EFTA00596126.pdf

Execution Copy CLEAR LAKE CLO, LTD. Issuer, CLEAR LAKE CLO, CORP. Co-Issuer, AND WELLS FARGO BANK, NATIONAL ASSOCIATION Trustee INDENTURE Dated as of January 18, 2007 COLLATERALIZED LOAN OBLIGATIONS EFTA00596126  TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.1 Definitions 2 Section 1.2 Assumptions as to Pledged Obligations 60 ARTICLE 2 THE SECURITIES Section 2.1 Forms Generally 61 Section 2.2 Forms of Notes and Certificate of Authentication 61 Section 2.3 Authorized Amount: Maturity Date; Denominations 63 Section 2.4 Intentionally Omitted. 64 Section 2.5 Execution. Authentication. Delivery and Dating 65 Section 2.6 Registration. Registration of Transfer and Exchange 65 Section 2.7 Mutilated. Defaced. Destroyed. Lost or Stolen Security 76 Section 2.8 Payment of Principal and Interest and Other Amounts; Principal and Interest Rights Preserved 76 Section 2.9 Persons Deemed Owners 79 Section 2.10 Cancellation 79 Section 2.11 Definitive Notes 80 Section 2.12 Notes Beneficially Owned by Non-Permitted Holders or Non- Permitted ERISA Holders 81 Section 2.13 Tax Purposes 82 Section 2.14 No Gross Up 83 ARTICLE 3 CONDITIONS PRECEDENT Section 3.1 Conditions to Issuance of Notes on Closing Date 83 Section 3.2 Intentionally Omitted. 86 Section 3.3 Custodianship; Delivery of Collateral Obligations and Eligible Investments 88 Section 3.4 Representations and Warranties Concerning Collateral 88 ARTICLE 4 SATISFACTION AND DISCHARGE Section 4.1 Satisfaction and Discharge of Indenture 90 Section 4.2 Application of Trust Money 91 Section 4.3 Repayment of Cash Held by Paying Agent 91 EFTA00596127  Page ARTICLE 5 REMEDIES Section 5.1 Events of Default 92 Section 5.2 Acceleration of Maturity; Rescission and Annulment 93 Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee 94 Section 5.4 Remedies 95 Section 5.5 Optional Preservation of Collateral 97 Section 5.6 Trustee May Enforce Claims Without Possession of Notes 98 Section 5.7 Application of Cash Collected 98 Section 5.8 Limitation on Suits 99 Section 5.9 Unconditional Rights of Noteholders to Receive Principal and Interest 99 Section 5.10 Restoration of Rights and Remedies 100 Section 5.11 Rights and Remedies Cumulative 100 Section 5.12 Delay or Omission Not Waiver 100 Section 5.13 Control by Requisite Noteholders 100 Section 5.14 Waiver of Past Defaults 101 Section 5.15 Undertaking for Costs 101 Section 5.16 Waiver of Stay or Extension Laws 102 Section 5.17 Sale of Collateral 102 Section 5.18 Action on the Notes 103 ARTICLE 6 THE TRUSTEE Section 6.1 Certain Duties and Responsibilities 103 Section 6.2 Notice of Default 105 Section 6.3 Certain Rights of Trustee 105 Section 6.4 Not Responsible for Recitals or Issuance of Securities 106 Section 6.5 May Hold Securities 107 Section 6.6 Cash Held in Trust 107 Section 6.7 Compensation and Reimbursement 107 Section 6.8 Corporate Trustee Required; Eligibility 108 Section 6.9 Resignation and Removal; Appointment of Successor 108 Section 6.10 Acceptance of Appointment by Successor 110 Section 6.11 Merger, Conversion, Consolidation or Succession to Business of Trustee 110 ii EFTA00596128  Page Section 6.12 Co-Trustees 110 Section 6.13 Certain Duties of Trustee Related to Delayed Payment of Proceeds 112 Section 6.14 Authenticating Agents 112 Section 6.15 Withholding 113 Section 6.16 Fiduciary for Noteholders Only; Agent for Other Secured Parties 113 Section 6.17 Representations and Warranties of the Bank 113 ARTICLE 7 COVENANTS Section 7.1 Payment of Principal and Interest 114 Section 7.2 Maintenance of Office or Agency 114 Section 7.3 Cash for Note Payments to be Held in Trust 115 Section 7.4 Existence of Co-Issuers 117 Section 7.5 Protection of Collateral 118 Section 7.6 Opinions as to Collateral 119 Section 7.7 Performance of Obligations 119 Section 7.8 Negative Covenants 120 Section 7.9 Statement as to Compliance 122 Section 7.10 Co-Issuers May Consolidate, etc., Only on Certain Terms 122 Section 7.11 Successor Substituted 123 Section 7.12 No Other Business 124 Section 7.13 Irish Listing 124 Section 7.14 Reaffirmation of Rating; Ongoing Rating Surveillance 124 Section 7.15 Reporting 125 Section 7.16 Calculation Agent 125 Section 7.17 Certain Tax Matters 126 Section 7.18 DTC and Related Actions 127 Section 7.19 Ramp-Up Period 128 ARTICLE 8 SUPPLEMENTAL INDENTURES Section 8.1 Supplemental Indentures Without Consent of Holders of Securities 129 Section 8.2 Supplemental Indentures With Consent of Holders of Notes 131 Section 8.3 Execution of Supplemental Indentures 132 Section 8.4 Effect of Supplemental Indentures 133 Section 8.5 Reference in Securities to Supplemental Indentures 133 iii EFTA00596129  Ngs ARTICLE 9 REDEMPTION OF NOTES/REPURCHASE OF NOTES Section 9.1 Mandatory Redemption 133 Section 9.2 Optional Redemption 133 Section 9.3 Redemption Procedures 134 Section 9.4 Notes Payable on Redemption Date 135 Section 9.5 Special Redemption 136 ARTICLE 10 ACCOUNTS, ACCOUNTINGS AND RELEASES Section 10.1 Collection of Cash 136 Section 10.2 Collection Account; Custodial Account 137 Section 10.3 Payment Account 140 Section 10.4 Expense Reserve Account 140 Section 10.5 Revolving Reserve Account: Ramp-Up Account; Synthetic Security Counterparty Accounts; Synthetic Security Issuer Accounts 140 Section 10.6 Accountings 144 Section 10.7 Release of Collateral 148 Section 10.8 Independent Accountants 149 Section 10.9 Reports to Rating Agencies 150 ARTICLE 11 APPLICATION OF MONIES Section 11.1 Disbursements of Cash from Payment Account 150 ARTICLE 12 SALE OF COLLATERAL OBLIGATIONS: PURCHASE OF ADDITIONAL COLLATERAL OBLIGATIONS Section 12.1 Sales of Collateral Obligations 154 Section 12.2 Purchase of Additional Collateral Obligations 156 Section 12.3 Certain Restrictions 157 ARTICLE 13 NOTEHOLDERS' RELATIONS Section 13.1 Subordination 158 Section 13.2 Standard of Conduct 159 ARTICLE 14 MISCELLANEOUS Section 14.1 Form of Documents Delivered to Trustee 159 iv EFTA00596130  Page Section 14.2 Acts of Holders 160 Section 14.3 Notices, etc., to Trustee, the Co-Issuers, the Collateral Manager, the Initial Purchaser, the Placement Agent, the Administrator, each Rating Agency and the Irish Paying Listing Agent 160 Section 14.4 Notices to Holders; Waiver 162 Section 14.5 Effect of Headings and Table of Contents 163 Section 14.6 Successors and Assigns 163 Section 14.7 Separability 163 Section 14.8 Benefits of Indenture 163 Section 14.9 Intentionally Omitted 163 Section 14.10 Governing Law 163 Section 14.11 Submission to Jurisdiction 163 Section 14.12 Process Agents 164 Section 14.13 Counterparts 164 Section 14.14 Acts of Issuer 164 ARTICLE 15 ASSIGNMENT OF CERTAIN AGREEMENTS Section 15.1 Assignment of Collateral Management Agreement 164 EFTA00596131 Schedule I — Collateral Obligations Schedule 2 — Moody's Industry Classification Group List Schedule 3 — Industry Classifications Schedule 4 — Diversity Score Calculation Schedule 5 — Calculation of LIBOR Exhibit A — Forms of Notes A- I -Form of Rule 144A Global Note A-2-Form of Temporary Regulation S Global Note A-3-Form of Regulation S Global Note A-4-Form of Certificated Income Note Exhibit B — Forms of Note Transfer and Exchange Certificates B-I -Form of Transfer Certificate for Rule I44A Global Note to Temporary Regulation S Global Note or Regulation S Global Note B-2-Form of Transfer Certificate for Temporary Regulation S Global Note or Regulation S Global Note to Rule 144A Global Note B-3 Form of Transfer Certificate for Certificated Income Note to Regulation S Global Note B-4 Form of Transferee Certificate for Certificated Income Notes Exhibit C — Form of Cleary Gottlieb Steen & Hamilton LLP Opinions Exhibit D — Form of Walkers Opinion Exhibit E — Form of Trustee Counsel Opinion Exhibit F — Form of Collateral Manager Counsel Opinion Exhibit G — Form of Account Agreement Exhibit H — Form of Important Notice to DTC Participants Exhibit I — Form of Report Notice vi EFTA00596132  INDENTURE, dated as of January 18, 2007, among Clear Lake CLO, Ltd., an exempted company incorporated with limited liability under the laws of the Cayman Islands (the "Issuer"), Clear Lake CLO, Corp., a corporation organized under the laws of the State of Delaware (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers") and Wells Fargo Bank, National Association, a national banking association, as trustee (herein, together with its permitted successors in the trusts hereunder, the "Trustee"). PRELIMINARY STATEMENT The Co-Issuers are duly authorized to execute and deliver this Indenture to provide for the Securities 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 Noteholders and the Trustee. 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 Noteholders, the Collateral Manager, the Collateral Administrator and the Trustee (collectively, the "Secured Parties") all of its right, tide and interest in, to and under, in each case, whether now owned or existing, or hereafter acquired or arising (the "Collateral"): (a) any Collateral Obligations (listed, as of the Closing Date, in Schedule 1 to this Indenture) and Eligible Investments which the Issuer causes to be delivered to the Trustee (directly or through an intermediary or bailee) herewith or in the future and all payments thereon or with respect thereto; (b) (i) the Payment Account, (ii) the Collection Account, (iii) the Revolving Reserve Account, (iv) the Synthetic Security Counterparty Accounts (subject to the rights of any Synthetic Security Counterparty in any such Synthetic Security Counterparty Accounts), (v) the Expense Reserve Account, (vi) the Synthetic Security Issuer Accounts, (vii) the Ramp-Up Account and (viii) the Custodial Account, (each an "Account" and collectively, the "Accounts") any Collateral Obligations or Eligible Investments purchased with funds on deposit therein, and all income from the investment of funds therein; (c) the Collateral Management Agreement as set forth in Article 15 hereof, and the Collateral Administration Agreement; (d) all Cash delivered to the Trustee (or its bailee); (e) all accounts, chattel paper, deposit accounts, financial assets, general intangibles, instruments, investment property, letter-of-credit rights (each as defined in the applicable Uniform Commercial Code) and other supporting obligations relating to the foregoing; and EFTA00596133  (f) all proceeds (as defined in the applicable Uniform Commercial Code) with respect to the foregoing; provided that the Collateral shall not include the Excluded Property. Such Grant is made, however, in trust, to secure the Notes and other obligations listed in the following paragraph. In accordance with the priorities set forth in the Priority of Payments and Article 13 of this Indenture, the Notes are secured by such Grant equally and ratably without prejudice, priority or distinction between any Note and any other Note by reason of difference in time of issuance or otherwise, except as expressly provided in this Indenture. Such Grant is made to secure, in accordance with the priorities set forth in the Priority of Payments and Article 13 of this Indenture: (i) the payment of all amounts due on the Notes in accordance with their terms; (ii) the payment of all other sums payable under this Indenture; and (iii) compliance with the provisions of this Indenture, all as provided in this Indenture (the "Secured Obligations"). Such Grant shall, for the purpose of determining the property subject to the lien created by such Grant, 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 the Grant, accepts the trusts hereunder in accordance with the provisions hereof, and agrees to perform the duties herein to the best of its ability such that the interests of the Noteholders may be adequately and effectively protected. ARTICLE 1 DEFINITIONS Section 1.1 Definitions. Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture, and the definitions of such terms are equally applicable both to the singular and plural forms of such terms and to the masculine, feminine and neuter genders of such terms. The word "including" shall mean "including without limitation." Whenever any reference is made to an amount the determination of which is governed by Section 1.2, the provisions of Section 1.2 shall be applicable to such determination or calculation, whether or not reference is specifically made to Section 1.2, unless some other method of calculation or determination is expressly specified in the particular provision. All references in this Indenture to designated "Articles," "Sections," "Subsections" and other subdivisions are to the designated articles, sections, subsections and other subdivisions of this Indenture. The words "herein," "hereof," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular article, section, subsection or other subdivision. "Account" or "Accounts": The meaning assigned in the first granting clause hereof. 2 EFTA00596134  "Account Agreement": An agreement in substantially the form of Exhibit G hereto. "Accountants' Certificate": A certificate of a firm of Independent certified public accountants of national reputation appointed by the Issuer pursuant to Section 10.8, which may be the firm of Independent Accountants that performs certain accounting services for the Issuer or the Collateral Manager. "Accredited Investor": An "accredited investor" as defined in Rule 501(a) under the Securities Act. "Mt" and "Act of Holders": The meanings specified in Section 14.2. "Administration Agreement": An agreement between the Administrator and the Issuer relating to the various corporate and administrative functions the Administrator will perform on behalf of the Issuer, including communications with shareholders, and the provision of certain clerical, administrative and other services in the Cayman Islands until termination of the Administration Agreement. "Administrative Expenses": Amounts due from or accrued for the account of the Issuer or the Co-Issuer to, in the following order of priority, (i) any Person in respect of any governmental fee, charge or tax imposed on or applicable to the Issuer (including all filing, registration and annual return fees payable to the Cayman Islands' government and registered office fees); (ii) the Trustee for any amount owed to the Trustee under the Indenture (other than under Section 6.7(a)(iii) of the Indenture); (iii) the Collateral Administrator for the Collateral Administrator Fee and Collateral Administrator Expenses; (iv) ordinary fees and ordinary expenses of the Rating Agencies in connection with the rating of the Securities, including fees for any credit estimates and ongoing surveillance fees, and the ordinary fees and ordinary expenses of the Independent Accountants appointed under Section 10.8; (v) the Trustee for amounts owed to the Trustee under Section 6.7(a)(iii) of the Indenture; (vi) the Administrator as provided in the Administration Agreement; and (vii) any other Person in respect of any other expenses permitted under the Indenture and the documents delivered pursuant to or in connection with the Indenture, the Collateral Administration Agreement and the Securities and any other expenses and indemnification obligations of the Co-Issuers including, without limitation, expenses and indemnification obligations (but not fees) owed to the Collateral Manager; provided, however, that Administrative Expenses shall not include any amounts due or accrued with respect to actions taken on or prior to the Closing Date, which amounts will be payable only from the Expense Reserve Account. "Administrator": Walkers SPV Limited or any successor. "Affiliate" or "Affiliated": With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, "control," when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. For purposes of this definition, (i) the management of an account by one Person for the benefit of any other Person shall not 3 EFTA00596135 constitute "control" of such other Person and (ii) with respect to the Issuer, "Affiliate" does not include the Administrator or any entities which the Administrator controls or administers. "Agent Members": Members of, or participants in, a Depositary. "Aggregate Principal Amount": With respect to any date of determination, (a) when used with respect to any Class or Classes of Securities as a whole (or any specified Securities of any such Class), the original principal amount of such Class or Classes (or of such specified Securities, as applicable) reduced, in the case of the Senior Notes only, by all prior payments, if any, made with respect to the principal of such Class or Classes (or such specified Senior Notes), (b) when used with respect to all of the Senior Notes, the sum of (i) the Aggregate Principal Amount of the Class A-1 Notes, (ii) the Aggregate Principal Amount of the Class A-2 Notes, (iii) the Aggregate Principal Amount of the Class B Notes, (iv) the Aggregate Principal Amount of the Class C Notes and (v) the Aggregate Principal Amount of the Class D Notes and (c) when used with respect to all of the Notes, the sum of (i) the Aggregate Principal Amount of the Senior Notes and (ii) the Aggregate Principal Amount of the Income Notes. "Aggregate Principal Balance": When used with respect to the Collateral Obligations or the Eligible Investments, the sum of the Principal Balances of all the Collateral Obligations or Eligible Investments, respectively. When used with respect to a portion of the Collateral Obligations or Eligible Investments, the sum of the Principal Balances of that portion of the Collateral Obligations or Eligible Investments. "Aggregate Unfunded Amount": As of any date of determination, the aggregate Unfunded Portions with respect to all Revolving Loans held by the Issuer as of such date. "Applicable Advance Rate": For each Collateral Obligation and for the applicable number of Business Days between the certification date for a sale required by Section 9.2 and the expected date of such sale, the percentage specified below: Moody's Senior Secured Loans with a Market Value: 1-2 days 3-5 days 6-15 days of 90% or more 93% 92% 88% below 90% 80% 73% 60% Other Collateral Obligations with a Moody's Rating of at least "B3" and a Market Value of 90% or more 89% 85% 75% All other Collateral Obligations 75% 65% 45% "Applicable Issuer" or "Applicable Issuers": With respect to the Class A Notes, the Class B Notes and the Class C Notes, each of the Co-Issuers and with respect to the Class D Notes and the Income Notes, the Issuer only. "Assumed Reinvestment Rate": With respect to any account securing the Notes, the greater of (i) zero and (ii) LIBOR (as determined on the most recent LIBOR Determination Date) minus 0.25% per annum. 4 EFTA00596136  "Authenticating Agent": With respect to the Securities or a Class of Securities, the Person designated by the Trustee to authenticate such Securities on behalf of the Trustee pursuant to Section 6.14 hereof "Authorized Denomination": The meaning specified in Section 2.3. "Authorized Officer: With respect to the Issuer or the Co-Issuer, any Officer or any other Person who is authorized to act for the Issuer or the Co-Issuer, as applicable, in matters relating to, and binding upon, the Issuer or the Co-Issuer, which, for the avoidance of doubt, shall include any duly appointed attorney-in-fact. With respect to the Collateral Manager, any Officer, employee, member, manager 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 Trustee or any other bank or trust company acting as trustee of an express trust or as custodian, a Trust Officer. 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. "Bank": Wells Fargo Bank, National Association, a national banking association, in its individual capacity and not as Trustee, or any successor thereto. "Bankruptcy Code": The United States Bankruptcy Code, Title I I of the United States Code, as amended. "Bankruptcy Law": The U.S. Bankruptcy Code, as amended from time to time, and Part V of the Companies Law (2004 Revision) of the Cayman Islands, as amended from time to time. "Benefit Plan Investor": A "benefit plan investor" within the meaning of 29 C.F.R. Section 2510.3-101(0(2) as modified by Section 3(42) of ERISA. "Board of Directors": With respect to the Issuer, the duly appointed directors of the Issuer, and with respect to the Co-Issuer, the duly appointed directors of the Co-Issuer. "Board Resolution": With respect to the Issuer, a resolution of the Board of Directors of the Issuer and, with respect to the Co-Issuer, a resolution of the Board of Directors of the Co-Issuer. "Bond": A debt obligation (other than a Structured Finance Obligation) in the form of, or represented by, a bond, note (other than notes delivered pursuant to Loans) or other debt security. "Break-Even Default Rate": For any Class of Senior Notes as of any time, the maximum Aggregate Principal Balance of Defaulted Obligations (expressed as a percentage of the Aggregate Principal Balance of all Collateral Obligations) which the Current Portfolio or the Proposed Portfolio, as applicable, can sustain as determined through application of the CDO Monitor, which, after giving effect to assumptions on recoveries and timing and the 5 EFTA00596137 Priority of Payments, will result in sufficient funds remaining (i) in the case of the Class A Notes, for the timely payment of interest and ultimate payment of principal on such Class, and (ii) in the case of any other Class of Senior Notes, for the ultimate payment of principal and interest on such Class. "Business Day": (i) Any day that is not a Saturday, Sunday or a day on which banking institutions are authorized or obligated by law, regulation or executive order to close in New York City or the city of the Corporate Trust Office of the Trustee or, in the case of the final payment of principal of a Security, the place of presentation of such Security or (ii) for the sole purpose of the determination of LIBOR Determination Dates, any day on which dealings in deposits in U.S. Dollars are transacted in the London interbank market. To the extent action is required of the Paying Agent in Ireland, Dublin, Ireland will be considered in determining "Business Day" for purposes of determining when such Paying Agent action is required. "Caa Collateral Obligation": A Collateral Obligation (other than a Defaulted Obligation) with a Moody's Obligation Rating of "Caal" or lower. "Caa Excess": The Excess, if any, by which (i) the Aggregate Principal Balance of Caa Collateral Obligations exceeds (ii) 7.5% of the Collateral Principal Amount; provided that in determining which of the Caa Collateral Obligations shall be included in the Caa Excess, the Caa Collateral Obligations with the lowest Market Value shall be deemed to constitute such Caa Excess. "Caa/CCC Excess": The greater of the Caa Excess or the CCC Excess. "Calculation Agent": The meaning specified in Section 7.16. "Cash": Such coin or currency of the United States of America as at the time shall be legal tender for payment of all public and private debts. "CCC Collateral Obli ation": A Collateral Obligation (other than a Defaulted Obligation) with an Rating of "CCC+" or lower . "CCC Excess": The Excess, if any, by which (i) the Aggregate Principal Balance of CCC Collateral Obligations exceeds (ii) 7.5% of the Collateral Principal Amount; provided that in determining which of the CCC Collateral Obligations shall be included in the CCC Excess, the CCC Collateral Obligations with the lowest Market Value shall be deemed to constitute such CCC Excess. "Certificate of Authentication": The meaning specified in Section 2.1. "Certificated Income Note": The meaning specified in Section 2.2(e) "Certificated Note": The meaning specified in Section 2.2(e). "Certificated Security": The meaning specified in Section 8-102(a)(4) of the UCC. 6 EFTA00596138  "Class": When referring to the Notes or Securities, Class A-1 Notes, Class A-2 Notes, Class B Notes, Class C Notes, Class D Notes and/or the Income Notes, as appropriate. "Class A Coverage Tests": The Overcollateralization Test and the Interest Coverage Test, each as applied with respect to the Class A Notes. "Class A Notes": The Class A-I Notes and the Class A-2 Notes, collectively. "Class A-1 Interest Amount": With respect to a Payment Date, (a) the product of (i) the Aggregate Principal Amount of the Class A-I Notes at the beginning of the relevant Periodic Interest Accrual Period plus the amount of any unpaid Class A-1 Interest Amount from the prior Payment Date, (ii) the Class A-1 Interest Rate for such period, (iii) the actual number of days in such period and (iv) 1/360 plus (b) the amount of any unpaid Class A-1 Interest Amount from the prior Payment Date. "Class A-I Interest Rate": The annual interest rate accruing on the Class A-I Notes equal to LIBOR plus the applicable spread specified in Section 2.3. "Class A-1 Notes": The Class A-1 Floating Rate Senior Notes issued by the Co- Issuers pursuant to this Indenture and having the characteristics specified in Section 2.3. "Class A-2 Interest Amount": With respect to a Payment Date, (a) the product of (i) the Aggregate Principal Amount of the Class A-2 Notes as of the beginning of the relevant Periodic Interest Accrual Period plus the amount of any unpaid Class A-2 Interest Amount from the prior Payment Date, (ii) the Class A-2 Interest Rate for such period, (iii) the actual number of days in such period and (iv) 1/360 plus (b) the amount of any unpaid Class A-2 Interest Amount from the prior Payment Date. "Class A-2 Interest Rate": The annual interest rate accruing on the Class A-2 Notes equal to LIBOR trs the applicable spread specified in Section 2.3. "Class A-2 Notes": The Class A-2 Floating Rate Senior Notes issued by the Co- Issuers pursuant to this Indenture and having the characteristics specified in Section 2.3. "Class B Coverage Tests": The Overcollateralization Test and the Interest Coverage Test, each as applied with respect to the Class B Notes. "Class B Interest Amount": With respect to a Payment Date, the product of (i) the Aggregate Principal Amount of the Class B Notes as of the beginning of the relevant Periodic Interest Accrual Period plus the aggregate Deferred Interest with respect to the Class B Notes after the preceding Payment Date, (ii) the Class B Interest Rate for such period, (iii) the actual number of days in such period and (iv) 1/360. "Class B Interest Rate": The annual interest rate accruing on the Class B Notes equal to LIBOR Om the applicable spread specified in Section 2.3. "Class B Notes": The Class B Floating Rate Deferrable Senior Subordinate Notes issued by the Co-Issuers pursuant to this Indenture and having the characteristics specified in Section 2.3. 7 EFTA00596139  "Class C Coverage Tests": The Overcollateralization Test and the Interest Coverage Test, each as applied with respect to the Class C Notes. "Class C Interest Amount": With respect to a Payment Date, the product of (i) the Aggregate Principal Amount of the Class C Notes as of the beginning of the relevant Periodic Interest Accrual Period plus the aggregate Deferred Interest with respect to the Class C Notes after the preceding Payment Date, (ii) the Class C Interest Rate for such period, (iii) the actual number of days in such period and (iv) 1/360. "Class C Interest Rate": The annual interest rate accruing on the Class C Notes equal to LIBOR p the applicable spread specified in Section 2.3. "Class C Notes": The Class C Floating Rate Deferrable Senior Subordinate Notes issued by the Co-Issuers pursuant to this Indenture and having the characteristics specified in Section 2.3. "Class D Coverage Tests": The Overcollateralization Test and the Interest Coverage Test, each as applied with respect to the Class D Notes. "Class D Interest Amount": With respect to a Payment Date, the product of (i) the Aggregate Principal Amount of the Class D Notes as of the beginning of the relevant Periodic Interest Accrual Period plus the aggregate Deferred Interest with respect to the Class D Notes after the preceding Payment Date, (ii) the Class D Interest Rate for such period, (iii) the actual number of days in such period and (iv) 1/360. "Class D Interest Rate": The annual interest rate accruing on the Class D Notes equal to LIBOR Wig the applicable spread specified in Section 2.3. "Class D Notes": The Class D Floating Rate Deferrable Subordinate Notes issued by the Issuer pursuant to this Indenture and having the characteristics specified in Section 2.3. "Clearing Agency": A "clearing agency" as defined in Section I7A of the Exchange Act. "Clearing Corporation": (i) Clearstream, (ii) DTC, (iii) Euroclear and (iv) any entity included within the meaning of "clearing corporation" under the UCC. "Clearing Corporation Security": A Collateral Obligation that is a Financial Asset that is (i) in bearer form or (ii) registered in the name of a Clearing Corporation or the nominee of such Clearing Corporation and, if a Certificated Security, is held in the custody of such Clearing Corporation. "Clearstream": Clearstream Banking, sociite anonyme, a corporation organized under the laws of the Duchy of Luxembourg, or any successor thereto. "Closing Date": January 18, 2007. "Code": The United States Internal Revenue Code of 1986, as amended, and any successor statute thereto. 8 EFTA00596140  "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": The meaning specified in the Granting Clauses hereof. "Collateral Administration Agreement": The Collateral Administration Agreement, dated as of the Closing Date, among the Issuer, the Collateral Manager and the Collateral Administrator, as amended from time to time. "Collateral Administrator": The Bank in its capacity as such under the Collateral Administration Agreement, and its permitted successors. "Collateral Administrator Expenses": Amounts owed to the Collateral Administrator in any Collection Period, other than those included within the Collateral Administrator Fee, pursuant to the Collateral Administration Agreement. "Collateral Administrator Fee": Fees payable to the Collateral Administrator for the performance of the Collateral Administrator's obligations under the Collateral Administration Agreement. "Collateral Interest Amount": As of any date of determination, the aggregate amount of Interest Proceeds that have been received or are reasonably expected to be received, in each case during the Collection Period in which such date of determination occurs. "Collateral Management Agreement": The Management Agreement, dated as of the Closing Date, between the Issuer and the Collateral Manager, as amended from time to time. "Collateral Manager": Jefferies Capital Management, Inc., 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 Obligation": An obligation that, as of the date of purchase by the Issuer (or entry into a commitment to purchase by the Issuer), is (i) a Term Loan or a participation in a Term Loan, (ii) a Revolving Loan or a participation in a Revolving Loan, (iii) a Structured Finance Obligation, (iv) a Bond or (v) a Synthetic Security (provided that, in the case of (i), (ii), (iii) or (iv), such obligation, and in the case of (v), the relevant underlying obligation and, where indicated, the Synthetic Security itself, satisfies the Collateral Obligation Eligibility Criteria as of such date) and has been Delivered to the trustee as Collateral hereunder. "Collateral Obligation Eligibility Criteria": The following criteria: (a) The obligation is denominated and payable only in U.S. Dollars. 9 EFTA00596141  (b) The terms of the obligation do not provide for such obligation to be converted or exchanged at any time into any Equity Security or any other security or asset that is characterized as equity for U.S. federal income tax purposes. (c) The obligation (a) has a Moody's Rating (including any estimated or confidential rating which is in respect of the full obligation of the Obligor and which is monitored) and (b) has an. Rating (including any confidential rating which is in respect of the full obligation of the Obligor and which is monitored and in relation to which consent to disclosure has been provided to by the related Obligor), which Rating does not have a "p", "pi", "q", "r", or "t" subscript. (d) The obligation is not a Defaulted Obligation, Equity Security or Credit Risk Obligation. (e) The related Obligor is the borrower, issuer or guarantor in respect of such obligation. (f) The obligation (except in the case of a Bond or Structured Finance Obligation) is not subordinated by its terms to other indebtedness for borrowed money of the applicable Obligor; provided that, for the avoidance of doubt, this clause will not prohibit the purchase of Subordinated Lien Loans or unsecured Loans. (g) The obligation (a) bears simple interest payable in cash no less frequently than annually at a fixed or floating rate that is paid on a periodic basis on an unleveraged basis and, in the case of a floating rate, computed on a benchmark interest rate plus or minus a spread, if any (which may vary under the terms of the obligation) and (b) does not by its terms permit the deferral of the payment of interest in cash thereon, including, without limitation, by providing for the payment of interest through the issuance of additional debt securities identical to such debt security or through additions to the principal amount thereof for a specified period in the future or for the remainder of its life or by capitalizing interest due on such debt security as principal (except in the case of a PIK Obligation). With respect to an obligation that provides for the payment of interest at a floating rate, such floating rate is determined by reference to the U.S. Dollar prime rate or other base rate, London interbank offered rate or similar interbank offered rate, commercial deposit rate or any other index for which Rating Confirmation has been received. (h) The obligation is not subject to an outstanding offer to be acquired, exchanged or tendered. (i) Except in the case of a Synthetic Security, the obligation provides for payment of a fixed amount of principal payable in cash according to a fixed schedule (which may include optional call dates) and at stated maturity thereof. The payment or repayment of the principal, if any, of the obligation is not an amount determined by reference to any formula or index or subject to any contingency under the terms thereof (except in the case of a Synthetic Security). 10 EFTA00596142  (j) The obligation will not subject the Issuer, with respect to payments due under its terms or proceeds of its disposal, to a withholding tax (other than withholding taxes with respect to commitment and similar fees associated with Collateral Obligations constituting Revolving Loans or participations in Revolving Loans), unless the obligor or issuer must make additional payments so that the net amounts received by the Issuer after satisfaction of such tax is the amount due to the Issuer before the imposition of any such withholding tax. (k) The Obligor is Domiciled in an Eligible Country. (1) The obligation is not a Loan that is an obligation of a debtor in possession or a trustee for a debtor in an insolvency proceeding other than a Current Pay Obligation or a DIP Loan. (m) In the case of an obligation that is a participation in a Term Loan or Revolving Loan, the participation seller has an issuer credit rating (long-term senior unsecured rating) by Moodaof at least "A3" and an issuer credit rating (long-term senior unsecured rating) by of at least "A". (n) The obligation does not constitute Margin Stock or a Margin Loan. (o) The obligation is not a Zero-Coupon Obligation or a Step-up Obligation. (p) In the case of a Synthetic Security, the Synthetic Security Counterparty or issuer, as the case may be, has a long-term senior unsecured rating by Moody's of at least "Al", and if rated "Al" by Moody's, such rating is not on watch for downgrade, and a long-term senior unsecured rating by. of at least "A+". (q) The obligation is treated for U.S. federal income tax purposes as indebtedness. (r) In the case of an obligation issued by a U.S. obligor, the obligation is in registered form within the meaning of Sections 871(h)(2)(B)(i) and 881(c)(2)(B)(i) of the Code. (s) The obligation will not cause the Issuer to be deemed to have participated in the negotiation of the terms of a primary loan origination for U.S. tax purposes. (t) In the case of a PIK Obligation (other than a Partial PIK Obligation), no interest has been de