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INDENTURE

Execution Version

Dated as of August 22, 2023

among

DRIFTWOOD CLO 2023-I, LTD. an exempted company with limited liability incorporated under the laws of the Cayman Islands Cayman Registration No. EX-382916 Registered Office: PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands

as Issuer

DRIFTWOOD CLO 2023-I, LLC a Delaware limited liability company DE File No. 7429831 Registered Agent: National Registered Agents Inc., 1209 Orange Street, Wilmington, DE 19801

as Co-Issuer

and

IRONCLAD TRUST COMPANY, NATIONAL ASSOCIATION a national banking association Principal Corporate Trust Office: 100 Wall Street, Suite 1650, New York, NY 10005 DTC Participant No. 2176

as Trustee, Note Registrar, Paying Agent, Transfer Agent, Custodian, and Collateral Administrator

$400,000,000

Aggregate Principal Amount of Secured Notes and Subordinated Notes

Secured by a Portfolio of Broadly Syndicated First-Lien Senior Secured Leveraged Loans

INDENTURE

THIS INDENTURE (this "Indenture"), dated as of August 22, 2023, is entered into among DRIFTWOOD CLO 2023-I, LTD., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the "Issuer"), DRIFTWOOD CLO 2023-I, LLC, a Delaware limited liability company (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers"), and IRONCLAD TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States (the "Trustee"), acting in its capacity as trustee, note registrar, paying agent, transfer agent, custodian, and collateral administrator.

RECITALS

WHEREAS, the Issuer is an exempted company with limited liability incorporated under the laws of the Cayman Islands, registered with the Cayman Islands Registrar of Companies under Registration No. EX-382916, with its registered office at PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands, and has been formed for the purpose of issuing securities, acquiring, holding, and disposing of a portfolio of collateral obligations, and engaging in related activities;

WHEREAS, the Co-Issuer is a Delaware limited liability company, formed under the Delaware Limited Liability Company Act, with DE File No. 7429831, and having National Registered Agents Inc., 1209 Orange Street, Wilmington, Delaware 19801 as its registered agent, the sole member of which is the Issuer;

WHEREAS, the Co-Issuers desire to issue, and the Trustee has agreed to authenticate and deliver, secured notes and subordinated notes in an aggregate principal amount of $400,000,000 (collectively, the "Notes"), the proceeds of which will be used to acquire a portfolio of broadly syndicated first-lien senior secured leveraged loans (the "Collateral Obligations"), and to pay expenses related to the issuance of the Notes and the establishment of the trust estate created hereby;

WHEREAS, Driftwood Credit Management LLC, a Delaware limited liability company registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (CRD #182447), with its principal office at 200 Brickell Avenue, Suite 3100, Miami, Florida 33131 (the "Collateral Manager"), will serve as collateral manager with respect to the portfolio of Collateral Obligations pursuant to a Collateral Management Agreement dated as of August 22, 2023 (the "Collateral Management Agreement"), between the Issuer and the Collateral Manager;

WHEREAS, the Notes are being offered and sold to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States in reliance on the exemption from registration provided by Regulation S under the Securities Act, and, in each case, will not be registered under the Securities Act or any state securities laws and may not be offered or sold within the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

WHEREAS, the Rated Notes (as defined herein) have been rated by Brindoval Analytical Services Inc. ("Brindoval" or "CAS") and Ridgeline Credit Ratings LLC ("Ridgeline" or "RCR" and, together with Brindoval, the "Rating Agencies"), and the ratings assigned to the Rated Notes are set forth in Section 2.01 hereof;

WHEREAS, the Trustee has agreed to serve as trustee, note registrar, paying agent, transfer agent, custodian, and collateral administrator under this Indenture, and the principal corporate trust office of the Trustee is located at 100 Wall Street, Suite 1650, New York, New York 10005, and the Trustee is a participant in The Depository Trust Company ("DTC") under Participant No. 2176;

WHEREAS, reference is made to the Preliminary Offering Memorandum dated August 4, 2023 and the Final Offering Memorandum dated August 18, 2023 (the "Offering Memorandum"), each relating to the offer and sale of the Notes, copies of which have been provided to the Trustee;

WHEREAS, Meridian Atlantic Securities LLC (CRD #39821), with offices at 383 Madison Avenue, 22nd Floor, New York, New York 10179, has acted as placement agent (the "Placement Agent") in connection with the offer and sale of the Notes;

WHEREAS, the First Supplemental Indenture dated as of September 8, 2023 (the "First Supplemental Indenture"), reflecting the final pricing of the Notes as of the Pricing Date (as defined herein), supplements and amends certain provisions of this Indenture, and references herein to this "Indenture" shall include the First Supplemental Indenture, unless the context otherwise requires;

WHEREAS, the Co-Issuers have duly authorized the execution and delivery of this Indenture and the issuance of the Notes, and all things necessary to make this Indenture a valid agreement of the Co-Issuers and the Trustee, and to make the Notes valid obligations of the Co-Issuers, have been done;

NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

GRANTING CLAUSES

The Issuer hereby grants, pledges, assigns, transfers, and conveys to the Trustee, for the benefit of the Secured Parties (as defined herein), a first-priority perfected security interest in all of the Issuer's right, title, and interest in, to, and under the following property, whether now owned or hereafter acquired (collectively, the "Trust Estate"):

(a) all Collateral Obligations, including all broadly syndicated first-lien senior secured leveraged loans acquired by or on behalf of the Issuer from time to time, whether such Collateral Obligations are owned on the date hereof or are acquired hereafter during the Reinvestment Period or otherwise, together with all rights, powers, and privileges of the Issuer as a lender or holder under or in connection with such Collateral Obligations, including all rights to receive payments of principal, interest, fees, and other amounts thereunder;

(b) all funds on deposit in, and all financial assets and investment property held in, the Collection Account (including the Interest Collection Sub-Account and the Principal Collection Sub-Account), the Payment Account, the Interest Reserve Account, the Principal Collection Account, the Ramp-Up Account, the Expense Reserve Account, and the Unused Proceeds Account (collectively, the "Accounts"), each as established and maintained by the Trustee at the Account Bank pursuant to Section 6.01 hereof;

(c) all Eligible Investments, cash equivalents, and other investment property acquired with funds on deposit in any Account, and all interest, dividends, and other income earned thereon;

(d) all proceeds of the foregoing, including all cash proceeds, non-cash proceeds, insurance proceeds, and claims for damages in connection with the Collateral Obligations, the Accounts, and the Eligible Investments;

(e) all rights of the Issuer under the Collateral Management Agreement dated as of August 22, 2023 between the Issuer and Driftwood Credit Management LLC, including all rights to receive the performance of the Collateral Manager's obligations thereunder;

(f) all rights of the Issuer under the Collateral Administration Agreement dated as of August 22, 2023 between the Issuer and Ironclad Trust Company, N.A. (the "Collateral Administration Agreement"), including all rights to receive reports, calculations, and other deliverables thereunder;

(g) all rights of the Issuer under the Co-Issuance Agreement dated as of August 22, 2023 between the Issuer and the Co-Issuer (the "Co-Issuance Agreement"), including all rights to enforce the obligations of the Co-Issuer thereunder;

(h) all books, records, ledger cards, files, correspondence, and other documents relating to the foregoing; and

(i) all accessions to any of the foregoing, and all substitutions and replacements for, and products of, any of the foregoing.

The foregoing grant is made to secure the due and punctual payment of all obligations of the Co-Issuers under the Notes and this Indenture, including (i) the due and punctual payment of principal of and interest on each class of Notes, in accordance with the terms of such Notes and this Indenture, (ii) the due and punctual payment of all fees, expenses, indemnities, and other amounts payable by the Co-Issuers under this Indenture and the other Transaction Documents, and (iii) the performance and observance of all covenants, agreements, and conditions of the Co-Issuers contained herein, in each case in accordance with the Priority of Payments set forth in Article VI hereof.

The Trustee hereby acknowledges receipt of and accepts the foregoing grant and assignment and agrees to hold the Trust Estate in trust for the benefit of the Secured Parties in accordance with the terms and provisions of this Indenture. The Trustee shall have all rights, powers, and duties set forth herein and under applicable law with respect to the Trust Estate. The Issuer hereby authorizes the Trustee to file any financing statements, continuation statements, or amendments thereto under the Uniform Commercial Code of any applicable jurisdiction, and to take any other action necessary or desirable to perfect, protect, and maintain the security interest granted hereby.

ARTICLE I — DEFINITIONS AND INTERPRETATION

Section 1.01 — Definitions

As used in this Indenture, the following terms shall have the meanings set forth below. Unless otherwise specified, all capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in this Section 1.01.

"Account Bank" means Havenwood Bank, N.A., a national banking association, with its principal office at 227 West Monroe Street, Chicago, Illinois 60606, or any successor account bank appointed in accordance with the terms of this Indenture, provided that such successor satisfies the eligibility requirements set forth herein, including a minimum long-term unsecured credit rating of A2 (or the equivalent) from at least one nationally recognized statistical rating organization.

"Accrual Period" means, with respect to any Payment Date, the period from and including the immediately preceding Payment Date (or, in the case of the first Accrual Period, the Closing Date) to but excluding such Payment Date.

"Accounts" has the meaning set forth in the Granting Clauses.

"Administrative Expenses" means all fees, costs, expenses, indemnities, and other amounts payable by the Issuer or the Co-Issuer to the Trustee, the Collateral Administrator, the Account Bank, the Note Registrar, the Paying Agent, the Transfer Agent, counsel to any such person, independent accountants, and any other service provider in connection with the Transaction Documents, other than the Senior Collateral Management Fee, the Subordinate Collateral Management Fee, and the Incentive Management Fee.

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, more than 50% of the voting power of the outstanding voting securities of such other Person.

"Aggregate Principal Balance" means, as of any date of determination, the sum of the Outstanding Principal Balances of all Collateral Obligations on such date. The initial target Aggregate Principal Balance is $400,000,000.

"Business Day" means any day other than a Saturday, Sunday, or any day on which banking institutions in the City of New York, the State of Delaware, the Cayman Islands, or the city in which the principal office of the Account Bank is located are authorized or obligated by law, regulation, or executive order to close.

"Cede & Co." means the nominee of The Depository Trust Company, or any successor nominee thereof.

"Class A I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes and the Class A-2 Notes for the related Accrual Period. The minimum trigger level for the Class A I/C Ratio is 120.00%.

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

"Class A O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with Defaulted Obligations, Credit Risk Obligations, and excess CCC Obligations valued at their respective market values or recovery values, as applicable, rather than par) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes and the Class A-2 Notes. The minimum trigger level for the Class A O/C Ratio is 128.00%.

"Class A-1 Notes" means the $256,000,000 aggregate initial principal amount of Class A-1 Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 155 basis points, rated AAA by Brindoval Analytical Services Inc. and AAA by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAA5 (Rule 144A) and CUSIP G2694LAA7 (Regulation S), and ISIN US26738TAA51 (Rule 144A).

"Class A-2 Notes" means the $40,000,000 aggregate initial principal amount of Class A-2 Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 190 basis points, rated AA by Brindoval Analytical Services Inc. and AA by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAB3 (Rule 144A).

"Class B I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes for the related Accrual Period. The minimum trigger level for the Class B I/C Ratio is 115.00%.

"Class B Notes" means the $28,000,000 aggregate initial principal amount of Class B Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 230 basis points, rated A by Brindoval Analytical Services Inc. and A by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAC1 (Rule 144A).

"Class B O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with adjustments as described in the definition of Class A O/C Ratio) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes. The minimum trigger level for the Class B O/C Ratio is 118.00%.

"Class C I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes for the related Accrual Period. The minimum trigger level for the Class C I/C Ratio is 110.00%.

"Class C Notes" means the $24,000,000 aggregate initial principal amount of Class C Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 310 basis points, rated BBB by Brindoval Analytical Services Inc. and BBB by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAD9 (Rule 144A).

"Class C O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with adjustments as described in the definition of Class A O/C Ratio) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes. The minimum trigger level for the Class C O/C Ratio is 110.00%.

"Class D I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes for the related Accrual Period. The minimum trigger level for the Class D I/C Ratio is 105.00%.

"Class D Notes" means the $16,000,000 aggregate initial principal amount of Class D Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 625 basis points, rated BB by Brindoval Analytical Services Inc. and BB by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAE7 (Rule 144A).

"Class D O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with adjustments as described in the definition of Class A O/C Ratio) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes. The minimum trigger level for the Class D O/C Ratio is 105.50%.

"Clean-Up Call" has the meaning set forth in Section 4.04.

"Closing Date" means September 12, 2023, the date on which the Notes are first issued and delivered and the initial Collateral Obligations are transferred to the Trust Estate from the warehouse facility.

"Co-Issuance Agreement" means the Co-Issuance Agreement dated as of August 22, 2023 between the Issuer and the Co-Issuer, as the same may be amended, supplemented, or otherwise modified from time to time.

"Co-Issuer" means Driftwood CLO 2023-I, LLC, a Delaware limited liability company (DE File No. 7429831), the sole member of which is the Issuer, or any successor permitted under this Indenture.

"Co-Issuers" means, collectively, the Issuer and the Co-Issuer.

"Collateral Administration Agreement" means the Collateral Administration Agreement dated as of August 22, 2023 between the Issuer and Ironclad Trust Company, N.A., as collateral administrator, as the same may be amended, supplemented, or otherwise modified from time to time.

"Collateral Administrator" means Ironclad Trust Company, N.A., acting in its capacity as collateral administrator under the Collateral Administration Agreement, or any successor collateral administrator appointed in accordance with the terms thereof.

"Collateral Manager" means Driftwood Credit Management LLC, a Delaware limited liability company registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (CRD #182447), with its principal office at 200 Brickell Avenue, Suite 3100, Miami, Florida 33131, or any successor collateral manager appointed in accordance with Article XIV hereof.

"Collateral Management Agreement" means the Collateral Management Agreement dated as of August 22, 2023 between the Issuer and the Collateral Manager, as the same may be amended, supplemented, or otherwise modified from time to time.

"Collateral Obligation" means any broadly syndicated first-lien senior secured leveraged loan acquired by or on behalf of the Issuer that satisfies the Eligibility Criteria set forth in Section 5.02, together with any Substitute Collateral Obligation, workout obligation, or restructured obligation held by the Issuer and treated as a Collateral Obligation in accordance with the terms of this Indenture.

"Collateral Quality Tests" means, collectively, the Minimum Weighted Average Spread Test, the Maximum Weighted Average Life Test, the Minimum Diversity Score Test, the Minimum Weighted Average Recovery Rate Test, and the Minimum WARF Test, each as described in Section 5.03.

"Collection Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, consisting of the Interest Collection Sub-Account and the Principal Collection Sub-Account.

"Compounded SOFR" means the reference rate determined in accordance with Section 1.04 for each Accrual Period, based on the secured overnight financing rate published by the Federal Reserve Bank of New York (or a successor administrator), compounded in arrears over the applicable Accrual Period, subject to the fallback provisions set forth in Section 1.04 and the 26253 fallback convention.

"Controlling Class" means, at any time, the most senior class of Rated Notes then Outstanding. As of the Closing Date, the Controlling Class is the Class A-1 Notes.

"Coverage Tests" means, collectively, the Overcollateralization Tests and the Interest Coverage Tests, each as defined in Article VII.

"Credit Improved Obligation" means a Collateral Obligation that the Collateral Manager, in its reasonable business judgment, determines has experienced a material improvement in credit quality since the date of its acquisition by the Issuer, such that a sale and reinvestment of the proceeds thereof in a Substitute Collateral Obligation would benefit the portfolio as a whole.

"Credit Risk Obligation" means a Collateral Obligation that the Collateral Manager, in its reasonable business judgment, determines has a significant risk of declining in credit quality to a level at or below a specified threshold, such that the continued holding of such Collateral Obligation would be detrimental to the interests of the Noteholders.

"Day Count Convention" means Actual/360, meaning that interest for any Accrual Period shall be calculated on the basis of the actual number of days elapsed during such Accrual Period divided by 360.

"Defaulted Obligation" means any Collateral Obligation with respect to which (a) a default in the payment of principal or interest has occurred and is continuing beyond any applicable grace period, (b) the obligor thereof has commenced or has had commenced against it a proceeding under the Bankruptcy Code or any analogous insolvency or reorganization statute, or (c) the Collateral Manager has otherwise determined, in its reasonable business judgment, that such Collateral Obligation is in default or is reasonably expected to become a payment default.

"Determination Date" means, with respect to each Payment Date, the date that is ten (10) Business Days prior to such Payment Date, on which the Collateral Administrator shall determine the amounts available in each sub-account of the Collection Account and calculate the Coverage Tests and Collateral Quality Tests.

"Diversity Score" means the measure of portfolio diversification calculated in accordance with the methodology set forth in Schedule 3 hereto. The minimum Diversity Score required under this Indenture is 60.

"DTC" means The Depository Trust Company, a New York-chartered limited purpose trust company and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended, or any successor securities depository.

"Effective Date" means the date (which shall be no later than the Effective Date Deadline) on which the Issuer has satisfied each of the conditions set forth in Section 5.05.

"Effective Date Deadline" means December 12, 2023, being the date that is ninety (90) days following the Pricing Date.

"Eligibility Criteria" means the criteria set forth in Section 5.02 that must be satisfied by each Collateral Obligation at the time of its acquisition by the Issuer.

"Eligible Account" means a segregated account maintained at a depository institution the long-term unsecured obligations of which are rated at least A2 by each Rating Agency (or, if the Account Bank ceases to satisfy such rating requirement, a segregated trust account at a depository institution satisfying such requirement, or an account at a depository institution the deposits of which are insured by the Federal Deposit Insurance Corporation and the total amount on deposit in which does not exceed the FDIC insurance limit).

"Eligible Investments" means any of the following obligations and securities, in each case denominated and payable in U.S. dollars and maturing or payable on demand no later than the next succeeding Payment Date: (a) direct obligations of, and obligations the timely payment of which is fully guaranteed by, the United States of America; (b) demand deposits or time deposits in, or certificates of deposit or bankers' acceptances of, any depository institution organized under the laws of the United States of America or any state thereof whose long-term unsecured obligations are rated at least A2 by each Rating Agency; (c) repurchase agreements with respect to any obligation described in clause (a) with a counterparty rated at least A2 by each Rating Agency; (d) money market funds rated in the highest rating category of each Rating Agency; and (e) such other investments as may be acceptable to each Rating Agency.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.

"Event of Default" has the meaning set forth in Section 11.01.

"Expense Reserve Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which the Issuer shall deposit amounts on the Closing Date to be used for the payment of Administrative Expenses.

"FATCA" means Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder, any applicable intergovernmental agreement (and any law or regulation implementing any such intergovernmental agreement), and any agreement with the IRS entered into pursuant thereto.

"First Supplemental Indenture" means the First Supplemental Indenture dated as of September 8, 2023 between the Co-Issuers and the Trustee, reflecting the final pricing of the Notes on the Pricing Date.

"Incentive Management Fee" means a fee payable to the Collateral Manager equal to 20% of excess residual interest proceeds distributed on any Payment Date after a 12% internal rate of return hurdle to the Subordinated Noteholders has been met, as calculated in accordance with the Collateral Management Agreement and Section 14.03 hereof.

"Interest Collection Sub-Account" means the sub-account of the Collection Account into which Interest Proceeds are deposited.

"Interest Coverage Test" has the meaning set forth in Section 7.04.

"Interest Proceeds" means, for any Accrual Period, all amounts received by or on behalf of the Issuer during such Accrual Period representing interest (including default interest) on, or commitment fees, facility fees, amendment fees, or consent fees in respect of, the Collateral Obligations, together with all interest and investment income earned on Eligible Investments and funds on deposit in the Interest Collection Sub-Account and the Interest Reserve Account, and excluding any amounts that constitute Principal Proceeds.

"Interest Reserve Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which certain Interest Proceeds may be deposited as a reserve for the payment of interest on the Notes on subsequent Payment Dates.

"Issuer" means Driftwood CLO 2023-I, Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands (Cayman Registration No. EX-382916), or any successor permitted under this Indenture.

"Majority" means, with respect to any class of Notes, the holders of more than 50% of the aggregate Outstanding Principal Balance (or, in the case of Subordinated Notes, more than 50% of the aggregate notional amount) of such class.

"Maximum CCC Bucket" means 7.5% of the Aggregate Principal Balance (initially, $30,000,000), representing the maximum permitted aggregate Outstanding Principal Balance of Collateral Obligations rated CCC+, CCC, or CCC− by any Rating Agency.

"Maximum Fixed-Rate Bucket" means 10.0% of the Aggregate Principal Balance (initially, $40,000,000), representing the maximum permitted aggregate Outstanding Principal Balance of fixed-rate Collateral Obligations.

"Maximum Second-Lien Bucket" means 5.0% of the Aggregate Principal Balance (initially, $20,000,000), representing the maximum permitted aggregate Outstanding Principal Balance of second-lien Collateral Obligations.

"Maximum Weighted Average Life" means 7.5 years, being the maximum permitted weighted average remaining life of all Collateral Obligations as of any Determination Date.

"Measurement Date" means each Determination Date and each date on which the Collateral Manager proposes to acquire or dispose of a Collateral Obligation.

"Minimum Denomination" means (a) with respect to each class of Rated Notes, $250,000 and integral multiples of $1,000 in excess thereof, and (b) with respect to the Subordinated Notes, $250,000 and integral multiples of $1 in excess thereof.

"Minimum Diversity Score" means 60.

"Minimum Weighted Average Recovery Rate" means 45.0%.

"Minimum Weighted Average Spread" means 350 basis points.

"Minimum WARF" means 2,850, as measured on the rating factor scale utilized by Brindoval Analytical Services Inc. For the avoidance of doubt, a higher numerical WARF indicates lower average credit quality; accordingly, the weighted average rating factor of the portfolio must not exceed 2,850 at any time.

"Non-Call Period" means the period from and including the Closing Date (September 12, 2023) to and including September 12, 2025 (being a period of two years).

"Note Registrar" means Ironclad Trust Company, N.A., acting in its capacity as note registrar under this Indenture, or any successor note registrar appointed in accordance with the terms hereof.

"Noteholder" or "Holder" means, with respect to any Note, the Person in whose name such Note is registered in the Note Register maintained by the Note Registrar.

"Notes" means, collectively, the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, and the Subordinated Notes.

"Offering Memorandum" means the Final Offering Memorandum dated August 18, 2023 relating to the offer and sale of the Notes.

"Officer's Certificate" means a certificate signed by an authorized officer of the Issuer, the Co-Issuer, or the Collateral Manager, as applicable.

"Opinion of Counsel" means a written opinion of counsel, which counsel may be an employee of or counsel to the Issuer, the Co-Issuer, or the Collateral Manager, and which counsel shall be acceptable to the Trustee.

"Outstanding" means, as of any date of determination with respect to any Note, each Note theretofore authenticated and delivered under this Indenture, except (a) any Note theretofore cancelled by the Trustee or delivered to the Trustee for cancellation, (b) any Note for whose payment money in the necessary amount has been theretofore deposited with the Trustee in trust for the Holder thereof, (c) any Note that has been defeased pursuant to Section 13.02, and (d) any Note in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture. In determining whether the Holders of the requisite principal amount of Notes have given any request, demand, authorization, direction, notice, consent, or waiver hereunder, Notes owned by the Issuer, the Co-Issuer, or the Collateral Manager, or any Affiliate of any of the foregoing, shall be disregarded and deemed not to be Outstanding for such purpose.

"Outstanding Principal Balance" means, with respect to any Collateral Obligation, the outstanding principal balance thereof (excluding any capitalized interest, penalty interest, or payment-in-kind amounts) as of any date of determination.

"Overcollateralization Test" has the meaning set forth in Section 7.02.

"Paying Agent" means Ironclad Trust Company, N.A., acting in its capacity as paying agent under this Indenture, or any successor paying agent appointed in accordance with the terms hereof.

"Payment Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, from which payments to Noteholders shall be made on each Payment Date.

"Payment Date" means January 15, April 15, July 15, and October 15 of each year, commencing January 15, 2024, and continuing to and including the Stated Maturity Date or such earlier date on which all Notes have been redeemed or paid in full; provided that if any such date is not a Business Day, the Payment Date shall be the next succeeding Business Day (with the modified following business day convention, provided that if such next succeeding Business Day would fall in the next calendar month, the Payment Date shall instead be the immediately preceding Business Day).

"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, governmental body, or other entity.

"Placement Agent" means Meridian Atlantic Securities LLC (CRD #39821), with offices at 383 Madison Avenue, 22nd Floor, New York, New York 10179.

"Pricing Date" means September 8, 2023, the date on which the final pricing terms for the Notes were established.

"Principal Collection Sub-Account" means the sub-account of the Collection Account into which Principal Proceeds are deposited.

"Principal Proceeds" means, for any Accrual Period, all amounts received by or on behalf of the Issuer during such Accrual Period representing principal payments on, or proceeds from the sale, exchange, or other disposition of, the Collateral Obligations, including scheduled principal payments, unscheduled principal payments (whether voluntary or involuntary prepayments), and proceeds from the sale of Collateral Obligations (net of any bona fide selling expenses), and excluding any amounts that constitute Interest Proceeds.

"Priority of Payments" means the priorities set forth in Section 6.03 (with respect to Interest Proceeds) and Section 6.04 (with respect to Principal Proceeds).

"Ramp-Up Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which a portion of the net proceeds of the Notes shall be deposited on the Closing Date for the acquisition of Collateral Obligations during the ramp-up period.

"Rated Notes" means, collectively, the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, having an aggregate initial principal amount of $364,000,000.

"Rating Agencies" means Brindoval Analytical Services Inc. ("CAS") and Ridgeline Credit Ratings LLC ("RCR"), or, if any such entity ceases to provide rating services, any nationally recognized statistical rating organization designated as a replacement by the Collateral Manager with the consent of a Majority of each class of Rated Notes Outstanding.

"Rating Agency Confirmation" means, with respect to any action, a written confirmation from each Rating Agency that such action will not result in the downgrade, qualification, or withdrawal of any rating then assigned to any class of Rated Notes.

"Rating Agency Notification" means prior written notice to each Rating Agency of the applicable action.

"Record Date" means, with respect to each Payment Date, the fifteenth (15th) calendar day preceding such Payment Date (whether or not a Business Day).

"Reinvestment Period" means the period from and including the Closing Date (September 12, 2023) to and including September 12, 2028 (being a period of five years from the Closing Date).

"Secured Parties" means the Holders of the Rated Notes, the Trustee, the Collateral Administrator, the Account Bank, and any other Person entitled to the benefit of the security interest granted under the Granting Clauses.

"Securities Act" means the Securities Act of 1933, as amended.

"Senior Collateral Management Fee" means a fee payable to the Collateral Manager equal to 0.15% per annum of the Aggregate Principal Balance, calculated on each Determination Date and payable quarterly on each Payment Date from Interest Proceeds in accordance with the Priority of Payments. Based on a full par Aggregate Principal Balance of $400,000,000, the Senior Collateral Management Fee would be $600,000 per annum (or $150,000 per quarterly Payment Date).

"SOFR" means the Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York (or a successor administrator), on the Federal Reserve Bank of New York's website, currently at https://apps.newyorkfed.org/markets/autorates/SOFR, or any successor source.

"Stated Maturity Date" means October 15, 2036, the final stated maturity date for all classes of Notes.

"Subordinate Collateral Management Fee" means a fee payable to the Collateral Manager equal to 0.35% per annum of the Aggregate Principal Balance, calculated on each Determination Date and payable quarterly on each Payment Date from Interest Proceeds in accordance with the Priority of Payments, but only after payment of Class D Note interest and all senior expenses. Based on a full par Aggregate Principal Balance of $400,000,000, the Subordinate Collateral Management Fee would be $1,400,000 per annum (or $350,000 per quarterly Payment Date).

"Subordinated Notes" means the $36,000,000 aggregate initial principal amount of Subordinated Notes issued by the Co-Issuers pursuant to this Indenture, which Subordinated Notes are unrated, bear no stated rate of interest, are entitled only to residual distributions pursuant to the Priority of Payments, and are identified by CUSIP 26738TAF4 (Rule 144A). The Subordinated Notes represent the equity tranche of the capital structure.

"Substitute Collateral Obligation" means any Collateral Obligation acquired by the Issuer with Principal Proceeds during the Reinvestment Period in substitution for a Collateral Obligation that has been sold, prepaid, or otherwise disposed of, provided that such Substitute Collateral Obligation satisfies the Eligibility Criteria, the Collateral Quality Tests (on a pro forma basis after giving effect to such acquisition), and the Concentration Limitations.

"Tax Event" has the meaning set forth in Section 4.03.

"Total Deal Size" means $400,000,000, being the aggregate initial principal amount of all classes of Notes issued hereunder.

"Transaction Documents" means, collectively, this Indenture (including the First Supplemental Indenture), the Notes, the Collateral Management Agreement, the Collateral Administration Agreement, the Co-Issuance Agreement, the Offering Memorandum, and any other document, agreement, or certificate executed and delivered in connection with the transactions contemplated hereby.

"Transfer Agent" means Ironclad Trust Company, N.A., acting in its capacity as transfer agent under this Indenture, or any successor transfer agent appointed in accordance with the terms hereof.

"Trust Estate" has the meaning set forth in the Granting Clauses.

"Trustee" means Ironclad Trust Company, N.A., a national banking association, acting in its capacity as trustee under this Indenture, or any successor trustee appointed in accordance with Article IX hereof.

"Trustee Expense Cap" means $50,000 per Payment Date, being the maximum amount of expenses (exclusive of the Trustee Fee) reimbursable to the Trustee on any single Payment Date pursuant to item (2) of the Interest Waterfall. Expenses in excess of the Trustee Expense Cap on any Payment Date shall be carried forward and paid on subsequent Payment Dates, subject to the Trustee Expense Cap applicable to such subsequent Payment Dates.

"Trustee Fee" means $25,000 per annum (flat), payable quarterly in arrears on each Payment Date (pro rata, $6,250 per Payment Date), from Interest Proceeds in accordance with the Priority of Payments.

"Unused Proceeds Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which any portion of the net proceeds of the Notes not applied to the acquisition of Collateral Obligations or deposited into other Accounts on the Closing Date shall be deposited.

"WARF" means weighted average rating factor, calculated in accordance with the methodology set forth in Schedule 4 hereto.

Section 1.02 — Rules of Construction

(a) Unless the context otherwise requires, (i) words in the singular include the plural and words in the plural include the singular, (ii) words importing a gender include all genders, (iii) the terms "herein," "hereof," "hereunder," and words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Schedule, or Exhibit hereof, (iv) references to Articles, Sections, Schedules, and Exhibits are to Articles, Sections, Schedules, and Exhibits of this Indenture unless otherwise specified, (v) references to any agreement or instrument are to such agreement or instrument as the same may be amended, supplemented, restated, or otherwise modified from time to time in accordance with the terms thereof, (vi) references to any statute, rule, or regulation include all amendments thereto and any successor statute, rule, or regulation, (vii) references to any Person include such Person's successors and permitted assigns, and (viii) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."

(b) The headings and captions contained in this Indenture are for convenience of reference only and shall not affect the interpretation of this Indenture.

(d) Unless otherwise specified, all accounting terms used herein shall be interpreted in accordance with United States generally accepted accounting principles as in effect from time to time.

(e) In the computation of any period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."

Section 1.03 — Computation of Time Periods

(a) Except as otherwise expressly provided herein, whenever any action is required to be taken, or any notice is required to be given, on or by a particular day and such day is not a Business Day, then such action may be taken, or such notice may be given, on the next succeeding Business Day with the same force and effect as if taken or given on the required day.

(b) With respect to each Payment Date, if such date falls on a day that is not a Business Day, the Payment Date shall be adjusted in accordance with the modified following business day convention, which means that such Payment Date shall be postponed to the next succeeding Business Day; provided, however, that if such next succeeding Business Day would fall in the next calendar month, the Payment Date shall instead be the immediately preceding Business Day. Interest shall accrue to but excluding the adjusted Payment Date.

Section 1.04 — SOFR Determination and Fallback

(a) Determination of Compounded SOFR. For each Accrual Period, the Compounded SOFR rate applicable to each class of Rated Notes shall be determined by the Trustee (or such other calculation agent as may be appointed by the Issuer with the consent of the Trustee) in accordance with the following provisions:

(i) Compounded SOFR shall be determined on the basis of the daily SOFR rates published by the Federal Reserve Bank of New York (or a successor administrator) for each U.S. Government Securities Business Day during the applicable observation period, which shall be the period from two (2) U.S. Government Securities Business Days prior to the first day of the Accrual Period to two (2) U.S. Government Securities Business Days prior to the Payment Date, and shall be calculated on a compounded basis using the formula set forth below:

Compounded SOFR = [(the product of (1 + SOFRi × ni/360) for each day i in the observation period) − 1] × (360/d)

where SOFRi is the SOFR rate for day i, ni is the number of calendar days for which rate SOFRi applies, and d is the total number of calendar days in the Accrual Period;

(ii) If, on any U.S. Government Securities Business Day during the observation period, the SOFR rate has not been published by 5:00 p.m. (Eastern Time) and no SOFR cessation event has occurred, then SOFR for such day shall be the SOFR published on the immediately preceding U.S. Government Securities Business Day;

(iii) All calculations of Compounded SOFR shall be made to five decimal places and shall be rounded to the nearest one hundred-thousandth, with five one-millionths being rounded upward.

(b) SOFR Cessation Event and Fallback. If a SOFR cessation event occurs (including a public statement or publication by the Federal Reserve Bank of New York, the administrator of SOFR, or a governmental authority having jurisdiction over such administrator, that SOFR has ceased or will cease to be provided permanently or indefinitely, or that SOFR is no longer representative), then the Trustee shall select a replacement benchmark rate in accordance with the following waterfall, consistent with the recommendations of the Alternative Reference Rates Committee ("ARRC") and the 26253 fallback convention:

(i) Step 1: The replacement rate shall be the rate (including any spread adjustment) recommended by the ARRC or by a relevant governmental body as the replacement for SOFR in U.S. dollar-denominated floating-rate securities, if such rate has been so recommended;

(ii) Step 2: If no rate has been recommended as described in Step 1, then the replacement rate shall be the rate (including any spread adjustment) that the Trustee (in consultation with the Issuer and the Collateral Manager) determines is most comparable to SOFR, taking into account, among other factors, any selection by the International Swaps and Derivatives Association for purposes of its definitions and protocols;

(iii) Step 3: If the Trustee is unable to determine a replacement rate pursuant to Steps 1 or 2, then interest on the Rated Notes for the applicable Accrual Period shall accrue at the Compounded SOFR rate applicable to the immediately preceding Accrual Period, until such time as a replacement rate can be determined.

(c) Conforming Changes. In connection with the implementation of a replacement benchmark rate pursuant to this Section 1.04, the Trustee shall be authorized to make such conforming changes as may be necessary or advisable, including changes to the definition of "Business Day," the timing and frequency of determining rates and making payments of interest, the rounding of amounts, and other administrative matters, in each case consistent with accepted market practice for the applicable replacement benchmark rate. The Trustee shall provide notice to the Co-Issuers, the Collateral Manager, the Noteholders, and the Rating Agencies of any replacement rate selected and any conforming changes implemented.

(d) Limitation on Trustee Liability. The Trustee shall not be liable for any error in the determination of Compounded SOFR or any replacement benchmark rate, or for any delay in implementing a rate transition, to the extent that the Trustee has acted in good faith and in accordance with the procedures set forth in this Section 1.04. The Trustee shall have no obligation to independently verify the accuracy of any SOFR rate published by the Federal Reserve Bank of New York or any successor administrator.

ARTICLE II — THE NOTES

Section 2.01 — Designation, Amount, and Terms of the Notes

(a) The Co-Issuers have authorized the issuance of the following classes of Notes in an aggregate principal amount of $400,000,000:

(b) The Class A-1 Notes have been assigned CUSIP G2694LAA7 (Regulation S) and ISIN US26738TAA51 (Rule 144A).

(c) The Rated Notes comprise the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, having an aggregate initial principal amount of $364,000,000. The Subordinated Notes have an aggregate initial principal amount of $36,000,000.

(d) Each class of Notes constitutes a separate series for purposes of this Indenture and the Trust Indenture Act of 1939, as amended (to the extent applicable). The holders of each class of Notes shall have the rights, duties, and obligations provided for such class in this Indenture.

(e) The Notes shall be issued in fully registered, book-entry form through the facilities of DTC, and shall be held through participants and indirect participants in DTC as described in Section 2.02 and Section 9.07. No beneficial owner of an interest in any Note held through DTC shall be entitled to receive a physical certificate representing such interest except in the limited circumstances described in Section 2.02(c).

(f) Each class of Notes shall have the Stated Maturity Date of October 15, 2036, unless earlier redeemed, purchased, or cancelled in accordance with the terms of this Indenture.

(g) The Notes rank in right of payment in the following order of priority: first, the Class A-1 Notes; second, the Class A-2 Notes; third, the Class B Notes; fourth, the Class C Notes; fifth, the Class D Notes; and sixth, the Subordinated Notes. The Subordinated Notes are subordinated in right of payment to all classes of Rated Notes. Within each class, all Notes of such class rank pari passu with one another without preference or priority.

Section 2.02 — Form and Dating

(a) Global Notes. The Notes of each class initially shall be issued in the form of one or more global notes (each, a "Global Note"), in fully registered form, registered in the name of Cede & Co., as nominee of DTC, and deposited with, or on behalf of, DTC. Transfers of beneficial interests in any Global Note shall be effected through the book-entry system maintained by DTC (and, in the case of beneficial interests held through Stonefield Industries ("Thackeray Partners LLC") or Glenrock Corporation ("Ashgrove Enterprises"), through the book-entry systems maintained by such depositaries, as applicable).

(b) Rule 144A and Regulation S Global Notes. Each class of Notes shall be represented by (i) a Rule 144A Global Note, representing Notes offered and sold in reliance on the exemption from registration provided by Rule 144A under the Securities Act, and (ii) a Regulation S Global Note, representing Notes offered and sold in reliance on the exemption from registration provided by Regulation S under the Securities Act.

(c) Definitive Notes. Notes in definitive, fully registered, certificated form ("Definitive Notes") shall be issued to the beneficial owners of interests in Global Notes only if: (i) DTC notifies the Trustee that it is unwilling or unable to continue as depository for the Global Notes or ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depository is not appointed within 90 days after the Trustee receives such notice or becomes aware of such cessation; (ii) an Event of Default has occurred and is continuing and holders of beneficial interests representing at least a Majority of the Outstanding Rated Notes request the issuance of Definitive Notes; or (iii) the Issuer elects to terminate the book-entry system through DTC with respect to one or more classes of Notes.

(d) Forms. The form of each class of Note shall be substantially in the form attached hereto as the applicable Exhibit: Exhibit A-1 (Class A-1 Note), Exhibit A-2 (Class A-2 Note), Exhibit A-3 (Class B Note), Exhibit A-4 (Class C Note), Exhibit A-5 (Class D Note), and Exhibit A-6 (Subordinated Note), with such changes thereto as may be necessary or appropriate to conform to the terms and conditions of this Indenture and the applicable class.

Section 2.03 — Execution, Authentication, and Delivery

(a) The Notes shall be executed on behalf of the Co-Issuers by the manual or facsimile signature of an authorized signatory of the Issuer and an authorized signatory of the Co-Issuer. The signature of any person that was authorized at the time of execution shall be valid and effective notwithstanding that such person may have ceased to hold such office prior to the authentication and delivery of such Notes or may not hold such office at the date of such Notes.

(b) No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until such Note shall have been authenticated by the manual signature of an authorized signatory of the Trustee on the certificate of authentication appearing on such Note. The certificate of authentication shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder.

INDENTURE
Execution Version
Dated as of August 22, 2023
among
DRIFTWOOD CLO 2023-I, LTD. an exempted company with limited liability incorporated under the laws of the Cayman Islands Cayman Registration No. EX-382916 Registered Office: PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands
as Issuer
DRIFTWOOD CLO 2023-I, LLC a Delaware limited liability company DE File No. 7429831 Registered Agent: National Registered Agents Inc., 1209 Orange Street, Wilmington, DE 19801
as Co-Issuer
and
IRONCLAD TRUST COMPANY, NATIONAL ASSOCIATION a national banking association Principal Corporate Trust Office: 100 Wall Street, Suite 1650, New York, NY 10005 DTC Participant No. 2176
as Trustee, Note Registrar, Paying Agent, Transfer Agent, Custodian, and Collateral Administrator
$400,000,000
Aggregate Principal Amount of Secured Notes and Subordinated Notes
Secured by a Portfolio of Broadly Syndicated First-Lien Senior Secured Leveraged Loans
INDENTURE
THIS INDENTURE (this "Indenture"), dated as of August 22, 2023, is entered into among DRIFTWOOD CLO 2023-I, LTD., an exempted company with limited liability incorporated under the laws of the Cayman Islands (the "Issuer"), DRIFTWOOD CLO 2023-I, LLC, a Delaware limited liability company (the "Co-Issuer" and, together with the Issuer, the "Co-Issuers"), and IRONCLAD TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association organized under the laws of the United States (the "Trustee"), acting in its capacity as trustee, note registrar, paying agent, transfer agent, custodian, and collateral administrator.
RECITALS
WHEREAS, the Issuer is an exempted company with limited liability incorporated under the laws of the Cayman Islands, registered with the Cayman Islands Registrar of Companies under Registration No. EX-382916, with its registered office at PO Box 4927, Windward House, 3rd Floor, George Town, Grand Cayman KY1-1306, Cayman Islands, and has been formed for the purpose of issuing securities, acquiring, holding, and disposing of a portfolio of collateral obligations, and engaging in related activities;
WHEREAS, the Co-Issuer is a Delaware limited liability company, formed under the Delaware Limited Liability Company Act, with DE File No. 7429831, and having National Registered Agents Inc., 1209 Orange Street, Wilmington, Delaware 19801 as its registered agent, the sole member of which is the Issuer;
WHEREAS, the Co-Issuers desire to issue, and the Trustee has agreed to authenticate and deliver, secured notes and subordinated notes in an aggregate principal amount of $400,000,000 (collectively, the "Notes"), the proceeds of which will be used to acquire a portfolio of broadly syndicated first-lien senior secured leveraged loans (the "Collateral Obligations"), and to pay expenses related to the issuance of the Notes and the establishment of the trust estate created hereby;
WHEREAS, Driftwood Credit Management LLC, a Delaware limited liability company registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (CRD #182447), with its principal office at 200 Brickell Avenue, Suite 3100, Miami, Florida 33131 (the "Collateral Manager"), will serve as collateral manager with respect to the portfolio of Collateral Obligations pursuant to a Collateral Management Agreement dated as of August 22, 2023 (the "Collateral Management Agreement"), between the Issuer and the Collateral Manager;
WHEREAS, the Notes are being offered and sold to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States in reliance on the exemption from registration provided by Regulation S under the Securities Act, and, in each case, will not be registered under the Securities Act or any state securities laws and may not be offered or sold within the United States or to U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;
WHEREAS, the Rated Notes (as defined herein) have been rated by Brindoval Analytical Services Inc. ("Brindoval" or "CAS") and Ridgeline Credit Ratings LLC ("Ridgeline" or "RCR" and, together with Brindoval, the "Rating Agencies"), and the ratings assigned to the Rated Notes are set forth in Section 2.01 hereof;
WHEREAS, the Trustee has agreed to serve as trustee, note registrar, paying agent, transfer agent, custodian, and collateral administrator under this Indenture, and the principal corporate trust office of the Trustee is located at 100 Wall Street, Suite 1650, New York, New York 10005, and the Trustee is a participant in The Depository Trust Company ("DTC") under Participant No. 2176;
WHEREAS, reference is made to the Preliminary Offering Memorandum dated August 4, 2023 and the Final Offering Memorandum dated August 18, 2023 (the "Offering Memorandum"), each relating to the offer and sale of the Notes, copies of which have been provided to the Trustee;
WHEREAS, Meridian Atlantic Securities LLC (CRD #39821), with offices at 383 Madison Avenue, 22nd Floor, New York, New York 10179, has acted as placement agent (the "Placement Agent") in connection with the offer and sale of the Notes;
WHEREAS, the First Supplemental Indenture dated as of September 8, 2023 (the "First Supplemental Indenture"), reflecting the final pricing of the Notes as of the Pricing Date (as defined herein), supplements and amends certain provisions of this Indenture, and references herein to this "Indenture" shall include the First Supplemental Indenture, unless the context otherwise requires;
WHEREAS, the Co-Issuers have duly authorized the execution and delivery of this Indenture and the issuance of the Notes, and all things necessary to make this Indenture a valid agreement of the Co-Issuers and the Trustee, and to make the Notes valid obligations of the Co-Issuers, have been done;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
GRANTING CLAUSES
The Issuer hereby grants, pledges, assigns, transfers, and conveys to the Trustee, for the benefit of the Secured Parties (as defined herein), a first-priority perfected security interest in all of the Issuer's right, title, and interest in, to, and under the following property, whether now owned or hereafter acquired (collectively, the "Trust Estate"):
(a) all Collateral Obligations, including all broadly syndicated first-lien senior secured leveraged loans acquired by or on behalf of the Issuer from time to time, whether such Collateral Obligations are owned on the date hereof or are acquired hereafter during the Reinvestment Period or otherwise, together with all rights, powers, and privileges of the Issuer as a lender or holder under or in connection with such Collateral Obligations, including all rights to receive payments of principal, interest, fees, and other amounts thereunder;
(b) all funds on deposit in, and all financial assets and investment property held in, the Collection Account (including the Interest Collection Sub-Account and the Principal Collection Sub-Account), the Payment Account, the Interest Reserve Account, the Principal Collection Account, the Ramp-Up Account, the Expense Reserve Account, and the Unused Proceeds Account (collectively, the "Accounts"), each as established and maintained by the Trustee at the Account Bank pursuant to Section 6.01 hereof;
(c) all Eligible Investments, cash equivalents, and other investment property acquired with funds on deposit in any Account, and all interest, dividends, and other income earned thereon;
(d) all proceeds of the foregoing, including all cash proceeds, non-cash proceeds, insurance proceeds, and claims for damages in connection with the Collateral Obligations, the Accounts, and the Eligible Investments;
(e) all rights of the Issuer under the Collateral Management Agreement dated as of August 22, 2023 between the Issuer and Driftwood Credit Management LLC, including all rights to receive the performance of the Collateral Manager's obligations thereunder;
(f) all rights of the Issuer under the Collateral Administration Agreement dated as of August 22, 2023 between the Issuer and Ironclad Trust Company, N.A. (the "Collateral Administration Agreement"), including all rights to receive reports, calculations, and other deliverables thereunder;
(g) all rights of the Issuer under the Co-Issuance Agreement dated as of August 22, 2023 between the Issuer and the Co-Issuer (the "Co-Issuance Agreement"), including all rights to enforce the obligations of the Co-Issuer thereunder;
(h) all books, records, ledger cards, files, correspondence, and other documents relating to the foregoing; and
(i) all accessions to any of the foregoing, and all substitutions and replacements for, and products of, any of the foregoing.
The foregoing grant is made to secure the due and punctual payment of all obligations of the Co-Issuers under the Notes and this Indenture, including (i) the due and punctual payment of principal of and interest on each class of Notes, in accordance with the terms of such Notes and this Indenture, (ii) the due and punctual payment of all fees, expenses, indemnities, and other amounts payable by the Co-Issuers under this Indenture and the other Transaction Documents, and (iii) the performance and observance of all covenants, agreements, and conditions of the Co-Issuers contained herein, in each case in accordance with the Priority of Payments set forth in Article VI hereof.
The Trustee hereby acknowledges receipt of and accepts the foregoing grant and assignment and agrees to hold the Trust Estate in trust for the benefit of the Secured Parties in accordance with the terms and provisions of this Indenture. The Trustee shall have all rights, powers, and duties set forth herein and under applicable law with respect to the Trust Estate. The Issuer hereby authorizes the Trustee to file any financing statements, continuation statements, or amendments thereto under the Uniform Commercial Code of any applicable jurisdiction, and to take any other action necessary or desirable to perfect, protect, and maintain the security interest granted hereby.
ARTICLE I — DEFINITIONS AND INTERPRETATION
Section 1.01 — Definitions
As used in this Indenture, the following terms shall have the meanings set forth below. Unless otherwise specified, all capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in this Section 1.01.
"Account Bank" means Havenwood Bank, N.A., a national banking association, with its principal office at 227 West Monroe Street, Chicago, Illinois 60606, or any successor account bank appointed in accordance with the terms of this Indenture, provided that such successor satisfies the eligibility requirements set forth herein, including a minimum long-term unsecured credit rating of A2 (or the equivalent) from at least one nationally recognized statistical rating organization.
"Accrual Period" means, with respect to any Payment Date, the period from and including the immediately preceding Payment Date (or, in the case of the first Accrual Period, the Closing Date) to but excluding such Payment Date.
"Accounts" has the meaning set forth in the Granting Clauses.
"Administrative Expenses" means all fees, costs, expenses, indemnities, and other amounts payable by the Issuer or the Co-Issuer to the Trustee, the Collateral Administrator, the Account Bank, the Note Registrar, the Paying Agent, the Transfer Agent, counsel to any such person, independent accountants, and any other service provider in connection with the Transaction Documents, other than the Senior Collateral Management Fee, the Subordinate Collateral Management Fee, and the Incentive Management Fee.
"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person. For purposes of this definition, "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, more than 50% of the voting power of the outstanding voting securities of such other Person.
"Aggregate Principal Balance" means, as of any date of determination, the sum of the Outstanding Principal Balances of all Collateral Obligations on such date. The initial target Aggregate Principal Balance is $400,000,000.
"Business Day" means any day other than a Saturday, Sunday, or any day on which banking institutions in the City of New York, the State of Delaware, the Cayman Islands, or the city in which the principal office of the Account Bank is located are authorized or obligated by law, regulation, or executive order to close.
"Cede & Co." means the nominee of The Depository Trust Company, or any successor nominee thereof.
"Class A I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes and the Class A-2 Notes for the related Accrual Period. The minimum trigger level for the Class A I/C Ratio is 120.00%.
"Class A Notes" means, collectively, the Class A-1 Notes and the Class A-2 Notes.
"Class A O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with Defaulted Obligations, Credit Risk Obligations, and excess CCC Obligations valued at their respective market values or recovery values, as applicable, rather than par) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes and the Class A-2 Notes. The minimum trigger level for the Class A O/C Ratio is 128.00%.
"Class A-1 Notes" means the $256,000,000 aggregate initial principal amount of Class A-1 Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 155 basis points, rated AAA by Brindoval Analytical Services Inc. and AAA by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAA5 (Rule 144A) and CUSIP G2694LAA7 (Regulation S), and ISIN US26738TAA51 (Rule 144A).
"Class A-2 Notes" means the $40,000,000 aggregate initial principal amount of Class A-2 Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 190 basis points, rated AA by Brindoval Analytical Services Inc. and AA by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAB3 (Rule 144A).
"Class B I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes for the related Accrual Period. The minimum trigger level for the Class B I/C Ratio is 115.00%.
"Class B Notes" means the $28,000,000 aggregate initial principal amount of Class B Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 230 basis points, rated A by Brindoval Analytical Services Inc. and A by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAC1 (Rule 144A).
"Class B O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with adjustments as described in the definition of Class A O/C Ratio) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes, the Class A-2 Notes, and the Class B Notes. The minimum trigger level for the Class B O/C Ratio is 118.00%.
"Class C I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes for the related Accrual Period. The minimum trigger level for the Class C I/C Ratio is 110.00%.
"Class C Notes" means the $24,000,000 aggregate initial principal amount of Class C Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 310 basis points, rated BBB by Brindoval Analytical Services Inc. and BBB by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAD9 (Rule 144A).
"Class C O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with adjustments as described in the definition of Class A O/C Ratio) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, and the Class C Notes. The minimum trigger level for the Class C O/C Ratio is 110.00%.
"Class D I/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) Interest Collections available for the payment of interest on the Notes (after deducting therefrom amounts payable pursuant to items (1) through (6) of the Interest Waterfall set forth in Section 6.03) to (b) the scheduled interest on the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes for the related Accrual Period. The minimum trigger level for the Class D I/C Ratio is 105.00%.
"Class D Notes" means the $16,000,000 aggregate initial principal amount of Class D Secured Notes due October 15, 2036, issued by the Co-Issuers pursuant to this Indenture, bearing interest at a rate per annum equal to Compounded SOFR plus 625 basis points, rated BB by Brindoval Analytical Services Inc. and BB by Ridgeline Credit Ratings LLC, and identified by CUSIP 26738TAE7 (Rule 144A).
"Class D O/C Ratio" means, as of any Determination Date, the ratio (expressed as a percentage) of (a) the Aggregate Principal Balance of all Collateral Obligations (with adjustments as described in the definition of Class A O/C Ratio) to (b) the sum of the Outstanding Principal Balances of the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes. The minimum trigger level for the Class D O/C Ratio is 105.50%.
"Clean-Up Call" has the meaning set forth in Section 4.04.
"Closing Date" means September 12, 2023, the date on which the Notes are first issued and delivered and the initial Collateral Obligations are transferred to the Trust Estate from the warehouse facility.
"Co-Issuance Agreement" means the Co-Issuance Agreement dated as of August 22, 2023 between the Issuer and the Co-Issuer, as the same may be amended, supplemented, or otherwise modified from time to time.
"Co-Issuer" means Driftwood CLO 2023-I, LLC, a Delaware limited liability company (DE File No. 7429831), the sole member of which is the Issuer, or any successor permitted under this Indenture.
"Co-Issuers" means, collectively, the Issuer and the Co-Issuer.
"Collateral Administration Agreement" means the Collateral Administration Agreement dated as of August 22, 2023 between the Issuer and Ironclad Trust Company, N.A., as collateral administrator, as the same may be amended, supplemented, or otherwise modified from time to time.
"Collateral Administrator" means Ironclad Trust Company, N.A., acting in its capacity as collateral administrator under the Collateral Administration Agreement, or any successor collateral administrator appointed in accordance with the terms thereof.
"Collateral Manager" means Driftwood Credit Management LLC, a Delaware limited liability company registered with the U.S. Securities and Exchange Commission as an investment adviser under the Investment Advisers Act of 1940, as amended (CRD #182447), with its principal office at 200 Brickell Avenue, Suite 3100, Miami, Florida 33131, or any successor collateral manager appointed in accordance with Article XIV hereof.
"Collateral Management Agreement" means the Collateral Management Agreement dated as of August 22, 2023 between the Issuer and the Collateral Manager, as the same may be amended, supplemented, or otherwise modified from time to time.
"Collateral Obligation" means any broadly syndicated first-lien senior secured leveraged loan acquired by or on behalf of the Issuer that satisfies the Eligibility Criteria set forth in Section 5.02, together with any Substitute Collateral Obligation, workout obligation, or restructured obligation held by the Issuer and treated as a Collateral Obligation in accordance with the terms of this Indenture.
"Collateral Quality Tests" means, collectively, the Minimum Weighted Average Spread Test, the Maximum Weighted Average Life Test, the Minimum Diversity Score Test, the Minimum Weighted Average Recovery Rate Test, and the Minimum WARF Test, each as described in Section 5.03.
"Collection Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, consisting of the Interest Collection Sub-Account and the Principal Collection Sub-Account.
"Compounded SOFR" means the reference rate determined in accordance with Section 1.04 for each Accrual Period, based on the secured overnight financing rate published by the Federal Reserve Bank of New York (or a successor administrator), compounded in arrears over the applicable Accrual Period, subject to the fallback provisions set forth in Section 1.04 and the 26253 fallback convention.
"Controlling Class" means, at any time, the most senior class of Rated Notes then Outstanding. As of the Closing Date, the Controlling Class is the Class A-1 Notes.
"Coverage Tests" means, collectively, the Overcollateralization Tests and the Interest Coverage Tests, each as defined in Article VII.
"Credit Improved Obligation" means a Collateral Obligation that the Collateral Manager, in its reasonable business judgment, determines has experienced a material improvement in credit quality since the date of its acquisition by the Issuer, such that a sale and reinvestment of the proceeds thereof in a Substitute Collateral Obligation would benefit the portfolio as a whole.
"Credit Risk Obligation" means a Collateral Obligation that the Collateral Manager, in its reasonable business judgment, determines has a significant risk of declining in credit quality to a level at or below a specified threshold, such that the continued holding of such Collateral Obligation would be detrimental to the interests of the Noteholders.
"Day Count Convention" means Actual/360, meaning that interest for any Accrual Period shall be calculated on the basis of the actual number of days elapsed during such Accrual Period divided by 360.
"Defaulted Obligation" means any Collateral Obligation with respect to which (a) a default in the payment of principal or interest has occurred and is continuing beyond any applicable grace period, (b) the obligor thereof has commenced or has had commenced against it a proceeding under the Bankruptcy Code or any analogous insolvency or reorganization statute, or (c) the Collateral Manager has otherwise determined, in its reasonable business judgment, that such Collateral Obligation is in default or is reasonably expected to become a payment default.
"Determination Date" means, with respect to each Payment Date, the date that is ten (10) Business Days prior to such Payment Date, on which the Collateral Administrator shall determine the amounts available in each sub-account of the Collection Account and calculate the Coverage Tests and Collateral Quality Tests.
"Diversity Score" means the measure of portfolio diversification calculated in accordance with the methodology set forth in Schedule 3 hereto. The minimum Diversity Score required under this Indenture is 60.
"DTC" means The Depository Trust Company, a New York-chartered limited purpose trust company and a clearing agency registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended, or any successor securities depository.
"Effective Date" means the date (which shall be no later than the Effective Date Deadline) on which the Issuer has satisfied each of the conditions set forth in Section 5.05.
"Effective Date Deadline" means December 12, 2023, being the date that is ninety (90) days following the Pricing Date.
"Eligibility Criteria" means the criteria set forth in Section 5.02 that must be satisfied by each Collateral Obligation at the time of its acquisition by the Issuer.
"Eligible Account" means a segregated account maintained at a depository institution the long-term unsecured obligations of which are rated at least A2 by each Rating Agency (or, if the Account Bank ceases to satisfy such rating requirement, a segregated trust account at a depository institution satisfying such requirement, or an account at a depository institution the deposits of which are insured by the Federal Deposit Insurance Corporation and the total amount on deposit in which does not exceed the FDIC insurance limit).
"Eligible Investments" means any of the following obligations and securities, in each case denominated and payable in U.S. dollars and maturing or payable on demand no later than the next succeeding Payment Date: (a) direct obligations of, and obligations the timely payment of which is fully guaranteed by, the United States of America; (b) demand deposits or time deposits in, or certificates of deposit or bankers' acceptances of, any depository institution organized under the laws of the United States of America or any state thereof whose long-term unsecured obligations are rated at least A2 by each Rating Agency; (c) repurchase agreements with respect to any obligation described in clause (a) with a counterparty rated at least A2 by each Rating Agency; (d) money market funds rated in the highest rating category of each Rating Agency; and (e) such other investments as may be acceptable to each Rating Agency.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"Event of Default" has the meaning set forth in Section 11.01.
"Expense Reserve Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which the Issuer shall deposit amounts on the Closing Date to be used for the payment of Administrative Expenses.
"FATCA" means Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder, any applicable intergovernmental agreement (and any law or regulation implementing any such intergovernmental agreement), and any agreement with the IRS entered into pursuant thereto.
"First Supplemental Indenture" means the First Supplemental Indenture dated as of September 8, 2023 between the Co-Issuers and the Trustee, reflecting the final pricing of the Notes on the Pricing Date.
"Incentive Management Fee" means a fee payable to the Collateral Manager equal to 20% of excess residual interest proceeds distributed on any Payment Date after a 12% internal rate of return hurdle to the Subordinated Noteholders has been met, as calculated in accordance with the Collateral Management Agreement and Section 14.03 hereof.
"Interest Collection Sub-Account" means the sub-account of the Collection Account into which Interest Proceeds are deposited.
"Interest Coverage Test" has the meaning set forth in Section 7.04.
"Interest Proceeds" means, for any Accrual Period, all amounts received by or on behalf of the Issuer during such Accrual Period representing interest (including default interest) on, or commitment fees, facility fees, amendment fees, or consent fees in respect of, the Collateral Obligations, together with all interest and investment income earned on Eligible Investments and funds on deposit in the Interest Collection Sub-Account and the Interest Reserve Account, and excluding any amounts that constitute Principal Proceeds.
"Interest Reserve Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which certain Interest Proceeds may be deposited as a reserve for the payment of interest on the Notes on subsequent Payment Dates.
"Issuer" means Driftwood CLO 2023-I, Ltd., an exempted company with limited liability incorporated under the laws of the Cayman Islands (Cayman Registration No. EX-382916), or any successor permitted under this Indenture.
"Majority" means, with respect to any class of Notes, the holders of more than 50% of the aggregate Outstanding Principal Balance (or, in the case of Subordinated Notes, more than 50% of the aggregate notional amount) of such class.
"Maximum CCC Bucket" means 7.5% of the Aggregate Principal Balance (initially, $30,000,000), representing the maximum permitted aggregate Outstanding Principal Balance of Collateral Obligations rated CCC+, CCC, or CCC− by any Rating Agency.
"Maximum Fixed-Rate Bucket" means 10.0% of the Aggregate Principal Balance (initially, $40,000,000), representing the maximum permitted aggregate Outstanding Principal Balance of fixed-rate Collateral Obligations.
"Maximum Second-Lien Bucket" means 5.0% of the Aggregate Principal Balance (initially, $20,000,000), representing the maximum permitted aggregate Outstanding Principal Balance of second-lien Collateral Obligations.
"Maximum Weighted Average Life" means 7.5 years, being the maximum permitted weighted average remaining life of all Collateral Obligations as of any Determination Date.
"Measurement Date" means each Determination Date and each date on which the Collateral Manager proposes to acquire or dispose of a Collateral Obligation.
"Minimum Denomination" means (a) with respect to each class of Rated Notes, $250,000 and integral multiples of $1,000 in excess thereof, and (b) with respect to the Subordinated Notes, $250,000 and integral multiples of $1 in excess thereof.
"Minimum Diversity Score" means 60.
"Minimum Weighted Average Recovery Rate" means 45.0%.
"Minimum Weighted Average Spread" means 350 basis points.
"Minimum WARF" means 2,850, as measured on the rating factor scale utilized by Brindoval Analytical Services Inc. For the avoidance of doubt, a higher numerical WARF indicates lower average credit quality; accordingly, the weighted average rating factor of the portfolio must not exceed 2,850 at any time.
"Non-Call Period" means the period from and including the Closing Date (September 12, 2023) to and including September 12, 2025 (being a period of two years).
"Note Registrar" means Ironclad Trust Company, N.A., acting in its capacity as note registrar under this Indenture, or any successor note registrar appointed in accordance with the terms hereof.
"Noteholder" or "Holder" means, with respect to any Note, the Person in whose name such Note is registered in the Note Register maintained by the Note Registrar.
"Notes" means, collectively, the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, the Class D Notes, and the Subordinated Notes.
"Offering Memorandum" means the Final Offering Memorandum dated August 18, 2023 relating to the offer and sale of the Notes.
"Officer's Certificate" means a certificate signed by an authorized officer of the Issuer, the Co-Issuer, or the Collateral Manager, as applicable.
"Opinion of Counsel" means a written opinion of counsel, which counsel may be an employee of or counsel to the Issuer, the Co-Issuer, or the Collateral Manager, and which counsel shall be acceptable to the Trustee.
"Outstanding" means, as of any date of determination with respect to any Note, each Note theretofore authenticated and delivered under this Indenture, except (a) any Note theretofore cancelled by the Trustee or delivered to the Trustee for cancellation, (b) any Note for whose payment money in the necessary amount has been theretofore deposited with the Trustee in trust for the Holder thereof, (c) any Note that has been defeased pursuant to Section 13.02, and (d) any Note in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture. In determining whether the Holders of the requisite principal amount of Notes have given any request, demand, authorization, direction, notice, consent, or waiver hereunder, Notes owned by the Issuer, the Co-Issuer, or the Collateral Manager, or any Affiliate of any of the foregoing, shall be disregarded and deemed not to be Outstanding for such purpose.
"Outstanding Principal Balance" means, with respect to any Collateral Obligation, the outstanding principal balance thereof (excluding any capitalized interest, penalty interest, or payment-in-kind amounts) as of any date of determination.
"Overcollateralization Test" has the meaning set forth in Section 7.02.
"Paying Agent" means Ironclad Trust Company, N.A., acting in its capacity as paying agent under this Indenture, or any successor paying agent appointed in accordance with the terms hereof.
"Payment Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, from which payments to Noteholders shall be made on each Payment Date.
"Payment Date" means January 15, April 15, July 15, and October 15 of each year, commencing January 15, 2024, and continuing to and including the Stated Maturity Date or such earlier date on which all Notes have been redeemed or paid in full; provided that if any such date is not a Business Day, the Payment Date shall be the next succeeding Business Day (with the modified following business day convention, provided that if such next succeeding Business Day would fall in the next calendar month, the Payment Date shall instead be the immediately preceding Business Day).
"Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company, trust, unincorporated organization, governmental body, or other entity.
"Placement Agent" means Meridian Atlantic Securities LLC (CRD #39821), with offices at 383 Madison Avenue, 22nd Floor, New York, New York 10179.
"Pricing Date" means September 8, 2023, the date on which the final pricing terms for the Notes were established.
"Principal Collection Sub-Account" means the sub-account of the Collection Account into which Principal Proceeds are deposited.
"Principal Proceeds" means, for any Accrual Period, all amounts received by or on behalf of the Issuer during such Accrual Period representing principal payments on, or proceeds from the sale, exchange, or other disposition of, the Collateral Obligations, including scheduled principal payments, unscheduled principal payments (whether voluntary or involuntary prepayments), and proceeds from the sale of Collateral Obligations (net of any bona fide selling expenses), and excluding any amounts that constitute Interest Proceeds.
"Priority of Payments" means the priorities set forth in Section 6.03 (with respect to Interest Proceeds) and Section 6.04 (with respect to Principal Proceeds).
"Ramp-Up Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which a portion of the net proceeds of the Notes shall be deposited on the Closing Date for the acquisition of Collateral Obligations during the ramp-up period.
"Rated Notes" means, collectively, the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, having an aggregate initial principal amount of $364,000,000.
"Rating Agencies" means Brindoval Analytical Services Inc. ("CAS") and Ridgeline Credit Ratings LLC ("RCR"), or, if any such entity ceases to provide rating services, any nationally recognized statistical rating organization designated as a replacement by the Collateral Manager with the consent of a Majority of each class of Rated Notes Outstanding.
"Rating Agency Confirmation" means, with respect to any action, a written confirmation from each Rating Agency that such action will not result in the downgrade, qualification, or withdrawal of any rating then assigned to any class of Rated Notes.
"Rating Agency Notification" means prior written notice to each Rating Agency of the applicable action.
"Record Date" means, with respect to each Payment Date, the fifteenth (15th) calendar day preceding such Payment Date (whether or not a Business Day).
"Reinvestment Period" means the period from and including the Closing Date (September 12, 2023) to and including September 12, 2028 (being a period of five years from the Closing Date).
"Secured Parties" means the Holders of the Rated Notes, the Trustee, the Collateral Administrator, the Account Bank, and any other Person entitled to the benefit of the security interest granted under the Granting Clauses.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Collateral Management Fee" means a fee payable to the Collateral Manager equal to 0.15% per annum of the Aggregate Principal Balance, calculated on each Determination Date and payable quarterly on each Payment Date from Interest Proceeds in accordance with the Priority of Payments. Based on a full par Aggregate Principal Balance of $400,000,000, the Senior Collateral Management Fee would be $600,000 per annum (or $150,000 per quarterly Payment Date).
"SOFR" means the Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York (or a successor administrator), on the Federal Reserve Bank of New York's website, currently at https://apps.newyorkfed.org/markets/autorates/SOFR, or any successor source.
"Stated Maturity Date" means October 15, 2036, the final stated maturity date for all classes of Notes.
"Subordinate Collateral Management Fee" means a fee payable to the Collateral Manager equal to 0.35% per annum of the Aggregate Principal Balance, calculated on each Determination Date and payable quarterly on each Payment Date from Interest Proceeds in accordance with the Priority of Payments, but only after payment of Class D Note interest and all senior expenses. Based on a full par Aggregate Principal Balance of $400,000,000, the Subordinate Collateral Management Fee would be $1,400,000 per annum (or $350,000 per quarterly Payment Date).
"Subordinated Notes" means the $36,000,000 aggregate initial principal amount of Subordinated Notes issued by the Co-Issuers pursuant to this Indenture, which Subordinated Notes are unrated, bear no stated rate of interest, are entitled only to residual distributions pursuant to the Priority of Payments, and are identified by CUSIP 26738TAF4 (Rule 144A). The Subordinated Notes represent the equity tranche of the capital structure.
"Substitute Collateral Obligation" means any Collateral Obligation acquired by the Issuer with Principal Proceeds during the Reinvestment Period in substitution for a Collateral Obligation that has been sold, prepaid, or otherwise disposed of, provided that such Substitute Collateral Obligation satisfies the Eligibility Criteria, the Collateral Quality Tests (on a pro forma basis after giving effect to such acquisition), and the Concentration Limitations.
"Tax Event" has the meaning set forth in Section 4.03.
"Total Deal Size" means $400,000,000, being the aggregate initial principal amount of all classes of Notes issued hereunder.
"Transaction Documents" means, collectively, this Indenture (including the First Supplemental Indenture), the Notes, the Collateral Management Agreement, the Collateral Administration Agreement, the Co-Issuance Agreement, the Offering Memorandum, and any other document, agreement, or certificate executed and delivered in connection with the transactions contemplated hereby.
"Transfer Agent" means Ironclad Trust Company, N.A., acting in its capacity as transfer agent under this Indenture, or any successor transfer agent appointed in accordance with the terms hereof.
"Trust Estate" has the meaning set forth in the Granting Clauses.
"Trustee" means Ironclad Trust Company, N.A., a national banking association, acting in its capacity as trustee under this Indenture, or any successor trustee appointed in accordance with Article IX hereof.
"Trustee Expense Cap" means $50,000 per Payment Date, being the maximum amount of expenses (exclusive of the Trustee Fee) reimbursable to the Trustee on any single Payment Date pursuant to item (2) of the Interest Waterfall. Expenses in excess of the Trustee Expense Cap on any Payment Date shall be carried forward and paid on subsequent Payment Dates, subject to the Trustee Expense Cap applicable to such subsequent Payment Dates.
"Trustee Fee" means $25,000 per annum (flat), payable quarterly in arrears on each Payment Date (pro rata, $6,250 per Payment Date), from Interest Proceeds in accordance with the Priority of Payments.
"Unused Proceeds Account" means the account established and maintained by the Trustee at the Account Bank pursuant to Section 6.01, into which any portion of the net proceeds of the Notes not applied to the acquisition of Collateral Obligations or deposited into other Accounts on the Closing Date shall be deposited.
"WARF" means weighted average rating factor, calculated in accordance with the methodology set forth in Schedule 4 hereto.
Section 1.02 — Rules of Construction
(a) Unless the context otherwise requires, (i) words in the singular include the plural and words in the plural include the singular, (ii) words importing a gender include all genders, (iii) the terms "herein," "hereof," "hereunder," and words of similar import refer to this Indenture as a whole and not to any particular Article, Section, Schedule, or Exhibit hereof, (iv) references to Articles, Sections, Schedules, and Exhibits are to Articles, Sections, Schedules, and Exhibits of this Indenture unless otherwise specified, (v) references to any agreement or instrument are to such agreement or instrument as the same may be amended, supplemented, restated, or otherwise modified from time to time in accordance with the terms thereof, (vi) references to any statute, rule, or regulation include all amendments thereto and any successor statute, rule, or regulation, (vii) references to any Person include such Person's successors and permitted assigns, and (viii) the words "include," "includes," and "including" shall be deemed to be followed by the phrase "without limitation."
(b) The headings and captions contained in this Indenture are for convenience of reference only and shall not affect the interpretation of this Indenture.
(c) All dollar amounts referenced in this Indenture are in United States dollars unless otherwise expressly specified.
(d) Unless otherwise specified, all accounting terms used herein shall be interpreted in accordance with United States generally accepted accounting principles as in effect from time to time.
(e) In the computation of any period of time from a specified date to a later specified date, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."
Section 1.03 — Computation of Time Periods
(a) Except as otherwise expressly provided herein, whenever any action is required to be taken, or any notice is required to be given, on or by a particular day and such day is not a Business Day, then such action may be taken, or such notice may be given, on the next succeeding Business Day with the same force and effect as if taken or given on the required day.
(b) With respect to each Payment Date, if such date falls on a day that is not a Business Day, the Payment Date shall be adjusted in accordance with the modified following business day convention, which means that such Payment Date shall be postponed to the next succeeding Business Day; provided, however, that if such next succeeding Business Day would fall in the next calendar month, the Payment Date shall instead be the immediately preceding Business Day. Interest shall accrue to but excluding the adjusted Payment Date.
(c) All references herein to specific times of day refer to Eastern Time, unless otherwise indicated.
Section 1.04 — SOFR Determination and Fallback
(a) Determination of Compounded SOFR. For each Accrual Period, the Compounded SOFR rate applicable to each class of Rated Notes shall be determined by the Trustee (or such other calculation agent as may be appointed by the Issuer with the consent of the Trustee) in accordance with the following provisions:
(i) Compounded SOFR shall be determined on the basis of the daily SOFR rates published by the Federal Reserve Bank of New York (or a successor administrator) for each U.S. Government Securities Business Day during the applicable observation period, which shall be the period from two (2) U.S. Government Securities Business Days prior to the first day of the Accrual Period to two (2) U.S. Government Securities Business Days prior to the Payment Date, and shall be calculated on a compounded basis using the formula set forth below:
Compounded SOFR = [(the product of (1 + SOFRi × ni/360) for each day i in the observation period) − 1] × (360/d)
where SOFRi is the SOFR rate for day i, ni is the number of calendar days for which rate SOFRi applies, and d is the total number of calendar days in the Accrual Period;
(ii) If, on any U.S. Government Securities Business Day during the observation period, the SOFR rate has not been published by 5:00 p.m. (Eastern Time) and no SOFR cessation event has occurred, then SOFR for such day shall be the SOFR published on the immediately preceding U.S. Government Securities Business Day;
(iii) All calculations of Compounded SOFR shall be made to five decimal places and shall be rounded to the nearest one hundred-thousandth, with five one-millionths being rounded upward.
(b) SOFR Cessation Event and Fallback. If a SOFR cessation event occurs (including a public statement or publication by the Federal Reserve Bank of New York, the administrator of SOFR, or a governmental authority having jurisdiction over such administrator, that SOFR has ceased or will cease to be provided permanently or indefinitely, or that SOFR is no longer representative), then the Trustee shall select a replacement benchmark rate in accordance with the following waterfall, consistent with the recommendations of the Alternative Reference Rates Committee ("ARRC") and the 26253 fallback convention:
(i) Step 1: The replacement rate shall be the rate (including any spread adjustment) recommended by the ARRC or by a relevant governmental body as the replacement for SOFR in U.S. dollar-denominated floating-rate securities, if such rate has been so recommended;
(ii) Step 2: If no rate has been recommended as described in Step 1, then the replacement rate shall be the rate (including any spread adjustment) that the Trustee (in consultation with the Issuer and the Collateral Manager) determines is most comparable to SOFR, taking into account, among other factors, any selection by the International Swaps and Derivatives Association for purposes of its definitions and protocols;
(iii) Step 3: If the Trustee is unable to determine a replacement rate pursuant to Steps 1 or 2, then interest on the Rated Notes for the applicable Accrual Period shall accrue at the Compounded SOFR rate applicable to the immediately preceding Accrual Period, until such time as a replacement rate can be determined.
(c) Conforming Changes. In connection with the implementation of a replacement benchmark rate pursuant to this Section 1.04, the Trustee shall be authorized to make such conforming changes as may be necessary or advisable, including changes to the definition of "Business Day," the timing and frequency of determining rates and making payments of interest, the rounding of amounts, and other administrative matters, in each case consistent with accepted market practice for the applicable replacement benchmark rate. The Trustee shall provide notice to the Co-Issuers, the Collateral Manager, the Noteholders, and the Rating Agencies of any replacement rate selected and any conforming changes implemented.
(d) Limitation on Trustee Liability. The Trustee shall not be liable for any error in the determination of Compounded SOFR or any replacement benchmark rate, or for any delay in implementing a rate transition, to the extent that the Trustee has acted in good faith and in accordance with the procedures set forth in this Section 1.04. The Trustee shall have no obligation to independently verify the accuracy of any SOFR rate published by the Federal Reserve Bank of New York or any successor administrator.
ARTICLE II — THE NOTES
Section 2.01 — Designation, Amount, and Terms of the Notes
(a) The Co-Issuers have authorized the issuance of the following classes of Notes in an aggregate principal amount of $400,000,000:
(b) The Class A-1 Notes have been assigned CUSIP G2694LAA7 (Regulation S) and ISIN US26738TAA51 (Rule 144A).
(c) The Rated Notes comprise the Class A-1 Notes, the Class A-2 Notes, the Class B Notes, the Class C Notes, and the Class D Notes, having an aggregate initial principal amount of $364,000,000. The Subordinated Notes have an aggregate initial principal amount of $36,000,000.
(d) Each class of Notes constitutes a separate series for purposes of this Indenture and the Trust Indenture Act of 1939, as amended (to the extent applicable). The holders of each class of Notes shall have the rights, duties, and obligations provided for such class in this Indenture.
(e) The Notes shall be issued in fully registered, book-entry form through the facilities of DTC, and shall be held through participants and indirect participants in DTC as described in Section 2.02 and Section 9.07. No beneficial owner of an interest in any Note held through DTC shall be entitled to receive a physical certificate representing such interest except in the limited circumstances described in Section 2.02(c).
(f) Each class of Notes shall have the Stated Maturity Date of October 15, 2036, unless earlier redeemed, purchased, or cancelled in accordance with the terms of this Indenture.
(g) The Notes rank in right of payment in the following order of priority: first, the Class A-1 Notes; second, the Class A-2 Notes; third, the Class B Notes; fourth, the Class C Notes; fifth, the Class D Notes; and sixth, the Subordinated Notes. The Subordinated Notes are subordinated in right of payment to all classes of Rated Notes. Within each class, all Notes of such class rank pari passu with one another without preference or priority.
Section 2.02 — Form and Dating
(a) Global Notes. The Notes of each class initially shall be issued in the form of one or more global notes (each, a "Global Note"), in fully registered form, registered in the name of Cede & Co., as nominee of DTC, and deposited with, or on behalf of, DTC. Transfers of beneficial interests in any Global Note shall be effected through the book-entry system maintained by DTC (and, in the case of beneficial interests held through Stonefield Industries ("Thackeray Partners LLC") or Glenrock Corporation ("Ashgrove Enterprises"), through the book-entry systems maintained by such depositaries, as applicable).
(b) Rule 144A and Regulation S Global Notes. Each class of Notes shall be represented by (i) a Rule 144A Global Note, representing Notes offered and sold in reliance on the exemption from registration provided by Rule 144A under the Securities Act, and (ii) a Regulation S Global Note, representing Notes offered and sold in reliance on the exemption from registration provided by Regulation S under the Securities Act.
(c) Definitive Notes. Notes in definitive, fully registered, certificated form ("Definitive Notes") shall be issued to the beneficial owners of interests in Global Notes only if: (i) DTC notifies the Trustee that it is unwilling or unable to continue as depository for the Global Notes or ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depository is not appointed within 90 days after the Trustee receives such notice or becomes aware of such cessation; (ii) an Event of Default has occurred and is continuing and holders of beneficial interests representing at least a Majority of the Outstanding Rated Notes request the issuance of Definitive Notes; or (iii) the Issuer elects to terminate the book-entry system through DTC with respect to one or more classes of Notes.
(d) Forms. The form of each class of Note shall be substantially in the form attached hereto as the applicable Exhibit: Exhibit A-1 (Class A-1 Note), Exhibit A-2 (Class A-2 Note), Exhibit A-3 (Class B Note), Exhibit A-4 (Class C Note), Exhibit A-5 (Class D Note), and Exhibit A-6 (Subordinated Note), with such changes thereto as may be necessary or appropriate to conform to the terms and conditions of this Indenture and the applicable class.
Section 2.03 — Execution, Authentication, and Delivery
(a) The Notes shall be executed on behalf of the Co-Issuers by the manual or facsimile signature of an authorized signatory of the Issuer and an authorized signatory of the Co-Issuer. The signature of any person that was authorized at the time of execution shall be valid and effective notwithstanding that such person may have ceased to hold such office prior to the authentication and delivery of such Notes or may not hold such office at the date of such Notes.
(b) No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose until such Note shall have been authenticated by the manual signature of an authorized signatory of the Trustee on the certificate of authentication appearing on such Note. The certificate of authentication shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder.
(c) The Trustee shall authenticate Notes for original issuance upon receipt of (i) an Issuer Order (substantially in the form of Exhibit F hereto) requesting the authentication and delivery of the Notes, specifying the aggregate principal amount, class, and form of the Notes to be authenticated, the date on which such Notes are to be authenticated and delivered, and the Person or Persons to whom such Notes are to be delivered, (ii) an Officer's Certificate (substantially in the form of Exhibit E hereto) certifying that the conditions precedent to the issuance of such Notes set forth in this Indenture have been satisfied, and (iii) an Opinion of Counsel to the effect that the execution and delivery of such Notes have been duly authorized by the Co-Issuers and that such Notes, when authenticated and delivered by the Trustee in accordance with this Indenture, will constitute valid and legally binding obligations of the Co-Issuers, enforceable against the Co-Issuers in accordance with their terms, subject to customary qualifications.
(d) The Trustee may appoint one or more authenticating agents with power to act on the Trustee's behalf and subject to the Trustee's direction in the authentication of Notes. Any such authenticating agent shall be acceptable to the Issuer and shall at all times be a Person eligible to serve as trustee under Section 9.06.
Section 2.04 — Denominations
(a) Each class of Rated Notes shall be issuable only in minimum denominations of $250,000 and integral multiples of $1,000 in excess thereof. No Rated Note may be issued, transferred, or exchanged in a denomination less than the applicable minimum denomination.
(b) The Subordinated Notes shall be issuable only in minimum denominations of $250,000 and integral multiples of $1 in excess thereof. No Subordinated Note may be issued, transferred, or exchanged in a denomination less than the applicable minimum denomination.
(c) If, as a result of a partial redemption, the outstanding principal balance of any Rated Note would be reduced below $250,000, such Note shall instead be redeemed in full.
Section 2.05 — Note Registrar and Paying Agent
(a) Ironclad Trust Company, N.A. is hereby appointed as the initial Note Registrar, Paying Agent, and Transfer Agent under this Indenture. The Note Registrar shall maintain at its office a register (the "Note Register") in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall record (i) the names and addresses of the Holders of all Notes, (ii) the aggregate principal amount and class of Notes held by each such Holder, (iii) any transfers of Notes, and (iv) such other information as the Trustee may deem necessary or desirable.
(b) The Issuer may, with the consent of the Trustee, appoint one or more additional or successor Note Registrars, Paying Agents, or Transfer Agents. Notice of any such appointment shall be provided to each Rating Agency and to the Noteholders.
(c) The Note Register shall be available for inspection by the Co-Issuers and the Collateral Manager at any reasonable time upon reasonable prior written notice to the Note Registrar.
Section 2.06 — Registration of Transfer and Exchange
(a) General. Upon surrender of any Note for registration of transfer or exchange at the office of the Note Registrar, and compliance with the provisions of this Section 2.06, the Co-Issuers shall execute and the Trustee shall authenticate and deliver one or more new Notes of the same class and aggregate principal amount, registered in the name of the designated transferee or transferees, as the case may be.
(b) Rule 144A Transfers. No transfer of a Note offered and sold in reliance on Rule 144A shall be registered unless the transferee delivers to the Note Registrar a certificate, substantially in the form of Exhibit B hereto, certifying that (i) the transferee is a qualified institutional buyer within the meaning of Rule 144A, (ii) the transferee is aware that the sale is being made to it in reliance on Rule 144A, and (iii) the transferee is acquiring the Note for its own account or for the account of one or more qualified institutional buyers.
(c) Regulation S Transfers. No transfer of a Note offered and sold in reliance on Regulation S shall be registered unless the transferee delivers to the Note Registrar a certificate, substantially in the form of Exhibit C hereto, certifying that the transfer is being made in an offshore transaction in compliance with Regulation S and that the transferee is not a U.S. person (as defined in Regulation S).
(d) Transfers Between Rule 144A and Regulation S. Transfers of Notes from a Rule 144A Global Note to a Regulation S Global Note, or from a Regulation S Global Note to a Rule 144A Global Note, shall be effected only upon receipt by the Note Registrar of the applicable transfer certificate (Exhibit B or Exhibit C hereto, as the case may be) and such other documentation as the Note Registrar may reasonably require.
(e) ERISA Restrictions. Notwithstanding any other provision of this Section 2.06:
(i) The Subordinated Notes may not be acquired by or transferred to (A) any employee benefit plan (as defined in Section 3(3) of ERISA)

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