EX-10.1 2 gars-ex101_8.htm EX-10.1 gars-ex101_8.htm

 

EXECUTION COPY

EXHIBIT 10.1

 

THIS SUPPLEMENTAL INDENTURE, dated as of October 18, 2018 (the "Refinancing Date") (the "Supplemental Indenture"), among Garrison Funding 2018-2 Ltd. (formerly known as Garrison Funding 2016-2 Ltd.), an exempted company incorporated with limited liability in the Cayman Islands (the "Issuer"), Garrison Funding 2018-2 LLC (formerly known as Garrison Funding 2016-2 LLC), a limited liability company organized under the laws of the State of Delaware (the "Co-Issuer" and together with the Issuer, the "Co-Issuers") and Deutsche Bank Trust Company Americas, as trustee (in such capacity and together with its permitted successors and assigns, the "Trustee"), is entered into pursuant to the terms of the indenture, dated as of September 29, 2016, among the Issuer, the Co-Issuer, and the Trustee (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the "Indenture"). Capitalized terms used but not defined in this Supplemental Indenture have the meanings set forth in the Indenture.

 

WITNESSETH:

 

WHEREAS, pursuant to Section 8.1(xiii) of the Indenture, the Trustee and the Co-Issuers may enter into a supplemental indenture to amend the name of the Issuer or the Co-Issuer;

 

WHEREAS, pursuant to Section 8.2 of the Indenture, the Trustee and the Co-Issuers may enter into a supplemental indenture to add any provisions to, or change in any manner or eliminate any provisions of, the Indenture or modify in any manner the rights of the Holders of the Notes of any Class under the Indenture, subject to the consent of the Collateral Manager as hereby provided and the requisite percentage of each Class of Notes required by said Section 8.2;

 

WHEREAS, the Co-Issuers wish to amend the Indenture as set forth in this Supplemental Indenture to effect a Refinancing of the Class A-1R Notes, the Class A-1T Notes, the Class A-1F Notes, the Class A- 2 Notes, the Class B Notes and the Class C Notes (collectively, the "Refinanced Notes") through the issuance of the Class A-1R-R Notes, the Class A-1T-R Notes, the Class A-2-R Notes and the Class B-R Notes (collectively, the "Refinancing Notes") and make the further changes as indicated in Annex A hereto;

 

WHEREAS, the Subordinated Notes issued on the Closing Date shall be exchanged by Holders of the Subordinated Notes for the Subordinated Notes to be issued on the Refinancing Date;

 

WHEREAS, the conditions set forth for entry into a supplemental indenture pursuant to Section

 

8.2

and Section 8.3 of the Indenture have been satisfied;

 

WHEREAS, (i) pursuant to Sections 9.2(a) and 9.4 of the Indenture, a Majority of the Subordinated Notes have directed the Applicable Issuers to redeem the Secured Notes in whole (with respect to all Classes of Secured Notes) but not in part from Refinancing Proceeds and (ii) pursuant to Section 9.2(a) of the Indenture, the Collateral Manager hereby consents to and a Majority of the Subordinated Notes has consented to the terms of such Refinancing and any financial institutions acting as lenders thereunder or purchasers thereof and the conditions set forth in Section 9.2 of the Indenture have been satisfied; and

 

WHEREAS, the Collateral Management Agreement, dated as of September 29, 2016, between the Issuer and the Collateral Manager, the Collateral Administration Agreement, dated as of September 29, 2016, between the Issuer, the Collateral Manager, and Deutsche Bank Trust Company Americas, as Collateral Administrator, the Class A-1R Note Purchase Agreement, dated as of September 29, 2016, among the Issuer, the Co-Issuer, the Note Agent and each purchaser of the Class A-1R Notes and certain other Transaction Documents, in each case, will be amended on the Refinancing Date; and

 

 


 

NOW, THEREFORE, in consideration of the mutual agreements herein set forth, the parties agree as follows:

 

Section 1. Amendments to the Indenture. As of the date hereof, the Indenture is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and the green, stricken text (indicated textually in the same manner as the following example: green, stricken text) and to add the bold and double-underlined text (indicated textually in the same manner as the following example: bold and double-underlined text) and the green, underlined text (indicated as follows: green, underlined text) as set forth on the pages of the Indenture attached as Annex A hereto.

 

Section 2.Conditions Precedent.

 

The Refinancing Notes to be issued on the Refinancing Date shall be executed by the Co-Issuers and the Subordinated Notes to be issued on the Refinancing Date shall be executed by the Issuer, and such Notes shall be delivered to the Trustee for authentication and thereupon the same shall be authenticated and delivered by the Trustee upon Issuer Order and upon receipt by the Trustee of the following:

 

(i)an Officer's certificate of each of the Co-Issuers (A) evidencing the authorization by Board Resolution of the execution and delivery of this Supplemental Indenture, the Placement Agreement relating to the placement of the Natixis Placed Notes, by and among the Co-Issuers and the Placement Agent, and the amendment to the Class A-1R Note Purchase Agreement, and in the case of the Issuer, the amendment to the Collateral Management Agreement, the Collateral Administration Agreement as amended and restated on the date hereof, the Securities Account Control Agreement as amended and restated on the date hereof, in each case dated as of the Refinancing Date, and related transaction documents and the execution, authentication and delivery of the Refinancing Notes and the Subordinated Notes applied for by it and specifying (x) the Stated Maturity, principal amount and Interest Rate of each Class of Refinancing Notes to be authenticated and delivered and (y) the Stated Maturity and principal amount of the Subordinated Notes to be authenticated and delivered and (B) certifying that (1) the attached copy of such Board Resolution is a true and complete copy thereof, (2) such resolutions have not been rescinded and are in full force and effect on and as of the Refinancing Date and (3) the Officers authorized to execute and deliver such documents hold the offices and have the signatures indicated thereon;

 

(ii)from each of the Co-Issuers either (A) a certificate of the Applicable Issuer or other official document evidencing the due authorization, approval or consent of any governmental body or bodies, at the time having jurisdiction in the premises, together with an Opinion of Counsel of such Applicable Issuer that no other authorization, approval or consent of any governmental body is required for the valid issuance of the Refinancing Notes and, in the case of the Issuer, the Subordinated Notes, or (B) an Opinion of Counsel of the Applicable Issuer that no such authorization, approval or consent of any governmental body is required for the valid issuance of such Refinancing Notes and, in the case of the Issuer, the Subordinated Notes except as have been given (provided that the opinions delivered pursuant to clauses (iii) and (iv) below may satisfy the requirement);

 

(iii)opinions of (a) Milbank, Tweed, Hadley & McCloy LLP, special U.S. counsel to the Co- Issuers; (b) Dechert LLP, special U.S. counsel to the Collateral Manager and the EU Retention   Provider; (c) Proskauer Rose LLP, special U.S. counsel to the Collateral Manager and the EU Retention Provider; and (d) Seyfarth Shaw LLP, counsel to the Trustee and the Collateral Administrator, in each case dated the Refinancing Date, in form and substance satisfactory to the Co-Issuers and the Trustee;

 

(iv)an opinion of Maples and Calder, Cayman Islands counsel to the Issuer, dated the Refinancing Date, in form and substance satisfactory to the Issuer;

 

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(v)an Officer's certificate of each of the Co-Issuers stating that, to the best of the signing Officer's knowledge, the Applicable Issuer is not in default under the Indenture (as supplemented by this Supplemental Indenture) and that the issuance of the Refinancing Notes and the Subordinated Notes applied for by it shall not result in a default or a breach of any of the terms, conditions or provisions of, or constitute a default under, its organizational documents, any indenture or other agreement or instrument to which it is a party or by which it is bound, or any order of any court or administrative agency entered in any Proceeding to which it is a party or by which it may be bound or to which it may be subject; that all conditions precedent provided in this Supplemental Indenture relating to the authentication and delivery of the Refinancing Notes and the Subordinated Notes applied for by it have been complied with; that all expenses due or accrued with respect to the offering of the Refinancing Notes or relating to actions taken on or in connection with the Refinancing Date have been paid or reserves therefor have been made; and, with respect to the Issuer, each Collateral Obligation included in the Assets of the Issuer as of the Refinancing Date satisfies the definition of "Collateral Obligation" in the Indenture. The Officer's certificate of each of the Co-Issuers shall also state that, to the best of the signing Officer's knowledge, all of its representations and warranties contained herein are true and correct as of the Refinancing Date;

 

(vi)an Officer's certificate of the Collateral Manager certifying pursuant to Section 9.2(f) of the Indenture that the requirements of Section 9.2(d) of the Indenture are satisfied and that each Collateral Obligation included in the Assets of the Issuer as of the Refinancing Date satisfies the definition of "Collateral Obligation" in the Indenture;

 

(vii)letters signed by S&P and DBRS confirming that each Class of Refinancing Notes rated by it has been assigned the rating specified in the table below and that such ratings are in effect on the Refinancing Date;

 

Class of Refinancing Notes

Rating by S&P

Rating by DBRS

Class A-1R-R Notes

"AAA (sf)"

"AAA (sf)"

Class A-1T-R Notes

"AAA (sf)"

"AAA (sf)"

Class A-2-R Notes

"AA (sf)"

N/A

Class B-R Notes

"A (sf)"

N/A

 

(viii)an Issuer Order directing the Trustee to authenticate the Refinancing Notes and the Subordinated Notes in the amounts and names set forth therein and to apply the proceeds thereof to redeem, subject to and in accordance with the Priority of Payments, the Refinanced Notes at the applicable Redemption Prices therefor on the Refinancing Date; and

 

(ix)an Officer's certificate of the Issuer to the effect that application has been made to Euronext Dublin (formerly known as the Irish Stock Exchange plc) ("Euronext Dublin") for the Refinancing Notes (other than the Class A-1R-R Notes) to be admitted to the Official List and trading on the Global Exchange Market of Euronext Dublin.

 

Section 3.Consent of Holders of Refinancing Notes and Subordinated Notes.

 

Each Holder or beneficial owner of Refinancing Notes and each Holder or beneficial owner of Subordinated Notes, by its acquisition thereof on the Refinancing Date, shall be deemed to agree to (i) the terms  of  the  Indenture,  as  supplemented  by  this  Supplemental  Indenture,  (ii)  the  execution  of  this

 

3


 

Supplemental Indenture by the Co-Issuers and the Trustee, (iii) the amendment to the Collateral Management Agreement effected on the Refinancing Date, (iv) the amendment to the Collateral Administration Agreement effected on the Refinancing Date, (v) the amendment to the Class A-1R Note Purchase Agreement effected on the Refinancing Date, (vi) the amendment to the Securities Account Control Agreement effected on the Refinancing Date and (vii) the transfer of U.S.$30,542,698.70 of the proceeds received from the sale of the Refinancing Notes to the Holders of the Subordinated Notes on the Refinancing Date (of which U.S.$18,250,000 will be applied by the Issuer to the purchase price of the Class B-R Notes purchased by the BDC on the Refinancing Date).

 

Section 4.Governing Law.

 

THIS SUPPLEMENTAL INDENTURE AND THE REFINANCING NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 5.Execution in Counterparts.

 

This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of an executed counterpart of this Supplemental Indenture by electronic means (including email or telecopy) will be effective as delivery of a manually executed counterpart of this Supplemental Indenture.

 

Section 6.Concerning the Trustee.

 

The recitals contained in this Supplemental Indenture shall be taken as the statements of the Co-Issuers, and the Trustee assumes no responsibility for their correctness. Except as provided in the Indenture, the Trustee shall not be responsible or accountable in any way whatsoever for or with respect to the validity, execution or sufficiency of this Supplemental Indenture and makes no representation with respect thereto. In entering into this Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

 

Section 7.No Other Changes.

 

Except as provided herein (including Annex A hereto), the Indenture shall remain unchanged and in full force and effect, and each reference to the Indenture and words of similar import in the Indenture, as amended hereby, shall be a reference to the Indenture as amended hereby and as the same may be further amended, supplemented and otherwise modified and in effect from time to time.

 

Section 8.Execution, Delivery and Validity.

 

Each of the Co-Issuers represents and warrants to the Trustee that this Supplemental Indenture has been duly and validly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms.

 

Section 9.Binding Effect.

 

This Supplemental Indenture shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

4


 

Section 10.Direction to Trustee.

 

The Issuer hereby directs the Trustee to execute this Supplemental Indenture and acknowledges and agrees that the Trustee will be fully protected in relying upon the foregoing direction.

 

Section 11.Waiver of Jury Trial.

 

THE TRUSTEE, THE HOLDERS (BY THEIR ACCEPTANCE OF REFINANCING NOTES OR SUBORDINATED NOTES, AS APPLICABLE) AND EACH OF THE CO-ISSUERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SUPPLEMENTAL INDENTURE, THE REFINANCING NOTES, THE SUBORDINATED NOTES OR ANY OTHER RELATED DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF THE TRUSTEE, THE HOLDERS OR EITHER OF THE CO- ISSUERS. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE TRUSTEE AND THE CO-ISSUERS TO ENTER INTO THIS SUPPLEMENTAL INDENTURE.

 

Section 12.Limited Recourse; No Bankruptcy Petition.

 

Notwithstanding any other provision hereof, the obligations of the Co-Issuers under this Supplemental Indenture are limited in recourse to the Assets. To the extent the Assets are not sufficient to meet the obligations of the Co-Issuers in full, after application of the Assets in accordance with the provisions of the Indenture, the Co-Issuers shall have no further obligations hereunder and all obligations of and claims against the Co-Issuers shall be extinguished and shall not thereafter revive. The provisions of Section 5.4(d) of the Indenture are hereby incorporated into this Supplemental Indenture as if fully set forth herein, mutatis mutandis.

 

5


 

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Supplemental Indenture as of the date first written above.

 

Garrison Funding 2018-2 Ltd., as Issuer

 

By:

 

/s/ Carrie Bunton

Name:

 

Carrie Bunton

Title:

 

Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Supplemental Indenture]

 

6


 

GARRISON FUNDING 2018-2 LLC, as Co-Issuer

 

By:

 

/s/ Donald J. Puglisi

Name:

 

Donald J. Puglisi

Title:

 

Manager

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Supplemental Indenture]

 

7


 

DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as Trustee

 

By:

 

/s/ Mark Nguyen

Name:

 

Mark Nguyen

Title:

 

Associate

 

 

 

By:

 

/s/ Vincent Pham

Name:

 

Vincent Pham

Title:

 

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Supplemental Indenture]

 

8


 

ACKNOWLEDGED AND CONSENTED TO:

 

GARRISON CAPITAL INC.,

as Collateral Manager

 

 

 

By:

 

/s/ Daniel Hahn

Name:

 

Daniel Hahn

Title:

 

Vice President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Supplemental Indenture]

9


 

ANNEX A

 

[attached]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10


 

EXECUTION VERSION

(Conformed through Supplemental Indenture, dated as of October 18, 2018)

ANNEX A

 

 

 

 

 

INDENTURE

 

 

by and among

 

 

GARRISON FUNDING 20162018-2 LTD.

Issuer

 

 

 

GARRISON FUNDING 20162018-2 LLC

Co-Issuer

 

 

 

and

 

 

 

DEUTSCHE BANK TRUST COMPANY AMERICAS

Trustee

 

 

 

 

 

Dated as of September 29, 2016

 

 

 

11


 

TABLE OF CONTENTS

 

 

 

Page

ARTICLE I DEFINITIONS

3

SECTION 1.1

DEFINITIONS

3

SECTION 1.2

USAGE OF TERMS.

6677

SECTION 1.3

ASSUMPTIONS AS TO ASSETS

6677

ARTICLE II THE NOTES

6980

SECTION 2.1

FORMS GENERALLY

6980

SECTION 2.2

FORMS OF NOTES

6980

SECTION 2.3

AUTHORIZED AMOUNT; STATED MATURITY; DENOMINATIONS

7082

SECTION 2.4

EXECUTION, AUTHENTICATION, DELIVERY AND DATING

7283

SECTION 2.5

REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE

7383

SECTION 2.6

MUTILATED, DEFACED, DESTROYED, LOST OR STOLEN NOTE

8292

SECTION 2.7

PAYMENT OF PRINCIPAL AND INTEREST AND OTHER AMOUNTS; PRINCIPAL AND INTEREST RIGHTS PRESERVED

8393

SECTION 2.8

PERSONS DEEMED OWNERS

8696

SECTION 2.9

CANCELLATION

8696

SECTION 2.10

DTC CEASES TO BE DEPOSITORY

8797

SECTION 2.11

NON-PERMITTED HOLDERS

8898

SECTION 2.12

TREATMENT AND TAX CERTIFICATION

8999

SECTION 2.13

ADDITIONAL ISSUANCE

90102

SECTION 2.14

CLASS A-1R NOTES

92103

SECTION 2.15

KEY PERSON EVENT; APPROVED REPLACEMENT

93105

ARTICLE III CONDITIONS PRECEDENT

94106

SECTION 3.1

CONDITIONS TO ISSUANCE OF NOTES ON CLOSING DATE

94106

SECTION 3.2

CONDITIONS TO ADDITIONAL ISSUANCE

98109

SECTION 3.3

CUSTODIANSHIP; DELIVERY OF COLLATERAL OBLIGATIONS AND ELIGIBLE INVESTMENTS

101112

ARTICLE IV SATISFACTION AND DISCHARGE

101113

SECTION 4.1

SATISFACTION AND DISCHARGE OF INDENTURE

101113

SECTION 4.2

APPLICATION OF TRUST MONEY

103115

SECTION 4.3

REPAYMENT OF MONIES HELD BY PAYING AGENT

103115

ARTICLE V REMEDIES

103115

SECTION 5.1

EVENTS OF DEFAULT

103115

SECTION 5.2

ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

105117

SECTION 5.3

COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT  BY TRUSTEE

106118

SECTION 5.4

REMEDIES

108120

i


 

 

 

Page

SECTION 5.5

OPTIONAL PRESERVATION OF ASSETS

111122

SECTION 5.6

TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES

113124

SECTION 5.7

APPLICATION OF MONEY COLLECTED

113124

SECTION 5.8

LIMITATION ON SUITS

113124

SECTION 5.9

UNCONDITIONAL RIGHTS OF SECURED NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST

114125

SECTION 5.10

RESTORATION OF RIGHTS AND REMEDIES

114125

SECTION 5.11

RIGHTS AND REMEDIES CUMULATIVE

114126

SECTION 5.12

DELAY OR OMISSION NOT WAIVER

114126

SECTION 5.13

CONTROL BY MAJORITY OF CONTROLLING CLASS

114126

SECTION 5.14

WAIVER OF PAST DEFAULTS

115126

SECTION 5.15

UNDERTAKING FOR COSTS

115127

SECTION 5.16

WAIVER OF STAY OR EXTENSION LAWS

116127

SECTION 5.17

SALE OF ASSETS.

116127

SECTION 5.18

ACTION ON THE NOTES

117128

ARTICLE VI THE TRUSTEE

117129

SECTION 6.1

CERTAIN DUTIES AND RESPONSIBILITIES

117129

SECTION 6.2

NOTICE OF EVENT OF DEFAULT

119130

SECTION 6.3

CERTAIN RIGHTS OF TRUSTEE

119131

SECTION 6.4

NOT RESPONSIBLE FOR RECITALS OR ISSUANCE  OF NOTES

123134

SECTION 6.5

MAY HOLD NOTES

123134

SECTION 6.6

MONEY HELD IN TRUST

123134

SECTION 6.7

COMPENSATION AND REIMBURSEMENT

123134

SECTION 6.8

CORPORATE TRUSTEE REQUIRED; ELIGIBILITY

124136

SECTION 6.9

RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

125136

SECTION 6.10

ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

126137

SECTION 6.11

MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF TRUSTEE

126138

SECTION 6.12

CO-TRUSTEES

127138

SECTION 6.13

CERTAIN DUTIES OF TRUSTEE RELATED TO DELAYED PAYMENT OF PROCEEDS

128139

SECTION 6.14

AUTHENTICATING AGENTS

128140

SECTION 6.15

WITHHOLDING

129140

SECTION 6.16

FIDUCIARY FOR SECURED NOTEHOLDERS ONLY; AGENT FOR EACH OTHER SECURED PARTY AND THE HOLDERS OF THE SUBORDINATED NOTES

130141

SECTION 6.17

REPRESENTATIONS AND WARRANTIES OF THE BANK

130141

SECTION 6.18

COMMUNICATIONS WITH RATING AGENCIES

131142

SECTION 6.19

CUSTODIAN OF UNDERLYING INSTRUMENTS

131142

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Page

ARTICLE VII COVENANTS

131143

SECTION 7.1

PAYMENT OF PRINCIPAL AND INTEREST

131143

SECTION 7.2

MAINTENANCE OF OFFICE OR AGENCY

132143

SECTION 7.3

MONEY FOR NOTE PAYMENTS TO BE HELD  IN TRUST.

132144

SECTION 7.4

EXISTENCE OF CO-ISSUERS

134145

SECTION 7.5

PROTECTION OF ASSETS

135146

SECTION 7.6

OPINIONS AS  TO ASSETS

136147

SECTION 7.7

PERFORMANCE OF OBLIGATIONS

136148

SECTION 7.8

NEGATIVE COVENANTS

137148

SECTION 7.9

STATEMENT AS TO COMPLIANCE

138150

SECTION 7.10

CO-ISSUERS MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS

139150

SECTION 7.11

SUCCESSOR SUBSTITUTED

140152

SECTION 7.12

NO OTHER BUSINESS

141152

SECTION 7.13

MAINTENANCE OF LISTING

141152

SECTION 7.14

ANNUAL RATING REVIEW

141152

SECTION 7.15

REPORTING

141153

SECTION 7.16

CALCULATION AGENT

142153

SECTION 7.17

CERTAIN TAX MATTERS

142154

SECTION 7.18

EFFECTIVE DATE 145 ; REFINANCING EFFECTIVE DATE

145158

SECTION 7.19

REPRESENTATIONS RELATING TO SECURITY INTERESTS IN THE ASSETS

146160

SECTION 7.20

INFORMATION

149163

SECTION 7.21

CREDIT ESTIMATES

149163

ARTICLE VIII SUPPLEMENTAL INDENTURES

150164

SECTION 8.1

SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS OF NOTES

150164

SECTION 8.2

SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS OF NOTES.

152168

SECTION 8.3

EXECUTION OF SUPPLEMENTAL INDENTURES

154169

SECTION 8.4

EFFECT OF SUPPLEMENTAL INDENTURES

156171

SECTION 8.5

REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES

156171

ARTICLE IX REDEMPTION OF NOTES

156171

SECTION 9.1

MANDATORY REDEMPTION

156171

SECTION 9.2

OPTIONAL REDEMPTION

156171

SECTION 9.3

TAX REDEMPTION

159174

SECTION 9.4

REDEMPTION PROCEDURES

159175

SECTION 9.5

NOTES PAYABLE ON REDEMPTION DATE

162177

SECTION 9.6

SPECIAL REDEMPTION AND REFINANCING EFFECTIVE DATE-RELATED REDEMPTION

162177

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Page

SECTION 9.7

PREPAYMENTS; REDUCTION OF COMMITMENTS.

163178

ARTICLE X ACCOUNTS, ACCOUNTINGS AND RELEASES

165180

SECTION 10.1

COLLECTION OF MONEY

165180

SECTION 10.2

COLLECTION ACCOUNT

165180

SECTION 10.3

TRANSACTION ACCOUNTS

167182

SECTION 10.4

THE REVOLVER FUNDING ACCOUNT

168183

SECTION 10.5

[RESERVED]

169184

SECTION 10.6

CLASS A-1R PURCHASER COLLATERAL ACCOUNT.

169184

SECTION 10.7

[RESERVED]

170185

SECTION 10.8

REPORTS TO RATING AGENCIES AND ADDITIONAL RECIPIENTS

170185

SECTION 10.9

REINVESTMENT OF FUNDS IN ACCOUNTS; REPORTS BY TRUSTEE

170185

SECTION 10.10

ACCOUNTINGS

171186

SECTION 10.11

RELEASE OF COLLATERAL.

178193

SECTION 10.12

REPORTS BY INDEPENDENT ACCOUNTANTS

179194

SECTION 10.13

[RESERVED]

180196

SECTION 10.14

PROCEDURES RELATING TO THE ESTABLISHMENT OF ACCOUNTS CONTROLLED BY THE TRUSTEE

180196

SECTION 10.15

SECTION 3(C)(7) PROCEDURES

180196

ARTICLE XI APPLICATION OF MONIES

183199

SECTION 11.1

DISBURSEMENTS OF MONIES FROM PAYMENT ACCOUNT

183199

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

190205

SECTION 12.1

SALES OF COLLATERAL OBLIGATIONS

190205

SECTION 12.2

PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS

193207

SECTION 12.3

CONDITIONS APPLICABLE TO ALL SALE AND PURCHASE TRANSACTIONS

196210

SECTION 12.4

AMENDMENTS TO UNDERLYING INSTRUMENTS

197212

ARTICLE XIII NOTEHOLDERS' RELATIONS

198213

SECTION 13.1

SUBORDINATION

198213

SECTION 13.2

STANDARD OF CONDUCT

199214

SECTION 13.3

CAYMAN AML REGULATIONS.

214

SECTION 13.4

 

214

ARTICLE XIV MISCELLANEOUS

199214

SECTION 14.1

FORM OF DOCUMENTS DELIVERED TO TRUSTEE

199214

SECTION 14.2

ACTS OF HOLDERS

200215

SECTION 14.3

NOTICES, ETC., TO TRUSTEE, THE CO-ISSUERS, THE COLLATERAL MANAGER, THE PLACEMENT AGENT, THE COLLATERAL ADMINISTRATOR, THE PAYING AGENT, EACH HEDGE COUNTERPARTY AND S&P THE RATING AGENCIES

201216

iv


 

 

 

Page

SECTION 14.4

NOTICES TO HOLDERS; WAIVER

203219

SECTION 14.5

EFFECT OF HEADINGS AND TABLE OF CONTENTS

204220

SECTION 14.6

SUCCESSORS AND ASSIGNS

204220

SECTION 14.7

SEVERABILITY

204220

SECTION 14.8

BENEFITS OF INDENTURE

205220

SECTION 14.9

LEGAL HOLIDAYS

205220

SECTION 14.10

GOVERNING LAW

205220

SECTION 14.11

SUBMISSION TO JURISDICTION

205220

SECTION 14.12

WAIVER OF JURY TRIAL

205221

SECTION 14.13

COUNTERPARTS

206221

SECTION 14.14

ACTS OF ISSUER

206221

SECTION 14.15

LIABILITY OF CO-ISSUERS

206221

SECTION 14.16

COMMUNICATIONS WITH RATING AGENCIES.

206221

SECTION 14.17

17G-5 INFORMATION.

207222

SECTION 14.18

SPECIAL PROVISIONS APPLICABLE TO CP CONDUITS.

208223

SECTION 14.19

CONFIDENTIAL INFORMATION.

209225

ARTICLE XV ASSIGNMENT OF COLLATERAL MANAGEMENT AGREEMENT

211226

SECTION 15.1

ASSIGNMENT OF COLLATERAL MANAGEMENT AGREEMENT

211226

ARTICLE XVI HEDGE AGREEMENTS

213228

SECTION 16.1

HEDGE AGREEMENTS.

213228

 

 

v


 

 

Schedules and Exhibits

Schedule 1

List of Collateral Obligations

Schedule 2

S&P Industry Classifications

Schedule 3

S&P Recovery Rate Tables

Schedule 4

DBRS Rating Procedures

Schedule 5

DBRS Industry Classifications

Schedule 6

DBRS Collateral Quality Matrix

Schedule 47

DBRS Diversity Score Calculation

Exhibit A

Forms of Notes

A-1

Form of Global Secured Note

A-2

Form of Certificated Secured Note

A-3

Form of Certificated Subordinated Note

Exhibit B

Forms of Transfer and Exchange Certificates

B-1

Form of Transferor Certificate for Transfer of Rule 144A Global Secured Note or

 

Certificated Secured Note to Regulation S Global Secured Note

B-2

Form of Purchaser Representation Letter for Certificated Secured Notes

B-3

Form of Transferor Certificate for Transfer of Regulation S Global Secured Note

 

or Certificated Secured Note to Rule 144A Global Secured Note

B-4

Form of Purchaser Representation Letter for Certificated Subordinated Notes

B-5

Form of ERISA Certificate

B-6

Form of Transferee Certificate of Rule 144A Global Secured Note

B-7

Form of Transferee Certificate of Regulation S Global Secured Note

Exhibit C

Calculation of LIBOR[Reserved]

Exhibit D

Form of Note Owner Certificate

Exhibit E

Approved Appraisal Firms

Exhibit F

Form of EU Retention Letter

 

 

 

vi


 

INDENTURE, dated as of September 29, 2016, among GARRISON FUNDING 20162018-2 LTD. (formerly known as Garrison Funding 2016-2 Ltd.), an exempted company incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"), GARRISON FUNDING 2018-2 LLC (formerly known as Garrison Funding 2016-2 LLC), a limited liability company organized under the laws of the State of Delaware (the "Co-Issuer,"  and together with the Issuer, the "Co-Issuers"), and DEUTSCHE BANK TRUST COMPANY AMERICAS, 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, each Hedge Counterparty, the Administrator, the Collateral Administrator and the Note Agent (collectively, the "Secured Parties"), all of its right, title and interest in, to and under all property of the Issuer, in each case, whether now owned or existing, or hereafter acquired or arising and wherever located, including, without limitation, the following property of the Issuer (all such property, excluding the Excepted Property, is collectively referred to as the "Assets"):

 

(a)the Collateral Obligations (listed, as of the ClosingRefinancing Date,  in  Schedule 1 to this Indenture) which the Issuer causes to be Delivered to the Trustee (directly or through an intermediary or bailee) herewith and all payments thereon or with respect thereto, and all Collateral Obligations which are Delivered to the Trustee in the future pursuant to the terms hereof and all payments thereon or with respect thereto;

 

(b)each of the Accounts (other than the Class A-1R Purchaser Collateral Account, except to the extent set forth herein), each Class A-1R Purchaser Collateral Account (but only to the extent that the Issuer is entitled to amounts on deposit in such account and subject to the rights of the applicable Holder of the Class A-1R Notes set forth in the Class A-1R Note Purchase Agreement), and any Eligible Investments purchased with funds on deposit therein and, except with respect to any Class A-1R Purchaser Collateral Account, all income from the investment of funds therein;

 

(c)all income from the investment of funds in each Hedge Counterparty Collateral Account, subject to the rights of the Hedge Counterparty therein;

 

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(d)the Collateral Management Agreement as set forth in Article XV hereof, the Sub- Collateral Management Agreement, the Placement Agreement, the Hedge Agreements, the Collateral Administration Agreement, the Administration Agreement, the Registered Office Terms, the Closing Date Sale Agreement, the Closing Date Transfer Agreement, the EU Retention Letter and the Class A-1R Note Purchase Agreement;

 

(e)all Cash or Money Delivered to the Trustee (or its bailee) from any source for the benefit of the Secured Parties or the Issuer;

 

(f)all accounts, chattel paper, deposit accounts, financial assets, general intangibles, instruments, investment property, letter-of-credit rights and other supporting obligations relating to the foregoing (in each case as defined in the UCC);

 

(g)any other property otherwise Delivered to the Trustee by or on behalf of the Issuer (whether or not constituting Collateral Obligations or Eligible Investments);

 

(h)any Equity Securities received by the Issuer; and

 

(i)all proceeds with respect to the foregoing;

 

provided that such Grants shall not include amounts (if any) remaining from the U.S.$250 transaction fee paid to the Issuer in consideration of the issuance of the Secured Notes and Subordinated Notes, the funds attributable to the issuance and allotment of the Issuer's ordinary shares and the bank account in the Cayman Islands in which such funds are deposited (and any interest thereon) (collectively, the "Excepted Property").

 

The above Grant is made 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 XIII of this Indenture, the Secured Notes are secured by the Grant equally and ratably without prejudice, priority or distinction between any Secured Note and any other Secured Note by reason of difference in time of issuance or otherwise. Such Grant is made to secure,  in accordance with the priorities set forth in the Priority of Payments and Article XIII of this Indenture, (i) the payment of all amounts due on the Secured Notes in accordance with their terms,  (ii) the  payment  of  all  other  sums  (other  than  in  respect  of  the  Subordinated  Notes) payable under this Indenture, (iii) the payment of amounts owing by the Issuer under the Collateral Management Agreement, the Securities Account Control Agreement and  the Collateral Administration Agreement and (iv) compliance with the provisions of this Indenture, all as provided in this Indenture. 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.

 

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ARTICLE I

DEFINITIONS

Section 1.1      Definitions.   Except as otherwise specified herein or as the context    may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms.

 

"17g-5 Information":  The meaning specified in Section 14.17(a).

 

"17g-5 Website": The internet website of the Information Agent, initially located at https://tss.sfs.db.com/investpublic/ under the tab "NRSRO Reports," specified by Issuer's name, access to which is limited to Rating Agencies and NRSROs who have provided an NRSRO Certification.

 

"25% Limitation": A limitation that is exceeded only if Benefit Plan Investors hold 25% or more of the value of any class of equity interests in the Issuer, as calculated under 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

 

"2013 CLO Indenture": The indenture dated as of September 25, 2013 (as amended from time to time) among the 2013 CLO Issuer, Garrison Funding 2013-2 LLC, as co-issuer, and Deutsche Bank Trust Company Americas, as trustee.

 

"2013 CLO Issuer":  Garrison Funding 2013-2 Ltd.

 

"2013 CLO Portfolio": Collectively, the 2013 CLO Transfer Portfolio and the 2013 CLO Sale Portfolio.

 

"2013 CLO Sale Portfolio": The Collateral Obligations (as defined in the 2013 CLO Indenture) transferred to the Issuer under the Closing Date Sale Agreement, and listed on scheduleSchedule I thereto.

"2013 CLO Transfer Portfolio": The Collateral Obligations (as defined in the 2013 CLO Indenture) transferred to the Issuer under the Closing Date Transfer Agreement, and listed on schedule I thereto.

 

"Accountants' Certificate": A certificate, of the firm or firms appointed by the Issuer pursuant to Section 10.12(a).

 

"Accounts": (i) the Payment Account, (ii) the Collection Account, (iii) the Revolver Funding Account, (iv) the Custodial Account, (v) each Hedge Counterparty Collateral Account, and (vi) each Class A-1R Purchaser Collateral Account.

 

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

 

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

 

"Adjusted Break-even Default Rate":  As of any date of determination:

 

(a)prior to the S&P CDO Monitor Election Date, the sum of:

 

(i)the product of (x) the Break-even Default Rate, multiplied by (y) the quotient of (1) the Refinancing Target Initial Par Amount divided by (2) the Monitor Principal Amount; plus

 

(ii)the quotient of (x) the sum of (1) the Monitor Principal Amount minus (2) the Refinancing Target Initial Par Amount, divided by (y) the product of (1) the Monitor Principal Amount multiplied by (2) 1 minus the Weighted Average S&P Recovery Rate;

 

(b)on and after the S&P CDO Monitor Election Date, the maximum percentage of defaults, at any time, that the Current Portfolio or the Proposed Portfolio, as applicable, can sustain, determined through application of the applicable S&P CDO Monitor chosen by the Collateral 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 the Class A-1 Notes in full. After the S&P CDO Monitor Election Date, S&P will provide the Collateral Manager and the Collateral Administrator with the Adjusted Break-even Default Rate for each S&P CDO Monitor based upon the Weighted Average Spread and the Weighted Average S&P Recovery Rate to be associated with such S&P CDO Monitor as selected by the Collateral Manager from Section 2 of Schedule 3 or any other Weighted Average Spread and Weighted Average S&P Recovery Rate selected by the Collateral Manager from time to time.

 

"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 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 Aggregate Principal Balance of the Assets (excluding any Assets that constitute Interest Proceeds) as of the first day of the related Collection Period and (b) U.S.$250,000 per annum (prorated for the related Interest Accrual Period on the basis of a 360-day year consisting of twelve 30-day months); provided that in respect of the third Payment Date following the Closing Date and any Payment Date thereafter,  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 (or the two immediately preceding

4


 

Payment Dates in the case of the third Payment Date following the Closing Date) and during the related Collection Periods is less than the stated Administrative Expense Cap (without regard to any excess applied in accordance with this proviso) in the aggregate for such three preceding Payment Dates, then the excess may be applied to the Administrative Expense Cap with respect to the then-current Payment Date, except that, in respect of the third Payment Date following the Closing Date, such excess amount shall be calculated based on the Payment Dates preceding such Payment Date.

 

"Administrative Expenses": The fees, expenses (including indemnities) and other amounts due or accrued with respect to any Payment Date (including, with respect to any Payment Date, any such amounts that were due and not paid on any prior Payment Date in accordance with the Priority of Payments) and payable in the following order by the Issuer or the Co-Issuer: first, on a pari passu basis to (x) the Trustee pursuant to Section 6.7 and the other provisions of this Indenture and the Transaction Documents, (y) without duplication to clause (x), to the Bank in all of its capacities under the Transaction Documents and (z) the Collateral Administrator pursuant to the Collateral Administration Agreement, second, to the Note Agent the Agency Fee, 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 Collateral Manager) and counsel of the Co-Issuers for fees, costs and expenses; (ii) on a pro rata basis, (x) S&Pthe Rating Agencies for fees and expenses (including any annual fee, amendment fees and surveillance fees) in connection with any rating of the Rated Notes or in connection with the rating of (or provision of credit estimates in respect of) any Collateral Obligations   and (y) any person in respect of any fees or expenses incurred as a result of compliance with Rule 17g-5 of the Exchange Act; (iii) the Collateral Manager under this Indenture and pursuant to the Collateral Management Agreement but excluding the Collateral Management Fee; (iv) the Administrator pursuant to the Administration Agreement and the Registered Office Terms and the AML Services Provider pursuant to the AML Services Agreement; (v) the independent manager of the Co-Issuer for fees and expenses; (vi) any person in respect of any governmental fee, charge or tax (including any tax or other amount payable pursuant to, or incurred as a result of compliance with, the Tax Account Reporting Rules); and (vii) 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 the payment of all legal and other fees and expenses incurred in connection with the purchase or sale of any Collateral Obligations and any other expenses incurred in connection with the Collateral Obligations) and the Notes, including but not limited to, amounts owed to the Co-Issuer pursuant to Section 7.1, any amounts due in respect of the listing of any 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 and (y) for the avoidance of doubt, amounts that are expressly payable to any Person under the Priority of Payments in respect of an amount that is stated to be payable as an amount other than as Administrative Expenses (including, without limitation, interest and principal in respect of the Notes) shall not constitute Administrative Expenses.

 

"Administrator":  MaplesFS Limited and any successor thereto.

 

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

 

"Affected Investor": A Noteholder that is subject to regulation under any EU Retention Requirement Law or party to liquidity or credit support arrangements by a financial institution that is subject to regulation under any EU Retention Requirement Law.

 

"Affiliate": With respect to a Person, (a) any other Person who, directly or indirectly, is in control of, or controlled by, or is under common control with, such Person or (b) any other Person who is a director, Officer, employee or general partner (i) of such Person, (ii) of any subsidiary or parent company of such Person or (iii) of any Person described in clause (a) of this sentence; provided that (i) investment vehicles or funds or accounts managed by the Collateral Manager or Affiliates of the Collateral Manager shall be excluded from the definition hereof and (ii) neither the Issuer nor the Co-Issuer shall be deemed to be an Affiliate of the Collateral Manager or any of its Affiliates solely by reason of the Collateral Management Agreement. 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. For purposes of this definition, no entity shall be deemed an Affiliate of the Issuer or the Co-Issuer solely because the Administrator or any of its Affiliates acts as administrator or share trustee for such entity and the Administrator shall not in any case be an Affiliate of either Co-Issuer.

 

"Agency Fee": The fee payable to the Note Agent for services rendered by the Note Agent in connection with the Class A-1R Note Purchase Agreement in an amount equal to

$50,000 per annum.

 

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

 

"Aggregate Funded Spread":      As of any date, in the case of each Collateral Obligation that is not a Fixed Rate Obligation (and excluding any PIK Loan to the extent of any non-cash interest and excluding the unfunded portion of any Delayed Drawdown Collateral Obligation and any Revolving Collateral Obligation) the sum of the products of (i) the excess of the stated interest rate (giving effect to any floor rate) with respect to each such Collateral Obligation over LIBOR applicable to the Secured Notes during the Interest Accrual Period in which such date occurs (which spread or excess may be expressed as a negative percentage) multiplied by (ii) the Principal Balance of each such Collateral Obligation (excluding the unfunded portion of any Delayed Drawdown Collateral Obligation or Revolving Collateral Obligation).

 

"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 Deferred Interest previously added to the principal amount of any of the Class B Notes and the Class C Notes that remains unpaid except to the extent otherwise expressly provided herein). The Aggregate Outstanding Amount of the Class A-1R Notes at any time shall not include the Aggregate Undrawn  Amount,  except  (1)  during  the  Reinvestment  Period,  in  determining  whether the Holders of the requisite Aggregate Outstanding Amount of the Class A-1R Notes have given

6


 

any request, demand, authorization, direction, notice, consent or waiver, the Aggregate Undrawn Amount shall be deemed to be part of the Aggregate Outstanding Amount of the Class A-1R Notes and (2) as otherwise provided herein.

 

"Aggregate Participation Exposure": At any time, the Aggregate Principal Balance of all Collateral Obligations that are in the form of Participation Interests owned by the Issuer at such time.

 

"Aggregate Participation Percentage": For any Selling Institution at any time, the percentage of Total Capitalization represented by the Aggregate Participation Exposure at such time for such Selling Institution.

 

"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 Undrawn Amount": At any time, the excess (if any) of (i) the aggregate amount of the Commitments (including, for the avoidance of doubt, without duplication, any amounts on deposit in any Class A-1R Purchaser Collateral Account) (whether or not utilized) at such time over (ii) the Aggregate Outstanding Amount of the Class A-1R Notes at such time.

 

"Aggregate Unfunded Spread": As of any date, the sum of the products obtained by multiplying (a) for each Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation, the related commitment fee or other analogous fees (expressed at a per annum rate) then in effect as of such date by (b) the undrawn commitments under each such Delayed Drawdown Collateral Obligation and Revolving Collateral Obligation as of such date.

 

"AIFMD": European Union Directive 2011/61/EU on Alternative Investment Fund Managers.

 

"AIFMD Level 2 Regulation": Commission Delegated Regulation 231/2013 supplementing the AIFMD.

 

"Alternative Method":  The meaning specified in Section 7.17(m).

 

"Alternative Rate":  The meaning specified in the definition of the term  "LIBOR"

herein.

 

"Amendment  No.  1 to Class A-1R Note Purchase Agreement":  That certain agreement dated as of the Refinancing Date among the Issuer, the Co-Issuer, the Note Agent, and each purchaser of Class A-1R Notes amending the Class A-1R Note Purchase Agreement as in effect on the Closing Date.

 

"AML Compliance": Compliance with the Cayman AML Regulations.

 

"AML Services Agreement": The agreement between the Issuer and the AML Services Provider, as amended from time to time in accordance with the terms thereof, providing for the provision of services to the Issuer to enable the Issuer to achieve AML Compliance.

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

 

"Applicable Issuer" or "Applicable Issuers": With respect to the Secured Notes, the Co- Issuers; with respect to 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.

 

"Applicable Law":  The meaning specified in Section 6.3(r).

 

"Applicable Row Level": A number represented in the column of that name as set forth in the DBRS Collateral Quality Matrix; provided that an Applicable Row Level may also be determined by interpolating between two rows when calculating the relevant Collateral Quality Tests in the DBRS Collateral Quality Matrix; provided further that the ratable split of the interpolation must be constant across all calculations of the relevant Collateral Quality Tests to be in effect.

 

"Appraised Value": With respect to any Collateral Obligation, the value of such Collateral Obligation, as determined by the applicable Approved Appraisal Firm, as set forth in the related appraisal (or, if a range of values is set forth therein, the midpoint of such values), adjusted appropriately if the Issuer owns less than 100% of the total lenders' interests secured by the assets securing any Collateral Obligation or, if it has sold participation interests in such Collateral Obligation.

 

"Approval Period":  The meaning specified in Section 2.15(c).

 

"Approved Appraisal Firm": (a) each independent appraisal firm set forth on Exhibit E hereto or (b) (i) with respect to a Collateral Obligation that is a loan, an independent appraisal firm recognized as being experienced in conducting valuations of secured loans and with respect to a Collateral Obligation that is a debt obligation, an independent appraisal firm recognized as being experienced in conducting valuations of debt obligations, or (ii) an independent financial adviser of recognized standing retained by the Issuer, the Collateral Manager or the agent or lenders under any Collateral Obligation, in the case of each of the preceding clauses (b)(i) and (b)(ii) as approved by each of the Collateral Manager and a Majority of the Controlling Class for so long as any such Notes remain Outstanding.

 

"Approved Foreign Jurisdiction": Each of the United Kingdom, Japan, Germany, France, Canada, Australia, the Netherlands and each Approved Tax Jurisdiction; provided that each such country has a foreign currency borrower credit rating that is at least "AA" by S&P.

 

"Approved Replacement":  The meaning specified in Section 2.15(c).

 

"Approved Tax Jurisdiction": Each of Bahamas, Bermuda, Luxembourg, the British Virgin Islands, the U.S. Virgin Islands, Jersey, the Cayman Islands, the Channel Islands and  the Marshall Islands; provided that each such country has a foreign currency borrower credit rating that is at least "AA" by S&P.

 

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"ARC": The meaning set forth in the definition of the term "Specified Alternative Rate" herein.

 

"Article 17": Article 17 of the AIFMD.

 

"Article 51": Article 51 of the AIFMD Level 2 Regulation.

 

"Article 254": Article 254 of the Solvency II Level 2 Regulation.

 

"Articles 404-410": Articles 404-410 of the CRR.

 

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

 

"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); 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  Collateral Manager (if not the same party as the Bank), any Officer, employee, member or agent of the Collateral Manager who is authorized to act for the Collateral Manager in matters relating to, and binding upon, the Collateral Manager with respect to the subject matter of the request, certificate or order in question. With respect to the Collateral Administrator, any Officer, employee, partner or agent of the Collateral Administrator who is authorized to act for the Collateral Administrator in matters relating to, and binding upon, the Collateral Administrator with respect to the subject matter of the request, certificate or order in question. With respect to the Trustee, the Bank (in all of its capacities, including as Collateral Administrator) 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 or Trust 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.

 

"Balance": On any date, with respect to Cash or Eligible Investments in any Account,  the aggregate of the (i) current balance of any 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

9


 

greater than the face amount) of non-interest-bearing government and corporate securities and commercial paper.

 

"Bank": Deutsche Bank Trust Company Americas, a New York banking corporation with trust powers (including any organization or entity succeeding to all or substantially all of its corporate trust business) in its individual capacity and not as Trustee, and any successor thereto.

 

"Bankruptcy Code": The United States bankruptcy code, as set forth in Title 11 of the United States Code, as amended.

 

"Bankruptcy Law": The federal Bankruptcy Code, Title 11 of the United States Code, as amended from time to time, and any successor statute or any other applicable federal or state bankruptcy law or similar law, including, without limitation, Part V of the Companies Law (20162018 Revision) (as amended) of the Cayman Islands and the Companies Winding Up Rules, 2018 (as amended) of the Cayman Islands, each as amended from time to time, and any bankruptcy, insolvency, winding up, reorganization or similar law enacted under the laws of the Cayman Islands or any other applicable jurisdiction.

 

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

 

"BDC":  Garrison Capital Inc., a Delaware corporation.

"Benefit Plan Investor": A benefit plan investor as defined in 29 C.F.R. Section 2510.3- 101 and Section 3(42) of ERISA, which includes an employee benefit plan (as defined in   Section 3(3) of ERISA) that is subject to the fiduciary responsibility provisions of Title I of ERISA, a plan that is subject to Section 4975 of the Code or an entity whose underlying assets include "plan assets" by reason of any such employee benefit plan's or plan's investment in the entity.

 

"Board of Directors": 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 of Association in accordance with the laws of the Cayman Islands.

 

"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 managers of the Co-Issuer.

 

"Bond": Any obligation that (a) constitutes borrowed money and (b) 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).

 

"Borrowing": Each borrowing made under the Class A-1R Notes made pursuant to Section 2.14 and the Class A-1R Note Purchase Agreement.

 

"Borrowing Request": The meaning specified in the Class A-1R Note Purchase Agreement.

 

"Breakage Costs":  The meaning specified in the Class A-1R Note Purchase Agreement.

 

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"Break-even Default Rate": With respect to the Class A-1 Notes, as of any date of determination, the sum of:

 

(a)0.5158840.106586, plus

 

(b)the product of (i) 2.1176572.774458 multiplied by (ii) the Weighted Average Spread, plus

 

(c)the product of (i) 0.6214031.313144 multiplied by (ii) the Weighted Average S&P Recovery Rate.

 

"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, London, England or in the city in which the Corporate Trust Office of the Trustee is located or, for any final payment of principal, in the relevant place of presentation.

 

"Calculation Agent":  The meaning specified in Section 7.16.

 

"Capped Amounts": Any amounts in excess of the Interest Rate Cap on any Class A-1R Note that pays interest based on the CP Rate and that would otherwise be payable under Section 11.1(a)(i)(D) if not for the Interest Rate Cap.

 

"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.

 

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

 

"Cayman FATCA Legislation": The U.S. Cayman IGA, the UK/Cayman AIEA and the Cayman Islands Tax Information Authority Law (20162017 Revision) (as amended) together with regulations and guidance notes made pursuant to such law.

 

"Cayman IGA": The intergovernmental agreement between the Cayman Islands and the United States.

 

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"CCC (DBRS) Collateral Obligation": A Collateral Obligation (other than a Defaulted Obligation) with a DBRS Rating of "CCC (high)" or lower.

 

"CCC (DBRS) Excess": With respect to any date of determination, (a) if the Class A-1 Notes are Outstanding as of such date of determination, the excess, if any, of (i) the Aggregate Principal Balance of all CCC (DBRS) Collateral Obligations over (ii) 30.0% of Total Capitalization as of such date of determination; provided that in determining which of the CCC (DBRS) Collateral Obligations will be included in the CCC (DBRS) Excess, the CCC (DBRS) Collateral Obligations with the lowest Market Value expressed as a percentage of par will be deemed to constitute such CCC (DBRS) Excess; and (b) if the Class A-1 Notes are no longer Outstanding as of such date of determination, 0.

 

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

 

"CCC Excess": With respect to any date of determination, the excess, if any, of (a) the Aggregate Principal Balance of all CCC Collateral Obligations over (b) 30.0% of Total Capitalization as of such date of determination; provided that in determining which of the CCC Collateral Obligations will be included in the CCC Excess, the CCC Collateral Obligations with the lowest Market Value expressed as a percentage of par will be deemed to constitute such CCC Excess.

 

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

 

"Certificated Notes": The meaning specified in Section 2.2(b)(ii).

 

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

 

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

 

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

 

"CFTC":  The U.S. Commodity Futures Trading Commission.

 

"Change of Law": (i) The adoption of any law, rule or regulation after the ClosingRefinancing Date or (ii) any change in any law, rule or regulation or in the interpretation or application thereof by any governmental authority (including any central bank or other similar entity), including any directive or request made by any such governmental authority, after the ClosingRefinancing Date; provided that notwithstanding anything to the contrary herein, all requests, rules, guidelines, requirements and directives promulgated (x) by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority), the Committee of European Banking Supervisors or the United States or foreign regulatory authorities, in each case, pursuant to Basel III or similar capital requirements directive existing on the ClosingRefinancing Date impacting European banks and other regulated financial institutions and (y) pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, shall, in each case, be deemed to be a "Change of Law", regardless of the date enacted, adopted, issued or implemented.

 

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"Change of Tax Law": Any change in application or public announcement of an official position under or any change in or amendment to the laws (or any regulations or rulings promulgated thereunder) of the Cayman Islands or any political subdivision or taxing authority thereof, affecting taxation, or any proposed change in such laws or change in the official application, enforcement or interpretation of such laws, regulations or rulings (including a holding by a court of competent jurisdiction), or any other action taken by a taxing authority or court of competent jurisdiction in the relevant jurisdiction, or the official proposal of any such action.

 

"Class": All of the Notes having the same priority (as a single class); provided that (i) except as provided in clause (ii) of this proviso, the Class A-1R Notes, and the Class A-1T Notes and the Class A-1F Notes shall constitute, and vote together as, a single Class and (ii) the Class A-1R Notes, and the Class A-1T Notes and the Class A-1F Notes shall be treated as separate Classes, and shall vote separately, to the extent expressly specified in this Indenture or any other Transaction Document and for purposes of any determination as to whether a proposed supplemental indenture or amendment would directly affect the holders of any such Class exclusively and differently from the holders of any other Class.

 

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

 

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

 

"Class A-1 Notes": The Class A-1R Notes, and the Class A-1T Notes and the Class A-  1F Notes, collectively.

 

"Class A-1F Notes": ThePrior to the Refinancing Date, the Class A-1F Senior Secured Fixed Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3, on and after the Refinancing Date, there shall be no Class A-1F Notes Outstanding.

 

"Class A-1R Borrowing": The meaning specified in the Class A-1R Note Purchase Agreement.

 

"Class A-1R Note Additional Amounts": With respect to any Class A-1R Note and the holder thereof, any Breakage Costs, Increased Costs, Class A-1R Note Gross-Up Amounts and Capped Amounts payable in respect of such Note or otherwise to such holder under the Class A- 1R Note Purchase Agreement or this Indenture.

 

"Class A-1R Note Gross-Up Amount": The meaning specified in Section 7.17(mo).

 

"Class A-1R Note Purchase Agreement":       The Class A-1R Note Purchase Agreement dated as of the Closing Date among the Issuer, the Co-Issuer, the Note Agent, and each purchaser of Class A-1R Notes, as amended by Amendment No. 1 to Class A-1R Note Purchase Agreement and as further amended from time to time.

 

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"Class A-1R Notes": Prior to the Refinancing Date, the Class A-1R Senior Secured Revolving Floating Rate Notes issued on the Closing Date pursuant to this Indenture and, on and after the Refinancing Date, the Class A-1R-R Notes.

 

"Class A-1RR-R Notes": The Class A-1RR-R Senior Secured Revolving Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

"Class A-1R Purchaser Collateral Account":  The meaning specified in Section 10.6.

 

"Class A-1R Purchaser Rating Criteria": A test satisfied with respect to any Holder of  the Class A-1R Notes on each day during the applicable Revolving Period if: (i) such Holder or the CP Conduit providing the funding for such Holder has a short-term credit rating from S&P of at least "A-1" and, to the extent DBRS is rating any Notes then Outstanding, a DBRS Short Term Rating of at least "R-1 (middle)"; (ii) such Holder's obligations are guaranteed by an entity meeting the requirements under clause (i) at such time; or (iii) the Global Rating Agency Condition is satisfied with respect to such Holder's failure to satisfy the requirements under  either of clause (i) or (ii) at such time and both the Issuer and the Note Agent have consented thereto. The Class A-1R Purchaser Rating Criteria will not apply (x) after the applicable Revolving Period or (y) with respect to the Termed-Out Class A-1R Notes.

 

"Class A-1T Notes": ThePrior to the Refinancing Date, the Class A-1T Senior Secured Floating Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3, on and after the Refinancing Date, the Class A-1T-R Notes.

 

"Class A-21T-R Notes": The Class A-21T-R Senior Secured Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

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

 

"Class A-2 Notes": Prior to the Refinancing Date, the Class A-2 Senior Secured Floating Rate Notes issued on the Closing Date pursuant to this Indenture and, on and after the Refinancing Date, the Class A-2-R Notes.

 

"Class BA-2-R Notes": The Class BA-2-R Senior Secured Deferrable Floating Rate Notes issued pursuant to this Indenture and having the characteristics specified in Section 2.3.

 

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

 

"Class B Notes": Prior to the Refinancing Date, the Class B Secured Deferrable Floating Rate Notes issued on the Closing Date pursuant to this Indenture and, on and after the Refinancing Date, the Class B-R Notes.

 

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

 

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"Class C Notes": ThePrior to the Refinancing Date, the Class C Secured Deferrable Floating Rate Notes issued on the Closing Date pursuant to this Indenture and having the characteristics specified in Section 2.3, on and after the Refinancing Date, there shall be no Class C Notes Outstanding.

 

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

 

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

 

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

 

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

 

"Closing Date":  September 29, 2016.

 

"Closing Date Sale Agreement": The Loan Sale Agreement dated as of the Closing Date between the 2013 CLO Issuer, as seller, and the Issuer, as purchaser, relating to the assignment of the 2013 CLO Sale Portfolio.

 

"Closing Date Transfer Agreement": The Loan Assignment Agreement dated as of the Closing Date between the 2013 CLO Issuer, as transferor, and the Issuer, as transferee, relating to the assignment of the 2013 CLO Transfer Portfolio.

 

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

 

"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.

 

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

 

"Collateral Administrator": Deutsche Bank Trust Company Americas, in its capacity as collateral administrator under the Collateral Administration Agreement, and any successor thereto.

 

"Collateral Interest Amount": As of any date of determination, as determined by the Collateral Manager in accordance with this Indenture, without duplication, the aggregate amount of Interest Proceeds that has been received or that is expected to be received (other than

15


 

Interest Proceeds expected to be received from Defaulted Obligations and PIK Loans, but including Interest Proceeds actually received from Defaulted Obligations and PIK Loans), in each case during the Collection Period in which such date of determination occurs (or after such Collection Period but on or prior to the related Payment Date if such Interest Proceeds would be treated as Interest Proceeds with respect to such Collection Period).

 

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

 

"Collateral Management Fee": The Senior Collateral Management Fee and the Subordinated Collateral Management Fee.

 

"Collateral Manager": The BDC, until a successor Person shall have become the Collateral Manager pursuant to the provisions of the Collateral Management Agreement, and thereafter "Collateral Manager" shall mean such successor Person.

 

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

 

"Collateral Obligation": A Senior Secured Loan or a Second Lien Loan, or Participation Interest therein, pledged by the Issuer to the Trustee that as of the date of acquisition by the Issuer (or its binding commitment to acquire the same) meets each of the following criteria:

 

(i)is able to be pledged to the Trustee pursuant to its Underlying Instruments;

 

(ii)is an obligation of an Obligor Domiciled in the United States (or any state thereof but excluding any territory thereof) or an Approved Foreign Jurisdiction;

 

(iii)is U.S. Dollar denominated and is neither convertible by the issuer thereof into, nor payable in, any other currency, and is governed by the law of a state of the United States or the law of an Approved Foreign Jurisdiction (other than an Approved Tax Jurisdiction);

 

(iv)is not a Defaulted Obligation (unless such Defaulted Obligation is being acquired in an Exchange Transaction) or a Credit Risk Obligation;

 

(v)is not an Equity Security, a component of an Equity Security, an Equity Kicker (including any Equity Security acquired as part of a "unit" in connection with the purchase of a Collateral Obligation) or exchangeable or convertible into an Equity Security;

 

(vi)has (a) an S&P Rating and (b) for so long as the Class A-1 Notes are Outstanding, a DBRS Rating of at least "CCC (low)";

 

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(vii)does not have (A) an "f," "rL," "p," "pi," "qprelim," "t" or "sf" subscript assigned by S&P or (B) an "sf" subscript assigned by any other rating agency;

 

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

 

(ix)is not a Structured Finance Obligation, a finance lease or chattel paper;

 

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

 

(xi)does not mature after the Stated Maturity of the Notes;

 

(xii)is not a Real Estate Loan;

 

(xiii)does not constitute Margin Stock;

 

(xiv)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 with respect to (A) FATCA withholding or (B) 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; provided that this clause (xiv) shall not apply to commitment fees and other similar fees associated with Revolving Collateral Obligations or Delayed Drawdown Collateral Obligations;

 

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

 

(xvi)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;

 

(xvii)is not a Zero Coupon Obligation or a Bridge Loan;

 

(xviii)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;

 

(xix)if such Collateral Obligation is a Participation Interest, then such Participation Interest is acquired from (a) a Selling Institution incorporated or  organized under the laws of the United States (or any state thereof but excluding any territory thereof) or any U.S. branch of a Selling Institution incorporated or organized outside the United States or (b) with respect to Collateral Obligations the Obligors of which are organized or incorporated in an Approved Foreign Jurisdiction (other than an Approved Tax Jurisdiction), a Selling Institution organized or incorporated in an Approved Foreign Jurisdiction (other than an Approved Tax Jurisdiction), in each case to the extent such Selling Institution satisfies the S&P Counterparty Criteria;

 

 

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(xx)is not the subject of an Offer of exchange, or tender by its issuer, for Cash, securities or any other type of consideration other than (a) 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 that would otherwise qualify for purchase under the Eligibility Criteria described herein;

 

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

 

and

 

(xxii)is Registered;

 

(xxiii)is not a Synthetic Security;

 

(xxiv)neither is nor supports a letter of credit;

 

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

 

(xxvi)is not (a) a Bond, (b) a derivative or (c) a commodity forward contract;

 

(xxvii)is not a Related Obligation.; and

 

(xxviii)is  acquired  at  a  price  at  least  equal  to  75%  of  its    outstanding principal balance.

 

"Collateral Obligation Funding Amount": The meaning specified in Section 2.14(b).

 

"Collateral Quality Test":  A test satisfied on any Measurement Date that is   applicable (x) on and after the Effective Date and duringuntil the Refinancing Date, and (y) on and after the Refinancing Effective Date until the Reinvestment Period expires or terminates, and is satisfied on any Measurement Date during such periods 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 if a test is not satisfied on such date, the degree of compliance with such test is maintained or improved after giving effect to the investment, calculated in each case as required by Section 1.3 herein:

 

(i)

the Minimum Weighted Average S&P Spread Test;

 

 

(ii)

the Minimum Weighted Average Fixed Rate Coupon Test;

 

 

(iii)

the Maximum Weighted Average Life Test;

 

 

(iv)

the S&P CDO Monitor Test; and

 

 

(v)

the Minimum Weighted Average S&P Recovery Rate Test.;

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(vi)

for so long as the Class A-1 Notes are Outstanding, the Maximum DBRS Risk Score Test;

 

 

 

(vii)

for so long as the Class A-1 Notes are Outstanding, the Minimum Weighted Average DBRS Recovery Rate Test;

 

 

 

(viii)

for so long as the Class A-1 Notes are Outstanding, the Minimum DBRS Diversity Score Test; and

 

 

 

(ix)

for so long as the Class A-1 Notes are Outstanding, the Minimum Weighted Average DBRS Spread 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 eighth 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 of such Stated Maturity, (b) in the case of the final Collection Period preceding an Optional Redemption or Tax Redemption in whole of the Notes, on the Redemption Date and (c) in any other case, at the close of business on the eighth Business Day prior to such Payment Date.

 

"Commercial Paper Notes": With respect to a CP Conduit, commercial paper notes or secured liquidity notes issued by a CP Conduit or an entity providing funding to a CP Conduit from time to time.

 

"Commitment Fee Rate":  A rate equal to 1.0% per annum.

 

"Commitment Fee Shortfall": Any unpaid Commitment Fees plus the amount of interest which accrues on such unpaid Commitment Fees.

 

"Commitment Fees": The fees payable in respect of the Aggregate Undrawn Amount which will accrue for each Interest Accrual Period from (and including) the Closing Date to (and including) the last day of the Reinvestment Period at the Commitment Fee Rate.

 

"Commitment Shortfall":  The amount by which:

 

(a)the aggregate Unfunded Amount exceeds

 

(b)the sum of (i) the Aggregate Undrawn Amount plus (ii) amounts on deposit in the Collection Account, including Eligible Investments credited thereto, representing Principal Proceeds plus (iii) amounts on deposit in the Revolver Funding Account, including Eligible Investments credited thereto.

 

"Commitments": The aggregate amount that the Holders of the Class A-1R Notes have committed to advance to the Issuer pursuant to the Class A-1R Note Purchase Agreement from

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time to time during the Reinvestment Period to fund Borrowings under the Class A-1R Notes, whether or not utilized at such time and including the Termed-Out Class A-1R Notes. The commitments (whether or not utilized) of a Holder of Class A-1R Notes to fund a portion of each Borrowing are referred to herein as the Commitments of such Holder. The Commitments are subject to adjustment as set forth in Section 9.7.

 

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

 

"Concentration Limitations": Limitations that are applicable (x) on and after the Effective Date until the Refinancing Date, and (y) on and after the Refinancing Effective Date until the Reinvestment Period expires or terminates, and that are satisfied on any Measurement Date or other date of determination, in each case on and after the Effective Date, and during the Reinvestment Periodduring such periods if the Aggregate Principal Balance of the Collateral Obligations owned (or in relation to a proposed purchase of a Collateral Obligation, proposed to be owned) by the Issuer comply with all of the requirements set forth below (or in relation to a proposed purchase, if not in compliance, the relevant requirements must be maintained or improved after giving effect to the purchase), calculated in each case as required by Section 1.3 herein, calculated as a percentage of Total Capitalization:

 

(i)at least 85.0% shall consist of Collateral Obligations that are Senior Secured Loans, cash and Eligible Investments;

 

(ii)(a) not more than 15.010.0% may consist of Collateral Obligations that  are Second Lien Loans; and (b) not more than 15.0% may consist of First Lien Last- Out Loans and Second Lien Loans in the aggregate;

 

(iii)not more than 5.0% may consist of Fixed Rate Obligations;

 

(iv)not more than 5.0% may consist of Current Pay Obligations;

 

(v)not more than 3.0% may consist of obligations issued by a single Obligor and its Affiliates; provided that obligations issued by up to three Obligors (and their respective Affiliates) may each constitute up to 4.0% of Total Capitalization; provided further that the obligations included in the immediately prior proviso shall not be (A) issued by Obligors belonging to the S&P Industry Classification "Oil, Gas and Consumable Fuels" or "Energy Equipment and Services" or (B) a Second Lien LoanLoans;

 

(vi)not more than 12.0% may consist of Collateral Obligations that are issued by Obligors that belong to any single S&P Industry Classification, except that the largest S&P Industry Classification may represent up to 15.0% unless the largest S&P Industry Classification is the S&P Industry Classification "Oil, Gas and Consumable Fuels" or "Energy Equipment and Services";

 

(vii)not more than 12.0% may consist of Collateral Obligations that are issued by Obligors that belong to any single DBRS Industry Classification, except

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that (A) the largest DBRS Industry Classification may represent up to 25.0% and (B) the second largest DBRS Industry Classification may represent up to 15.0%;

 

(viii)(vii) not more than 10.0% may consist of Collateral Obligations as to which the S&P Rating is derived from a publicly monitored rating by Moody's (but not from a replacement of Moody's selected in accordance with the definition of "Rating Agency");

 

(ix)(viii) not more than 10.0% may consist of DIP Collateral Obligations;

 

(x)(ix) not more than 5.07.5% may consist of Collateral Obligations that pay interest less frequently than quarterly;

 

(xi)(x) not more than 10.0% may consist, in the aggregate, of Revolving Collateral Obligations and any undrawn commitments with respect to Delayed Drawdown Collateral Obligations;

 

(xii)(xi) not more than 5.0% may consist of Obligors Domiciled in an Approved Foreign Jurisdiction; provided that not more than 3.0% may consist of Collateral Obligations whose Obligors are Domiciled in an Approved Tax Jurisdiction (provided that a majority of the assets owned by, and revenue of, each such Obligor that is Domiciled in an Approved Tax Jurisdiction is located in or from the United States or an Approved Foreign Jurisdiction other than an Approved Tax Jurisdiction);

 

(xiii)(xii) not more than 25.0% may consist of Eligible Cov-Lite Loans;

 

(xiv)(xiii) not more than 20.0% may consist of Participation Interests;

 

(xv)(xiv) not more than 10.0% may consist of PIK Loans;

 

(xvi)(xv) not more than 15.0% may consist of Deemed Rated Obligations;

 

(xvixvii)not more than 25.0% may consist of Discount Obligations; and

 

(xviixviii)not more than 30.0% may consist of CCC Collateral Obligations.

"Conduit Rating Agency": Each nationally recognized investment rating agency that is then rating the Commercial Paper Notes of any CP Conduit.

 

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"Conduit Support Provider": Without duplication, (i) a provider of a Credit Facility or Liquidity Facility to or for the benefit of any CP Conduit, and any guarantor of such provider or

(ii) an entity that issues commercial paper or other debt obligations, the proceeds of which are used (directly or indirectly) to fund the obligations of any CP Conduit.

 

"Confidential Information": The meaning specified in Section 14.19(b).

 

"Consent Amendment":  The meaning specified in Section 8.3(b).

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

 

"Controlling Person": A Person (other than a Benefit Plan Investor) who has discretionary authority or control with respect to the assets of 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 corporate trust office of the Trustee (a) for Note transfer purposes and presentment of the Notes for final payment thereon, DB Services Americas, Inc., 5022 Gate Parkway, Suite 200, Jacksonville, Florida, 32256, Attention: Transfer Unit and (b) for all other purposes, Deutsche Bank Trust Company Americas, 1761 East St. Andrew Place, Santa Ana, California, 92705, Attention: Structured Credit Services – Garrison Funding 20162018-2, or such other address as the Trustee may designate from time to time by notice to the Holders, the Collateral Manager and the Issuer or the principal corporate trust office of any successor Trustee.

 

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

 

"Covered Audit Adjustment":  The meaning specified in Section 7.17(m).

 

"Cov-Lite Loan":  A Collateral Obligation the Underlying Instruments for which do   not (i) contain any financial covenants or (ii) require the borrower thereunder to comply with any Maintenance Covenant (regardless of whether compliance with one or more Incurrence Covenants is otherwise required by such Underlying Instruments); provided that other than for purposes of the S&P Recovery Rate, a Collateral Obligation shall not constitute a Cov-Lite Loan if the Underlying Instruments contain a cross-default or cross-acceleration provision to, or such Collateral Obligation is pari passu with, another loan of the applicable Obligor forming part of the same loan facility that contains one or more Maintenance Covenants.

 

"CP Conduit" Any limited-purpose entity established to use the direct or indirect proceeds of the issuance of commercial paper notes to finance financial assets and that is a

22


 

holder of Class A-1R Notes.   For the avoidance of doubt, for all purposes under this   Indenture and the other Transaction Documents, the term "CP Conduit" shall include (i) Versailles Assets LLC, (ii) Bleachers Finance 1 Limited, (iii) any other commercial paper program or vehicle established or administered by Natixis, New York Branch, and (iv) any other commercial paper program or vehicle established or administered by 20 Gates Management LLC.

 

"CP Rate": For any CP Conduit that is a Holder of Class A-1R Notes, a rate per annum equal to the sum of (i) the rate or, if more than one rate, the weighted average of the rates, determined if necessary by converting to an interest-bearing equivalent rate per annum (based on a year of 360 days and actual days elapsed) the discount rate (or rates) at which Commercial Paper Notes are sold by any placement agent or commercial paper dealer of a commercial paper conduit providing funding to a CP Conduit, plus (ii) if not included in the calculations in clause (i), the commissions and charges charged by such placement agent or commercial paper dealer with respect to such Commercial Paper Notes, incremental carrying costs incurred with respect to such Commercial Paper Notes maturing on dates other than those on which corresponding funds are received by such CP Conduit, other borrowings by such CP Conduit and any other costs (such as interest rate or currency swaps) associated with the issuance of Commercial Paper Notes that are allocated, in whole or in part, by such CP Conduit or its program manager or funding agent to fund or maintain such portion of the Class A-1R Notes (and which may be also allocated in part to the funding of other assets of such CP Conduit) and discount on Commercial Paper Notes issued to fund the discount on maturing Commercial Paper Notes, in all cases expressed as a percentage of the face amount thereof and converted to an interest-bearing equivalent rate per annum (based on a year of 360 days and actual days elapsed); provided, that the CP Rate shall not exceed LIBOR plus 0.50% per annum.

 

"CPO": A "commodity pool operator" as defined under the Commodity Exchange Act.

 

"Credit Facility":        With respect to any Class A-1R Note funded by any CP Conduit, a credit asset purchase agreement or other similar facility that provides credit support for defaults in respect of the failure to fund such Class A-1R Note, and any guaranty of any such agreement or facility.

 

"Credit Improved Obligation": Any Collateral Obligation that, in the reasonable business judgment of the Collateral Manager, has significantly improved in credit quality after it was acquired by the Issuer.

 

"Credit Risk Obligation": Any Collateral Obligation that is not a Defaulted Obligation but that, in the reasonable business judgment of the Collateral Manager, has a material risk of declining in credit quality and, with the lapse of time, becoming a Defaulted Obligation and is designated as a "Credit Risk Obligation" by the Collateral Manager.

 

"CRR": EU Regulation 575/2013 (on prudential requirements for credit institutions and investment firms and amending Regulation (EU) 648/2012).

 

"CTA": A "commodity trading adviser" as defined under the Commodity Exchange Act.

 

"Cumulative Deferred Senior Collateral Management Fee":  The meaning specified in the Collateral Management Agreement.

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"Cumulative Deferred Subordinated Collateral Management Fee": The meaning specified in the Collateral Management Agreement.

 

"Current Deferred Senior Collateral Management Fee": The meaning specified in the Collateral Management Agreement.

 

"Current Deferred Subordinated Collateral Management Fee": The meaning specified in the Collateral Management Agreement.

 

"Current Pay Obligation": A Collateral Obligation (other than a DIP Collateral Obligation) that would otherwise be a Defaulted Obligation as to which (i) all scheduled payments due (other than those due as a result of any bankruptcy, insolvency, receivership or other analogous proceeding) were paid in Cash and the Issuer or the Collateral Manager reasonably expects, and delivers to S&P a certificate of an Authorized Officer certifying, that such remaining scheduled payments due will be paid in cash, (ii) the S&P Rating of such Collateral Obligation is at least "CCC" and is not on a watch list for possible downgrade, (iii) the Market Value (which is not determined pursuant to clause (iv) of the definition thereof) of such Collateral Obligation is at least 85% of par and (iv) if the Obligor of such Collateral Obligation  is the subject of a bankruptcy, insolvency, receivership or other analogous proceeding, the bankruptcy court or other authorized official has authorized the payment of interest due and payable on such Collateral Obligation and the Obligor of such Collateral Obligation  is current on all such authorized payments; provided that to the extent that more than 5% of the Total Capitalization would otherwise constitute Current Pay Obligations, one or more Collateral Obligations designated by the Issuer having a Principal Balance at least equal to such excess shall be deemed not to constitute Current Pay Obligations (and shall therefore constitute Defaulted Obligations).; provided further that, any such Defaulted Obligations shall 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 Obligations, 5% of the Total Capitalization.

 

"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.

 

"DBRS":  DBRS, Inc., together with its successors.

 

"DBRS Deemed Rating": A deemed credit rating determined in accordance with the provisions set forth in Schedule 4.

 

"DBRS Collateral Quality Matrix": The DBRS Collateral Quality Matrix set forth on Schedule 6. On or prior to the Refinancing Date, the Issuer (or the Collateral Manager on the Issuer's behalf) shall specify to the Collateral Administrator (with a copy to   DBRS

24


 

and the Trustee) the Applicable Row Level to be in effect initially. Thereafter, upon not less than two Business Days' prior written notice to the Collateral Administrator (with a copy to DBRS and the Trustee), the Issuer (or the Collateral Manager on the Issuer's behalf) may specify a different Applicable Row Level than the one in use at that time; provided that the Issuer demonstrates compliance with all columns in the table for the proposed Applicable Row Level on Schedule 6.

 

"DBRS Diversity Score": A single number that indicates collateral concentration in terms of both issuer and industry concentration, calculated as set forth on Schedule 7.

 

"DBRS Equivalent": The meaning specified in Schedule 4.

 

"DBRS Industry Classification":  Each industry identified in Schedule 5.

 

"DBRS Long Term Rating": A long term credit rating determined in accordance with the provisions set forth in Schedule 4.

 

"DBRS Rating": A credit rating determined in accordance with the procedures set forth in Schedule 4.

 

"DBRS Rating Condition": With respect to any event, action or proposed action, a condition that is satisfied if DBRS has been notified in writing by the Issuer, the Collateral Manager or the Trustee of such event, action or proposed action and DBRS has confirmed in writing (which may be in the form of a letter, press release or other publication of a change in DBRS's published ratings criteria to this effect) that such action will not cause the then-current rating of any Class of Secured Notes rated by DBRS to be reduced or withdrawn; provided that the DBRS Rating Condition shall be deemed to have been satisfied if, within 10 Business Days following such notification by the Issuer, the Collateral Manager or the Trustee, none of the Issuer, the Collateral Manager or the Trustee has received a written communication relating to such event, action or proposed action from DBRS or if DBRS makes a public announcement or informs the Issuer, the Collateral Manager or the Trustee in writing that it believes that satisfaction of the DBRS Rating Condition is not required with respect to an event, action or its practice is not to give such confirmation; provided, further, that the DBRS Rating Condition shall not be applicable if either (x) the Class A-1 Notes are not rated by DBRS at such time or (y) the Class A-1 Notes are no longer Outstanding.

 

"DBRS Recovery Rate":  The rate determined by reference to the following table:

 

 

Obligor Domiciled in Tier 1 Countries

Obligor Domiciled in Tier 2 Countries

Obligor Domiciled in Tier 3 Countries

Senior Secured Loan

50.75%

45.75%

40.75%

Eligible Cov-Lite Loans

43.75%

38.75%

33.75%

Second Lien Loans, First Lien Last-Out Loans and Unsecured Loans

28.50%

23.50%

18.50%

 

Tier 1 Countries: United States, Canada, United Kingdom, Australia

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Tier 2 Countries: Luxembourg, the Netherlands, Germany, Japan

 

Tier 3 Countries:  France

 

"DBRS Risk Score": In respect of any Collateral Obligation at any time, the percentage set forth in the table below opposite the DBRS Long Term Rating in respect of such Collateral Obligation:

 

DBRS Long Term Rating

DBRS Risk Score

AAA

0.0987%

AA (high)

0.1539%

AA

0.2091%

AA (low)

0.2994%

A (high)

0.4801%

A

0.5704%

A (low)

0.9643%

BBB (high)

1.7521%

BBB

2.1460%

BBB (low)

2.9528%

BB (high)

6.9863%

BB

8.5997%

BB (low)

11.9572%

B (high)

17.3292%

B

22.0296%

B (low)

31.8670%

CCC (high)

48.2625%

CCC

54.8208%

CCC (low)

77.4104%

CC

100.0000%

C

100.0000%

D

100.0000%

 

If any such Collateral Obligation does not have a DBRS Long Term Rating, the DBRS Risk Score for such Collateral Obligation will be determined as provided below:

(a)if a credit estimate has been obtained and has not expired, the DBRS Risk Score will be as set forth in such credit estimate;

 

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(b)if a credit estimate has not been obtained, other than as described in clause (d) below:

(i)for the first 90 days from the acquisition of such Collateral Obligation, the DBRS Risk Score shall be, at the discretion of the Collateral Manager: (A) 31.8670%; provided that if three or more credit estimates have been received by the Issuer since the Refinancing Date of 48.2625% or higher, then the DBRS Risk Score for all subsequently acquired Collateral Obligations for which credit estimates shall have been requested and not obtained shall be 44.50% for the first 90 days from the acquisition of such Collateral Obligation; or (B) 44.50%; and

(ii)after 90 days from the acquisition of such Collateral Obligation, unless such Collateral Obligation has received a credit estimate, the DBRS Risk Score shall be 77.4104%;

 

(c)if a credit estimate has previously been obtained but has expired:

(i)the DBRS Risk Score shall remain the same for the first 30 days past the expiration;

(ii)if a new credit estimate has not been obtained within 30 days, the DBRS Risk Score shall be the higher of the DBRS Risk Score set forth in the expired credit estimate and 44.50%; and

(iii)if a new credit estimate has not been obtained within 90 days, the DBRS Risk Score shall be 77.4104%;

 

(d)if such Collateral Obligation is a Defaulted Obligation, the DBRS Risk Score shall be 100.0000%; and

 

(e)if a credit estimate for a Collateral Obligation has been requested and DBRS declines to provide such credit estimate until a later date but indicates that such credit estimate is forthcoming, the DBRS Risk Score shall be 44.50% until such credit estimate is provided.

 

"DBRS Short Term Rating": A short term credit rating determined in accordance with the provisions set forth in Schedule 4.

 

"Deemed Rated Obligation": Any Collateral Obligation which does not have a publicly monitored S&P Rating and pending receipt of a credit estimate is deemed to have an S&P Rating (i) as determined by the Collateral Manager or (ii) of "CCC-", in each case pursuant to the procedures set forth in clause (iii)(b) of the definition of the term "S&P Rating".

 

"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.

 

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"Default Differential": With respect to the Class A-1 Notes, as of any date of determination, the rate calculated by subtracting the Scenario Default Rate at such time from the Adjusted Break-even Default Rate at such time.

 

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

 

"Defaulted Obligation": Any Collateral Obligation, (i) as to which: (a) any payment due (whether scheduled, unscheduled, by way of acceleration or otherwise) under the Underlying Instruments is not made when due and such nonpayment is continuing for the lesser of (x) any applicable grace period and (y) three Business Days, provided that in the event the payment is received after three Business Days but within any applicable grace period (up to a maximum of five Business Days), such Collateral Obligation will no longer be considered a Defaulted Obligation,; (b) the nonpayment event described in clause (a) above occurs on another material obligation for borrowed money of the obligor that is senior or pari passu in right of payment with such Collateral Obligation,; (c) except in the case of a Collateral Obligation which is a DIP Collateral Obligation, the obligor in respect of such Collateral Obligation has, or others have, instituted proceedings to have such Obligor adjudicated as bankrupt or insolvent or placed into receivership and such proceedings have not been stayed or dismissed and the Collateral Obligation has not received adequate protection and current interest, or such Obligor has filed  for protection under Chapter 11 of the United States Bankruptcy Code,; or (d) except in the case of a Collateral Obligation (or, in the case of a Participation Interest, the underlying Senior Secured Loan) which is a DIP Collateral Obligation, such Collateral Obligation or the obligor in respect of such Collateral Obligation or another obligation for borrowed money of such Obligor is rated "CC", "D" or "SD" by a Rating Agencyhas either (x) an S&P Rating of "CC" or "SD" or lower, or had such rating immediately before such rating was withdrawn, or (y) for so long as the Class A-1 Notes are Outstanding, a DBRS Long Term Rating of "C" or "D", or had such a rating immediately before such rating was withdrawn; (ii) that is a Participation Interest in a loan or other debt security that would, if such loan or other debt security were a debt obligation, constitute a "Defaulted Obligation" under clause (i) above (a "Defaulted Participation Interest"); (iii) that is a Participation Interest (other than a Defaulted Participation Interest) with respect to which (a) the long-term debt or deposit obligations of the selling institution are rated "CC", "D" or "SD" by S&P or any such debt or deposit obligations shall cease to be rated by S&Phas (x) an S&P Rating of "CC" or "SD" or lower or had such rating immediately before such rating was withdrawn, or (y) for so long as the Class A-1 Notes are Outstanding, a DBRS Long Term Rating of "C" or "D", or had such a rating immediately before such rating was withdrawn; or (b) the selling institution has defaulted in the performance of any of its payment obligations with respect to such Participations under the related participation agreement; or (iv) that, in the reasonable business judgment of the  Collateral Manager, is a Defaulted Obligation; provided that for purposes of this definition, with respect to a Collateral Obligation already owned by the Issuer whose S&P Rating is  withdrawn, the S&P Rating shall be the last outstanding S&P Rating before the withdrawal. The identity of each Defaulted Obligation will be included in each Monthly Report.

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

 

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

 

"Delayed Drawdown Funding Amount": The meaning specified in Section 2.14(b).

"Deliver" or "Delivered" or "Delivery":  The taking of the following steps:

 

 

(i)

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

 

 

 

(a)

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

 

 

 

(b)

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

 

 

 

(c)

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

 

 

 

(ii)

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

 

 

 

(a)

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

 

 

 

(b)

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

 

 

 

(iii)

in the case of each Clearing Corporation Security,

 

 

(a)

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

 

 

 

(b)

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

 

 

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(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 acquiring the underlying Financial Asset for a Securities Intermediary, and in either case, accepting it for credit to the Custodian's securities account or (z) to become obligated under other law, regulation or rule to credit the underlying Financial Asset to a Securities Intermediary's securities account,

 

 

 

(b)

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

 

 

 

(c)

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

 

 

 

(vi)

in the case of Cash or Money,

 

 

(a)

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

 

 

 

(b)

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

 

 

 

(c)

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

 

 

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(vii)

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

 

 

(a)

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

 

 

 

(b)

causing the registration of the security granted under this Indenture in the Register of Mortgages of the Issuer at the Issuer's registered office in the Cayman Islands.

 

 

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

 

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

 

"DIP Collateral Obligation": 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.

 

"Direct Tax Owner": With respect to the Class A-1R Notes, the meaning specified in Section 2.5(q) and with respect to the Subordinated Notes, the meaning specified in Section 2.5(p).

 

"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 (b) if such Collateral Obligation has an S&P Rating below "B-", 85.0% of its principal balance; provided that such Collateral Obligation shall cease to be a Discount Obligation at such time as the Market Value (expressed as a percentage of the par amount of such Collateral Obligation) determined for such Collateral Obligation on each day during any period of 30 consecutive days since the acquisition by the Issuer of such Collateral Obligation, equals or exceeds 90% of its Principal Balance as of the end of such 30 consecutive day period.

 

"Distribution": Any payment of principal or interest or any dividend or premium payment made on, or any other distribution in respect of, a Collateral Obligation or other Asset.

 

"Distribution Report":  The meaning specified in Section 10.10(b).

 

"Dodd-Frank Act": The Dodd-Frank Wall Street Reform and Consumer Protection Act, as amended from time to time.

 

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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.

 

"Document Custody Office":  The meaning specified in Section 6.19(a).

 

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

 

"Domicile" or "Domiciled": With respect to any issuer of, or Obligor with respect to, a Collateral Obligation: (a) except as provided in clause (b) below, its country of organization;  or (b) if it is organized in an Approved Tax Jurisdiction, each of such jurisdiction and the country in which, in the Collateral Manager's good faith estimate, a substantial portion of its operations are located or from which a substantial portion of its revenue is derived, in each case directly or through subsidiaries (which shall be any jurisdiction and country known at the time of designation by the Collateral Manager to be the source of the majority of revenues, if any, of such issuer or Obligor).

 

"Draft CRR Amendment Regulation": The proposal to amend the CRR, adopted by the European Commission on September 30, 2015.

"DTC": The Depository Trust Company, its nominees, and their respective successors. "Due Date":  Each date on which a Distribution is due on a Collateral Obligation or other

Asset, each in accordance with its terms.

 

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

 

"Effective Date": The earlier to occur of (i) January 20, 2017 and (ii) the first date on which the Collateral Manager certifies to the Trustee and the Collateral Administrator that the conditions set forth in Section 7.18 are satisfied.

 

"Effective Date-Related Redemption": The meaning specified in Section 9.6.

 

"Effective Date-Related Redemption Amount": The meaning specified in Section 9.6.

 

"Effective Date-Related Redemption Date": The meaning specified in Section 9.6.

 

"Effective Date Report":  The meaning specified in Section 7.18(b)(i).

 

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

 

"Eligible Cov-Lite Loan": A Collateral Obligation that (i) is a Cov-Lite Loan, (ii) is a Senior Secured Loan, (iii) has a public rating by S&P of "B-" or higher, and (iv) constitutes all, or part, of a tranche at least equal to $100,000,000 at the time such tranche is issued.

 

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

 

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"Eligible Investment Required Ratings": In the case of each  Eligible  Investment,  a ratings requirement satisfied if (a) 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) such obligation or security (or the sovereign guaranteeing such obligation or security) has (x) 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) and (y) to the extent that DBRS is rating any Notes then Outstanding, a DBRS Short Term Rating of at least "R-1 (middle)" and, in the case of any Eligible Investment with a maturity longer than 91 days, a DBRS Long Term Rating of at least "AA".

 

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

 

 

(i)

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

 

 

 

(ii)

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

 

 

 

(iii)

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

 

 

 

(iv)

money market funds which have, at all times, credit ratings of "AAAm" by S&P (or, if not rated by S&P,and, to the extent that DBRS is rating any Notes then Outstanding, either credit ratings of "Aaa" and "MR1+" by Moody'sAAA" by DBRS to the extent rated by DBRS or otherwise the highest credit rating assigned by another NRSRO (excluding S&P); and

 

 

 

(v)

Cash; 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

33


 

 

those referred to in clause (iv) above, as mature (or are putable at par to the issuer thereof) no later than the earlier of (x) 90 days after the date of acquisition thereof or (y) 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 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 (other than any withholding tax imposed pursuant to FATCA), (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 the subject of a tender offer, voluntary redemption, exchange offer, conversion or other similar action, (g) in the Collateral 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. Eligible Investments may include, without limitation, those investments issued by or made with the Bank or for which the Bank or the Trustee or an Affiliate of the Bank or the Trustee provides services and receives compensation.

 

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

 

"EoD Overcollateralization Ratio": As of any Measurement Date or other date of determination, the percentage derived from:

 

(a)the sum of (x) the Principal Collateralization Amount on such date (provided that, for purposes of this calculation, all Defaulted Obligations will be valued at their Market Value) plus (y) the Net Aggregate Exposure Amount; divided by

 

(b)the sum of (x) Aggregate Outstanding Amount on such date of the Class A-1 Notes plus (y) the Net Aggregate Exposure Amount.

 

"Equity Kicker": A warrant (or other "attached" Equity Security) that is received with respect to a Collateral Obligation or purchased as part of a "unit" with a Collateral Obligation (so long as such warrant or other Equity Security is not Margin Stock and is not convertible or exchangeable into Margin Stock). The term "Equity Kicker" does not include any warrant that is detached or detachable from the underlying Collateral Obligation.

 

"Equity Security": Any security that by its terms does not provide for periodic payments of interest at a stated coupon rate and repayment of principal at a stated maturity and any other security that is not eligible for purchase by the Issuer as a Collateral Obligation and is not an Eligible Investment; it being understood that Equity Securities may not be purchased by the Issuer but may be received by the Issuer in exchange for a Collateral Obligation or a portion

34


 

thereof in connection with an insolvency, bankruptcy, reorganization, debt restructuring or workout of the issuer thereof.

 

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

 

"ESMA": The European Securities and Markets Authority (including any successor or replacement organization thereto).

 

"EU Retained Amount": A material net economic interest in the securitisation position comprised by the Notes which, in any event, shall not be less than 5% (or such lower amount, including 0%, if such lower amount is required or allowed under the applicable EU Retention Requirement Law as a result of amendment, repeal or otherwise) of the nominal value of the Collateral Obligations and Eligible Investments from time to time, as calculated and measured at each origination or acquisition of a Collateral Obligation or Eligible Investment by the Issuer.

 

"EU Retention Deficiency": An event which shall occur if the Subordinated Notes held by the EU Retention Provider are insufficient to constitute the EU Retained Amount.

 

"EU Retention Letter": (a) With respect to the Closing Date, a letter relating to the retention of net economic interest in substantially the form of Exhibit F hereto, from the EU Retention Provider and addressed to the Issuer, the Trustee and the Placement Agent, and (b) with respect to the Refinancing Date, a letter relating to the retention of net economic interest dated as of the Refinancing Date from the EU Retention Provider and addressed to the Issuer, the Trustee and the Placement Agent.

 

"EU Retention Provider":  The BDC.

 

"EU Retention Requirement": The requirements and obligations of the EU Retention Provider as set forth in the EU Retention Letter.

 

"EU Retention Requirement Laws": Each of: (a) Articles 404-410, the CRR and the Final RTS, together with any applicable guidance, regulatory technical standards, implementing technical standards or related documents published by any European Supervisory Authority, the European Central Bank (or any successor or replacement agency or authority) and any delegated regulations of the European Commission, (b) Article 51 and Article 17 as implemented by Section 5 of Chapter III of the AIFMD Level 2 Regulation supplementing the AIFMD, the AIFMD and the AIFMD Level 2 Regulation, and (c) Article 254, Solvency II and the Solvency II Level 2 Regulation, in each case including any further technical standards, any similar or successor laws (including any retention requirements applicable to UCITS funds), any implementing laws or regulations in force in any Member State of the European Union, any guidelines or other materials published by the European Supervisory Authorities (jointly or individually) in relation thereto and any delegated regulations of the European Commission (in each case including any amendments, replacements or successors thereto).

 

"Euroclear":  Euroclear Bank S.A./N.V.

 

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"European Supervisory Authorities": Together, the EBA, ESMA and EIOPA.

 

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

 

"Excel Default Model Input File": A Microsoft Excel file that provides all of the inputs required to determine whether the S&P CDO Monitor Test has been satisfied, including, at a minimum, the following data with respect to each Collateral Obligation: CUSIP number (if  any), LoanX identification or LIN # (if any), name of Obligor, coupon, spread (if applicable), LIBOR floor (if applicable), legal final maturity date, average life, principal balance, identification as a Senior Secured Loan or a Second Lien Loan, whether it is a Cov-Lite Loan, settlement date, S&P Industry Classification and S&P Recovery Rate.

 

"Excepted Property":  The meaning assigned in the Granting Clauses hereof.

 

"Excess CCC Adjustment Amount": As of any date of determination, an amount equal to the excess, if any, of:

 

(a)the Aggregate Principal Balance of all Collateral Obligations included in the CCC Excess; over

 

(b)the sum of the Market Values of all Collateral Obligations included in the CCC Excess.

 

"Excess CCC (DBRS) Adjustment Amount": As of any date of determination, (a) if the CCC (DBRS) Excess is less than or equal to the CCC Excess on such date of determination, 0, (b) if the CCC (DBRS) Excess is greater than the CCC Excess on such date of determination, an amount equal to:

 

 

(x)

the excess, if any, of:

 

(i)the Aggregate Principal Balance of all Collateral Obligations included in the CCC (DBRS) Excess; over

 

(ii)the sum of the Market Values of all Collateral Obligations included in the CCC (DBRS) Excess;

 

over

 

(y)the Excess CCC Adjustment Amount on such date.

 

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

 

"Exchange Transaction": The exchange of a debt obligation that is a Defaulted Obligation for another debt obligation that is a Defaulted Obligation which, but for the fact that such debt obligation is a Defaulted Obligation, would otherwise qualify as a Collateral Obligation and (i) in the Collateral Manager's reasonable business judgment, at the time of the exchange, such Received Obligation has a better likelihood of recovery than the Defaulted Obligation to be exchanged, (ii) as determined by the Collateral Manager, at the

 

36


 

time of the exchange, the Received Obligation is no less senior in right of payment vis-à-vis the obligor of such obligation's other outstanding indebtedness than the Defaulted Obligation to be exchanged vis-à-vis its obligor's other outstanding indebtedness, (iii) as determined by the Collateral Manager, both prior to and after giving effect to such exchange, each of the Coverage Tests is satisfied or, if any Coverage Test was not satisfied prior to such exchange, the coverage ratio relating to such test will be at least as close to being satisfied after giving effect to such exchange as it was before giving effect to such exchange, (iv) no more than one other Exchange Transaction has occurred during the Collection Period under which such Exchange Transaction is occurring, (v) as determined by the Collateral Manager, both prior to and after giving effect to such exchange, not more than 5.0% of Total Capitalization consists of obligations received in an Exchange Transaction (provided that solely for purposes of the foregoing calculation, the Total Capitalization shall be calculated based on the Aggregate Principal Balance of all  Defaulted Obligations rather than the Principal Collateralization Amount for all Defaulted Obligations, notwithstanding clause (i) and clause (iv) of the definition of the term "Total Capitalization"), (vi) the period for which the Issuer held the Defaulted Obligation to be exchanged will be included for all purposes in this Indenture when determining the period for which the Issuer holds the debt obligation received in exchange, (vii) as determined by the Collateral Manager, such exchanged Defaulted Obligation was not acquired in an Exchange Transaction and (viii) each of the Maximum Weighted Average Life Test and the S&P CDO Monitor Test are satisfied after such exchange or if not satisfied after such exchange are maintained or improved.

 

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

 

"Exposure Amount": With respect to any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, the excess, if any, of (i) the maximum funding commitment of the Issuer over (ii) the outstanding principal balance of such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation.

 

"FATCA": Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any U.S. or non-U.S. fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with either the implementation of such Sections of the Code (including the Cayman IGA), including but not limited to the Cayman FATCA Legislation.

 

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

 

"Final RTS":  Commission Delegated Regulation (EU) No. 625/2014 of 13 March 2014, supplementing the CRR.

 

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"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 Amendment to the Collateral Management Agreement": The first amendment to the Collateral Management Agreement dated as of the Refinancing Date between the Issuer and the Collateral Manager.

 

"First Lien Last-Out Loan": A Collateral Obligation that would be a  Senior Secured Loan but for the fact that, in the case of an event of default under the applicable Underlying Instrument, the lenders thereunder will be paid after one or more tranches of first lien loans (inclusive of any revolving loan commitments) funded under such Underlying Instrument (for which purposes an Obligor's obligations in respect of its trade claims, accounts receivables, inventory, capitalized leases or similar obligations shall be deemed not to constitute such first lien loans) issued by the same Obligor have been paid in full in accordance with a specified waterfall of payments. Unless otherwise explicitly stated herein, a First Lien Last-Out Loan shall not constitute a Senior Secured Loan.

 

"Fixed Rate Notes":  Notes that bearFitch":  Fitch Ratings, Inc. and any successor   in

interest at fixed rates.

 

"Fitch Rating (DBRS)": The meaning specified in Schedule 4.

 

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

 

"Floating Rate Notes":  Notes that bear interest at floating rates.

 

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

 

"Flowthrough Entity": A partnership, grantor trust or S corporation for United States Federal income tax purposes.

 

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

 

"Garrison":  Garrison Investment Group, LP.

 

"Global Rating Agency Condition": With respect to any action taken or to be taken by or on behalf of the Issuer, the satisfaction of the S&P Rating Agency Condition and, to the extent that DBRS is then rating any Secured Notes then Outstanding, the DBRS Rating Condition.

 

"Global Secured Note": Any Regulation S Global Secured Note or Rule 144A Global Secured 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

38


 

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.

 

"Hedge Agreement": Any interest rate swap, floor and/or cap agreements, including without limitation one or more interest rate basis swap agreements, between the Issuer and any Hedge Counterparty, as amended from time to time, and any replacement agreement entered into in accordance with this Indenture.

 

"Hedge Counterparty": Any one or more institutions entering into or guaranteeing a Hedge Agreement with the Issuer that either satisfies the Required Hedge Counterparty Rating or with respect to which the Global Rating Agency Condition has been satisfied and that has entered into a Hedge Agreement with the Issuer, including any permitted assignee or successor under the Hedge Agreements.

 

"Hedge Counterparty Collateral Account": The account established pursuant to Section 10.3(e).

 

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

 

"Holder AML Obligations":  The meaning specified in Section 2.5(s).

 

"Holder Tax Obligations":  The meaning specified in Section  2.12(d).

 

"Increased Costs": With respect to any Payment Date, the amount, as set forth in a certificate of a holder of a Class A-1R Note or Conduit Support Provider therefor (each, a "Funding Entity"), as the case may be, delivered to the Trustee, the Issuer and the Note Agent on or prior to the related Determination Date, necessary to compensate such Funding Entity, for (a) any increase in cost to a Funding Entity of making or maintaining any loan or asset purchase under the Class A-1R Note Purchase Agreement or a Credit Facility or Liquidity Facility related thereto (or of maintaining its obligation to make any such loan or asset purchase) resulting from a Change of Law after the ClosingRefinancing Date (or, if later, the date such holder acquired its Class A-1R Note) applicable to such Funding Entity, (b) any reduction in any amount received or receivable by a Funding Entity under the Class A-1R Note Purchase Agreement or a Credit Facility or Liquidity Facility related thereto resulting from a Change of Law applicable to such Funding Entity or (c) any reduction in the rate of return on the capital of a Funding Entity or its parent/holding company resulting from a Change of Law after the ClosingRefinancing Date (or, if later, the date such holder acquired its Class A-1R Note) applicable to such Funding Entity or parent/holding company to a level below that which such Funding Entity or parent/holding company could have achieved but for such Change of Law (or, if later, the date such holder acquired its Class A-1R Note); provided that, calculation and payment of  Increased Costs is subject to the provisions of the Class A-1R Note Purchase Agreement and shall exclude all Class A-1R Note Gross-Up Amounts.

 

39


 

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

 

"Indemnifiable Tax": Any tax which, as a result of a Change of Tax Law after the ClosingRefinancing Date, is imposed by any governmental authority of the Cayman Islands by withholding or deduction from a payment under a Class A-1R  Note other than (i) a tax that would not have been imposed but for (a) a present or former connection between the Cayman Islands and the Holder of such Class A-1R Note, any Person holding an interest in such Class A- 1R Note through a partnership, trust, financial intermediary or otherwise or any Person related to the Holder or Person holding an interest in such Class A-1R Note (other than a connection arising solely from having received a payment under, or enforced, such Class A-1R Note) or (b) presentation of such Class A-1R Note for payment (where presentation is required) on a day more than 30 Business Days after the date on which such payment became due except to the extent that additional amounts would have been payable on account of the withholding or deduction of taxes had presentation been made on such 30th Business Day, (ii) any tax imposed on account of the location of the paying agent, (iii) any estate, inheritance, gift, sales, transfer, personal property, wealth or similar tax, (iv) any tax imposed due to the inability or the failure of the affected Holder or Person to deliver, to the Issuer or to such governmental authority as the Issuer may direct, any document, form or certification required or reasonably requested in writing in order to allow the Issuer to make a payment without any deduction or withholding for or on account of any tax, (v) any tax that would not have been imposed had any representation or covenant from a Class A-1R Note Holder been accurate or (vi) any combination of taxes under clauses (i), (ii), (iii), (iv) and (v) above.

 

"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 1011.200 of the Code of Professional Conduct of the American Institute of Certified Public Accountants. For purposes of this definition, no manager or director of any Person will fail to be Independent solely because such Person acts as an independent manager or independent director thereof or of any such Person's affiliates. With  respect  to  the  Issuer,  the  Collateral  Manager  or  Affiliates  of the Collateral Manager, funds or accounts managed by the Collateral Manager or Affiliates of the Collateral Manager shall not be Independent of the Issuer, the Collateral Manager or Affiliates  of the Collateral Manager.

 

40


 

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

 

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

 

"Industry Diversity Measure": As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each S&P Industry Classification, obtained by dividing (i) the Aggregate Principal Balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by Obligors that belong to such S&P Industry Classification by (ii) the Aggregate Principal Balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

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

 

"Information Agent":  The meaning specified in Section 14.17(a).

 

"Initial Rating": (i) With respect to theeach Class of Rated Notes issued on the Closing Date, the rating or ratings, if any, assigned by S&P thereto on the Closing Date, and (ii) with respect to each Class of Rated Notes issued on the Refinancing Date, the rating for each such Class of Rated Notes indicated in Section 2.3. The rating assigned to the Class A-1R Notes by S&P doand DBRS does not address the payment of any Class A-1R Note Additional Amounts.

 

"Institutional Accredited Investor":  An Accredited Investor under clauses (1), (2), (3) or

(7) of Rule 501(a) under the Securities Act.

 

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

 

"Interest Accrual Period": (i) With respect to the initial Payment Date, the period from and including the Closing Date to but excluding such Payment Date (or, with respect to any Borrowing made under the Class A-1R Notes, the period from, and including, the date of such Borrowing to, but excluding, the earlier to occur of the Payment Date immediately following the Interest Accrual Period in which such Borrowing is made and the date on which such Borrowing is repaid in accordance with this Indenture); and (ii) with respect to each succeeding Payment Date, the period from and including the immediately preceding Payment Date to but excluding the following Payment Date (or, with respect to any Borrowing made under the Class A-1R Notes, the period from, and including, the date of such Borrowing to, but excluding, the earlier to occur of the Payment Date immediately following the Interest Accrual Period in which such Borrowing is made and the date on which such Borrowing is repaid in accordance with this Indenture) until the principal of the Secured Notes is paid or made available for payment; provided that for purposes of determining anywith respect to the Interest Accrual Period during which the Refinancing Date occurs, (A) for the Original Notes, the Interest Accrual Period shall be the period from and including the immediately preceding Payment Date to

41


 

but excluding the Refinancing Date (or, with respect to any Fixed Rate Notes, the Payment Date (notwithstanding the definition thereof) shall be assumed to be the 20th day of the relevant  month (irrespective of whether such day is a Business Day). Borrowing made under the Class A-1R Notes, the period from, and including, the date of such Borrowing to, but excluding, the Refinancing Date), and (B) for the Refinancing Notes, the Interest Accrual Period shall be the period from and including the Refinancing Date to but excluding the next Payment Date (or, with respect to any Borrowing made under the Class A-1R Notes, the period from, and including, the date of such Borrowing to, but excluding, the earlier to occur of the next Payment Date and the date on which such Borrowing is repaid in accordance with this Indenture).

 

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

 

"Interest Coverage Ratio": For any designated Class or Classes of Secured Notes, as of any Measurement Date or other date of determination on, or subsequent to, the Determination Date occurring immediately prior to the second Payment Date, the percentage derived from the following equation:  (A – B) / C, where:

 

A = The Collateral Interest Amount as of such Measurement Date or other date of determination;

 

B = Amounts payable (or expected as of the Measurement Date or other date of determination to be payable) on the following Payment Date as set forth in clauses   (A), (B) and (C) in Section 11.1(a)(i); and

 

C = Interest (and, with respect to the Class A-1R Notes, Commitment Fees) due and payable on the Secured Notes of such Class or Classes and each Class of Secured Notes that rank senior to or pari passu with such Class or Classes (excluding Deferred Interest but including any interest on Deferred Interest with respect to the Class B Notes or the Class C Notes) on such Payment Date.

 

"Interest Coverage Test": A test that is satisfied with respect to any Class or Classes of Secured Notes as of any Measurement Date or other date of determination on, or subsequent to, with respect to the Original Notes, the Determination Date occurring immediately prior to the second Payment Date following the Closing Date and, with respect to the Refinancing Notes, the Determination Date occurring immediately prior to the second Payment Date following the Refinancing Date, if (i) the applicable Interest Coverage Ratio is at least equal to the Required Interest Coverage Ratio for such Class or Classes or (ii) such Class or Classes of Secured Notes are no longer Outstanding.

 

"Interest Determination Date": The second London Banking Day preceding the first day of each Interest Accrual Period (which first day, in the case of the first Interest Accrual Period in respect of a Borrowing, is the date of such Borrowing); provided that, in the case of a Borrowing made on less than two London Banking Days' notice, the Interest Determination Date will be the date of the related borrowing request.

 

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"Interest Diversion Test": A test that will be satisfied on any Measurement Date after the Reinvestment Period on which any Notes remain outstanding if the Overcollateralization Ratio with respect to the Class CB Notes is equal to or greater than 150.0118.80%.

"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 (other than Eligible Investments credited to any Class A-1R Purchaser Collateral Account), 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 upfront fees, anniversary fees, redemption fees, collateral monitoring fees, success fees, termination fees, amendment and waiver fees, late payment fees, ticking fees and all other fees received by the Issuer during the related Collection Period, except for (A) those in connection with (1) the reduction of the par amount of the related Collateral Obligation, (2) the extension of the maturity of the related Collateral Obligation, (3) the reduction of the interest rate of the related Collateral Obligation or (4) any other fees received in connection with a Specified Change to an Underlying Instrument of the related Collateral  Obligation and (B) origination fees or amounts payable in respect of original issue discount of the related Collateral Obligation, in each case, as determined by the Collateral Manager with notice to the Trustee and the Collateral Administrator;

 

 

 

(iv)

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

 

 

 

(v)

any payment received with respect to any Hedge Agreement other than (a) an upfront payment received upon entering into such Hedge Agreement or (b) a payment received as a result of the termination of any Hedge Agreement (net of any amounts due and payable by the Issuer to the related Hedge Counterparty in connection with such termination) to the extent not used by the Issuer to enter  into a new or replacement Hedge Agreement;

 

 

provided that (i) 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, (ii) with respect to any Collateral Obligation that, as a result of any exchange, amendment or waiver of or supplement thereto, ceases to qualify as a Collateral Obligation, for so long as it remains

43


 

unqualified to be a Collateral Obligation, any amounts received in respect of such Collateral Obligation will constitute Principal Proceeds (and not Interest Proceeds) until the aggregate of all collections in respect of such Collateral Obligation equals the outstanding principal balance of such Collateral Obligation at the time it ceased to qualify as a Collateral Obligation, (iii) the portion of any prepayment of a Collateral Obligation that is above the par amount of such Collateral Obligation will constitute Principal Proceeds (and not Interest Proceeds), (iv) if after giving effect to any amendment with respect to the terms of a Collateral Obligation that would (1) extend the due date or maturity with respect to the payment of any amount of principal of such Collateral Obligation or (2) reduce the spread or coupon of such Collateral Obligation, such Collateral Obligation (after giving effect to such amendment) would not satisfy clauses (i), (iii) and (iv) of the definition of "Eligibility Criteria" (assuming such Collateral Obligation was evaluated as a new purchase), any distribution related to such Collateral Obligation will constitute Principal Proceeds until such time as such Collateral Obligation would satisfy clauses (i), (iii) and (iv) of the definition of "Eligibility Criteria" (assuming such Collateral Obligation was evaluated as a new purchase) and (v) any distributions related to any Collateral Obligation received while such Collateral Obligation is a Stale Rated Obligation shall be considered Principal Proceeds (and not Interest Proceeds).

 

"Interest Rate": With respect to each Class of Secured Notes, the per annum stated interest rate payable on such Class with respect to each Interest Accrual Period equal to LIBOR (or, for any CP Conduit that is a Holder of Class A-1R Notes, the CP Rate) for such Interest Accrual Period plus the spread specified in Section 2.3.

 

"Interest Rate Cap": With respect to each Interest Accrual Period, the sum of (i) LIBOR applicable to such Interest Accrual Period plus (ii) 2.201.58% per annum.

"Intermediary": Any agent or broker through which a Holder purchases its Notes, or any nominee or other entity through which a Holder holds its Notes.

 

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

 

"Investment Criteria Adjusted Balance": With respect to any Collateral Obligation, the Principal Balance of such Collateral Obligation; provided that for all purposes the Investment Criteria Adjusted Balance of any Discount Obligation shall be the purchase price of such Discount Obligation.

 

"Irish Stock Exchange": Euronext Dublin (formerly known as the Irish Stock Exchange plc).

 

"IRS":  United States Internal Revenue Service.

 

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"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, request or direction (which may be a standing order, request or direction) dated and signed in the name of the Applicable Issuers or by an Authorized Officer of the Issuer or the Co-Issuer, as applicable, or by the Collateral Manager by an Authorized Officer thereof, on behalf of the Issuer; provided that, for purposes of Section 10.11 and Article XII and the release, sale or acquisition of any Assets thereunder, "Issuer Order" or "Issuer Request" shall mean delivery to the Trustee on behalf of the Issuer or the Collateral Manager on its behalf, by email or otherwise in writing, of a trade ticket, confirmation of trade, instruction to post or to commit to the trade, "SWIFT" messages or similar electronic communication or language, which shall constitute a direction and certification that  the transaction is in compliance with and satisfies all applicable provisions of Section 10.11 and Article XII of this Indenture.

 

"Issuer Par Amount": On any date and with respect to each Obligor under a Collateral Obligation, the Aggregate Principal Balances of all Collateral Obligations issued by each Obligor and all affiliates.

 

"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.

 

"Key Person":  The meaning specified in Section 2.15(a).

 

"Key Person Event":  The meaning specified in Section 2.15(a).

 

"LIBOR": With respect to the Floating Rate Notes (other than the Class A-1R Notes to the extent held by a CP Conduit), for any Interest Accrual Period will equal the greater of (i) zero and (ii)(a) the rate appearing on the Reuters Screen for deposits with a term of three months; provided that LIBOR for the first Interest Accrual Period after the Refinancing Date will equal the rate determined through the use of straight-line interpolation by reference to two rates appearing on the Reuters Screen, one of which will be determined as if the maturity of the U.S. dollar deposits referred to therein were the period of time for which rates are available next shorter than such Interest Accrual Period and the other of which will be determined as if such maturity were the period of time for which rates are available next longer than such Interest Accrual Period; provided, further, that LIBOR with respect to any Borrowing under the Class A-1R Notes (other than the Class A-1R Notes to the extent held by a CP Conduit) that is not made on a Payment Date will equal the rate appearing on the Reuters Screen with a term equal to the period from and including the date of such Borrowing to but excluding the next succeeding Payment Date or, if such period does not equal a period appearing on the Reuters Screen shall be determined through the use of straight-line interpolation by reference to two rates appearing on the Reuters Screen, one of which will be determined as if the maturity of the U.S. dollar deposits referred to therein were the period of time for which rates  are available next shorter than such period and the other of which will be determined as if such maturity were the period of time for which rates are available next longer than such period or (b) if such rate is unavailable at the time LIBOR is to be determined, LIBOR

45


 

shall be determined on the basis of the rates at which deposits in U.S. Dollars are offered by four major banks in the London market selected by the Calculation Agent after consultation with the Collateral Manager (the "Reference Banks") at approximately 11:00 a.m., London time, on the Interest Determination Date to prime banks in the London interbank market for a period approximately equal to such Interest Accrual Period and an amount approximately equal to the amount of the applicable Borrowing or to the amount of the Aggregate Outstanding Amount of the Floating Rate Notes. The Calculation Agent will request the principal London office of each Reference Bank to provide a quotation of its rate. If at least two such quotations are provided, LIBOR shall be the arithmetic mean of such quotations (rounded upward to the next higher 1/100). If fewer than two quotations are provided as requested, LIBOR with respect to such Interest Accrual Period will be the arithmetic mean of the rates quoted by three major banks in New York, New York selected by the Calculation Agent after consultation with the Collateral Manager at approximately 11:00 a.m., New York Time, on such Interest Determination Date for loans in U.S. Dollars to leading European banks for a term approximately equal to such Interest Accrual Period and an amount approximately equal to the amount of the applicable Borrowing or to the amount of the Floating Rate Notes. If the Calculation Agent is required but is unable to determine a rate in accordance with at least one of the procedures described above for any reason, including due to actions by the British Bankers' Association or other regulators, LIBOR will be LIBOR as determined on the last Interest Determination Date for which the Calculation Agent was able to make such determination in accordance with at least one of such procedures. "LIBOR", when used with respect to a Collateral Obligation, means the "libor" rate determined in accordance with the terms of such Collateral Obligation. Notwithstanding anything in the foregoing, if at any time while any Secured Notes are outstanding a LIBOR Event occurs, the Collateral Manager (on behalf of the Issuer) may (1) select an Alternative Rate as the replacement for LIBOR in accordance with the immediately following paragraph, and (2) enter into a supplemental indenture in accordance with Section 8.1(xxiv) to implement the selection by the Collateral Manager of an Alternative Rate in place of LIBOR, and all references herein to "LIBOR" with respect to the Secured Notes will mean such Alternative Rate as so selected.

 

Notwithstanding anything herein to the contrary, if at any time while any Secured Notes are outstanding (w) a material disruption to LIBOR occurs, (x) a change in the methodology of calculating LIBOR occurs, (y) LIBOR ceases to exist or be reported or (z) the Collateral Manager reasonably expects that any of the events specified in clauses (x) or (y) are likely to occur or exist in an Interest Accrual Period within the next nine months (any of the foregoing events, a "LIBOR Event"), the Collateral Manager (on behalf of the Issuer) may select (with notice to the Trustee, the Calculation Agent and the Collateral Administrator) an alternative base rate (the "Alternative Rate"). In addition, the Collateral Manager shall propose an Alternative Rate within 30 days following the occurrence of a LIBOR Event, and, on the 45th day following the occurrence of a LIBOR Event, the Collateral Manager shall select a Specified Alternative Rate (if a Specified Alternative Rate exists at such time) as the Alternative Rate if another Alternative Rate  has not been implemented prior to such date. If (1) such Alternative Rate is not a Specified Alternative Rate (as determined by the Collateral Manager with notice to the Issuer, the Trustee (who shall forward notice to the Holders of the Controlling Class at the   direction of the Collateral Manager) and the Calculation Agent), then the Alternative Rate shall be

46


 

the rate selected by the Collateral Manager and consented to by a Majority of the Controlling Class and (2) such Alternative Rate is a Specified Alternative Rate (as determined by the Collateral Manager with notice to the Issuer, the Trustee (who shall forward notice to the Holders of the Controlling Class at the direction of the Collateral Manager) and the Calculation Agent), then the Alternative Rate shall be the rate selected by the Collateral Manager. To effect the foregoing, the Collateral Manager (on behalf of the Issuer) may enter into a supplemental indenture in accordance with Section 8.1(xxiv) to implement the selection by the Collateral Manager of an Alternative Rate in place of LIBOR. All references herein to "LIBOR" with respect to the Secured Notes will mean such Alternative Rate as so selected. In no event shall the Trustee or the Calculation Agent have any responsibility or liability for determining or verifying an Alternative Rate (including, without limitation, whether an Alternative Rate is a Specified Alternative Rate or whether the conditions to the definition of such Alternative Rate are satisfied). The Calculation Agent shall be entitled to rely upon any designation of an Alternative Rate by the Collateral Manager and shall have no liability for any failure or delay in performing its duties as a result of the unavailability of LIBOR.

 

"LIBOR Event": The meaning set forth in Exhibit C heretospecified in the definition of the term "LIBOR".

 

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

 

"Liquidity Facility": With respect to any Class A-1R Note funded by any CP Conduit, a liquidity asset purchase agreement, swap transaction or other facility that provides liquidity for Commercial Paper Notes, and any guaranty of any such agreement or facility.

 

"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.

 

"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.

 

"LSTA": The Loan Syndications and Trading Association (together with any successor organization).

 

"Maintenance Covenant": A covenant by any borrower to comply with one or more financial covenants (including without limitation any covenant relating to a borrowing base, asset valuation or similar asset-based requirement) during each reporting period, that exists regardless of whether or not such borrower has taken any specified action.

 

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"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; provided that, during the Reinvestment Period, in determining whether the Holders of the requisite Aggregate Outstanding Amount have given any request, demand, authorization, direction, notice, consent  or waiver hereunder, the Aggregate Undrawn Amount shall be deemed to be part of the Aggregate Outstanding Amount of the Class A-1R Notes.

 

"Mandatory Redemption":  The meaning specified in Section 9.1.

 

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

 

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

 

 

(i)

the bid price determined by the Loan Pricing Corporation, LoanX Inc. or Markit Group Limited;

 

 

 

(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 Collateral Manager;

 

 

 

(B)

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

 

 

 

(C)

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

 

 

 

(iii)

if the Market Value of an asset cannot be determined in accordance with clause (i) or (ii) above, then the Market Value shall be the Appraised Value; provided that the Appraised Value of such Collateral Obligation has been obtained or updated within the immediately preceding month or, if such asset is a Collateral Obligation acquired from an unaffiliated third party in an arms' length transaction within the immediately preceding 30 days and there has been no material adverse change with respect to the Obligor or the Collateral Obligation to the actual knowledge of the Collateral Manager, then the original purchase price paid for such Collateral Obligation (after adjustment for any borrowing or repayments and exclusive of interest);

 

 

(iv)

if a price or such bid described in clause (i), (ii) or (iii) is not available, then the Market Value of an asset will be the lowerlowest of (x) such asset's S&P Recovery Rate and, (y) such asset's DBRS Recovery Rate and (z) the price at which the Collateral Manager reasonably believes such asset could be sold in the market within 30 days, as certified by the Collateral Manager to the Trustee   and

 

50


 

 

determined by the Collateral Manager consistent with the manner in which it would determine the market value of an asset for purposes of other funds or accounts managed by it; provided, that, if the Collateral Manager or Garrison Capital Advisers LLC is not a Registered Investment Adviser, (1) the Market Value of any such asset may not be determined in accordance with this clause (iv) for more than 30 days and (2) if such Collateral Obligation has a public rating from Moody's or S&P, the Market Value of such Collateral Obligation for such 30-day period shall be the lower of:

 

 

 

(A)

the bid side market value thereof as reasonably determined by the Collateral Manager consistent with the Standard of Care and certified by the Collateral Manager to the Trustee; and

 

 

 

(B)

the higher of (x) 70% multiplied by the Principal Balance of such Collateral Obligation and (y) the applicable S&P Recovery Rate multiplied by the Principal Balance of such Collateral Obligation,

 

 

and, following such 30-day period, the Market Value of such Collateral Obligation shall be zero;  or

 

 

(v)

if the Market Value of an asset is not determined in accordance with clause (i), (ii), (iii) or (iv) 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.

 

 

"Material Adverse Effect": With respect to any event or circumstance, a material adverse effect on (a) the business, financial condition (other than the performance of the Assets) or operations of the Issuer, taken as a whole, (b) the validity or enforceability of this Indenture, the Collateral Management Agreement or the Issuer's Memorandum and Articles of Association   or (c) the existence, perfection, priority or enforceability of the Trustee's lien on the Assets.

 

"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.

 

"Maximum DBRS Risk Score Test": A test that will be applicable for so long as the Class A-1 Notes are Outstanding and will be satisfied on any date of determination if the Weighted Average DBRS Risk Score of the Collateral Obligations as of such date is less than or equal to the numerical equivalent of the Row Weighted Average Risk Score based upon the Applicable Row Level from the DBRS Collateral Quality Matrix.

 

"Maximum 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 September 29, 2024October 18, 2026.

 

"Measurement Date":  (i) Any day on which a purchase of a Collateral Obligation occurs,

(ii) any Determination Date, (iii) the date as of which the information in any Monthly Report   is calculated, (iv) with five Business Days prior written notice, any Business Day requested by S&P and, (v) the Effective Date and (vi) the Refinancing Effective Date.

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

 

"Minimum Eligible Rating":  A long-term rating of at least "A" and a short-term  rating of at least "A-1" by S&P (or "A+" by S&P if such institution has no short-term rating) and, for so long as DBRS is rating any Class of Notes then Outstanding, a DBRS Rating of at least "BBB (high)".

 

"Minimum DBRS Diversity Score Test": A test that will be applicable for so long  as the Class A-1 Notes are Outstanding and will be satisfied on any date of determination if the DBRS Diversity Score (calculated as a single number in accordance with standard diversity scoring methodology using DBRS Industry Classifications) equals or exceeds the Row Diversity Score for the Applicable Row Level in effect at such time in the DBRS Collateral Quality Matrix.

 

"Minimum Weighted Average DBRS Recovery Rate Test": A test that will be applicable for so long as the Class A-1 Notes are Outstanding and will be satisfied on any date of determination if the Weighted Average DBRS Recovery Rate equals or exceeds the Row "AAA" Recovery Level corresponding to the Applicable Row Level then in effect.

 

"Minimum Weighted Average DBRS Spread Test": A test that will be applicable for so long as the Class A-1 Notes are Outstanding and will be satisfied on any date of determination if the Weighted Average Spread equals or exceeds the Minimum Weighted Average DBRS Spread Test Level.

 

"Minimum Weighted Average DBRS Spread Test Level": On any date of determination, the Row Spread Level for the Applicable Row Level in effect at such time in the DBRS Collateral Quality Matrix.

 

"Memorandum and Articles of Association": The Issuer's Memorandum and Articles of Association, as they may beoriginally executed and as supplemented, amended, revised or and restated from time to time in accordance with the terms thereof.

 

"Minimum Weighted Average Fixed Rate Coupon Test": A test that will be satisfied on any date of determination if the Weighted Average Fixed Rate Coupon equals or exceeds 8.00%.

 

"Minimum Weighted Average S&P Recovery Rate Test": A test that will be satisfied on any date of determination if the Weighted Average S&P Recovery Rate for the Class A-1 Notes Outstanding equals or exceeds the Weighted Average S&P Recovery Rate for the Class A-1 Notes selected by the Collateral Manager in connection with the S&P CDO Monitor Test.

 

"Minimum Weighted Average S&P Spread Test": A test that will be satisfied on any date of determination if the Weighted Average Spread equals or exceeds the Weighted Average Spread selected by the Collateral Manager in connection with the S&P CDO Monitor Test.

 

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

 

"Monitor Principal Amount": As of any date of determination, an amount equal to the sum, without duplication, of the following: (a) the Aggregate Principal Balance of all Collateral Obligations (excluding Defaulted Obligations and Current Pay Obligations (each as to which the applicable rule below shall apply)), plus (b) the aggregate amount of funds on deposit in the Collection Account and the Revolver Funding Account, including Eligible Investments, constituting Principal Proceeds, plus (c)(i) for each Defaulted Obligation that has been a Defaulted Obligation for less than one year, the lower of (A) an amount equal to the Market Value at such time of such Defaulted Obligation and (B) the S&P Recovery Rate multiplied by the principal balance thereof at such time and (ii) for any Defaulted Obligation which has been a Defaulted Obligation for one year or more, zero, plus (d) for each Current Pay Obligation, 95% of such Current Pay Obligation's Market Value (but no greater than the par value of such Current Pay Obligation).

 

"Monthly Report":  The meaning specified in Section 10.10(a).

 

"Monthly Report Determination Date": The meaning specified in Section 10.10(a). "Moody's":  Moody's Investors Service, Inc. and any successor thereto.

 

"Moody's Rating (DBRS)": The meaning specified in Schedule 4.

 

"Natixis": Natixis Securities Americas LLC.

 

"Natixis Placed Notes": The Secured Notes (other than certain Class B-R Notes being purchased directly from the Issuer by the BDC on the Refinancing Date).

 

"Net Aggregate Exposure Amount": The excess of the aggregate of the Exposure Amounts of the Revolving Collateral Obligations and Delayed Drawdown Collateral Obligations over the amount of Principal Proceeds in the Revolver Funding Account.

 

"Non-Call Period": The period from the ClosingRefinancing Date to and including the earlier of (i) September 29, 2018November 20, 2020 and (ii) the date of an S&P Withdrawal.

 

"Non-Elevated 2013 CLO Participation Interest": Any participation interest in a Loan constituting part of the 2013 CLO Portfolio that is a Participation Interest as a result of the failure to elevate such participation interest within the applicable time period specified in clause

 

(b)

of the proviso in the definition of Participation Interest.

 

"Non-Foreign Status Certificate": The meaning specified in Section 2.12(g).

 

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

 

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

 

"Note Agent":  Natixis, New York Branch.

 

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"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 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 based on the amounts payable under clauses (x), and (y) and (z) below, of (x) principal of the Class A-1R Notes (together with any defaulted interest and defaulted Commitment Fees), and (y) principal of the Class A-1T Notes (together with any defaulted interest) and (z) principal of the Class A-1F Notes (together with any defaulted interest), until all such amounts have been paid in full; provided that in connection with any payment under this clause (i), the Commitments shall be reduced in accordance with Section 9.7(f);

 

(ii)to the payment of principal of the Class A-2 Notes (together with any defaulted interest) until such amounts have been paid in full;

 

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

 

(iv)to the payment of principal of the Class B Notes until such amounts have been paid in full; and

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

 

(vi)to the payment of principal of the Class C Notes until such amounts have been paid in full; and

 

(viiv)  to any applicable Holders of the Class A-1R Notes on a pro rata basis for  payment of accrued and unpaid Class A-1R Note Additional Amounts.

 

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

 

"Notes": Collectively, the Secured Notes and the Subordinated Notes authorized by, and authenticated and delivered under, this Indenture (as specified in Section 2.3).

 

"NRSRO": Any nationally recognized statistical rating organization, other than any Rating Agency.

 

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

 

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"Obligor":  Any borrower, obligor or guarantor under a Loan.

 

"Obligor Diversity Measure": As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each Obligor, obtained by dividing (i) the Aggregate Principal Balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by such Obligor by (ii) the Aggregate Principal Balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

"Offer":  The meaning specified in Section 10.11(c).

 

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

 

"Offering Circular":  The(i) With respect to the Secured Notes issued on the   Closing Date, the offering circular relating to the offer and sale of the Secured Notes dated September 26, 2016, and including any supplements thereto, and (ii) with respect to the Secured Notes issued on the Refinancing Date, the offering circular relating to the offer and sale of the Secured Notes dated October 16, 2018, and including any supplements thereto.

 

"Officer": (a) With respect to any corporation, the Chairman of the Board of Directors  or, with respect to the Issuer, any director, the President, any Vice President, the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of such entity or any Person authorized by such entity and shall, for the avoidance of doubt, include any duly appointed attorney-in-fact of the Issuer, and (b) with respect to the Co-Issuer and any limited liability company, any managing member or manager thereof or any person to whom the rights and powers of management thereof are delegated in accordance with the limited liability company agreement of such limited liability company.

 

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

 

"Opinion of Counsel": A written opinion addressed to the Trustee and, if required by the terms hereof, each Rating Agency then rating a Class of Rated Notes, in form and substance reasonably satisfactory to the Trustee (and, if so addressed, each Rating Agency then rating a Class of Rated Notes), 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 attorney or law firm, as the case may be, may, except as otherwise expressly provided in this Indenture, be counsel for the Issuer or the Co- Issuer, and which attorney or law firm, as the case may be, shall be reasonably satisfactory to the Trustee. Whenever an Opinion of Counsel is required hereunder, such Opinion of Counsel may rely on opinions of other counsel who are so admitted and so satisfactory, which opinions of other counsel shall accompany such Opinion of Counsel and shall be addressed to the Trustee (and, if required by the terms hereof, each Rating Agency then rating a Class of Rated Notes) or shall state that the Trustee (and, if required by the terms hereof, each Rating Agency then rating  a Class of Rated Notes) shall be entitled to rely thereon.

 

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

 

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"Original Notes": The Class A-1R Notes, the Class A-1F Notes, the Class A-1T Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes and the Subordinated Notes issued pursuant to this Indenture on the Closing Date.

 

"Origination Measurement Date": Each date upon which the Issuer commits to originate or acquire a Collateral Obligation and, the Closing Date and the Refinancing Date.

"Origination Requirement": The requirement which will be satisfied if, on any Origination Measurement Date:

 

(a)the Aggregate Principal Balance of all Collateral Obligations in respect of which the EU Retention Provider is the Originator; divided by

(b)the Aggregate Principal Balance of all Collateral Obligations and Eligible Investments owned by the Issuer (including any Collateral Obligations and Eligible Investments that the Issuer has made a binding commitment to acquire),

 

is greater than 50%.

 

"Originator": An entity which, either itself or through related entities (including the Issuer and the 2013 CLO Issuer), directly or indirectly, was involved or will be involved in the original agreement creating a Collateral Obligation.

 

"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 Registrar or delivered to the Registrar for cancellation in accordance with the terms of Section 2.9 or registered in the Register on the date that the Trustee provides notice to the Holders that this Indenture has been discharged in accordance with Article IV;

 

 

 

(ii)

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

 

 

 

(iii)

Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, unless proof satisfactory to the Trustee is presented that any such Notes are held by a "protected purchaser" (within the meaning of Section 8-303 of the UCC); and

 

 

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(iv)

Notes alleged to have been mutilated, destroyed, lost or stolen for which replacement Notes have been issued as provided in Section 2.6;

 

 

In determining whether the Holders of the requisite Aggregate Outstanding Amount have given  any  request,  demand,  authorization,  direction,  notice,  consent  or  waiver    hereunder, (a) Notes owned by the Issuer or the Co-Issuer (or, only in the case of (x) a vote on the removal of the Collateral Manager for "Cause" (as defined in the Collateral Management Agreement), (y) a waiver of an event constituting "Cause" under the Collateral Management Agreement as a basis for termination of the Collateral Management Agreement or removal of the Collateral Manager thereunder or (z) a vote in connection with the appointment of an Approved Replacement pursuant to Section 2.15, the Collateral Manager, any Affiliate thereof or any funds or accounts managed by the Collateral Manager or one of its Affiliates as to which the Collateral Manager or one of its Affiliates has discretionary voting authority) shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that a Trust Officer of the Trustee has actual knowledge to be so owned shall be so disregarded and (b) Notes so owned that have been pledged in good faith shall be regarded as Outstanding if the pledgee establishes to the reasonable satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not one of the Persons specified above.

 

"Overcollateralization Ratio": With respect to any specified Class or Classes of Secured Notes as of any Measurement Date or other date of determination, the percentage derived  from: (i) the sum of (x) (1) the Principal Collateralization Amount on such date plus (y) the Net Aggregate Exposure Amount minus (2) solely for purposes of calculating the Overcollateralization Ratio for the Overcollateralization Ratio Test with respect to the Class A-1 Notes, the Excess CCC (DBRS) Adjustment Amount divided by (ii) the sum of (x) Aggregate Outstanding Amount on such date of the Secured Notes of such Class or Classes, each Priority Class of Secured Notes and each Pari Passu Class of Secured Notes plus (y) the Net Aggregate Exposure Amount.

 

"Overcollateralization Ratio Test": A test that is satisfied with respect to any designated Class or Classes of Secured Notes as of any Measurement Date or other 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 are 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.

 

"Participation Interest": A participation interest in a Loan that is documented under a Loan Syndications and Trading Association, Loan Market Association or similar agreement standard for loan participation transactions among institutional market participants; provided that, with respect to any participation interest in a Loan constituting part of the 2013 CLO Portfolio, such participation interest shall be deemed to (a) be a Collateral Obligation for all purposes hereunder (provided that the related Senior Secured Loan or Second Lien Loan in which such participation interest is granted satisfies the definition of Collateral

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Obligation) and (b) not be a Participation Interest until the 30th day following the Closing Date if such participation interest has not been elevated by such day (provided that up to five participation interests that are part of the 2013 CLO Portfolio shall not be considered to be Participation Interests until the 90th day following the Closing Date if such participation interest has not been elevated by such day).

 

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

 

"Partnership Tax Audit Rules": Sections 6221 through 6241 of the Code, together with any guidance issued thereunder or successor provisions and any similar provision of state or local tax laws.

 

"Party":  The meaning specified in Section 14.15.

 

"Passing Report":  The meaning specified in Section 7.18(c).

 

"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 20th day of February, May, August and November of each year (or, if such day is not a Business Day, the next succeeding Business Day), commencing in November 2016, except that (x)provided that (x) the first Payment Date after the Closing Date occurred in November 2016 and the first Payment Date after the Refinancing Date shall occur in February 2019, (y) "Payment Date" shall include each date fixed by the Trustee on which payments are made in accordance with Section 5.7 and (yz) the final Payment Date (subject to any earlier redemption or payment of the Notes) shall be the Stated Maturity (or, if such day is not a Business Day, the next succeeding Business Day).

 

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

 

"Pending Collateral Obligation Purchase Funding Amount": The meaning specified in Section 2.14(b).

 

"Permitted Liens": (a) Liens in favor of the Trustee for the benefit of the Secured Parties granted pursuant to this Indenture and any other Transaction Document; (b) liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded (provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor); and (c) the interests of lessees and lessors under leases of real or personal property made in the ordinary course of business which interests would not have a Material Adverse Effect.

 

"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

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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 Collateral Manager has determined in its reasonable commercial judgment that the offeror has sufficient access to financing to consummate the Offer.

 

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

 

"PIK Loan" Any loan on which a portion (but not all) of the interest accrued for a specified portion of time or until the maturity thereof is, or at the option of the Obligor may be, added to the principal balance of such loan or otherwise deferred rather than being paid in cash, which carries a current cash pay interest rate of not less than (a) in the case of a Floating Rate Obligation, LIBOR plus 1.00% per annum or (b) in the case of a Fixed Rate Obligation, the zero-coupon swap rate in a fixed/floating interest rate swap with a term equal to five years; provided that a loan that, in addition to any capitalized interest, requires by the terms of its applicable Underlying Instrument interest to be paid in cash at a rate of (in the case of a PIK Loan that is a Fixed Rate Obligation) at least 4.00% and (in the case of a PIK Loan that is a Floating Rate Obligation) at least LIBOR plus 3.00% per annum shall be deemed not to be a PIK Loan hereunder. For the avoidance of doubt, (i) a Zero Coupon Obligation shall be deemed not to be a PIK Loan hereunder and (ii) if the Obligor under a PIK Loan fails to make a required cash interest payment thereunder, such PIK Loan shall become a Defaulted Obligation.

 

"Placement Agent": Natixis Securities Americas LLC, in its capacity as placement agent of the Natixis Placed Notes.

 

"Placement Agreement": The(i) With respect to the Secured Notes issued on the Closing Date, the agreement dated as of September 29, 2016 by and among the Co-Issuers and the Placement Agent relating to the placement of the Natixis Placed Notes, as amended from time to time., and (ii) with respect to the Secured Notes issued on the Refinancing Date, the agreement dated as of October 18, 2018 by and among the Co-Issuers and the Placement Agent relating to the placement of the Natixis Placed Notes, as amended from time to time.

 

"Plan Fiduciary": The meaning specified in Section 2.5(j)(ii)(B).

 

"Posting": The forwarding by the Collateral Administrator of emails received at the Rule 17g-5 Address to the 17g-5 Website.

 

"Prepayment":  The meaning specified in Section 9.7(a).

 

"Prepayment Notice Date":  The meaning specified in Section 9.7(c).

 

"Principal Balance": Subject to Section 1.3, with respect to (a) any Asset other than a Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation, as of any date of determination,  the  outstanding  principal  amount  of  such  Asset  (excluding  any   capitalized

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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 purposes of calculating the Overcollateralization Ratio and Total Capitalization, the Principal Balance of any Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation shall not include any undrawn commitments with respect to such Revolving Collateral Obligation or Delayed Drawdown Collateral Obligation; provided further that for all purposes (other than the determination of compliance with the EU Retention Requirement Laws, the calculation of the EU Retained Amount and whether aan EU Retention Deficiency has occurred) the Principal Balance of any Equity Security or interest only strip shall be deemed to be zero. For purposes of determining compliance with the EU Retention Requirement Laws, calculating the EU Retained Amount and determining whether aan EU Retention Deficiency has occurred, the Principal Balance of any Asset shall be its Principal Balance in each case without any adjustments for purchase price or the application of haircuts or other adjustments.

 

"Principal Collateralization Amount": As of any date, an amount equal to the sum, without duplication, of the following:

 

(a)the Aggregate Principal Balance of all Collateral Obligations (excluding Defaulted Obligations, Discount Obligations, Current Pay Obligations and Non-Elevated 2013 CLO Participation Interests (each as to which the applicable rule below shall apply)), plus

 

(b)the aggregate amount of funds on deposit in the Collection Account and the Revolver Funding Account, including Eligible Investments, constituting Principal Proceeds, plus

 

(c)for each Defaulted Obligation that has been a Defaulted Obligation for less than one year, the lower of (i) an amount equal to the Market Value at such time of such Defaulted Obligation and (ii) the S&P Recovery Rate multiplied by the principal balance thereof at such time, plus

 

(d)for each Discount Obligation, the aggregate purchase price, excluding accrued interest, expressed as a Dollar amount, for such Discount Obligations (after adding the amount of any subsequent borrowings and/or subtracting the amount of any subsequent repayments thereof), plus

 

(e)for each Current Pay Obligation, 95% of such Current Pay Obligation's Market Value (but no greater than the par value of such Current Pay Obligation), minus

 

 

(f)

the Excess CCC Adjustment Amount;

 

provided that, (i) with respect to any Collateral Obligation that satisfies more than one of the definitions of Defaulted Obligation, Discount Obligation, Current Pay Obligation or CCC Collateral Obligation, such Collateral Obligation shall, for the purposes of this definition, be

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treated as belonging to the category of Collateral Obligations which results in the lowest Principal Collateralization Amount on any date of determination and (ii) the Principal Collateralization Amount for any Defaulted Obligation which has been a Defaulted Obligation for one year or more will be zero. For the avoidance of doubt, any Collateral Obligation that is a Non-Elevated 2013 CLO Participation Interest shall have a value of zero for purposes of the Principal Collateralization Amount.

 

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

 

"Principal Financed Accrued Interest": With respect to (i) any Collateral Obligation owned or purchased by the Issuer on the Closing Date if purchased with Principal Proceeds, an amount equal to the unpaid interest on such Collateral Obligation that accrued prior to the Closing Date that is owing to the Issuer and remains unpaid as of the Closing Date and (ii) any Collateral Obligation purchased after the Closing Date, the amount of Principal Proceeds, if any, applied towards the purchase of accrued interest on such Collateral Obligation.

 

"Principal Proceeds": With respect to any Collection Period or Determination Date, all amounts received by the Issuer during the related Collection Period that do not constitute Interest Proceeds and any other amounts that have been designated as Principal Proceeds pursuant to the terms of this Indenture. For the avoidance of doubt, Principal Proceeds shall not include any Excepted Property.

 

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

 

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

 

"Priority Termination Event": The meaning specified in the relevant Hedge Agreement, which may include, without limitation, the occurrence of (i) the Issuer's failure to make required payments or deliveries pursuant to a Hedge Agreement with respect to which the Issuer is the  sole Defaulting Party (as defined in the relevant Hedge Agreement), (ii) the occurrence of certain events of bankruptcy, dissolution or insolvency with respect to the Issuer with respect to which the Issuer is the sole Defaulting Party (as defined in the relevant Hedge Agreement), (iii) the liquidation of the Assets due to an Event of Default under this Indenture or (iv) a change in law after the ClosingRefinancing Date which makes it unlawful for either the Issuer or a Hedge Counterparty to perform its obligations under a Hedge Agreement.

 

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

 

"Process Agent":  The meaning specified in Section 7.2.

 

"Program Manager": The investment manager or administrator of a CP Conduit, as applicable.

 

"Proposal Period":  The meaning specified in Section 2.15(b).

 

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"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.

 

"Proposed Replacement":  The meaning specified in Section 2.15(b).

 

"Purchaser Rating Criteria": A test satisfied with respect to any Holder of the Class A-  1R Notes on each day during the Reinvestment Period if: (i) such Holder or the CP Conduit providing the funding for such Holder has a short-term credit rating from S&P of at least "A-1"; (ii) such Holder's obligations are guaranteed by an entity meeting the requirements under clause (i) at such time; or (iii) the Rating Agency Condition is satisfied with respect to such Holder's failure to satisfy the requirements under either of clause (i) or (ii) at such time and both the  Issuer and the Note Agent have consented thereto. The Purchaser Rating Criteria will not apply after the Reinvestment Period.

 

"QIB/QP": Any Person that, at the time of its acquisition, purported acquisition or proposed acquisition of Notes is both (i) a Qualified Institutional Buyer and (ii) either (x) a Qualified Purchaser or (y) a corporation, partnership, limited liability company or other entity (other than a trust), each shareholder, partner, member or other equity owner of which is a Qualified Purchaser.

 

"Qualified Broker/Dealer": Any of Bank of America/Merrill Lynch; The Bank of Montreal; The Bank of New York Mellon, N.A.; Barclays Bank plc; BNP Paribas; Broadpoint Securities; Citadel Securities LLC; Credit Agricole CIB; Citibank, N.A.; Credit Agricole S.A.; Canadian Imperial Bank of Commerce; Commerzbank; Credit Suisse; Deutsche Bank AG; Dresdner Bank AG; GE Capital; Goldman Sachs & Co.; HSBC Bank; Imperial Capital LLC; ING Financial Partners, Inc.; Jefferies & Co.; J.P. Morgan Securities LLC; KeyBank; KKR Capital Markets LLC; Lazard; Lloyds TSB Bank; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co.; Natixis; Northern Trust Company; Oppenheimer & Co. Inc.; Royal Bank of Canada; The Royal Bank of Scotland plc; Scotia Capital; Societe Generale; SunTrust Bank; The Toronto-Dominion Bank; UBS AG; U.S. Bank National Association; Wells Fargo Bank, National Association; Cantor Fitzgerald, L.P.; Seaport Group; Stifel Nicolaus & Company, Incorporated; FBR & Co.; CIT Group Inc.; Gleacher & Company, Inc.; and Macquarie Capital.

 

"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 or 2a51-3 under the Investment Company Act.

 

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

 

"Rating Agency": Each of S&P and DBRS (in each case only for so long as Notes rated by such entity on the Refinancing Date are Outstanding and are rated by such entity), or, with respect to the Assets generally, Moody's or S&P or, if at any time Moody's or

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S&P  ceases  to  provide  rating  services  with  respect  to  debt obligations, any other nationally recognized investment rating agency selected by the Issuer (or the Collateral Manager on behalf of the Issuer). If at any time any of the rating agencies referred to above ceases to be a "Rating Agency" and a replacement rating agency is selected in accordance with the preceding sentence, then references to rating categories of such replaced rating agency in this Indenture shall be deemed instead to be references to the equivalent categories of such replacement rating agency as of the most recent date on which such replacement rating agency and such replaced rating agency published ratings for the type of obligation in respect of which such replacement rating agency is used; provided that a replacement rating agency selected to replace Moody's shall not be applicable for purposes of the determination of an S&P Rating.

 

"Rating Agency Condition": With respect to any event or 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 Rated Notes will occur as a result of such event or action; provided that the Rating Agency Condition will be deemed to be satisfied if (i) no Class of Rated Notes then outstanding is then rated by S&P (including due to the withdrawal by S&P of its rating on such Notes) or (ii) S&P makes a public announcement or informs the Issuer, the Collateral Manager or the Trustee in writing that (A) it believes that satisfaction of the Rating Agency Condition is not required with respect to such event or action, (B) its practice is not to give such confirmations or (C) it will not review such event or action for purposes of evaluating whether to confirm the then-current ratings (or initial ratings) of the Rated Notes.

 

"Rating Confirmation Failure":  The meaning specified in Section 7.18(c).

 

"Real Estate Loan": A loan or other debt obligation that is (a) secured primarily by a mortgage, deed of trust or similar lien on commercial real estate (other than hotels and casinos), residential real estate or undeveloped land or (b) made to a company engaged primarily in acquiring and developing undeveloped land (whether or not such loan or other debt obligation is secured by real estate).

 

"Received Obligation": A debt obligation that is a Defaulted Obligation received in connection with an Exchange Transaction.

 

"Record Date": With respect to the Notes, the date that is 15 days prior to the applicable Payment Date.

 

"Redemption Date": Any date specified for a redemption of Notes (other than a Mandatory Redemption) pursuant to Article IX.

 

"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 Deferred Interest, in the case of the Class B Notes and the Class C Notes) to the Redemption Date, plus (z) in the case of any Class A-1R Note being redeemed, any Class A-1R Note Additional Amounts in respect thereof and an amount equal to the accrued and unpaid Commitment Fees and any Commitment Fee  

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Shortfalls and (b) for each Subordinated Note, its proportional share (based on the outstanding principal amount of such Subordinated Notes) of the amount of the proceeds of the Assets remaining after giving effect to the Optional Redemption or Tax Redemption, as applicable, 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 Collateral Management Fees and Administrative Expenses, which shall not be subject to the Administrative Expense Cap) of the Co-Issuers; provided that, in connection with any Optional Redemption or Tax Redemption, Holders of 100% of the Aggregate Outstanding Amount of any Class of Secured Notes by notifying the Trustee in writing prior to the Redemption Date 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.

 

"Reduced Interest Class":  The meaning specified in Section 8.2(b).

 

"Reference Banks": The meaning specified in Exhibit C heretothe definition of the  term "LIBOR" herein.

 

"Reference Rate Modifier": A modifier applied to a reference rate in order to  cause such rate to be comparable to LIBOR, which may include an addition to or subtraction from such unadjusted rate.

 

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

 

"Refinancing Date":  October 18, 2018.

 

"Refinancing Effective Date": The earlier to occur of (i) July 15, 2019 and (ii) the first date on which the Collateral Manager certifies to the Trustee and the Collateral Administrator that the applicable conditions set forth in Section 7.18 are satisfied.

 

"Refinancing Effective Date-Related Redemption":   The meaning specified in   Section

9.6.

 

"Refinancing Effective Date-Related Redemption Amount":  The meaning specified   in

Section 9.6.

 

"Refinancing  Effective  Date-Related Redemption Date":The  meaning specified in Section 9.6.

"Refinancing Effective Date Report": The meaning specified in Section 7.18(b)(ii). "Refinancing Notes":  The Class A-1R-R Notes, the Class A-1T-R Notes, the   Class

A-2-R Notes and the Class B-R Notes.

 

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

 

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"Refinancing Target Par Amount": U.S.$400,728,000.

 

"Refinancing Target Par Condition": A condition satisfied as of the Refinancing 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 or committed to be reinvested in Collateral Obligations held by the Issuer on the Refinancing Effective Date), will equal or exceed the Refinancing Target Par Amount; provided that for purposes of this definition, any Collateral Obligation that becomes a Defaulted Obligation prior to the Refinancing Effective Date shall be treated as having a Principal Balance equal to its Principal Collateralization Amount.

 

"Regional Diversity Measure": As of any date of determination, the number obtained by dividing (a) 1 by (b) the sum of the squares of the quotients, for each S&P region classification, obtained by dividing (i) the Aggregate Principal Balance at such time of all Collateral Obligations (other than Defaulted Obligations) issued by Obligors that belong to such S&P region classification by (ii) the Aggregate Principal Balance at such time of all Collateral Obligations (other than Defaulted Obligations).

 

"Register" and "Registrar": The respective meanings specified in Section 2.5(a).

 

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

July 18, 1984; provided that a certificate of interest in a grantor trust shall not be treated as Registered unless each of the obligations or securities held by the trust was issued after that date.

 

"Registered Investment Adviser": A Person duly registered as an investment adviser in accordance with and pursuant to Section 203 of the Investment Advisers Act of 1940, as amended.

 

"Registered Office Terms": The Administrator's standard Terms and Conditions for the Provision of Registered Office Services, as published at http://www.maplesfiduciaryservices.com/terms/.

 

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

 

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

 

"Reinvestment Borrowing":  The meaning specified in Section 2.14(b).

 

"Reinvestment Borrowing Date": The last day of the Reinvestment Period (or, if any  such date is not a Business Day, the Business Day following such date).

 

"Reinvestment Period": The period from and including the Closing Date to and  including the earliest of (i) September 29, 2020,November 20, 2022 (ii) the date of the acceleration of the Maturity of any Class of Secured Notes pursuant to Section 5.2, (iii) the date on which the Collateral Manager reasonably determines that it can no longer reinvest in

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additional Collateral Obligations in accordance with Section 9.6 or the Collateral    Management Agreement, (iv) the date of an occurrence of a Key Person Event and (v) the date of an S&P Withdrawal.

 

"Reinvestment Target Par Balance": As of any date of determination on and after the Refinancing Effective Date, the Refinancing Target Initial Par Amount, minus (i) the Aggregate Undrawn Amount at such time, minus (ii) the amount of any reduction or prepayment in the aggregate outstanding principal amount of the Notes, plus (ii) the amount of any subsequent increase in the aggregate outstanding principal amount of the Class A-1R Notes as a result of a Borrowing thereunder,Refinancing Notes (except for any Prepayment) plus (iii) 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) after the Refinancing Date.

 

"Related Obligation": A loan issued by (or the Obligor of which is) (i) the BDC (or any of its Affiliates) or any other Person whose investments are primarily managed by the BDC or any of its Affiliates (other than, in each case, any investor in any fund managed by the BDC or any of its Affiliates) or (ii) an entity 25% or more of which is owned by an entity described in the preceding clause (i).

 

"Required Hedge Counterparty Rating": With respect to any Hedge Counterparty, the ratings required by (a) the criteria of S&P in effect at the time of execution of the related Hedge Agreement and (b) for so long as any Class A-1 Notes remain Outstanding, the criteria of DBRS in effect at the time of execution of the related Hedge Agreement.

 

"Required Interest Coverage Ratio": (a) for the Class A Notes, 135.0135.00%; and (b) for the Class B Notes, 125.0% and (c) for the Class C Notes, 115.0125.00%.

 

"Required Overcollateralization Ratio":   (a) for the Class A Notes, 173.4128.00%;   and (b) for the Class B Notes, 156.1% and (c) for the Class C Notes, 148.1118.16%.

 

"Retained Amount": A material net economic interest in the securitisation position comprised by the Notes which, in any event, shall not be less than 5% (or such lower amount, including 0%, if such lower amount is required or allowed under the applicable Retention Requirement Law as a result of amendment, repeal or otherwise) of the nominal value of the Collateral Obligations and Eligible Investments from time to time, as calculated and measured at each origination or acquisition of a Collateral Obligation or Eligible Investment by the Issuer.

 

"Retention Deficiency": An event which shall occur if the Subordinated Notes held by the Retention Provider are insufficient to constitute the Retained Amount.

 

"Retention Letter": Each letter relating to the retention of net economic interest in substantially the form of Exhibit F hereto, from the Retention Provider and addressed to the Issuer, the Trustee and the Placement Agent.

"Retention ProviderReset Amendment": The BDCmeaning set forth in Section 8.1. "Reuters Screen": Reuters Page LIBOR01 (or such other page that may replace

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that page on such service for the purpose of displaying comparable rates) as reported by Bloomberg Financial Markets Commodities News as of 11:00 a.m., London time, on the Interest Determination Date.

 

"Retention Requirement": The requirements and obligations of the Retention Provider as set forth in the Retention Letter.

 

"Retention Requirement Laws": Each of: (a) Articles 404-410, the CRR and the Final RTS, together with any applicable guidance, regulatory technical standards, implementing technical standards or related documents published by any European Supervisory Authority, the European Central Bank (or any successor or replacement agency or authority) and any delegated regulations of the European Commission, (b) Article 51 and Article 17 as implemented by Section 5 of Chapter III of the AIFMD Level 2 Regulation supplementing the AIFMD, the AIFMD and the AIFMD Level 2 Regulation, and (c) Article 254, Solvency II and the Solvency II Level 2 Regulation, in each case including any further technical standards, any similar or successor laws (including any retention requirements applicable to UCITS funds), any implementing laws or regulations in force in any Member State of the European Union, any guidelines or other materials published by the European Supervisory Authorities (jointly or individually) in relation thereto and any delegated regulations of the European Commission (in each case including any amendments, replacements or successors thereto).

 

"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.

 

"Revolving Period": The Reinvestment Period; provided that, with respect to the Termed-Out Class A-1R Notes, the Revolving Period shall mean the period from the Refinancing Date to and including the Term-Out Date, unless the Reinvestment Period has been terminated prior to such date.

 

"Row "AAA" Recovery Level": The column of that name in the DBRS Collateral Quality Matrix.

 

"Row Diversity Score": The column of that name in the DBRS Collateral Quality Matrix.

 

"Row Spread Level": The column of that name in the DBRS Collateral Quality Matrix.

 

"Row Weighted Average Risk Score": The column of that name in the DBRS Collateral Quality Matrix.

 

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

 

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

 

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

"Rule 17g-5":  The meaning specified in Section 14.17(a).

 

"Rule 17g-5 Address":  The meaning specified in Section 14.3(e).

 

"S&P": Standard & Poor'sS&P Global Ratings Services, a Standard & Poor's Financial Services LLC, an S&P Global business, and any successor or successors thereto.

 

"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 Collateral Manager, the Collateral Administrator and the Trustee. Each S&P CDO Monitor shall be chosen by the Collateral Manager and associated with either (x) a Weighted Average S&P Recovery Rate and a Weighted Average Spread from Section 2 of Schedule 3 or (y) a Weighted Average S&P Recovery Rate and a Weighted Average Spread confirmed by S&P; provided that as of any date of determination the Weighted Average S&P Recovery Rate for the Class A-1 Notes equals or exceeds the Weighted Average S&P Recovery Rate for the Class A-1 Notes chosen by the Collateral Manager and the Weighted Average Spread equals or exceeds the Weighted Average Spread chosen by the Collateral Manager.

 

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

"S&P CDO Monitor Test": A test that is applicable (x) on and after the Effective Date until the Refinancing Date, and (y) on and after the Refinancing Effective Date, and will be satisfied on any date of determination on or after the Effective Dateduring such periods (and,  on and after the S&P CDO Monitor Election Date, following receipt by the Collateral Manager and the Collateral Administrator of the Adjusted Break-even Default Rate for each S&P CDO Monitor (in accordance with the definition of "Adjusted Break-even Default Rate")) if, after giving effect to the sale of a Collateral Obligation or the purchase of a Collateral Obligation, the Default Differential of the Proposed Portfolio is positive. The S&P CDO Monitor Test will be considered to be improved if the Default Differential of the Proposed Portfolio is greater than the Default Differential of the Current Portfolio.

 

"S&P Counterparty Criteria": With respect to any Participation Interest acquired or sold by the Issuer, criteria that will be met if, immediately after giving effect to such acquisition or sale, the Aggregate Participation Percentages of all Selling Institutions and participants that have the same or a lower S&P Rating does not exceed the "Aggregate Percentage Limit" set forth below for such S&P Rating, and the Aggregate Participation Percentage of any single Selling

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Institution or participant that has the S&P Rating set forth below or a lower credit rating does not exceed the "Individual Percentage Limit" set forth below for such S&P Rating:

 

S&P Rating of Selling Institution or Participant (at or below)

Aggregate Percentage Limit

Individual Percentage Limit

AAA

20.0%

20.0%

AA+

20.010.0%

10.0%

AA

20.010.0%

10.0%

AA-

15.010.0%

10.0%

A+

10.05.0%

5.0%

A (with an A-l short-term rating)

5.0%

5.0%

A (without an A-l short- term rating)

0%

0%

A-  or below

0%

0%

 

"S&P Default Rate": With respect to a Collateral Obligation, the default rate as determined in accordance with Section 3 of Schedule 3 hereto.

 

"S&P Industry Classification":  Each industry identified in Schedule 2.

 

"S&P Rating Agency Condition": With respect to any event or 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 Rated Notes will occur as a result of such event or action; provided that the S&P Rating Agency Condition will be deemed to be satisfied if (i) no Class of Rated Notes then outstanding is then rated by S&P (including due to the withdrawal by S&P of its rating on such Notes) or (ii) S&P makes a public announcement or informs the Issuer, the Collateral Manager or the Trustee in writing that (A) it believes that satisfaction of the S&P Rating Agency Condition is not required with respect to such event or action, (B) its practice is not to give such confirmations or (C) it will not review such event or action for purposes of evaluating whether to confirm the then-current ratings (or initial ratings) of the Rated Notes.

 

"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 transactioncompliant with the S&P criteria, then the S&P  Rating shall be such rating (regardless of whether there is a published rating by S&P on the Collateral Obligations of such issuer held by the Issuer; provided that private ratings (that is, ratings provided at the request of the obligor) may be used for purposes of this definition if the related obligor has consented to the disclosure thereof and a copy of such consent has been provided to S&P) or (b) if there is no issuer credit rating of the issuer  by S&P but (1) there is a senior secured rating on any obligation or security of the

 

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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;

 

 

(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; provided that such credit rating shall expire on the earlier of (i) the 12-month anniversary of the date S&P assigned such credit rating to such DIP Collateral Obligation, unless S&P renews such credit rating, in which case, the credit rating shall expire on the 12-month anniversary of the date of renewal and (ii) the date S&P provides notice to the Collateral Manager that the credit quality of such DIP Collateral Obligation has deteriorated since S&P assigned or renewed such credit rating;

 

 

(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 the rating equivalent of the public rating by Moody's of such Collateral Obligation except that the S&P Rating of such obligation will be (1) one sub category below the S&P equivalent of the rating by Moody's if such rating is "Baa3" or higher and (2) two sub-categories below the S&P equivalent of the rating by Moody's if such rating is "Ba1" or lower;

 

 

 

(b)

subject to the limitations with respect to Deemed Rated Obligations as set forth in the definition of the term "Concentration Limitations", the S&P Rating may be based on a credit estimate provided by S&P, and in connection therewith, the Issuer, the Collateral Manager on behalf of the Issuer or the issuer of such Collateral Obligation shall, prior to or within 30 days after the acquisition of such Collateral Obligation, apply (and concurrently submit all available Information in respect of such application) to S&P for a credit estimate which shall be its S&P Rating; provided that, 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 Collateral Manager in its sole discretion if the Collateral Manager certifies to the Trustee and the Collateral Administrator that it believes that such S&P Rating determined by the  Collateral

 

 

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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 Collateral 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 Collateral Manager for a period of up to 90 days after the acquisition of such Collateral Obligation and (2) an S&P Rating of "CCC-" following such 90-day period; unless, during such 90-day period, the Collateral Manager has requested the extension of such period and S&P, in its sole discretion, has granted such request; provided further, that if 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 this Indenture, 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 this Indenture) on each 12-month anniversary thereafter;

 

 

(c)

with respect to a Collateral Obligation that is not a Defaulted Obligation, the S&P Rating of such Collateral Obligation will at the election of the Issuer (at the direction of the Collateral Manager) be "CCC-" provided (i) neither the issuer of such Collateral Obligation nor any of its Affiliates are subject to any bankruptcy or reorganization proceedings and (ii) the issuer has not defaulted on any payment obligation in respect of any debt security or other obligation of the issuer at any time within the two year period ending on such date of determination, all such debt securities and other obligations of the issuer that are pari passu with or  senior to the Collateral Obligation are current and the Collateral Manager reasonably expects them to remain current; provided further that the Issuer, the Collateral 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 Collateral Manager); or

 

 

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(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 Collateral 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.

 

"S&P Rating Confirmation Failure(DBRS)": The meaning specified in Section 7.18(c)Schedule 4.

 

"S&P Recovery Rate": With respect to a Collateral Obligation, the recovery rate set  forth in Section 1 of Schedule 3 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.

 

"S&P Withdrawal": Any event which results in S&P no longer assigning or maintaining a rating on any of the Rated Notes. For the avoidance of doubt, any downgrade of S&P's rating on any of the Rated Notes shall not constitute an S&P Withdrawal.

 

"Sale":  The meaning specified in Section 5.17.

 

"Sale Proceeds": All proceeds (excluding accrued interest, if any) received with respect to Assets as a result of sales of such Assets in accordance with Article XII and the termination of any Hedge Agreement, in each case less any reasonable expenses incurred by the Collateral Manager, the Collateral Administrator or the Trustee (other than amounts payable as Administrative Expenses) in connection with such sales and net of any amounts due and payable by the Issuer to the related Hedge Counterparty in connection with any such termination. Sale Proceeds will include Principal Financed Accrued Interest received in respect of such sale.

 

"Scenario Default Rate": With respect to the Class A-1 Notes, as of any date of determination, the sum of:

 

(a)prior to the S&P CDO Monitor Election Date:

 

(i)0.329915; plus

 

 

(ii)

the product of (x) 1.210322 multiplied by (y) the Expected Portfolio Default Rate, minus

 

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(iii)

the product of (x) 0.586627 multiplied by (y) the Default Rate Dispersion,

plus

 

 

(iv)

the quotient of (x) 2.538684 divided by (y) the Obligor Diversity Measure,

plus

 

(v)the quotient of (x) 0.216729 divided by (y) the Industry Diversity Measure, plus

 

(vi)the quotient of (x) 0.0575539 divided by (y) the Regional Diversity Measure, minus

 

 

(vii)

the product of (x) 0.0136662 multiplied by (y) the Weighted Average Life;

 

(b)on and after the S&P CDO Monitor Election Date, an estimate of the cumulative default rate for the Current Portfolio or the Proposed Portfolio, as applicable, consistent with S&P's initial rating of the Class A-1 Notes, determined by the Collateral Manager and the Collateral Administrator (which determination shall be made solely by application of the S&P CDO Monitor at such time).

 

"Schedule of Collateral Obligations": The schedule of Collateral Obligations attached as Schedule 1 hereto, which schedule shall include the issuer, Principal Balance, coupon/spread, the stated maturity and the S&P Rating (unless such rating is based on a credit estimate or is a  private or confidential rating from S&P) and, for so long as the Class A-1 Notes are Outstanding, the DBRS Rating, for each Collateral Obligation and the percentage of the aggregate commitment under each Revolving Collateral Obligation and Delayed Drawdown Collateral Obligation that is funded, as amended from time to time (without the consent of or any action on the part of any Person) to reflect the release of Collateral Obligations pursuant to Article X hereof 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 and/or fee due on such Due Date with respect to such Asset, determined in accordance with the assumptions specified in Section 1.3 hereof.

 

"Second Lien Loan": Any assignment of or other interest in a Loan that (i) is not (and that by its terms is not permitted to become) subordinate in right of payment to any other obligation of the obligor of the loan other than a Senior Secured Loan with respect to the liquidation of such obligor or the collateral for such Loan, (ii) is secured by a valid second priority perfected security interest or lien in, to or on specified collateral securing the obligor's obligations under the Loan, the value of which is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal or higher seniority secured by a lien or security interest in the same collateral, which security interest or lien is not subordinate to the security interest or lien securing any other debt for borrowed money other than a Senior Secured Loan on such specified collateral and (iii) is not secured solely or primarily by common stock or other equity interests.

 

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"Section 385 Rules": The final and temporary regulations issued under Section 385 of the Code (as amended from time to time).

 

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

 

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

 

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

 

"Securities Account Control Agreement": The amended and restated Securities Account Control Agreement dated as of the ClosingRefinancing Date among the Issuer, the Trustee and Deutsche Bank Trust Company Americas, as securities intermediary, as amended from time to time.

 

"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. "Securitisation Framework":   The proposal for a new regulation relating to a   European framework for simple, transparent and standardised securitisation, adopted by the European Commission on September 30, 2015.

"Securitisation Regulation": Together, the Draft CRR Amendment Regulation and the Securitisation FrameworkEuropean Union regulation 2017/2402 related to simple, transparent and standardised securitisation which was published in the Official Journal of the European Union on 28 December 2017 and which entered into force on 17 January 2018 and which shall apply on 1 January 2019, including any implementing regulationregulations, technical standards and official guidelinesguidance related thereto.

 

"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 Collateral Management Fee": The meaning specified in the Collateral Management Agreement.

 

"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 (subject to customary exceptions for permitted liens); (b) is secured by a valid first-priority perfected security interest or lien in, to or on specified collateral securing the obligor's  obligations  under  the  Loan  (subject  to  customary  exceptions  for  permitted liens); (c) the value of the collateral securing the Loan at the time of purchase together with other attributes of the obligor (including, without limitation, its general financial condition, ability to generate cash flow available for debt service and other demands for that cash flow) is adequate (in the commercially reasonable judgment of the Collateral Manager) to repay the Loan in accordance with its terms and to repay all other Loans of equal seniority secured by a first lien or security interest in the same collateral and (d) is not secured solely or primarily by common stock or other equity interests; provided that, except for purposes of determining the S&P

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Recovery Rate, the limitation set forth in this clause (d) shall not apply with respect to a Loan made to a parent entity that is secured solely or primarily by the stock of one or more of the subsidiaries of such parent entity to the extent that the granting by any such subsidiary of a lien on its own property would violate law or regulations applicable to such subsidiary (whether the obligation secured is such Loan or any other similar type of indebtedness owing to third parties). Notwithstanding the foregoing, for purposes of determining the S&P Recovery Rate of a Collateral Obligation that is a Senior Secured Loan under the proviso to clause (d) of this definition, such Collateral Obligation shall be deemed to be an Unsecured Loan.

 

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

 

"Solvency II": EU Directive 2009/138/EC.

 

"Solvency II Level 2 Regulation": Commission Delegated Regulation (EU) No 2015/35 of 10 October 2014 supplementing Solvency II.

 

"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 Alternative Rate": Any of the following: (a) the reference rate recognized or acknowledged as being the industry standard for leveraged loans (which recognition may be in the form of a press release, a member announcement, a member advice, letter, protocol, publication of standard terms or otherwise) by the LSTA or the Alternative Reference Rates Committee ("ARC"), which in either case may include a Reference Rate Modifier recognized or acknowledged by LSTA or ARC, respectively, and as certified by the Collateral Manager to the Trustee or (b) the single reference rate that is used in calculating the interest rate of at least 50% of the par amount of (i) quarterly pay Floating Rate Obligations owned by the Issuer or (ii) floating rate notes issued in the preceding three months in new issue collateralized loan obligation transactions (with respect to (b)(i) and (b)(ii) above, as determined by the Collateral Manager as of the first day of the Interest Accrual Period during which the Alternative Rate is selected).

 

"Specified Change": With respect to any Collateral Obligation, any exchange, amendment, consent, modification or waiver of, or supplement to, an Underlying Instrument that (a) extends the final maturity of a Collateral Obligation beyond the Stated Maturity, (b) reduces or forgives the principal amount of a Collateral Obligation (other than a Defaulted Obligation that has been a Defaulted Obligation for one year or more), (c) reduces the rate of interest payable on a Collateral Obligation by more than 25% for a Credit Risk Obligation or a Defaulted Obligation and more than 50% for other Collateral Obligations, (d) postpones the Due Date of any Scheduled Distribution in respect of a Collateral Obligation, unless the

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Maximum Weighted Average Life Test is satisfied after giving effect to such change, (e) subordinates (in right of payment, with respect to liquidation preferences or otherwise) a Collateral Obligation if such subordination causes any of the Coverage Tests or the Collateral Quality Test to cease to be in compliance (or, if any of the Coverage Tests or the Collateral Quality Test is not satisfied prior to such subordination, causes any such Coverage Test or the Collateral Quality Test to be worsened), (f) releases any material guarantor or co-obligor of a Collateral Obligation from its obligations, (g) releases a material portion of the collateral securing such Collateral Obligation (excluding Defaulted Obligations and any such releases associated with a prepayment), (h) with respect to Defaulted Obligations that have been Defaulted Obligations for less than one year, provides for a return that is less than the Principal Collateralization Amount for any such Defaulted Obligation as determined pursuant to clause (c) of the definition of "Principal Collateralization Amount" or (i) changes any of the provisions of an Underlying Instrument specifying the number or percentage of lenders required to effect any of the foregoing; provided that, in the case of clauses (d) and (e) above, such tests have been calculated, if applicable, after the Underlying Instrument has been re-evaluated by the Rating AgencyAgencies.

"Specified Change Condition": A condition that shall be satisfied on any day if the Aggregate Principal Balance of Collateral Obligations with an S&P Rating below "CCC" as a result of a Specified Change is less than 7.5% of Total Capitalization.

"Specified Event": With respect to any DIP Collateral Obligation or any Collateral Obligation that is the subject of a credit estimate by S&P or DBRS, the occurrence of any of the following events:

 

 

(a)

nonpayment of interest or principal;

 

 

(b)

the rescheduling of any interest or principal in any part of the capital structure of the related Obligor;

 

 

 

(c)

any breach of a covenant by such Obligor;

 

 

(d)

any act or omission that, in the determination of the Collateral Manager using commercially reasonable efforts, absent a cure by such Obligor, will result in a breach of a covenant occurring the next six months;

 

 

 

(e)

any restructuring of debt (including proposed debt) of such Obligor;

 

 

(f)

the occurrence of significant transactions (including any sale or acquisition of assets);

 

 

 

(g)

the reduction or increase in the Cash interest rate payable by the Obligor thereunder (excluding any increase in an interest rate arising by operation of a default or penalty interest clause under a Collateral Obligation);

 

 

 

(h)

the extension of the stated maturity date of such Collateral Obligation; or

 

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(i)the addition of payment-in-kind terms of such Collateral Obligation.

 

"Stale Rated Obligation": Any Collateral Obligation as to which (a) the information the Collateral Manager reasonably believes is required to receive a credit estimate on such Collateral Obligation from S&P is (i) not submitted within a 30-day period of the Issuer acquiring such Collateral Obligation or (ii) not submitted within 30 days after each 12-month anniversary of S&P assigning a credit estimate to such Collateral Obligation; provided that, once the Collateral Manager submits information that it reasonably believes is required to receive such credit estimate, such Collateral Obligation will no longer be considered a Stale Rated Obligation,  unless twelve months have elapsed since such submission, as provided in clause (b) below; or (b) twelve months have elapsed since the Collateral Manager's submission of the information it reasonably believes is required to receive a credit estimate on such Collateral Obligation and a credit estimate has not been provided by S&P; provided that, once a credit estimate is received after such information is submitted, such Collateral Obligation will no longer be considered a Stale Rated Obligation.

 

"STAMP":  The meaning specified in Section 2.5(a).

 

"Standard of Care": The meaning specified in the Collateral Management Agreement.

 

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

 

"Stated Maturity": With respect to the Notes of any Class, the date specified as such in Section 2.3.

 

"Step-Down Obligation": An obligation which by the terms of the related Underlying Instruments provides for a decrease in the per annum interest rate on such obligation (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 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 which by the terms of the related Underlying Instruments provides for an increase in the per annum interest rate on such obligation, or in the spread over the applicable index or benchmark rate, solely as a function of the passage of time (and does not provide for any subsequent decrease); provided that, an obligation providing for payment of a constant rate of interest at all times after the date of acquisition by the Issuer shall not constitute a Step-Up Obligation.

 

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"Structured Finance Obligation": Any obligation of a special purpose vehicle secured directly by, referenced to, or representing ownership of, a pool of receivables, loans, securities or other assets, including collateralized debt obligations.

 

"Sub-Collateral Management Agreement": The Sub-Collateral Management Agreement dated as of the Closing Date between the Collateral Manager and the Sub-Collateral Manager, as amended from time to time in accordance with the terms hereof and thereof.

 

"Sub-Collateral Manager":  Garrison Capital Advisers LLC.

 

"Subordinated Collateral Management Fee": The meaning set forth in the Collateral Management Agreement.

 

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

 

"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.

 

"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.$300,000,000.

 

"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 Principal Collateralization Amount.

 

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

 

"Tax Account Reporting Rules": FATCA, and any other laws, intergovernmental agreements, administrative guidance or official interpretations, adopted or entered  into  on, before or after the date of this Indenture, by one or more governments providing for  the collection of financial account information and the au