated Note": A Subordinated Note issued in the form of a Regulation S Global Note.
 
"Reinvestable Obligation":  The meaning specified in Section 12.2(e).
 
"Reinvesting Holder":  Each Holder on the Closing Date of a Subordinated Note that is a U.S. person, and such Holder's successors other than any purchaser of all or any portion of the Subordinated Note of such Holder.
 
"Reinvesting Holder Notes":  The Reinvesting Holder Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
"Reinvestment Agreement":  A guaranteed reinvestment agreement from a bank, insurance company or other corporation or entity having an Eligible Investment Required Rating; provided that such agreement provides that it is terminable by the purchaser, without penalty, in the event that the rating assigned to such agreement by either Rating Agency is at any time lower than such agreement's Eligible Investment Required Rating.
 
"Reinvestment Amount":  With respect to the Subordinated Notes held by a Reinvesting Holder, any amount that is available to be distributed on any Payment Date during the Reinvestment Period to such Reinvesting Holder in respect of its Subordinated Notes pursuant to clause (V) or (W) of Section 11.1(a)(i) but is instead deposited in the Reinvestment Amount Account on such Payment Date at the direction of such Reinvesting Holder in accordance with Section 11.1(e).  Each Reinvestment Amount shall be deemed to be paid to the applicable Reinvesting Holder on the Payment Date on which it is deposited in the Reinvestment Amount Account at the direction of such Reinvesting Holder, and each Reinvestment Amount will be actually paid to such Reinvesting Holder after such Payment Date, without interest thereon and solely to the extent of Principal Proceeds available therefor pursuant to clause (F) of Section 11.1(a)(ii) or proceeds in respect of the Assets available therefor pursuant to clause (U) of Section 11.1(a)(iii), as applicable.
 
"Reinvestment Amount Account":  The trust account established pursuant to Section 10.3(f).
 
"Reinvestment Period":  The period from and including the Closing Date to and including the earliest of (i) October 30, 2016 (or, if such day is not a Business Day, the next succeeding Business Day), (ii) any date on which the Maturity of any Class of Secured Notes is accelerated following an Event of Default pursuant to this Indenture; provided that, if the Reinvestment Period is terminated pursuant to this clause (ii) and such acceleration is subsequently rescinded, then the Reinvestment Period will be reinstated, and (iii) any date on which the Portfolio Manager, in its sole discretion, reasonably determines that it can no longer reinvest in additional Collateral Obligations deemed appropriate by the Portfolio Manager in accordance with this Indenture and the Portfolio Management Agreement, provided that, in the case of this clause (iii), the Portfolio Manager notifies the Issuer, the Trustee (who shall notify the Noteholders) and the Collateral Administrator thereof at least five Business Days prior to such date.
 
 
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"Reinvestment Target Par Balance":  As of any date of determination, the Target Initial Par Amount minus (i) the amount of any reduction in the Aggregate Outstanding Amount of the Notes through the payment of Principal Proceeds plus (ii) the aggregate amount of Principal Proceeds that result from the issuance of any additional notes pursuant to Sections 2.13 and 3.2 (after giving effect to such issuance of any additional notes).
 
"Related Obligation":  An obligation issued by the Portfolio 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 Portfolio Manager or any of its Affiliates.
 
"Repack Obligation":  Any obligation of a special purpose vehicle (i) collateralized or backed by a Structured Finance Obligation or (ii) the payments on which depend on the cash flows from one or more credit default swaps or other derivative financial contracts that reference a Structured Finance Obligation or a Loan.
 
"Required Interest Coverage Ratio":  (a) For the Class A Notes and the Class B Notes (considered as one Class for purposes of this definition), 125.00%, (b) for the Class C Notes, 120.00%, (c) for the Class D Notes, 115.00%, (d) for the Class E Notes, 107.50% and (e) for the Class F Notes, 100.00%.
 
"Required Interest Diversion Amount":  The lesser of (x) 75% of Available Funds from the Collateral Interest Amount on any Payment Date after application of such Collateral Interest Amount to the payment of amounts set forth in clauses (A) through (R) of Section 11.1(a)(i) and (y) the minimum amount that needs to be added to the Adjusted Collateral Principal Amount in order to cause the Interest Diversion Test to be satisfied.
 
"Required Overcollateralization Ratio":  (a) For the Class A Notes and the Class B Notes (considered as one Class for purposes of this definition), 120.48%, (b) for the Class C Notes, 115.31%, (c) for the Class D Notes, 110.10%, (d) for the Class E Notes, 104.44% and (e) for the Class F Notes, 102.12%.
 
"Restricted Trading Period":  The period during which (a) the Moody's rating or S&P rating of the Class A Notes or Class X Notes is withdrawn (and not reinstated) or is one or more sub-categories below its rating on the Closing Date; (b) the S&P rating of the Class B Notes is withdrawn (and not reinstated) or is one or more sub-categories below its rating on the Closing Date; or (c) the S&P rating of the Class C Notes, Class D Notes, Class E Notes or Class F Notes is withdrawn (and not reinstated) or is two or more sub-categories below its rating on the Closing Date; provided in each case that (1) such period will not be a Restricted Trading Period solely with respect to the definitions of "Credit Improved Obligation" and "Credit Risk Obligation" if (i) after giving effect to any sale of the relevant Collateral Obligations, the Aggregate Principal Balance of the Collateral Obligations (excluding the Collateral Obligation being sold) and Eligible Investments constituting Principal Proceeds (including, without duplication, the anticipated net proceeds of such sale) will be at least equal to the Reinvestment Target Par Balance, (ii) each test specified in the definition of Collateral Quality Test is satisfied, and (iii) each Overcollateralization Ratio Test is satisfied; (2) such period will not be a Restricted Trading Period upon the direction of the Issuer with the consent of a Majority of the Controlling Class, which direction shall remain in effect until the earlier of (i) a further downgrade or withdrawal of the Moody's rating of the Class A Notes or Class X Notes or of the S&P rating of any Class of Secured Notes that, disregarding such direction, would cause the condition set forth in clause (a), (b) or (c) above to be true and (ii) a subsequent direction to the Issuer (with a copy to the Trustee and the Collateral Administrator) by a Majority of the Controlling Class declaring the beginning of a Restricted Trading Period; and (3) no Restricted Trading Period shall restrict any sale of a Collateral Obligation entered into by the Issuer at a time when a Restricted Trading Period is not in effect, regardless of whether such sale has settled.
 
 
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"Retained Amount":  A "net economic interest" (as defined in Article 122a of the CRD) which, in any event, shall not be less than 5% (or such higher or lower amount as notified by the Issuer to the Retention Provider is required by Article 122a of the CRD) of the nominal value of the Assets calculated based on the Aggregate Principal Balance of all of the Collateral Obligations and the outstanding principal amount of all Eligible Investments, in each case at the time of determination without taking into account any deduction pursuant to the proviso to the definition of "Principal Balance" of any Collateral Obligation or any deduction or discount in respect of the purchase price paid therefor by the Issuer.
 
"Retention of Net Economic Interest Letter":  Each letter relating to the retention of net economic interest in substantially the form of Exhibit K hereto, from the Retention Provider and addressed to the Issuer, the Trustee and the Placement Agent.
 
"Retention Provider":  JMP Group LLC.
 
"Revolver Funding Account":  The account established pursuant to Section 10.4.
 
"Revolving Collateral Obligation":  Any Collateral Obligation (other than a Delayed Drawdown Collateral Obligation) that is a Loan (including, without limitation, revolving loans, including funded and unfunded portions of revolving credit lines and letter of credit facilities, unfunded commitments under specific facilities and other similar loans and investments) that by its terms may require one or more future advances to be made to the borrower by the Issuer; provided that any such Collateral Obligation will be a Revolving Collateral Obligation only until all commitments to make advances to the borrower expire or are terminated or irrevocably reduced to zero.
 
"Rule 144A":  Rule 144A, as amended, under the Securities Act.
 
"Rule 144A Global Note":  The meaning specified in Section 2.2(b)(ii).
 
"Rule 144A Information":  The meaning specified in Section 7.15.
 
"Rule 17g-5":  Rule 17g-5 under the Exchange Act.
 
"S&P":  Standard & Poor's Ratings Services, a Standard & Poor's Financial Services LLC business, and any successor or successors thereto.
 
 
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"S&P CDO Monitor":  Each dynamic, analytical computer model developed by S&P used to calculate the default frequency in terms of the amount of debt assumed to default as a percentage of the original principal amount of the Collateral Obligations consistent with a specified benchmark rating level based upon certain assumptions (including the applicable Weighted Average S&P Recovery Rate) and S&P's proprietary corporate default studies, as may be amended by S&P from time to time upon notice to the Issuer, the Portfolio Manager, the Collateral Administrator and the Trustee.  Each S&P CDO Monitor shall be chosen by the Portfolio Manager and associated with either (x) a Weighted Average S&P Recovery Rate and a Weighted Average Floating Spread from Section 2 of Schedule 6 or (y) a Weighted Average S&P Recovery Rate and a Weighted Average Floating Spread confirmed by S&P, provided that as of any date of determination the Weighted Average S&P Recovery Rate for each Class of Secured Notes Outstanding equals or exceeds the Weighted Average S&P Recovery Rate for such Class chosen by the Portfolio Manager and the Weighted Average Floating Spread equals or exceeds the Weighted Average Floating Spread chosen by the Portfolio Manager.
 
"S&P CDO Monitor Test":  A test that will be satisfied on any date of determination on or after the Effective Date following receipt by the Issuer and the Collateral Administrator of the requisite input files for the S&P CDO Monitor if, after giving effect to the sale of a Collateral Obligation or the purchase of a Collateral Obligation, each Class Default Differential of the Proposed Portfolio is positive.  The S&P CDO Monitor Test will be considered to be improved if each Class Default Differential of the Proposed Portfolio is greater than the corresponding Class Default Differential of the Current Portfolio.
 
"S&P Collateral Value":  On any date of determination, with respect to any Defaulted Obligation or Deferring Security, the lesser of (i) the S&P Recovery Amount of such Defaulted Obligation or Deferring Security, respectively, as of such date and (ii) the Market Value of such Defaulted Obligation or Deferring Security, respectively, as of such date.
 
"S&P Industry Classification":  The S&P Industry Classifications set forth in Schedule 3 hereto, and such industry classifications shall be updated at the option of the Portfolio Manager (on a unilateral basis) if S&P publishes revised industry classifications (it being understood that Article 8 shall not apply to any such update).
 
"S&P Rating":  With respect to any Collateral Obligation, as of any date of determination, the rating determined in accordance with the following methodology:
 
 
(i)
(A) if there is an issuer credit rating of the issuer of such Collateral Obligation by S&P as published by S&P, or the guarantor which unconditionally and irrevocably guarantees such Collateral Obligation pursuant to a form of guaranty approved by S&P for use in connection with this transaction, then the S&P Rating shall be such rating (regardless of whether there is a published rating by S&P on the Collateral Obligations of such issuer held by the Issuer, provided that private ratings (that is, ratings provided at the request of the obligor) may be used for purposes of this definition if the related obligor has consented to the disclosure thereof and a copy of such consent has been provided to S&P) or (B) if there is no issuer credit rating of the issuer by S&P but (1) there is a senior secured rating on any obligation or security of the issuer, then the S&P Rating of such Collateral Obligation shall be one sub-category below such rating; (2) if clause (1) above does not apply, but there is a senior unsecured rating on any obligation or security of the issuer, the S&P Rating of such Collateral Obligation shall equal such rating; and (3) if neither clause (1) nor clause (2) above applies, but there is a subordinated rating on any obligation or security of the issuer, then the S&P Rating of such Collateral Obligation shall be one sub-category above such rating if such rating is higher than "BB+", and shall be two sub-categories above such rating if such rating is "BB+" or lower;
 
 
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(ii)
with respect to any Collateral Obligation that is a DIP Collateral Obligation, the S&P Rating thereof shall be the credit rating assigned to such issue by S&P;
 
 
(iii)
if there is not a rating by S&P on the issuer or on an obligation of the issuer, then the S&P Rating may be determined pursuant to clauses (a) through (c) below:
 
 
(a)
if an obligation of the issuer is not a DIP Collateral Obligation and is publicly rated by Moody's, then the S&P Rating will be determined in accordance with the methodologies for establishing the Moody's Rating set forth above except that the S&P Rating of such obligation will be (1) one sub-category below the S&P equivalent of the Moody's Rating if such Moody's Rating is "Baa3" or higher and (2) two sub-categories below the S&P equivalent of the Moody's Rating if such Moody's Rating is "Ba1" or lower;
 
 
(b)
the S&P Rating may be based on a credit estimate provided by S&P, and in connection therewith, the Issuer, the Portfolio Manager on behalf of the Issuer or the issuer of such Collateral Obligation shall, prior to or within 30 days after the acquisition of such Collateral Obligation, apply (and concurrently submit all available Information in respect of such application) to S&P for a credit estimate which shall be its S&P Rating; provided that, if such Information is submitted within such 30-day period, then, pending receipt from S&P of such estimate, such Collateral Obligation shall have an S&P Rating as determined by the Portfolio Manager in its sole discretion if the Portfolio Manager certifies to the Trustee and the Collateral Administrator that it believes that such S&P Rating  determined by the Portfolio Manager is commercially reasonable and that the credit estimate provided by S&P will be at least equal to such S&P Rating determined by the Portfolio Manager; provided further, that if such Information is not submitted within such 30-day period, then, pending receipt from S&P of such estimate, the Collateral Obligation shall have (1) the S&P Rating as determined by the Portfolio Manager for a period of up to 90 days after the acquisition of such Collateral Obligation and (2) an S&P Rating of "CCC-" following such 90-day period; unless, during such 90-day period, the Portfolio Manager has requested the extension of such period and S&P, in its sole discretion, has granted such request; provided further, that if such 90-day period (or other extended period) elapses pending S&P's decision with respect to such application, the S&P Rating of such Collateral Obligation shall be "CCC-"; provided further, that if the Collateral Obligation has had a public rating by S&P that S&P has withdrawn or suspended within six months prior to the date of such application for a credit estimate in respect of such Collateral Obligation, the S&P Rating in respect thereof shall be "CCC-" pending receipt from S&P of such estimate, and S&P may elect not to provide such estimate until a period of six months have elapsed after the withdrawal or suspension of the public rating; provided further that the S&P Rating may not be determined pursuant to this clause (b) if the Collateral Obligation is a DIP Collateral Obligation; provided further that such credit estimate shall expire 12 months after the acquisition of such Collateral Obligation, following which such Collateral Obligation shall have an S&P Rating of "CCC-" unless, during such 12-month period, the Issuer applies for renewal thereof in accordance with Section 7.14(b), in which case such credit estimate shall continue to be the S&P Rating of such Collateral Obligation until S&P has confirmed or revised such credit estimate, upon which such confirmed or revised credit estimate shall be the S&P Rating of such Collateral Obligation; provided further that such confirmed or revised credit estimate shall expire on the next succeeding 12-month anniversary of the date of the acquisition of such Collateral Obligation and (when renewed annually in accordance with Section 7.14(b)) on each 12-month anniversary thereafter;
 
 
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(c)
with respect to a Collateral Obligation that is not a Defaulted Obligation, the S&P Rating of such Collateral Obligation will at the election of the Issuer (at the direction of the Portfolio Manager) be "CCC-"; provided (1) neither the issuer of such Collateral Obligation nor any of its Affiliates are subject to any bankruptcy or reorganization proceedings and (2) the issuer has not defaulted on any payment obligation in respect of any debt security or other obligation of the issuer at any time within the two year period ending on such date of determination, all such debt securities and other obligations of the issuer that are pari passu with or senior to the Collateral Obligation are current and the Portfolio Manager reasonably expects them to remain current;  provided further that the Issuer, the Portfolio Manager on behalf of the Issuer or the issuer of such Collateral Obligation shall submit all available Information in respect of such Collateral Obligation to S&P prior to or within 30 days after the election of the Issuer (at the direction of the Portfolio Manager);
 
 
(iv)
with respect to a DIP Collateral Obligation that has no issue rating by S&P or a Current Pay Obligation that is rated "D" or "SD" by S&P, the S&P Rating of such DIP Collateral Obligation or Current Pay Obligation, as applicable, will be, at the election of the Issuer (at the direction of the Portfolio Manager), "CCC-" or the S&P Rating determined pursuant to clause (iii)(b) above;
 
provided, that for purposes of the determination of the S&P Rating, (x) if the applicable rating assigned by S&P to an obligor or its obligations is on "credit watch positive" by S&P, such rating will be treated as being one sub-category above such assigned rating and (y) if the applicable rating assigned by S&P to an obligor or its obligations is on "credit watch negative" by S&P, such rating will be treated as being one sub-category below such assigned rating.
 
 
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"S&P Rating Condition": With respect to any action taken or to be taken by or on behalf of the Issuer, a condition that is satisfied if S&P provides written confirmation (which may take the form of a press release or other written communication which may be in electronic form or posted on S&P's website) that no immediate withdrawal or reduction with respect to its then-current rating by S&P of any Class of Secured Notes will occur as a result of such action; provided that the S&P Rating Condition will be deemed to be satisfied if (i) no Class of Secured Notes then Outstanding is then rated by S&P or (ii) S&P makes a public announcement or informs the Issuer, the Portfolio Manager or the Trustee in writing that (A) it believes that satisfaction of the S&P Rating Condition is not required with respect to an action or (B) its practice is not to give such confirmations.
 
"S&P Ratings Confirmation Failure":  The meaning specified in Section 7.18(e)(y).
 
"S&P Recovery Amount":  With respect to any Collateral Obligation, an amount equal to:  (a) the applicable S&P Recovery Rate multiplied by (b) the Principal Balance of such Collateral Obligation.
 
"S&P Recovery Rate":  With respect to a Collateral Obligation, the recovery rate set forth in Section 1 of Schedule 6 using the Initial Rating of the most senior Class of Secured Notes Outstanding at the time of determination.
 
"S&P Recovery Rating":  With respect to a Collateral Obligation for which an S&P Recovery Rate is being determined, the "Recovery Rating" assigned by S&P to such Collateral Obligation based upon the tables set forth in Schedule 6 hereto and the following table:
 
Recovery Rating
 
Description of Recovery
 
Recovery Range (%)
1+
 
High expectation, full recovery
 
75-95
1
 
Very high recovery
 
65-95
2
 
Substantial recovery
 
50-85
3
 
Meaningful recovery
 
30-65
4
 
Average recovery
 
20-45
5
 
Modest recovery
 
5-25
6
 
Negligible recovery
 
2-10

 
"Sale":  The meaning specified in Section 5.17.
 
"Sale Proceeds":  All proceeds (excluding proceeds representing accrued interest, if any) received with respect to Assets as a result of sales of such Assets in accordance with Article 12 (or Article 5, as applicable) less any reasonable expenses incurred by the Portfolio Manager, the Collateral Administrator or the Trustee (other than amounts payable as Administrative Expenses) in connection with such sales.
 
 
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"Schedule of Collateral Obligations":  The schedule of Collateral Obligations attached as Schedule 1 hereto, which schedule shall list each Collateral Obligation Delivered hereunder and each Collateral Obligation with respect to which the Portfolio Manager on behalf of the Issuer has entered into a binding commitment to purchase or enter into and shall include, with respect to each such Collateral Obligation, the issuer, Principal Balance, coupon/spread, the stated maturity, the Moody's Rating, the S&P Rating (unless such rating is based on a credit estimate or is a private or confidential rating from S&P), the Moody's Industry Classification and the S&P Industry Classification for each Collateral Obligation and the percentage of the aggregate commitment under each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation that is funded, as amended from time to time (without the consent of or any action on the part of any Person) to reflect the release of Collateral Obligations pursuant to Article 10 hereof, the inclusion of additional Collateral Obligations pursuant to Section 7.18 hereof and the inclusion of additional Collateral Obligations as provided in Section 12.2 hereof.
 
"Scheduled Distribution":  With respect to any Asset, for each Due Date, the scheduled payment of principal and/or interest due on such Due Date with respect to such Asset, determined in accordance with the assumptions specified in Section 1.2 hereof.
 
"Second Lien Loan":  Any assignment of or Participation Interest in a Loan that is a First Lien Last Out Loan or a Loan that:  (a) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the obligor of the Loan (other than with respect to trade claims, capitalized leases or similar obligations) but which is subordinated (with respect to liquidation preferences with respect to pledged collateral) to a Senior Secured Loan of the obligor; (b) is secured by a valid second-priority perfected security interest or lien in, to or on specified collateral (subject to customary exceptions for permitted liens, including without limitation, tax liens) securing the obligor's obligations under the Second Lien Loan the value of which at the time of purchase is adequate (in the commercially reasonable judgment of the Portfolio Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal or higher seniority secured by a lien or security interest in the same collateral; and (c) is not secured solely or primarily by common stock or other equity interests; provided that the limitation set forth in this clause (c) shall not apply with respect to a Loan made to a parent entity that is secured solely or primarily by the stock of one or more of the subsidiaries of such parent entity to the extent that the granting by any such subsidiary of a lien on its own property would violate law or regulations applicable to such subsidiary (whether the obligation secured is such Loan or any other similar type of indebtedness owing to third parties); provided further that for a Loan to which, due to the operation of the foregoing proviso, the limitation set forth in this clause (c) does not apply, the S&P Recovery Rate will be determined on a case by case basis if there is no assigned S&P Recovery Rating.
 
"Secured Note Payment Sequence": The application, in accordance with the Priority of Payments, of Interest Proceeds or Principal Proceeds, as applicable, in the following order:
 
 
(i)
to the payment, pro rata and pari passu, of (i) principal of the Class A Notes and (ii) principal of the Class X Notes, until such amounts have been paid in full;
 
 
(ii)
to the payment of principal of the Class B Notes until such amount has been paid in full;
 
 
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(iii)
to the payment of principal of the Class C Notes (including any Note Deferred Interest in respect of the Class C Notes) until the Class C Notes have been paid in full;
 
 
(iv)
to the payment of accrued and unpaid interest (excluding Note Deferred Interest but including any interest on Note Deferred Interest) on the Class C Notes until such amount has been paid in full;
 
 
(v)
to the payment of principal of the Class D Notes (including any Note Deferred Interest in respect of the Class D Notes) until the Class D Notes have been paid in full;
 
 
(vi)
to the payment of accrued and unpaid interest (excluding Note Deferred Interest but including any interest on Note Deferred Interest) on the Class D Notes until such amount has been paid in full;
 
 
(vii)
to the payment of principal of the Class E Notes (including any Note Deferred Interest in respect of the Class E Notes) until the Class E Notes have been paid in full;
 
 
(viii)
to the payment of accrued and unpaid interest (excluding Note Deferred Interest but including any interest on Note Deferred Interest) on the Class E Notes until such amount has been paid in full;
 
 
(ix)
to the payment of principal of the Class F Notes (including any Note Deferred Interest in respect of the Class F Notes) until the Class F Notes have been paid in full; and
 
 
(x)
to the payment of accrued and unpaid interest (excluding Note Deferred Interest but including any interest on Note Deferred Interest) on the Class F Notes until such amount has been paid in full.
 
"Secured Notes":  Collectively, the Class A Notes, the Class X Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E Notes and the Class F Notes authorized by, and authenticated and delivered under, this Indenture (as specified in Section 2.3).
 
"Secured Parties":  The meaning specified in the Granting Clauses.
 
"Securities Account Control Agreement":  The Securities Account Control Agreement dated as of the Closing Date among the Issuer, the Trustee and U.S. Bank National Association, as securities intermediary.
 
"Securities Act":  The United States Securities Act of 1933, as amended.
 
"Securities Intermediary":  The meaning specified in Section 8-102(a)(14) of the UCC.
 
"Securities Lending Agreement":  An agreement pursuant to which the Issuer agrees to loan any securities lending counterparty one or more assets and such securities lending counterparty agrees to post collateral with the Trustee or a securities intermediary to secure its obligation to return such assets to the Issuer.
 
 
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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 Portfolio Manager in arrears on each Payment Date (prorated for the related Collection Period) pursuant to Section 8(a) of the Portfolio Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.15% per annum (calculated on the basis of a 360-day year consisting of twelve 30-day months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date; provided that the Senior Management Fee payable on any Payment Date shall not include any such fee (or any portion thereof) the payment of which has been irrevocably waived by the Portfolio Manager pursuant to Section 11.1(d) no later than the Determination Date immediately prior to such Payment Date.
 
"Senior Secured Bond":  A debt security (that is not a Loan) that (a) is issued by a corporation, limited liability company, partnership or trust and is in the form of, or represented by, a bond, note, certificated debt security or other debt security (other than any of the foregoing that evidences a Loan or Participation Interest), (b) is secured by a valid first priority perfected security interest or lien in, to or on specified collateral securing the obligor's obligations under such obligation but is not secured solely or primarily by common stock or other equity interests and (c) has a rating that is not lower than the related obligor's Moody's corporate family rating.
 
"Senior Secured Loan":  Any assignment of or Participation Interest in a Loan that:  (a) is not (and cannot by its terms become) subordinate in right of payment to any other obligation of the obligor of the Loan (other than with respect to trade claims, capitalized leases or similar obligations); (b) is secured by a valid first-priority perfected security interest or lien in, to or on specified collateral (subject to customary exceptions for permitted liens, including without limitation, tax liens) securing the obligor's obligations under the Loan; (c) the value of the collateral securing the Loan at the time of purchase together with other attributes of the obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Portfolio Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal seniority secured by a first lien or security interest in the same collateral; and (d) is not secured solely or primarily by common stock or other equity interests; provided that the limitation set forth in this clause (d) shall not apply with respect to a Loan made to an obligor that is secured solely or primarily by the stock of, or other equity interests in, such obligor or one or more of its subsidiaries to the extent that either (1) in the Portfolio Manager's commercially reasonable judgment, the applicable Underlying Instruments of such Loan limit the activities of such obligor or such subsidiary, as applicable, in such a manner so as to provide a reasonable expectation that (x) cash flows from such obligor or from such subsidiary and such obligor, as applicable, are sufficient to provide debt service on such Loan and (y) assets of such obligor or of such subsidiary and such obligor, as applicable, would be available to repay principal of and interest on such Loan in the event of the enforcement of such Underlying Instruments or (2) the granting by such obligor or any such subsidiary of a lien on its own property (whether to secure such Loan or to secure any other similar type of indebtedness owing to third parties) would violate laws or regulations applicable to such obligor or to such subsidiary; provided further that for obligations to which, due to the operation of the foregoing proviso, the limitation set forth in this clause (d) does not apply, the S&P Recovery Rate will be determined on a case by case basis if there is no assigned S&P Recovery Rating.
 
 
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"Similar Law":  Any federal, state, local, non-U.S. or other law or regulation that are substantially similar to the fiduciary responsibility or prohibited transaction provisions contained in Title I of ERISA or Section 4975 of the Code.
 
"Special Redemption":  The meaning specified in Section 9.6.
 
"Special Redemption Amount":  The meaning specified in Section 9.6.
 
"Special Redemption Date":  The meaning specified in Section 9.6.
 
"Specified Amendment": With respect to any Collateral Obligation that is the subject of a rating estimate or is a private or confidential rating by S&P or Moody's, any waiver, modification, amendment or variance that:
 
 
(i)
modifies the amortization schedule with respect to such Collateral Obligation in a manner that:
 
 
(a)
reduces the Dollar amount of any Scheduled Distribution by more than the greater of (x) 25% and (y) $250,000; or
 
 
(b)
postpones any Scheduled Distribution by more than two payment periods or eliminates a Scheduled Distribution;
 
 
(ii)
causes a deferral or capitalization of interest by more than 100 basis points (excluding any increase in an interest rate arising by operation of a default or penalty interest clause under a Collateral Obligation);
 
 
(iii)
extends the stated maturity date of such Collateral Obligation by more than 24 months; provided that (x) any such extension shall be deemed not to have been made until the Business Day following the original stated maturity date of such Collateral Obligation and (y) such extension shall not cause the Weighted Average Life of such Collateral Obligation to increase by more than 25%;
 
 
(iv)
releases any party from its obligations under such Collateral Obligation, if such release would have a material adverse effect on the Collateral Obligation;
 
 
(v)
reduces the principal amount thereof; or
 
 
(vi)
in the reasonable business judgment of the Portfolio Manager, has a material adverse impact on the value of such Collateral Obligation.
 
 
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"Specified Event": With respect to any Collateral Obligation that is the subject of a rating estimate, private rating or confidential rating by S&P, the occurrence of any of the following events of which the Issuer or the Portfolio Manager has knowledge:
 
 
(a)
the non-payment of interest or principal due and payable with respect to such Collateral Obligation;
 
 
(b)
the rescheduling of any interest or principal in any part of the capital structure of the related Obligor;
 
 
(c)
any restructuring of debt of the related Obligor;
 
 
(d)
any breach of a covenant by the related Obligor;
 
 
(e)
the occurrence of any significant transactions (including the sale or acquisition of underlying assets) with respect to such Collateral Obligation; or
 
 
(f)
any changes in payment terms (including the addition of payment-in-kind terms, changes in maturity dates, and changes in interest rates) with respect to such Collateral Obligation.
 
"specified United States person":  The meaning specified in Section 1473(3) of the Code.
 
"Stated Maturity":  With respect to the Notes of any Class, the date specified as such in Section 2.3.
 
"Step-Down Obligation":  An obligation or security which by the terms of the related Underlying Instruments provides for a decrease in the per annum interest rate on such obligation or security (other than by reason of any change in the applicable index or benchmark rate used to determine such interest rate) or in the spread over the applicable index or benchmark rate, solely as a function of the passage of time; provided that an obligation or security providing for payment of a constant rate of interest at all times after the date of acquisition by the Issuer shall not constitute a Step-Down Obligation.
 
"Step-Up Obligation":  An obligation or security which by the terms of the related Underlying Instruments provides for an increase in the per annum interest rate on such obligation or security, or in the spread over the applicable index or benchmark rate, solely as a function of the passage of time; provided that an obligation or security providing for payment of a constant rate of interest at all times after the date of acquisition by the Issuer shall not constitute a Step-Up Obligation.
 
"Structured Finance Obligation":  Any obligation issued by a special purpose vehicle and secured directly by, referenced to, or representing ownership of, a pool of receivables or other financial assets of any obligor, including collateralized debt obligations and mortgage-backed securities (excluding, for the avoidance of doubt, an asset based loan secured by accounts receivables of an operating business).
 
 
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"Subordinated Loan":  A loan obligation of any corporation, partnership, trust or other business entity which is (whether by its terms or otherwise) subordinate in right of payment to any other debt for borrowed money incurred by the Obligor under such loan.
 
"Subordinated Management Fee":  The fee payable to the Portfolio Manager in arrears on each Payment Date (prorated for the related Collection Period) pursuant to Section 8(a) of the Portfolio Management Agreement and Section 11.1 of this Indenture, in an amount equal to 0.35% per annum (calculated on the basis of a 360-day year consisting of twelve 30-day months) of the Fee Basis Amount at the beginning of the Collection Period relating to such Payment Date; provided that the Subordinated Management Fee payable on any Payment Date shall not include any such fee (or any portion thereof) the payment of which has been irrevocably waived by the Portfolio Manager pursuant to Section 11.1(d) no later than the Determination Date immediately prior to such Payment Date.
 
"Subordinated Notes":  The subordinated notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.
 
"Subordinated Notes Internal Rate of Return":  An annualized internal rate of return (computed using the "XIRR" function in Microsoft® Excel 2002 or an equivalent function in another software package), stated on a per annum basis, for the following cash flows, assuming all Subordinated Notes were purchased on the Closing Date for U.S.$23,800,000:
 
 
(a)
each distribution of Interest Proceeds made to the Holders of the Subordinated Notes on any prior Payment Date and, to the extent necessary to reach the applicable Subordinated Notes Internal Rate of Return, the current Payment Date; and
 
 
(b)
each distribution of Principal Proceeds made to the Holders of the Subordinated Notes on any prior Payment Date and, to the extent necessary to reach the applicable Subordinated Notes Internal Rate of Return, the current Payment Date.
 
All Reinvestment Amounts with respect to the Subordinated Notes shall be deemed to have been distributed to the relevant Reinvesting Holder(s) through the applicable Payment Date for purposes of calculating the Subordinated Notes Internal Rate of Return.
 
"Subsequent Delivery Date":  The settlement date with respect to the Issuer's acquisition of a Collateral Obligation to be pledged to the Trustee after the Closing Date.
 
"Substitute Obligations":  The meaning specified in Section 12.2(e).
 
"Successor Entity":  The meaning specified in Section 7.10.
 
"Synthetic Security": A security or swap transaction, other than a Participation Interest, that has payments associated with either payments of interest on and/or principal of a reference obligation or the credit performance of a reference obligation.
 
"Target Initial Par Amount":  U.S.$329,400,000.
 
 
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"Target Initial Par Condition":  A condition satisfied as of the Effective Date if the Aggregate Principal Balance of Collateral Obligations that are held by the Issuer and that the Issuer has committed to purchase on such date, together with the amount of any proceeds of prepayments, maturities or redemptions of Collateral Obligations purchased by the Issuer prior to such date (other than any such proceeds that have been reinvested in Collateral Obligations held by the Issuer on the Effective Date), will equal or exceed the Target Initial Par Amount; provided that for purposes of this definition, any Collateral Obligation that becomes a Defaulted Obligation prior to the Effective Date shall be treated as having a Principal Balance equal to its Moody's Collateral Value.
 
"Tax":  Any present or future tax, levy, impost, duty, charge or assessment of any nature (including interest, penalties and additions thereto) imposed by any governmental or other taxing authority other than a stamp, registration, documentation or similar tax.
 
"Tax Event":  An event that occurs if (a) there is a change in or the adoption of any U.S. or foreign tax statute or treaty, or any change in or the issuance of any regulation (whether final, temporary or proposed), rule, ruling, practice, procedure or judicial decision or interpretation of the foregoing after the Closing Date and (b) as a result of the foregoing or of FATCA (i) any obligor under any Collateral Obligation is required to deduct or withhold from any payment under such Collateral  Obligation to the Issuer for or on account of any Tax for whatever reason (other than (x) withholding tax on (1) fees received with respect to a Letter of Credit Reimbursement Obligation, late payment fees, prepayment fees or other similar fees (2) amendment, waiver, consent and extension fees and (3) commitment fees and other similar fees in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations and (y) withholding tax imposed as a result of the failure by any Holder to comply with its Noteholder Reporting Obligations, so long as the Issuer, within 60 days after the imposition of such withholding tax, exercises its right to demand that such Non-Permitted Holder transfer its interest to a Person that is not a Non-Permitted Holder and, if such Non-Permitted Holder fails to so transfer its Notes, the Issuer exercises its right to sell such Notes or interest therein to a person that is not a Non-Permitted Holder) and such obligor is not required to pay to the Issuer such additional amount as is necessary to ensure that the net amount actually received by the Issuer (free and clear of Taxes, whether assessed against such obligor or the Issuer) will equal the full amount that the Issuer would have received had no such deduction or withholding occurred or (ii) any jurisdiction imposes net income, profits or similar Tax on the Issuer.
 
"Tax Guidelines":  The requirements set forth in Annex A to the Portfolio Management Agreement.
 
"Tax Jurisdiction":  The Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, the Channel Islands, the Netherlands Antilles or the Marshall Islands and any other tax advantaged jurisdiction as may be notified by Moody's to the Portfolio Manager, with a copy to the Designated Successor Manager, from time to time.
 
"Tax Redemption": The meaning specified in Section 9.3(a) hereof.
 
 
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"Third Party Credit Exposure":  As of any date of determination, the Principal Balance of each Collateral Obligation that consists of a Participation Interest or a Letter of Credit Reimbursement Obligation.
 
"Third Party Credit Exposure Limits":  Limits that shall be satisfied if the Third Party Credit Exposure with counterparties having the ratings below from S&P do not exceed the percentage of the Collateral Principal Amount specified below:
 
S&P's credit rating of Selling Institution or LOC Agent Bank
 
Aggregate
Percentage
Limit
 
Individual
Percentage
Limit
AAA
 
20%
   
20%
 
AA+
 
10%
   
10%
 
AA
 
10%
   
10%
 
AA-
 
10%
   
10%
 
A+
 
5%
   
5%
 
A
 
5%
   
5%
 
A- or lower
 
0%
   
0%
 

provided that a Selling Institution or LOC Agent Bank having an S&P credit rating of "A" must also have a short-term S&P rating of "A-1"; otherwise its Aggregate Percentage Limit and Individual Percentage Limit shall be 0%.
 
"Trading Plan":  The meaning specified in Section 1.2(k).
 
"Trading Plan Period":  The meaning specified in Section 1.2(k).
 
"Transaction Documents": This Indenture, the Securities Account Control Agreement, the Portfolio Management Agreement, the Designated Successor Management Agreement, the Collateral Administration Agreement, the Administration Agreement, the Placement Agreement and each Retention of Net Economic Interest Letter.
 
"Transfer Agent":  The Person or Persons authorized by the Issuer to exchange or register the transfer of Notes.
 
"Trust Officer":  When used with respect to the Trustee, any Officer within the Corporate Trust Office (or any successor group of the Trustee), including any Officer to whom any corporate trust matter is referred at the Corporate Trust Office because of such person's knowledge of and familiarity with the particular subject and, in each case, having direct responsibility for the administration of this transaction.
 
"Trustee":  The meaning specified in the first sentence of this Indenture.
 
"UCC":  The Uniform Commercial Code as in effect in the State of New York or, if different, the political subdivision of the United States that governs the perfection of the relevant security interest as amended from time to time.
 
"Uncertificated Security":  The meaning specified in Section 8-102(a)(18) of the UCC.
 
 
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"Underlying Instrument":  The indenture or other agreement pursuant to which an Asset has been issued or created and each other agreement that governs the terms of or secures the obligations represented by such Asset or of which the holders of such Asset are the beneficiaries.
 
"United States owned foreign entity": The meaning specified in Section 2.12(c).
 
"Unpaid Class X Principal Amortization Amount":  For any Payment Date, the aggregate amount of all or any portion of the Class X Principal Amortization Amount for any prior Payment Dates that were not paid on such prior Payment Dates.
 
"Unregistered Securities":  The meaning specified in Section 5.17(c).
 
"Unsalable Asset": (a) A Defaulted Obligation, Equity Security, obligation received in connection with an Offer or a Permitted Offer, in a restructuring or plan of reorganization with respect to the obligor, or other exchange or any other security or debt obligation that is part of the Assets, in respect of which the Issuer has not received a payment in Cash during the preceding 12 months or (b) any Collateral Obligation identified in a certificate of the Portfolio Manager as having a current Market Value of less than $1,000, in each case of (a) and (b) with respect to which the Portfolio Manager certifies to the Trustee that (x) it has made commercially reasonable efforts to dispose of such Collateral Obligation for at least 90 days and (y) in its commercially reasonable judgment such Collateral Obligation is not expected to be saleable for the foreseeable future.
 
"Unscheduled Principal Payments":  Any principal payments received with respect to a Collateral Obligation after the Reinvestment Period as a result of prepayment, including but not limited to, prepayments resulting from optional redemptions, exchange offers, tender offers, consents or other prepayments made by the obligor thereunder.
 
"U.S. Person" and "U.S. person":  The meanings specified in Section 7701(a)(30) of the Code or in Regulation S, as the context requires.
 
"Weighted Average Coupon": As of any Measurement Date, the number obtained by dividing:  (a) the amount equal to the Aggregate Coupon minus any amount required to be deposited in the LC Reserve Account in accordance with Section 10.3(h) in respect of any Fixed Rate Obligation by (b) an amount equal to the Aggregate Principal Balance (including for this purpose any capitalized interest) of all Fixed Rate Obligations as of such Measurement Date (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest).
 
"Weighted Average Floating Spread":  As of any Measurement Date, the number obtained by dividing: (a) the amount equal to (A) the Aggregate Funded Spread plus (B) the Aggregate Unfunded Spread plus (C) the Aggregate Excess Funded Spread minus any amount required to be deposited in the LC Reserve Account in accordance with Section 10.3(h) by (b) the lesser of (A) the Reinvestment Target Par Balance and (B) an amount equal to the Aggregate Principal Balance of all Floating Rate Obligations as of such Measurement Date (excluding any Deferrable Security and any Partial Deferrable Security to the extent of any non-cash interest); provided that, for the purposes of the S&P CDO Monitor, (x) the Aggregate Excess Funded Spread shall not be included in the calculation of the amount described in clause (a)(C) and (y) clause (b) shall in all cases be equal to the amount in clause (b)(B).
 
 
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"Weighted Average Life":  As of any date of determination with respect to all Collateral Obligations other than Defaulted Obligations, the number of years following such date obtained by summing the products obtained by multiplying:
 
(a) (i) the Average Life at such time of each such Collateral Obligation by (ii) the outstanding Principal Balance of such Collateral Obligation,
 
and dividing such sum by:
 
(b) the aggregate remaining principal balance at such time of all Collateral Obligations other than Defaulted Obligations.
 
For the purposes of the foregoing, the "Average Life" is, on any date of determination with respect to any Collateral Obligation, the quotient obtained by dividing (i) the sum of the products of (a) the number of years (rounded to the nearest one hundredth thereof) from such date of determination to the respective dates of each successive Scheduled Distribution of principal of such Collateral Obligation and (b) the respective amounts of principal of such Scheduled Distributions by (ii) the sum of all successive Scheduled Distributions of principal on such Collateral Obligation.
 
"Weighted Average Life Test":  A test satisfied on any date of determination if the Weighted Average Life of 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 October 30, 2020.
 
"Weighted Average Moody's Rating Factor":  The number (rounded up to the nearest whole number) determined by:
 
 
(a)
summing the products of (i) the Principal Balance of each Collateral Obligation (excluding Equity Securities) multiplied by (ii) the Moody's Rating Factor of such Collateral Obligation (as described below) and
 
 
(b)
dividing such sum by the outstanding Principal Balance of all such Collateral Obligations.
 
For purposes of the foregoing, the "Moody's Rating Factor" relating to any Collateral Obligation is the number set forth in the table below opposite the Moody's Default Probability Rating of such Collateral Obligation.
 
 
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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
   

 
For purposes of the Maximum Moody's Rating Factor Test, any Collateral Obligation issued or guaranteed by the United States government or any agency or instrumentality thereof is assigned a Moody's Rating Factor corresponding to the then-current Moody's long-term issuer rating of the United States of America.
 
"Weighted Average Moody's 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 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.
 
"Weighted Average S&P Recovery Rate":  As of any date of determination, the number, expressed as a percentage and determined separately for each Class of Secured Notes, obtained by summing the products obtained by multiplying the outstanding Principal Balance of each Collateral Obligation by its corresponding recovery rate as determined in accordance with Section 1 of Schedule 6 hereto, dividing such sum by the aggregate principal balance of all Collateral Obligations, and rounding to the nearest tenth of a percent.
 
"Zero Coupon Bond": Any debt security that by its terms (a) does not bear interest for all or part of the remaining period that it is outstanding, (b) provides for periodic payments of interest in Cash less frequently than semi-annually or (c) pays interest only at its stated maturity.
 
1.2           Assumptions as to Assets.  In connection with all calculations required to be made pursuant to this Indenture with respect to Scheduled Distributions on any Asset, or any payments on any other assets included in the Assets, with respect to the sale of and reinvestment in Collateral Obligations, and with respect to the income that can be earned on Scheduled Distributions on such Assets and on any other amounts that may be received for deposit in the Collection Account, the provisions set forth in this Section 1.2 shall be applied.  The provisions of this Section 1.2 shall be applicable to any determination or calculation that is covered by this Section 1.2, whether or not reference is specifically made to Section 1.2, unless some other method of calculation or determination is expressly specified in the particular provision.
 
 
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(a)           All calculations with respect to Scheduled Distributions on the Assets shall be made on the basis of information as to the terms of each such Asset and upon reports of payments, if any, received on such Asset that are furnished by or on behalf of the issuer of such Asset and, to the extent they are not manifestly in error, such information or reports may be conclusively relied upon in making such calculations.
 
(b)           For purposes of calculating the Coverage Tests, except as otherwise specified in the Coverage Tests, such calculations will not include scheduled interest and principal payments on Defaulted Obligations unless or until such payments are actually made.
 
(c)           For each Collection Period and as of any date of determination, the Scheduled Distribution on any Asset (other than a Defaulted Obligation, which, except as otherwise provided herein, shall be assumed to have a Scheduled Distribution of zero, except to the extent of any payments actually received) shall be the sum of (i) the total amount of payments and collections to be received during such Collection Period in respect of such Asset (including the proceeds of the sale of such Asset received and, in the case of sales which have not yet settled, to be received during the Collection Period and not reinvested in additional Collateral Obligations or Eligible Investments or retained in the Collection Account for subsequent reinvestment pursuant to Section 12.2) that, if received as scheduled, will be available in the Collection Account at the end of the Collection Period and (ii) any such amounts received in prior Collection Periods that were not disbursed on a previous Payment Date, in each case net of withholding or similar taxes to be withheld from such payments (but taking into account gross-up payments in respect of such taxes).
 
(d)           Each Scheduled Distribution receivable with respect to an Asset shall be assumed to be received on the applicable Due Date, and each such Scheduled Distribution shall be assumed to be immediately deposited in the Collection Account to earn interest at the Assumed Reinvestment Rate.  All such funds shall be assumed to continue to earn interest until the date on which they are required to be available in the Collection Account for application, in accordance with the terms hereof, to payments of principal of or interest on the Secured Notes and distributions on the Subordinated Notes, or other amounts payable pursuant to this Indenture.  For purposes of the applicable determinations required by Section 10.6(b)(iv), Article 12 and the definition of "Interest Coverage Ratio", the expected interest on the Secured Notes and Floating Rate Obligations will be calculated using the then current interest rates applicable thereto.
 
(e)           References in Section 11.1(a) to calculations made on a "pro forma basis" shall mean such calculations after giving effect to all payments, in accordance with the Priority of Payments described herein, that precede (in priority of payment) or include the clause in which such calculation is made.
 
(f)           For purposes of calculating all Concentration Limitations, in both the numerator and the denominator of any component of the Concentration Limitations, Defaulted Obligations will be treated as having a Principal Balance equal to zero.
 
 
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(g)           Except where expressly referenced herein for inclusion in such calculations, Defaulted Obligations will not be included in the calculation of the Collateral Quality Test.
 
(h)           If a Collateral Obligation included in the Assets would be deemed a Current Pay Obligation but for the applicable percentage limitation in the proviso to clause (x) of the proviso to the definition of "Defaulted Obligation", then the Current Pay Obligations with the lowest Market Value (assuming that such Market Value is expressed as a percentage of the Principal Balance of such Current Pay Obligations as of the date of determination) shall be deemed Defaulted Obligations.  Each such Defaulted Obligation will be treated as a Defaulted Obligation for all purposes until such time as the Aggregate Principal Balance of Current Pay Obligations would not exceed, on a pro forma basis including such Defaulted Obligation, the applicable percentage of the Collateral Principal Amount.
 
(i)           For all purposes (including calculation of the Coverage Tests), the Principal Balance of a Revolving Collateral Obligation or a Delayed Drawdown Collateral Obligation will include all unfunded commitments that have not been irrevocably reduced or withdrawn.
 
(j)           For purposes of calculating the Collateral Quality Test, DIP Collateral Obligations will be treated as having an S&P Recovery Rate equal to the S&P Recovery Rate for Senior Secured Loans.
 
(k)           For purposes of calculating compliance with the Investment Criteria, at the election of the Portfolio Manager in its sole discretion, any proposed investment (whether a single Collateral Obligation or a group of Collateral Obligations identified by the Portfolio Manager as such at the time when compliance with the Investment Criteria is required to be calculated (a "Trading Plan")) may be evaluated after giving effect to all sales and reinvestments proposed to be entered into, and all payments (including prepayments) expected to be received, within the 10 Business Days following the date of determination of such compliance (such period, the "Trading Plan Period"); provided that (u) no Trading Plan may result in the purchase of Collateral Obligations having an Aggregate Principal Balance that exceeds 5% of the Collateral Principal Amount as of the first day of the Trading Plan Period, (v) no Trading Plan may result in the purchase of Collateral Obligations with an Average Life less than six months, (w) no Trading Plan may result in the purchase of a group of Collateral Obligations if the difference between the shortest Average Life of any Collateral Obligation in such group and the longest Average Life of any Collateral Obligation in such group is greater than two years, (x) no Trading Plan Period may include a Determination Date, (y) no more than one Trading Plan may be in effect at any time during a Trading Plan Period and (z) if the Investment Criteria are not satisfied upon the expiry of the related Trading Plan Period, the Portfolio Manager may not elect any Trading Plan at any time thereafter; and provided further that the Portfolio Manager shall notify S&P, Moody's, the Trustee and the Collateral Administrator of the commencement of any Trading Plan Period and any Collateral Obligations covered in such Trading Plan.  The Trustee shall forward such notice to the Holders of Notes no later than the Business Day following receipt thereof from the Portfolio Manager.
 
 
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(l)           For purposes of calculating compliance with the Investment Criteria, upon the direction of the Portfolio Manager by notice to the Trustee and the Collateral Administrator, any Eligible Investment representing Principal Proceeds received upon the sale or other disposition of a Collateral Obligation shall be deemed to have the characteristics of such Collateral Obligation until reinvested in an additional Collateral Obligation.  Such calculations shall be based upon the principal amount of such Collateral Obligation, except in the case of Defaulted Obligations and Credit Risk Obligations, in which case the calculations will be based upon the Principal Proceeds received on the sale or other disposition of such Defaulted Obligation or Credit Risk Obligation.
 
(m)           For purposes of calculating the Sale Proceeds of a Collateral Obligation in sale transactions, Sale Proceeds will include any Principal Financed Accrued Interest received in respect of such sale.
 
(n)           For purposes of calculating clause (i) of the Concentration Limitations, the amounts on deposit in the Collection Account, the Reinvestment Amount Account and the Ramp-Up Account (including Eligible Investments therein) representing Principal Proceeds shall each be deemed to be a Floating Rate Obligation that is a Senior Secured Loan.
 
(o)           For the purposes of calculating compliance with each of the Concentration Limitations all calculations will be rounded to the nearest 0.1%.  All other calculations, unless otherwise set forth herein or the context otherwise requires, shall be rounded to the nearest ten-thousandth if expressed as a percentage, and to the nearest one-hundredth if expressed otherwise.
 
(p)           Notwithstanding any other provision of this Indenture to the contrary, all monetary calculations under this Indenture shall be in Dollars.
 
(q)           If withholding tax is imposed on (x) the fees associated with any Letter of Credit Reimbursement Obligation, late payment fees, prepayment fees or other similar fees, (y) any amendment, waiver, consent or extension fees or (z) commitment fees or other similar fees in respect of Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations, the calculations of the Weighted Average Floating Spread, the Weighted Average Coupon and the Interest Coverage Test (and all component calculations of such calculations and tests, including when such a component calculation is calculated independently), as applicable, shall be made on a net basis after taking into account such withholding, unless the Obligor is required to make "gross-up" payments to the Issuer that cover the full amount of any such withholding tax on an after-tax basis pursuant to the Underlying Instrument with respect thereto.
 
(r)           Any reference in this Indenture to an amount of the Trustee's or the Collateral Administrator's fees calculated with respect to a period at a per annum rate shall be computed on the basis of a 360-day year of twelve 30-day months prorated for the related Collection Period and shall be based on the aggregate face amount of the Assets.
 
 
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(s)           To the extent of any ambiguity in the interpretation of any definition or term contained in this Indenture or to the extent more than one methodology can be used to make any of the determinations or calculations set forth herein, the Collateral Administrator shall request direction from the Portfolio Manager as to the interpretation and/or methodology to be used, and the Collateral Administrator shall follow such direction, and together with the Trustee, shall be entitled to conclusively rely thereon without any responsibility or liability therefor.
 
(t)           For purposes of calculating compliance with any tests hereunder (including the Target Initial Par Condition, Collateral Quality Test and Concentration Limitations), the trade date (and not the settlement date) with respect to any acquisition or disposition of a Collateral Obligation or Eligible Investment shall be used by the Collateral Administrator to determine whether and when such acquisition or disposition has occurred.
 
(u)           The equity interest in any Blocker Subsidiary permitted under Section 7.4(c) and each asset of any such Blocker 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.
 
(v)           Any Asset with a stated maturity later than the Stated Maturity of the Notes (other than the Class X Notes) will have a Principal Balance of zero.
 
2.           The Notes
 
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 such Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of such Note.
 
2.2           Forms of Notes.  (a) The forms of the Notes, including the forms of Certificated Notes, Regulation S Global Notes and Rule 144A Global Notes, shall be as set forth in the applicable part of Exhibit A hereto.
 
                                (b)           Regulation S Global Notes, Rule 144A Global Notes, Certificated Accredited Investor Notes and Certificated Subordinated Notes.
 
(i)          The Notes of each Class sold to persons who are not U.S. persons in offshore transactions in reliance on Regulation S shall each be issued initially in the form of one permanent global note per Class in definitive, fully registered form without interest coupons substantially in the form attached as Exhibit A1 hereto (each, a "Regulation S Global Note"), and shall be deposited on behalf of the subscribers for such Notes represented thereby with the Trustee as custodian for, and registered in the name of a nominee of, DTC for the respective accounts of Euroclear and Clearstream, duly executed by the Applicable Issuers and authenticated by the Trustee as hereinafter provided.
 
 
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(ii)          The Notes of each Class (other than Subordinated Notes) sold to persons that are QIB/QPs shall each be issued initially in the form of one permanent global note per Class in definitive, fully registered form without interest coupons substantially in the form attached as Exhibit A1 hereto (each, a "Rule 144A Global Note") and shall be deposited on behalf of the subscribers for such Notes represented thereby with the Trustee as custodian for, and registered in the name of a nominee of, DTC, duly executed by the Applicable Issuers and authenticated by the Trustee as hereinafter provided.  The Class C Notes, Class D Notes, Class E Notes and Class F Notes sold to, or for the account or benefit of, either (i) U.S. persons that are (x) Knowledgeable Employees or an entity owned exclusively by Knowledgeable Employees that are also (y) Accredited Investors or (ii) at the election of the Issuer, non-U.S. purchasers in offshore transactions in reliance on Regulation S, shall be issued in the form of definitive, fully registered notes without coupons substantially in the form attached as Exhibit A3 hereto (each, a "Certificated Accredited Investor 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 provided herein.  The Subordinated Notes (other than the Regulation S Global Subordinated Notes) sold to, or for the account or benefit of, U.S. persons that are either (x) QIB/QPs or (y)(1) Knowledgeable Employees or an entity owned exclusively by Knowledgeable Employees that are also (2) Accredited Investors, shall be issued, and the Reinvesting Holder Notes shall be evidenced, in the form of definitive, fully registered notes without coupons substantially in the form attached as Exhibit A4 hereto (and the Reinvesting Holder Notes in the form attached as Exhibit A5 hereto) (each, a "Certificated Subordinated 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 provided herein.
 
(iii)          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.
 
                                (c)           Book Entry Provisions.  This Section 2.2(c) shall apply only to Global Notes deposited with or on behalf of DTC.
 
The provisions of the "Operating Procedures of the Euroclear System" of Euroclear and the "Terms and Conditions Governing Use of Participants" of Clearstream, respectively, will be applicable to the Global Notes insofar as interests in such Global Notes are held by the Agent Members of Euroclear or Clearstream, as the case may be.
 
Agent Members shall have no rights under this Indenture with respect to any Global Notes held on their behalf by the Trustee, as custodian for DTC and DTC may be treated by the Applicable Issuer, the Trustee, and any agent of the Applicable Issuer or the Trustee as the absolute owner of such Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein shall prevent the Applicable Issuer, the Trustee, or any agent of the Applicable Issuer or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by DTC or impair, as between DTC and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.
 
 
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2.3           Authorized Amount; Stated Maturity; Denominations.  The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to U.S.$343,800,000 aggregate principal amount of Notes (except for (i) Note Deferred Interest with respect to the Class C Notes, Class D Notes, Class E Notes and Class F Notes, (ii) the Reinvesting Holder Notes, (iii) Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section